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Court of AppealDismissedCivil Appeal (No. not stated in judgment)

Butler v Butler (Civil Appeal 49 of 1983) [1984] KECA 34 (KLR)

Court of Appeal of Kenya
5 July 1984
AKA.A. KnellerZCZ.R. ChesoniJNJ.O. Nyarangi
4,478 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed injured people can be compensated for reduced ability to earn, even without a prior salary.

What this practically means

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Executive summary

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This Court of Appeal judgment arose from a road accident on June 23, 1979 in which the appellant, driving his brother-in-law's Peugeot, lost control of the vehicle, killing his brother-in-law and seriously injuring the respondent, the deceased's wife. Liability was admitted at trial and the High Court (Porter J, November 2, 1982) awarded the respondent Kshs 1,600,000 - limited at her own request to Kshs 800,000 under the Fatal Accidents Act claim and Kshs 800,000 for her personal injuries. The appeal, pursued only against the Kshs 600,000 awarded for loss of earning capacity, contended that the trial judge erred in treating it as a separate head calculated on a multiplier basis rather than folding it into general damages. Kneller JA, delivering the leading judgment with which Chesoni Ag JA and Nyarangi Ag JA agreed, surveyed the English authorities (Bonham Carter, Fairley, Moeliker, Ashcroft) and held that loss of earning capacity is distinct from loss of future earnings: it is compensation for diminished chances in the labour market, awarded as part of general damages, and where not included in the composite award it may properly be given under its own heading. The court reaffirmed that damages assessment is discretionary and appellate interference is warranted only on wrong principles or an unreasonable award, and that foreign awards are only a guide subject to Kenyan conditions. The appeal was dismissed with costs, with interest to be recalculated.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the trial judge erred in law in awarding loss of earning capacity as a separate head of damages rather than as part of general damages for pain and suffering
  2. 2.Whether the multiplier approach (rather than a figure 'plucked from the air') was a proper method of assessing loss of earning capacity where there was no evidence of prior earnings
  3. 3.Whether the award of Kshs 600,000 for loss of earning capacity was excessive

Key legal issues

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01

Whether loss of earning capacity may be a separate head of damages

Holding

Yes - it is a different head from loss of future earnings; it is compensation for diminution of earning capacity as part of general damages, and where not included in the composite general damages award, it may properly be awarded under its own heading.

Reasoning

The court distinguished loss of future earnings (real assessable loss proved by evidence, multiplied) from loss of earning capacity (diminished chances in the labour market, part of general damages). Following Fairley, Moeliker, Ashcroft and the 'lost years' analogy, the court held the trial judge's separate heading was permissible and supported by the evidence of the respondent's diminution in the labour market.

p. 4
02

Method of assessing loss of earning capacity where no prior earnings are proved

Holding

The claim is not one for loss of future earnings; the judge must do the best he can, assessing the present value of the risk of financial disadvantage in the labour market, using relevant factors such as age, qualifications, disabilities and remaining working life; the figure need not be plucked from the air where the plaintiff furnishes material for a reasonable assessment.

Reasoning

There was no evidence of the respondent's prior earnings, so no claim for loss of future earnings lay. Adopting Moeliker v Reyrolle, the court held a mathematical approach using relevant factors is permissible, and the plaintiff must furnish the material on which a reasonable figure is based. The trial judge's use of an estimated secretarial salary multiplied by 10 was upheld as a sound exercise of assessment.

p. 4
03

Standard of appellate interference with assessment of damages

Holding

The assessment of damages is akin to an exercise of discretion; an appellate court will not interfere unless wrong principles were applied or the award is so excessive or low that no reasonable court would make it.

Reasoning

Following the court's own earlier decision in Zablon W Mariga v Morris Wambua Musila and H West & Sons Ltd v Shephard, the court held that a differing personal assessment is not a ground of interference. Nothing of the kind occurred here; the judge's conclusions were supported by the evidence and the award was 'just about right'.

p. 5

Legal principles established

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  • Loss of earning capacity is a distinct head of damages from loss of future earnings: compensation for loss of future earnings requires proof of real assessable loss, while diminution of earning capacity is awarded as part of general damages.
  • Where loss of earning capacity is not included within general damages for pain, suffering and loss of amenity, it is not improper to award it under its own heading.
  • An appellate court should be slow to reverse a trial judge's assessment of damages unless he acted on wrong principles, awarded so excessively or so little that no reasonable court would, or took into account matters he ought not (or failed to take into account matters he ought) to have considered.
  • Awards by foreign courts do not necessarily represent the results which should prevail in Kenya, where local conditions may differ; some degree of uniformity is to be sought and the best guide is recent awards in comparable local cases.
  • A plaintiff who suffers loss of earning capacity is entitled to be compensated even if she was not using her earning capacity in salaried employment at the time of the accident.

Court orders

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  1. 1.Appeal dismissed
  2. 2.Appellant to pay costs of the appeal
  3. 3.Interest on the award to be recalculated

The bench

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One judgment of the whole court — no separate or dissenting opinions.

AK
majority

Wrote the judgment

Wrote the leading judgment; reviewed the assessment of damages for loss of earning capacity, surveyed the English authorities, and concluded the trial judge applied the right principles; would dismiss the appeal with costs but recalculating interest.

In my opinion, the judge approached this head of damages with the right principles in mind. His conclusions are supported by the evidence.p. 5
ZC
concurring

Wrote the judgment

Agreed with Kneller JA; held that loss of earning capacity may be awarded under its own heading where not included within general damages, and that the appellate court should be slow to interfere with the trial judge's assessment.

but where it is not so included, it is not improper to award it under its own heading as the learned judge in this case did.p. 6
JN
concurring

Wrote the judgment

Agreed with Kneller JA; likened loss of earning capacity to the 'lost years' doctrine and held separate compensation for loss of earning capacity is supportable on the evidence.

I concur with the order proposed by Kneller JA on costs.p. 7
On appeal from
High Court of Kenya, Nairobi
Not stated in judgment
Jurisdiction invoked
Court of Appeal Rules (including rule 29, Court of Appeal Rules) - appellate jurisdiction over the High Court award of damages

Relief refused

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Substitution of Kshs 500,000 (sum tendered before trial) for the Kshs 1,600,000 award

The trial judge applied the right principles and his award was supported by the evidence; appellate court should be slow to interfere with assessment of damages

p. 5

Costs of the suit in the High Court limited to costs incurred after acceptance of the Kshs 500,000 tender

Appeal dismissed with costs to the respondent

p. 7

Costs

Appeal dismissed with costs to the respondent; interest to be recalculated.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The result is that I would dismiss this appeal with costs but order that the interest be recalculated. Chesoni Ag JA and Nyarangi Ag JA agree and these now become the orders of the court.
p. 5Final orders - dismissal of the appeal
compensation for loss of future earnings, is awarded for real assessable loss proved by evidence. Compensation for diminution of earning capacity is awarded as part of the general damages.
p. 4Distinction between loss of future earnings and loss of earning capacity
Whether at the time of the accident she was using her earning capacity or not is immaterial. She had it and could put it into use whenever she wanted, now it was diminished and she was entitled to compensation for the loss she had suffered.
p. 5Entitlement to compensation for loss of earning capacity without prior salaried employment
the assessment of damages is more like an exercise of discretion by the trial judge and an appellate court should be slow to reverse the trial judge unless he has either acted on wrong principles or awarded so excessive or so little damages that no reasonable court would
p. 6Appellate interference with assessment of damages
awards by foreign courts do not necessarily represent the results which should prevail in Kenya, where the conditions relevant to the assessment of damages, such as rents, standards of living, levels of earnings, costs of medical supervision and drugs, may be different.
p. 5Foreign comparators in Kenyan damages assessments
in my judgment, the decisions in the Picket v British Rail Engineering Ltd [1979] I All ER 774 and Civil Appeal No 66 of 1982 provide clear authority for separate compensation for loss of earning capacity
p. 6Separate compensation for loss of earning capacity

Issues in the judgment

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minor

Agreed special damages figure appears variously as Kshs 40,881 and Kshs 40,880 in the judgment (both in the narrative and the trial judge's table).

minor

Chesoni Ag JA's opinion contains an incomplete/unclear sentence regarding the trial judge's award figures for loss of earning capacity.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Butler v Butler (Civil Appeal 49 of 1983) [1984] KECA 34 (KLR)", Case Analysis (1984). Civil Appeal (No. not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1984/34/eng@1984-07-05

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.