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Court of AppealPartially AllowedCivil Appeal No. 20 of 2014

Paul Muiyoro t/a Spotted Zebra v Bulent Gulbahar Remax Realtors [2016] KECA 95 (KLR)

Court of Appeal
25 November 2016
RNR. N. NambuyeFAF. AzangalalaJMJ. Mohammed
3,095 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal awarded a businessman Kshs. 3.8 million after a judge wrongly re-opened liability, but rejected bigger claims because they were never pleaded.

What this practically means

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Executive summary

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The appellant, Paul Muiyoro t/a Spotted Zebra, purchased a bar and restaurant business known as Club D' Mills operating on premises owned by the respondents for Kshs. 3,800,000/=. After interlocutory judgment was regularly entered against the respondents for failing to file a defence, the suit proceeded to formal proof before Ougo, J., who dismissed the appellant's suit, finding that the respondents were strangers to the sale of the business and that the appellant had failed to prove his claims. On appeal, the Court of Appeal held that the learned Judge erred by re-opening the question of liability, which had been concluded by the interlocutory judgment. Once interlocutory judgment is regularly entered, liability is a foregone conclusion and the court at formal proof is concerned only with the extent of the loss and the appropriateness of relief. The court found that the Kshs. 3,800,000/= special damages claim had been specifically pleaded and strictly proved by the sale agreement and evidence of payment, and that the Judge misapprehended the case by demanding privity of contract with the respondents. However, the claims for loss of business (Kshs. 10,256,955/=) and for goods carted away by auctioneers (Kshs. 669,767/=) failed as unpleaded special damages, and the claim for general damages for breach of contract was unsustainable, general damages not being normally available for breach of contract. The court set aside the High Court judgment, entered judgment for the appellant for Kshs. 3,800,000/= with interest at court rates from the date of filing suit, and awarded the appellant the costs of the appeal and of the suit in the High Court.

Questions the Court framed

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

  1. 1.Whether the learned Judge fell into error on the question of liability after entry of interlocutory judgment
  2. 2.Whether the appellant proved his claim of Kshs. 3,800,000/= as special damages

Key legal issues

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01

Effect of interlocutory judgment on liability at formal proof

Holding

The trial judge erred in re-opening liability after interlocutory judgment had been regularly entered; at formal proof the court is concerned only with the extent of loss and the appropriateness of relief.

Reasoning

The respondents failed to file a defence and interlocutory judgment was entered on the appellant's uncontested pleadings, including the pleaded purchase of the business for Kshs. 3,800,000/=. At formal proof the appellant only had to demonstrate the basis and justification for the claim. By questioning privity of contract between the appellant and the respondents, the learned Judge re-opened a concluded issue, misapprehended the appellant's case and dislodged a regularly obtained interlocutory judgment, which the circumstances did not justify.

p. 4
02

Pleading and strict proof of special damages

Holding

The appellant specifically pleaded and strictly proved the Kshs. 3,800,000/= claim by producing the sale agreement and evidence of payment, entitling him to judgment; the other claims failed for want of pleading.

Reasoning

Special damage claims must be specifically pleaded and strictly proved. The claim for Kshs. 3,800,000/= was pleaded in the plaint and proved by the sale agreement and transfer of funds, so it was recoverable. By contrast, the claims for loss of business and for goods carted away by auctioneers were never pleaded and could not be awarded even if evidence had been led. Counsel was right to abandon them.

p. 4
03

Availability of general damages for breach of contract

Holding

General damages are not normally awardable for breach of contract because such damages are quantifiable and not at large.

Reasoning

The appellant's claim of Kshs. 1,250,874/= as general damages for breach of contract could not succeed. A long line of authorities, crystallised in Dharamshi v Karan, establishes that damages from breach of contract are usually quantifiable and are not at large; where damages can be quantified they cease to be general.

p. 5
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Duty of a first appellate court

Holding

As a first appeal, the Court has jurisdiction to re-consider and re-evaluate the evidence afresh and draw its own conclusions, while bearing in mind the trial judge's advantage of seeing and assessing the witnesses' demeanour.

Reasoning

The court restated the settled approach on first appeals, citing Peters v Sunday Post and Selle v Associated Motor Boats: it may re-consider and re-evaluate evidence and draw its own conclusions, but must exercise that jurisdiction cautiously because the trial judge had the advantage of assessing demeanour. This principle framed but did not determine the outcome, which turned on the effect of the interlocutory judgment.

p. 3

Legal principles established

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  • Once interlocutory judgment has been regularly entered, the question of liability becomes a foregone conclusion and cannot be revisited at formal proof; the court is confined to assessing quantum.
  • Special damages must be specifically pleaded and strictly proved; unpleaded special damages cannot be awarded even where evidence is led.
  • General damages cannot normally be awarded for breach of contract because damages arising from breach of contract are quantifiable and not at large.

Court orders

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  1. 1.The judgment of the High Court dismissing the appellant's suit with costs is set aside
  2. 2.Judgment is entered for the appellant for Kshs. 3,800,000/= as special damages for the wrongful acts of the respondents
  3. 3.The said sum shall attract interest at court rates from the date of filing suit until payment in full
  4. 4.The appellant shall have the costs of this appeal and of the suit in the High Court

The bench

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

RN
majority
FA
majority
JM
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 600 of 2010
Jurisdiction invoked
First appeal to the Court of Appeal under the Constitution of Kenya, 2010 and the Court of Appeal's appellate jurisdiction (the judgment invokes Article 159(2)(d) of the Kenya Constitution 2010 in the memorandum of appeal)

Relief refused

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Claim for loss of business of Kshs. 10,256,955/=

It was a special damage claim that was not specifically pleaded and could not be proved by evidence alone

p. 5

Claim for Kshs. 669,767/= for goods taken and sold by the auctioneers

Not pleaded; a special damages claim cannot be awarded without pleading even if evidence is led

p. 5

Claim for general damages of Kshs. 1,250,874/= for breach of contract

General damages are not normally available for breach of contract since such damages are quantifiable and not at large

p. 5

Costs

The appellant shall have the costs of this appeal and of the suit in the High Court.

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.

It is now settled that once interlocutory judgment has been entered the question of liability becomes a foregone conclusion.
p. 4Effect of interlocutory judgment on liability
The role of the court after entering interlocutory judgment was only to assess damages since interlocutory judgment having been regularly obtained there can never be any doubt that judgment was final with regard to liability and was unassailable.
p. 4Interlocutory judgment final on liability, interlocutory only on quantum
The court, at the stage of formal proof, is only concerned with the extent of the loss and the appropriateness of the relief sought.
p. 4Scope of formal proof hearing
Special damages must be pleaded with as much particularity as circumstances permit
p. 5Particularity required in pleading special damages
The judgment of the learned Judge of the High Court dismissing the appellant's suit with costs is hereby set aside and Judgment is entered for the appellant for the sum of Kenya Shillings Three Million, Eight Hundred Thousand (Kshs.3,800,000/=), being special damages suffered by the appellant by reason of wrongful acts of the respondents.
p. 5Final orders - disposal of the appeal
The appellant shall have the costs of this appeal and of the suit in the High Court.
p. 6Costs order

Issues in the judgment

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minor

The second respondent is named inconsistently within the judgment - as 'REMAX REALTORS' in the cause title and as 'Reamax Realtors' in the opening paragraph of the judgment.

minor

Minor inconsistency in the pleaded quantum for loss of business between the figures Kshs. 10,265,958/= and Kshs. 10,256,955/=.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (6)

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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, "Paul Muiyoro t/a Spotted Zebra v Bulent Gulbahar Remax Realtors [2016] KECA 95 (KLR)", Case Analysis (2016). Civil Appeal No. 20 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/95/eng@2016-11-25

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