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Court of AppealDismissedCivil Appeal (memorandum of appeal; number not stated in judgment)

Turn-O-Metal Engineers Limited v Ministry of Medical Services & another (Civil Appeal 552 of 2019) [2025] KECA 896 (KLR)

Court of Appeal of Kenya
23 May 2025
3,858 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal dismissed a contractor's Kshs 100 million claim because it had no receipts or paperwork proving its losses, only an accountant's calculations.

What this practically means

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Executive summary

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Turn-O-Metal Engineers Limited contracted with the Ministry of Medical Services in November 2005 to drill, construct and develop boreholes for hospitals in North-Eastern and Central Kenya at a contract price of about Kshs. 35.8 million, donor-funded by the International Development Association. The contractor claimed breach, alleging delayed possession, lack of supervision, delayed and improper payments and wrongful withdrawal of Lot 5/Zone E, and sought special damages of Kshs. 101,939,381.79 plus general damages. The High Court (M. Odero, J.) found a valid contract breached by the respondent, but awarded only the retention monies of Kshs. 1,511,500.06 with interest at court rates, holding that the special damages were not strictly proved and that general damages were unavailable absent proof of oppressive or vindictive conduct. The Court of Appeal, in a single unanimous judgment of the bench of Gatembu Kairu, Ochieng and Muchelule, JJA, dismissed the appeal. It affirmed the trial court, holding that the appellant failed to complete the works even within the extended completion date and was liable to liquidated damages under Clause 49; that interest claims failed because the payment certificates were never certified as the contract required and the contract was silent on interest on retention monies; that there was no contractual basis for the project-management compensation claim; and that the reduced-scope, Zone E and loss-of-earnings claims rested on unsupported desktop projections by the appellant's accountant. Because the works were of a public nature, each party was ordered to bear its own costs of the appeal.

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 erred in concluding that the appellant did not discharge its burden of establishing its claims to the required standard
  2. 2.Whether the appellant was liable to pay liquidated damages for delayed completion and whether the deduction of Kshs. 1,950,725.10 was justified
  3. 3.Whether the appellant proved its claims for interest on late payments and on retention monies
  4. 4.Whether there was any contractual basis for the claim for compensation for performing the role of project manager and site supervisor
  5. 5.Whether the claims for reduced scope of work, wrongful withdrawal of Lot 5/Zone E, and loss of earnings for extended time on site were proved

Key legal issues

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01

Duty of a first appellate court

Holding

The Court of Appeal on a first appeal must re-evaluate the evidence and draw its own conclusions, while bearing in mind it neither saw nor heard the witnesses.

Reasoning

Citing Abok James Odera and Kenya Ports Authority v Kuston (Kenya), the Court restated that its primary role as a first appellate court is to re-evaluate, re-assess and re-analyse the evidence on the record and determine whether the trial judge's conclusions should stand, giving reasons either way, and to rule only on the evidence on record without introducing extraneous matters.

p. 5
02

Liquidated damages for delayed completion

Holding

The appellant, having failed to complete the works even within the extended completion date, was contractually liable to pay liquidated damages, and the employer was entitled to deduct them from payments due.

Reasoning

Clause 49 of the Conditions of Contract obliged the contractor to pay liquidated damages per day for late completion, which the employer could deduct from payments due. The correspondence showed the appellant applied for extensions, received an extension only to 30 April 2007, and still failed to complete on time, so the trial judge's conclusion was well supported by the evidence.

p. 5
03

Proof of special damages

Holding

The claims for special damages beyond the retention monies failed because they were not strictly proved; figures produced by the appellant's in-house accountant, without documentary support or audited accounts, do not discharge the burden of proof on a balance of probabilities.

Reasoning

The Court affirmed the settled principle that special damages must be specifically pleaded and strictly proved. The appellant listed alleged losses but tendered no supporting receipts, invoices or audited accounts, relying only on computations by its accountant. Claims for interest also failed because the underlying payment certificates were never certified as the contract required.

p. 7
04

Contractual basis for claims

Holding

A party cannot claim compensation for services (such as acting as project manager) or interest where the contract makes no provision for them and no variation was made.

Reasoning

The Court agreed with the trial judge that the Project Manager was identified with specificity in the contract and no variation was made to that provision, so there was no basis for the claim for performing that role. Similarly, since the contract was silent on interest on retention monies, there was no contractual basis to award it, though interest at court rates was allowed on the retention amount.

p. 6

Legal principles established

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  • On a first appeal, the Court of Appeal must re-evaluate, re-assess and re-analyse the evidence on the record and determine whether the conclusions of the trial judge are to stand, while making due allowance for the fact that it did not see or hear the witnesses.
  • Special damages must not only be specifically pleaded but must also be strictly proved, with documentary evidence; mere figures generated by a party's accountant without supporting documents or audited accounts do not suffice.
  • General damages are not ordinarily awardable for breach of contract, save where the defendant's conduct is proved to be oppressive, high-handed, outrageous, insolent or vindictive.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Each party shall bear its own costs of the appeal

The bench

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

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
Jurisdiction invoked
First appeal to the Court of Appeal under Rule 31 of the Court of Appeal Rules

Relief refused

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Certified payments/liquidated damages claim of Kshs. 1,950,725.10

Appellant failed to complete the works on time despite extension, and Clause 49 of the Conditions of Contract provided a contractual basis for liquidated damages for delayed completion

p. 6

Interest on late payments of Kshs. 34,780,183.79 and Kshs. 69,152.71

The payment certificates on which the claims were based were neither certified by the project manager nor by a person appointed by the 1st respondent in accordance with the contract

p. 6

Interest on retention monies

The contract is silent on interest on retention monies, so there was no contractual basis to award it

p. 6

Compensation for performing the role of project manager and site supervisor (Kshs. 2,367,152.98)

No contractual basis was established; the Project Manager was identified with specificity in the contract and no variation was made

p. 6

Claim for reduced scope of work (Kshs. 3,651,348.60) and wrongful withdrawal of Lot 5/Zone E (Kshs. 2,548,606.43)

No evidence that a contract for Zone E was concluded or that the appellant mobilised for those works

p. 7

Claim for extended time on site and loss of earnings (Kshs. 19,599,828.08)

Not proved beyond a desk-top computation and projections by the appellant's accountant

p. 7

General damages for malice, vindictiveness or high-handedness

No evidence tendered to prove malice, vindictiveness or high-handedness in the conduct of the 1st respondent

Costs

Given the public nature of the works the appellant was executing, we order that each party shall bear its own costs of the appeal.

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.

This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re- evaluate, re-assess and reanalyse the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way.
p. 4Duty of first appellate court
the appellant merely suggested figures without backing any of those figures "with documentary evidence by way of receipts, invoices etc"
p. 3Strict proof of special damages
generally, courts do not award general damages for breach of contract, but an exception to the rule is in cases where "the conduct of the defendant is proved to be oppressive, highhanded, outrageous, insolent or vindictive."
p. 3General damages for breach of contract
The appeal fails and is hereby dismissed. Given the public nature of the works the appellant was executing, we order that each party shall bear its own costs of the appeal.
p. 7Final orders and costs

Issues in the judgment

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minor

The judgment states two different dates for the High Court judgment: 28th June 2019 in the opening paragraph and 14th March 2019 later.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Turn-O-Metal Engineers Limited v Ministry of Medical Services & another (Civil Appeal 552 of 2019) [2025] KECA 896 (KLR)", Case Analysis (2025). Civil Appeal (memorandum of appeal; number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/896/eng@2025-05-23

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