(Being an appeal from the ruling of Hon. Symphie N. Makila, Principal Magistrate, delivered by Hon. D. K. Mutai, Principal Magistrate, on 24 th May 2023 in Kitale CMCC No. 670 of 2002)
JUDGMENT.
1. This only matter pending in this appeal, dated 9 th December 2024 , is one of when date of interest on liquidated sums runs from. Briefly, the Appellant file suit in Kitale CMCC No. 670 of 2002 . Judgment was delivered on 13 th December 2018 and the court delivered a judgment with a declaration that the Respondent was liable to pay the Appellant a sum of Kshs. 2,108,080.00 . The Appellant was also awarded the costs of the suit and interest till full payment.
2. Being dissatisfied by the decision of the trial court on the interest decreed, the Respondent lodged an application for review seeking that interest be calculated a 6%, per annum. The application was declined by the trial court. The Respondent subsequently filed the appeal herein seeking for various orders including the declaration on the applicable interest rate and the commencement date for the liquidated sum.
3. In the ruling of the appellate court delivered on the 27 th October 2022, the High Court made a determination on all the issues raised in the Memorandum of Appeal save for the issue of when interest would run in regard to the liquidated sum. The Judge referred the matter back to the subordinate court to compute interest at 6% and the court on the application of the Appellant to determine the applicable date, directed that the same will be from the date of judgment until full payment. Dissatisfied by the directive, the Appellant has since filed the second appeal.
4. I note that the Appellant has filed a fresh Record of Appeal for the court to determine the pending issue. I deem that it would have sufficed for the Appellant to seek for a review/clarification of the ruling of 27 th October 2022, as opposed to initiating a fresh appeal on the same. Be that as it may, I see no prejudice in proceeding with the determination as sought.
5. In the Memorandum of Appeal dated 21 st June 2023, the Appellant set out the Grounds of Appeal as follows:
“ 1. THAT the learned magistrate erred in law in failing to find that interest on the adjudged principal amount of Kshs. 2,108,080 should be calculated from the date of filing of the suit until payment in full.
2. THAT the learned magistrate erred in law and fact by failing to find that the appellant's claim having been for the liquidated amount of Kshs. 2,108,080, which was awarded by the trial magistrate, interest on the said amount should be calculated from the date the suit was filed until payment in full.
3. THAT the learned magistrate erred in law and fact in finding that interest stopped running when Kitale HCCA No. 18B of 2020; Kenindia Assurance Company Limited vs Peter Macharia Kariuki was pending before this Honourable Court.
4. THAT the finding by the learned magistrate that this Honourable Court pronounced itself in Kitale HCCA No. 18B of 2020; Kenindia Assurance Company Limited vs Peter Macharia Kariuki on the date from which interest on the sum of Kshs. 2,108,080 should run is erroneous.
5. THAT the learned magistrate erred in law and fact by failing to consider the appellant's grounds of opposition, the appellant's submissions, and the authority cited by the appellant.
6. THAT the decision of the learned magistrate was plainly wrong .
6. The Grounds of Appeal can be summed up into two main ground. These are:
“ i. If the ruling if the High Court determined the issue in the ruling dated 27 th October 2022.
ii. When interest on the liquidated sum commences computation .
7. On the first issue, I have carefully read through the ruling of the appellate court dated 27 th October 2022. It is clear that the court commenced the consideration of the application statute to determine the issue but did not pronounce itself in the issue in the final determination. It is therefore apt that this court pronounces itself on the same and brings this matter to a close, at least at this stage.
8. On the second issue, I have also had the benefit of carefully reading the ruling of my brother Hon. Justice Mrima delivered on the 27 th October 2022. I note at paragraph 35 of the ruling that he cited section 26 of the Civil Procedure Act (CPA). For the purpose of this short ruling, I will reproduce the same herein:
“( 1) Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.
(2) Where such a decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have ordered interest at 6 per cent per annum ”.
9. At paragraph 36 of the same ruling, the Judge made the following observation. Under section 26 (1) of the of the CPA, a court passing a money decree may order payment of interest in the following manner:
(i) Interest from the date of institution of the suit to the date of the decree.
(ii) Interest from a period before the institution of the suit to the date of the decree.
(iii) Further interest from the date of the decree to the date of the payment or such earlier date as the court thinks fit .
10. From the reminder of the ruling, the learned Judge proceeded to determine the issue of interest rate but did not pronounce himself on the issue of commencement of the computation of interest. I have no doubt however that the same was an oversight as the learned Judge had already set the ground to facilitate the determination of the issue.
11. The provisions of the Act are fairly straight forward. Under Section 26 (1) of the CPA, the Act clearly provides that interest on a money decree is computed from the date of the suit. What is the import of the same? The date of the suit is the date when the claim is lodged in court or a tribunal, for the purpose of adjudicating on the same. In the case of a suit, such as in this case, the applicable date is 27 th November 2002 when the present suit was filed and the filing fees paid.
12. While the provisions of section 26 (1) of the CPA appear to be couched in permissive terms by using the word ‘ may ’, I have no doubt that the same is in relation to the interest rate and not the date of commencement. The courts intervention is called upon where the court seeks to depart from the date of filing to a date prior to the filing of the suit and which shall thus be calculated based on the circumstances of each case.
13. This position is fortified by the wordings in section 26 (2) of the CPA. The statute provides that where the decree is silent on the interest rate, then the applicable interest rate shall be 6%. As was evidenced by the finding of my brother on the same, the court determined the interest rate at 6% in the current matter.
14. Further, in the case cited by the Appellant, being Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd (No.2) [1970] 1 EA 469 (CAN ), the Court of Appeal held as follows:
" The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing suit. Where, however, damages have to be assessed by the court, the right to those damages does not arise until they are assessed and therefore interest is only given from the date of judgment ."
15. The Respondents have cited the case of New Tyres Enterprises Limited -vs- Kenya Alliance Insurance Company Ltd [1988] eKLR where the Court of appeal stated as follows:
" In the present case the liability of the respondent to pay for the appellant's loss was not determined until the date of judgment and that is the date from which interest should be payable. I am satisfied that the judge's order is perfectly in consonance with the normal practice and was a proper and fair exercise of his discretion ”.
16. A close reading of the entire determination however paints a different outcome. At page 2 of the Judgment, the court observed thus:
“ The allegation case came before Gachuhi J, (as he then was) who found on the evidence before him that judgment by the respondent that there had been a previous burglary had not been proved and gave for the appellant for the amount claimed together with interest and costs. He awarded interest on the date principal of taxation, sum at the rate of 12% pa from the date of filing suit (emphasis mine) , and on costs at the same rate from until payment in full.
The Court was informed from the bar that the full amount payable under the decree has been paid. The Appellant now appeals to this Court on the following grounds:
(1) The learned judge erred in awarding the appellant interest at the rate of 12% pa on the principal sum of Kshs 781,219 only from January 20, 1984 being the date of filing of the action and not from February 4, 1983 being the date of repudiation of liability.
(2) The learned judge erred in awarding the appellant interest at the Court rate of 12% pa on costs only from the date of taxation and not from the date of filing of the action." At the commencement of this appeal, Mr Omesh Kapila, learned counsel for the appellant, very wisely abandoned the second ground of appeal and made submissions only in relation to the first ground only ”.
17. In the final orders, the three judges made the unanimous conclusions as follows:
“ the upshot this appeal fails and is dismissed with costs.
Masime JA. The facts of the case from which this appeal arises are clearly set out in the judgment of Kwach Ag JA which I have read in draft. The only ground argued in this appeal is an objection to the learned trial judge's exercise of discretion in awarding interest on the decretal amount. I agree with Kwach Ag JA that there is no reason disclosed for this Court to interfere with the learned trial judge's exercise of discretion. Consequently, this appeal should be dismissed with costs. As Gicheru Ag JA agrees it is so ordered.
Gicheru Ag JA. I have read in draft the judgments of Masime JA and Kwach Ag JA and I agree that this appeal should be dismissed with costs to the respondent ”.
18. It is therefore evident that the Court of Appeal in the cited judgment upheld the determination of the trial judge that had awarded interest on the decretal sum from the date if filing suit until full payment, and not from the date of judgment. I can’t agree more with that position.
19. Having so found, and to avoid ambiguity, I deem it proper to direct on when the application interest should cease. It is generally agreed that the Respondent paid the decretal sum as adjudged by the trial court on 18 th August 2020. I would be inclined to direct that the same date be the cut-off date for the calculation of interest on the decretal sum. The Respondent should not be burden with the interest that accrued after that date, for a delay that is not of their making.
20. I have considered the Respondents submissions that the applicable date would fall afoul the provisions of section 4 of the Limitation of Actions Act. I have also considered the authorities cited by Counsel. Judgment in the primary suit having been delivered on 13 th December 2018 and having made the determination that the cut-off date for calculating interest is 18 th August 2020, then I deem that the sting of section 4 of the Limitation of Actions Act is extinguished as the difference is only two years and the Act permits a period of 6 years.
21. The upshot is that the appeal succeeds in part and I make the following orders:
a. The Judgment of the High Court delivered on the 27 th October 2022, did not determine the issue of when interest on the decretal sum should be computed.
b. The ruling of the trial court of 24 th May 2023, by Hon. S. M. Makila, Principal Magistrate, is set aside to the extent that interest was to be computed form the date of judgment and substituted with an order that interest shall run from the date of filing suit until 18 th August 2020.
c. Each party to bear their costs of the appeal .
Dated, signed and delivered virtually via Microsoft Teams this 3 rd Day of September 2026.
HCCA NO. E039 of 2023 PETER MACHARIA KARIUKI VS KENINDIA ASSURANCE CO. LTD RULING Pg. 8
JUDGMENT.
1. This only matter pending in this appeal, dated 9 th December 2024 , is one of when date of interest on liquidated sums runs from. Briefly, the Appellant file suit in Kitale CMCC No. 670 of 2002 . Judgment was delivered on 13 th December 2018 and the court delivered a judgment with a declaration that the Respondent was liable to pay the Appellant a sum of Kshs. 2,108,080.00 . The Appellant was also awarded the costs of the suit and interest till full payment.
2. Being dissatisfied by the decision of the trial court on the interest decreed, the Respondent lodged an application for review seeking that interest be calculated a 6%, per annum. The application was declined by the trial court. The Respondent subsequently filed the appeal herein seeking for various orders including the declaration on the applicable interest rate and the commencement date for the liquidated sum.
3. In the ruling of the appellate court delivered on the 27 th October 2022, the High Court made a determination on all the issues raised in the Memorandum of Appeal save for the issue of when interest would run in regard to the liquidated sum. The Judge referred the matter back to the subordinate court to compute interest at 6% and the court on the application of the Appellant to determine the applicable date, directed that the same will be from the date of judgment until full payment. Dissatisfied by the directive, the Appellant has since filed the second appeal.
4. I note that the Appellant has filed a fresh Record of Appeal for the court to determine the pending issue. I deem that it would have sufficed for the Appellant to seek for a review/clarification of the ruling of 27 th October 2022, as opposed to initiating a fresh appeal on the same. Be that as it may, I see no prejudice in proceeding with the determination as sought.
5. In the Memorandum of Appeal dated 21 st June 2023, the Appellant set out the Grounds of Appeal as follows:
“ 1. THAT the learned magistrate erred in law in failing to find that interest on the adjudged principal amount of Kshs. 2,108,080 should be calculated from the date of filing of the suit until payment in full.
2. THAT the learned magistrate erred in law and fact by failing to find that the appellant's claim having been for the liquidated amount of Kshs. 2,108,080, which was awarded by the trial magistrate, interest on the said amount should be calculated from the date the suit was filed until payment in full.
3. THAT the learned magistrate erred in law and fact in finding that interest stopped running when Kitale HCCA No. 18B of 2020; Kenindia Assurance Company Limited vs Peter Macharia Kariuki was pending before this Honourable Court.
4. THAT the finding by the learned magistrate that this Honourable Court pronounced itself in Kitale HCCA No. 18B of 2020; Kenindia Assurance Company Limited vs Peter Macharia Kariuki on the date from which interest on the sum of Kshs. 2,108,080 should run is erroneous.
5. THAT the learned magistrate erred in law and fact by failing to consider the appellant's grounds of opposition, the appellant's submissions, and the authority cited by the appellant.
6. THAT the decision of the learned magistrate was plainly wrong .
6. The Grounds of Appeal can be summed up into two main ground. These are:
“ i. If the ruling if the High Court determined the issue in the ruling dated 27 th October 2022.
ii. When interest on the liquidated sum commences computation .
7. On the first issue, I have carefully read through the ruling of the appellate court dated 27 th October 2022. It is clear that the court commenced the consideration of the application statute to determine the issue but did not pronounce itself in the issue in the final determination. It is therefore apt that this court pronounces itself on the same and brings this matter to a close, at least at this stage.
8. On the second issue, I have also had the benefit of carefully reading the ruling of my brother Hon. Justice Mrima delivered on the 27 th October 2022. I note at paragraph 35 of the ruling that he cited section 26 of the Civil Procedure Act (CPA). For the purpose of this short ruling, I will reproduce the same herein:
“( 1) Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.
(2) Where such a decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have ordered interest at 6 per cent per annum ”.
9. At paragraph 36 of the same ruling, the Judge made the following observation. Under section 26 (1) of the of the CPA, a court passing a money decree may order payment of interest in the following manner:
(i) Interest from the date of institution of the suit to the date of the decree.
(ii) Interest from a period before the institution of the suit to the date of the decree.
(iii) Further interest from the date of the decree to the date of the payment or such earlier date as the court thinks fit .
10. From the reminder of the ruling, the learned Judge proceeded to determine the issue of interest rate but did not pronounce himself on the issue of commencement of the computation of interest. I have no doubt however that the same was an oversight as the learned Judge had already set the ground to facilitate the determination of the issue.
11. The provisions of the Act are fairly straight forward. Under Section 26 (1) of the CPA, the Act clearly provides that interest on a money decree is computed from the date of the suit. What is the import of the same? The date of the suit is the date when the claim is lodged in court or a tribunal, for the purpose of adjudicating on the same. In the case of a suit, such as in this case, the applicable date is 27 th November 2002 when the present suit was filed and the filing fees paid.
12. While the provisions of section 26 (1) of the CPA appear to be couched in permissive terms by using the word ‘ may ’, I have no doubt that the same is in relation to the interest rate and not the date of commencement. The courts intervention is called upon where the court seeks to depart from the date of filing to a date prior to the filing of the suit and which shall thus be calculated based on the circumstances of each case.
13. This position is fortified by the wordings in section 26 (2) of the CPA. The statute provides that where the decree is silent on the interest rate, then the applicable interest rate shall be 6%. As was evidenced by the finding of my brother on the same, the court determined the interest rate at 6% in the current matter.
14. Further, in the case cited by the Appellant, being Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd (No.2) [1970] 1 EA 469 (CAN ), the Court of Appeal held as follows:
" The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing suit. Where, however, damages have to be assessed by the court, the right to those damages does not arise until they are assessed and therefore interest is only given from the date of judgment ."
15. The Respondents have cited the case of New Tyres Enterprises Limited -vs- Kenya Alliance Insurance Company Ltd [1988] eKLR where the Court of appeal stated as follows:
" In the present case the liability of the respondent to pay for the appellant's loss was not determined until the date of judgment and that is the date from which interest should be payable. I am satisfied that the judge's order is perfectly in consonance with the normal practice and was a proper and fair exercise of his discretion ”.
16. A close reading of the entire determination however paints a different outcome. At page 2 of the Judgment, the court observed thus:
“ The allegation case came before Gachuhi J, (as he then was) who found on the evidence before him that judgment by the respondent that there had been a previous burglary had not been proved and gave for the appellant for the amount claimed together with interest and costs. He awarded interest on the date principal of taxation, sum at the rate of 12% pa from the date of filing suit (emphasis mine) , and on costs at the same rate from until payment in full.
The Court was informed from the bar that the full amount payable under the decree has been paid. The Appellant now appeals to this Court on the following grounds:
(1) The learned judge erred in awarding the appellant interest at the rate of 12% pa on the principal sum of Kshs 781,219 only from January 20, 1984 being the date of filing of the action and not from February 4, 1983 being the date of repudiation of liability.
(2) The learned judge erred in awarding the appellant interest at the Court rate of 12% pa on costs only from the date of taxation and not from the date of filing of the action." At the commencement of this appeal, Mr Omesh Kapila, learned counsel for the appellant, very wisely abandoned the second ground of appeal and made submissions only in relation to the first ground only ”.
17. In the final orders, the three judges made the unanimous conclusions as follows:
“ the upshot this appeal fails and is dismissed with costs.
Masime JA. The facts of the case from which this appeal arises are clearly set out in the judgment of Kwach Ag JA which I have read in draft. The only ground argued in this appeal is an objection to the learned trial judge's exercise of discretion in awarding interest on the decretal amount. I agree with Kwach Ag JA that there is no reason disclosed for this Court to interfere with the learned trial judge's exercise of discretion. Consequently, this appeal should be dismissed with costs. As Gicheru Ag JA agrees it is so ordered.
Gicheru Ag JA. I have read in draft the judgments of Masime JA and Kwach Ag JA and I agree that this appeal should be dismissed with costs to the respondent ”.
18. It is therefore evident that the Court of Appeal in the cited judgment upheld the determination of the trial judge that had awarded interest on the decretal sum from the date if filing suit until full payment, and not from the date of judgment. I can’t agree more with that position.
19. Having so found, and to avoid ambiguity, I deem it proper to direct on when the application interest should cease. It is generally agreed that the Respondent paid the decretal sum as adjudged by the trial court on 18 th August 2020. I would be inclined to direct that the same date be the cut-off date for the calculation of interest on the decretal sum. The Respondent should not be burden with the interest that accrued after that date, for a delay that is not of their making.
20. I have considered the Respondents submissions that the applicable date would fall afoul the provisions of section 4 of the Limitation of Actions Act. I have also considered the authorities cited by Counsel. Judgment in the primary suit having been delivered on 13 th December 2018 and having made the determination that the cut-off date for calculating interest is 18 th August 2020, then I deem that the sting of section 4 of the Limitation of Actions Act is extinguished as the difference is only two years and the Act permits a period of 6 years.
21. The upshot is that the appeal succeeds in part and I make the following orders:
a. The Judgment of the High Court delivered on the 27 th October 2022, did not determine the issue of when interest on the decretal sum should be computed.
b. The ruling of the trial court of 24 th May 2023, by Hon. S. M. Makila, Principal Magistrate, is set aside to the extent that interest was to be computed form the date of judgment and substituted with an order that interest shall run from the date of filing suit until 18 th August 2020.
c. Each party to bear their costs of the appeal .
Dated, signed and delivered virtually via Microsoft Teams this 3 rd Day of September 2026.
HCCA NO. E039 of 2023 PETER MACHARIA KARIUKI VS KENINDIA ASSURANCE CO. LTD RULING Pg. 8