1. The plaintiff instituted this suit vide a plaint dated 13/5/2022 whereby he claimed that the defendant breached the contract that they had entered into for the supply of Burundi Arabica Green Coffee.
2. The plaintiff sought the following prayers:
“ i. The sum of USD 259,272.00/=
ii. Interest on (i) above at court’s rate from the dates the amount fell due until payment in full.
iii. General damages for breach of contract.
iv. Special damages of USD 228,701/- for transport cost spent in coming to Kenya, accommodation and bank interest charges borne by the Plaintiff arising from the Defendant’s breach of contract.
v. Costs of the suit.
vi. Any other order that the court deems fit.”
3. On 13/2/2023, when this matter came up for hearing, the parties herein recorded a consent where it was agreed that judgment be entered in favour of the plaintiff as against the defendant for the principal amount of USD 259,272/- payable in 12 months’ installments of USD 21,606/- starting from March 2024. The said consent was on that day adopted as a judgment of this court.
4. The court directed the parties to submit on the remaining issues, that is, interest, general damages, special damages and costs.
5. Accordingly, the plaintiff filed written submissions dated 29/2/2024 while the defendant filed submissions dated 12/4/2024. The court has analysed and considered the submissions filed by the parties.
Analysis and determination:
6. The first issue for determination is whether the plaintiff is entitled to interest on the principal amount of USD 259,272.00/- from the date it fell due until payment in full.
7. On this issue, the plaintiff submitted that the defendant’s neglect and/or refusal to settle the debt owed to the plaintiff for a period of over seven years caused him financial stagnation and crippled his various projects and the expansion of his business due to lack of sufficient finances. He submitted that his coffee business has been struggling as he has been seeking funds to pay the loan he took to source the coffee and that he is still repaying the loan to date.
8. On its part, the defendant submitted that the parties had not put an interest clause in their contract therefore it would be unfair and amount to rewriting the contract by giving an order on interest.
9. On this, I am guided by section 26(1) of the Civil Procedure Act which states:
“ (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.”
10. My understanding of the provision above is that the court is clothed with the discretion to order the payment of interest on the principal sum and on what period such an interest should be levied.
11. In Omega Enterprises Kenya Limited vs Eldoret Sirikwa Hotel Limited & Others Civil Appeal No. 235 of 2001, the Court of Appeal held:
“There is no doubt that if a party is deprived of the use of his money he must be compensated therefore by an award of interest thereon from the date he was so deprived.”
12. In Nalinkumar M. Shah vs. Mumias Sugar Company Ltd [2010] eKLR the court held:
“ ...Kenyan courts have power at common law to award interest for late payment of debt or damages irrespective of whether or not there is an agreement between the parties and there is also no impediment to awarding compound interest for the late payment if circumstances justify the same and if such interest will serve the ends of justice. After all, a commercial transaction deserves the same treatment whether and wherever it takes place.”
13. In this case, there was a contract that stipulated how and when payment was due for the supply of coffee by the plaintiff. The defendant failed to pay the agreed sums in accordance with the agreement and only made payment when a consent was recorded.
14. In my view, it would be in the interest of justice for interest to be charged from the date when the contractual sum was due (when the plaintiff was deprived of the use of that money) until payment in full.
15. The second issue for determination is whether the plaintiff is entitled to general damages.
16. The plaintiff submitted that although general damages for breach of contract are normally not granted there are exceptions to the rule as was held in the case of Capital Fish Kenya Limited vs. Kenya Power & Lighting Company Limited 2016 eKLR, he was in this case entitled to the award of the same since the transaction the subject of these proceedings took place way back in 2016, and that the plaintiff followed up with the payment severally with the plaintiff traveling to Kenya numerous times at his own expense in pursuit of the debt.
17. The Plaintiff maintained that the defendant’s conduct was oppressive and unreasonable, entitling the Plaintiff to general damages.
18. The defendant on the other hand submitted that it conceded to the claim indicating that it was always ready to pay the decretal amount but it encountered difficult times. It urged the court not to award general damages.
19. It is trite that the primary remedy for a breach of contract is compensatory damages, which aim to place the injured party in the position they would have been in had the contract been performed as agreed. General damages are typically not recoverable in breach of contract cases. This was emphasized in the Court of Appeal case of National Industrial Credit Bank Limited v. Aquinas Francis Wasike & Another [2006] eKLR, where the court stated:
" As a general rule, no general damages are recoverable in cases of alleged breach of contract."
20. The Court of Appeal in the case of Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited [2016] KECA 56 (KLR), considered the issue of exceptions to the general rule that general damages are not granted in breach of contract cases. The court stated the following:
“ On the second issue, the appellant conceded that whereas the general legal principle is that courts do not normally award damages for breach of contract, there are exceptions such as when the conduct of the respondent is shown to be oppressive, high-handed, outrageous, insolent, or vindictive. In support of this proposition, the appellant relied on the Nigerian case of Marine Management Association & Another vs National Maritime Authority (2012) 18 NWLR 504. …
The appellant having conceded to the general proposition regarding the award of damages for breach of contract, it was incumbent upon it to lead evidence so as to bring the respondent’s conduct into the exceptions it alluded to above. In this case the mere fact that the appellant wrote several letters to the respondent without remedial measure being undertaken immediately cannot amount to oppressiveness, insolent or vindictive behaviour. The correspondence was responded to explaining what was being undertaken. The fact that the respondent took no corrective action only making incessant promises that the issue was under investigations is not of itself evidence of high handedness, outrageous, or insolent conduct. Further there was no agreement at the time as to the real cause of power outages. There was a blame game between them which went on for a long time. In those circumstances we do not see how the respondent can be accused of being oppressive, high handed, outrageous, insolent or even vindictive.”
21. From the record, it is evident that in this case, the plaintiff followed up on his payment several times without much success, and the defendant entered into payment agreements with the plaintiff, which it never honoured.
22. While the conduct of the defendant was undoubtedly frustrating to the plaintiff and in breach of the contract between the parties, I am of the view circumstances pointed out by the plaintiff are ordinary follow-ups of the debt and do not amount to oppressive, high-handed, outrageous, insolent, or even vindictive behavior on the part of the defendant. Consequently, I find that the plaintiff is not entitled to general damages for the breach of contract.
23. The third issue for determination is whether the plaintiff is entitled to special damages of USD 228,701/-.
24. The plaintiff submitted that it is entitled to special damages of USD 228,701 for transport costs spent in coming to Kenya, accommodation and bank interest charges.
25. The plaintiff produced invoices and receipts for air tickets and receipts for accommodation during the days he had to travel to Kenya in an attempt to recover money from the defendant. The aforementioned documents are produced in the plaintiff’s bundle of documents dated 20/5/2022.
26. The plaintiff further asserted that he took a loan in order to meet the defendant’s order, in the hope that he would repay the loan once the defendant paid the purchase price as agreed. The plaintiff further submitted that due to the defendant’s refusal to settle the amount owed, there has been an accumulation of interest on the loan at the rate of 16.5% annually payable to Interbank Burundi as a result of default in the loan repayment In support of this assertion, the plaintiff produced the loan approval letter by Interbank Burundi dated 11/4/2016.
27. On its part, the defendant submitted that the claim for accommodation, interest on bank charges, and transport were not directly associated with the breach.
28. The nature of special damages was discussed in the Court of Appeal case of Hahn vs. Singh, Civil Appeal No. 42 of 1983 [185] KLR 716, where the court held as follows:-
“ Special damages must not only be specifically claimed (pleaded) but also strictly proved...for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and nature of the acts themselves."
29. In Hydro Water Well (K) Limited v Sechere & 2 others (sued in their representative capacity as the officers of Chae Kenya Society & 2 others (Sued in their representative capacity as the officers of Chae Kenya Society) [2021] KEHC 22 (KLR)
“ Our decisional law is quite clear that one consequence of this general principle is that a party claiming special damages must demonstrate that they actually made the payments or suffered the specific injury before compensation is permitted. A natural corollary of this has been that the courts have insisted that a party must present actual receipts of payments made to substantiate loss or economic injury. In this regard, our courts have held that only a receipt meets the test.”
30. I have considered the invoices, receipts, and air tickets produced by the plaintiff on pages 30-41 in his bundle of documents. The documents constitute air travel invoices, hotel accommodation receipts and receipts for covid 19 tests with different dates between 2019 to 2021. I note that some of the said documents indicate the name of the plaintiff while others bear the names of other individuals not related to this suit.
31. I note further that although the plaintiff produced these documents, he did not demonstrate to the court how the documents are directly related to his alleged travels to Kenya in order to follow up with the debt owed by the defendant. There is no proof that the plaintiff travelled to Kenya for the purposes of following up with the defendant on the contractual debt.
32. Similarly the loan approval document that the plaintiff produced on pages 51 to 53 of his bundle claiming bank interest from the defendant, has not been shown to be a direct result of the breach of contract by the defendant. As stated in Hahn vs. Singh (supra), special damages must not only be specifically claimed but also strictly proved for they are not the direct natural or probable consequence of the act complained of.
33. Accordingly, I find therefore that the plaintiff has not strictly proved the special damages that he claims.
34. The final issue for determination is whether the plaintiff is entitled to the costs of this suit.
35. It is trite law that costs follow the event. In this case, the defendant failed to honour the terms of the contract between the parties and the subsequent agreements entered into by the parties. This led the plaintiff to send a demand letter to the defendant dated 15/12/2021 and to the institution of this suit which was subsequently settled vide a consent.
36. It is plausible that the plaintiff incurred costs in filing this suit, legal fees, and other incidental costs. I therefore award the plaintiff the costs of this suit.
Disposition
37. In the end, these are the court’s final orders:
i. Interest is hereby granted from the date when the contractual sum was due until payment in full.
ii. The claim for general damages is hereby denied.
iii. Special damages is not proven to the required standards and is hereby denied.
iii. Cost of the suit granted to the plaintiff.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 13TH DAY OF MARCH 2025
ADO MOSES
JUDGE
In the presence of:-
Moses – Court Assistant