[2019] KEHC 9342 (KLR)
The court held that pre-judgment interest on special damages is justified to fully compensate the plaintiff for the loss suffered from the time the cause of action arose until judgment. The rationale is both compensatory and to encourage early settlement by the defendant. The court exercised its discretion under...
Source-derived case information.
- Citation
- [2019] KEHC 9342 (KLR)
- Parties
- Plaintiff: Franco Esposito; Defendant: Assia Animal Health Limited
- Court
- High Court
- Court Station
- High Court at Malindi
- Jurisdiction
- Kenya
- Case Number
- Civil Case 43 of 2010
- Procedural Posture
- Civil Case / Post Judgment Application for Interest on Special Damages
- Outcome
- Application allowed.
- Judges
- DB Nyakundi
- Legal Topics
- Award of Interest, Special Damages, Pre Judgment Interest, Discretion of Court
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Franco Esposito
Plaintiff
Assia Animal Health Limited
Defendant
Procedural Posture
Civil Case / Post Judgment Application for Interest on Special Damages
Legal Issues
- 1 Whether pre-judgment interest on special damages should be awarded from the date of filing suit.
- 2 What is the applicable rate and period for interest on special damages in civil claims.
Ratio Decidendi
The court held that pre-judgment interest on special damages is justified to fully compensate the plaintiff for the loss suffered from the time the cause of action arose until judgment. The rationale is both compensatory and to encourage early settlement by the defendant. The court exercised its discretion under Section 26(1) of the Civil Procedure Act to award pre-judgment interest on special damages at the rate of 14% per annum from the date of filing suit until payment in full. The court found that this approach aligns with established legal principles and relevant case law, ensuring the plaintiff is not unjustly deprived of the use of money due to the defendant's wrongful act.
Court Disposition
Application allowed.
Orders
- Pre-judgment interest on the award of special damages to be calculated at 14% per annum from the date the suit was filed until payment in full.
- Plaintiff awarded costs of the application.
Full Case Text
Judgment text and source record
26 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT MALINDI
CIVIL CASE NO. 43 OF 2010
FRANCO ESPOSITO............................................................PLAINTIFF
VERSUS
ASSIA ANIMAL HEALTH LIMITED.............................DEFENDANT
RULING
The application filed by the plaintiff on 1st March, 2019 against the defendant/respondent is to seek the legal position regarding award of interest applicable on the award of special damages. This application is based on the judgement delivered on 4th December, 2017 in favour of the plaintiff as against the defendant for an award of general and special damages, costs and interest of the suit.
The Law
The provision of interest in civil claims/judgements is provided for in Section 26(1) of the Civil Procedure Act which states as follows:
“Where most in so far as a decree is for payment of money, the court may in the decree order interest at such rates 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.”
The legislature therefore made it clear that the award of interest under Section 26 of the Act relate to prejudgment period and post judgement at the conclusion of the suit. The provision gives discretion to the court to subject the award to various levels of interest subject to the substantive claims in the judgement.
In the case of the so called contract interest to be awarded is normally set out in the agreement. The court in interpreting the contract will have to give effect to the clause on interest unless there are factors that are in conflict with the law or public policy on rate of interest being awarded by one party against another in the contract. The court in such circumstances has the discretion to interfere with the rate of interest so as to do justice to the parties.
In the case of Prem Lata v Peter Musa Mbiyu 1965 EA 592 the court held on the issue of interest as follows:
“In both these cases, the successful party was deprived of the use of goods or money by reason of the wrongful act on the part of the defendant, and in such a case it is clearly right that the party who has been deprived of the use of goods or money to which he is entitled should be compensated for such deprivation by the award of interest.”
That being so the justification for an award of interest on the principal sum is generally speaking to compensate a plaintiff for the deprivation of any money or specific goods through the wrongful Act of the defendant. With regard to pre-judgement rate of interest contemplated by Section 26(1) of the Act it’s observed those special damages commenced accruing interest on the day the plaintiff suffered actual loss occasioned by the tortfeasor or the defendant.
In the instant case I have in mind the medical expenses and related costs and loss of motor vehicle KBH 619X. The rationale is twofold, first in my view court’s award pre-judgement interest to compensate the plaintiff fully for the loss of money from the time the cause of action arose until the time of judgement. Secondly, it’s to encourage the tortfeasor to settle the claim for actual loss in advance without resorting to litigation. On my part I agree with the applicant on this issue of interest calculation to run from the date of filing suit.
In the circumstances the applicant motion succeeds for the relief of pre-judgement interest on the award of special damages to be calculated at rate of 14% P.A. as from the date the suit was filed until payment in full. The plaintiff will also have the costs of this application.
Dated, delivered in open court on 11th March, 2019.
............................
R. NYAKUNDI
JUDGE
In the presence of:
Mr. Otara for the applicant
Mr. Shujaa for the respondent