[2023] KECA 1268 (KLR)

Nation Media Group Limited & 2 others v Gulf Energy Limited (Civil Appeal 503 of 2019) [2023] KECA 1268 (KLR) (27 October 2023) (Judgment)

Neutral citation: [2023] KECA 1268 (KLR)

Republic of Kenya

In the Court of Appeal at Nairobi

Civil Appeal 503 of 2019

HM Okwengu, MSA Makhandia & J Mohammed, JJA

October 27, 2023

Between

The Nation Media Group Limited

1st Appellant

The Managing Director, Daily Nation

2nd Appellant

Immaculate Karambu

3rd Appellant

and

Gulf Energy Limited

Respondent

(An appeal from the judgment of the High Court of Kenya in Nairobi (L. Njuguna, J.) dated 9th March, 2017 in Nairobi HCCC No. 587 of 2012 Civil Case 587 of 2012 )

Judgment

1. This is an appeal from the judgment and decree of the High Court of Kenya at Nairobi, (L. Njuguna, J.) dated 9th March, 2017. Gulf Energy Limited (the respondent) filed a suit against The Nation Media Group, The Managing Director, Daily Nation and Immaculate Karambu (the 1st to 3rd appellants respectively) claiming against them jointly and severally:-“a)A permanent injunction restraining the defendants and each of them by themselves, their servants, agents, employees or otherwise howsoever from further printing, publishing or distributing or causing to be written, published and distributed any of the defamatory material contained in the said articles or such material as would be scandalous or defamatory to the plaintiff in any form or manner whatsoever;b.general damages on the footing of exemplary and aggravated damages on the basis of the matters pleaded in paragraph 18 herein -above;c.costs of this suit;d.interest on (b) and (c) above at such rates and for such period as this Court may deem appropriate; ande.any such other or further relief as this Court may deem appropriate to grant.”

2. It is not in dispute that the publication in question was printed and published on the front page and page 2 of the Daily Nation Newspaper dated Tuesday,16th October, 2012 with an abridged version that had been published on 15th October, 2012 on the 1st appellant’s website under the link http: www.nation.co.ke/News (the article).

3. As the article was the basis of the respondent’s claim, it is necessary to reproduce it in its entirety:Petrol Prices Driven up By Suspect Deal”A flawed tendering process which led to overpricing of freight charges could have led to Kenyans paying a higher price for their petrol.While the industry average for importation of crude oil has been $0. 90 per barrel, the winners of the September tender charged $3. 126 and $2. 83 per barrel.It was only after protests by industry players that the ministry hastily cancelled the tender awarded to Essar Energy and Gulf Energy Ltd. And just two days after the cancellation, Gulf Energy Ltd emerged the winner after retendering at $1. 475 per barrel, half its earlier price.You will note a huge difference between the bids received for subject tenders and the winning bids for previous tenders. In view of this, we recommend that you hold the award of these tenders and request that you call for a re-tender of the same. This will relieve consumers from paying exorbitant fuel prices if the subject cargoes will land in Kenya…. At the premiums received’ read part of a letter from the Oil Industry Supply Coordination Committee to the Energy Permanent Secretary Patrick Nyoike.In his defence, Mr. Nyoike blamed junior officers in his ministry for the mess, but imposed no sanctions on the officers or the companies involved.On Sunday, the Energy Regulatory Commission cited increases in freight costs as the key contributor to the sh5- 6 per litre increase in pump prices.Notable is the fact that while the price of crude oil marginally rose by three per cent, the average cost of imported petrol rose by 12 per cent at the pump, an indication of how huge freight cost played to increase the overall cost.Industry players fault the ministry for allowing irregularities within the procurement system, and enabling bidders (oil markers) to quote high freight costs for the import of crude oil.Freight costs form part of what ERC considers alongside international crude oil prices and taxes in calculating the recommended monthly prices.The procurement is done by the Ministry of Energy. We work with what the Ministry has gotten as a tender result. Said ERC Director General Kaburu Mwirichia.The sudden change of price in September points to possible mischief within the tender system which could have informed increases in pump prices even in the past.The Consumer Federation of Kenya’s (Cofek) now wants parliament to review the ERC Act to give the Commission a wider mandate in the procurement process.Cofek says this will seal off loopholes for oil marketers to inflate import costs at the expense of the consumers.Parliament should review the ERC Act to give it a wide mandate outside just caps on oil prices. The commission is not relevant to consumers if it cannot address the broad repercussions of its decision on pump prices’ said Cofek Secretary General Stephen Mutoro.’Cofek had earlier moved to court to oppose the decision by the Ministry of Energy to award the Kenya Petroleum Refineries Ltd monopoly under the new refinery regulations which elevated the facility to a merchant status from July this year.The consumer watchdog argued that it had ‘given oil marketing companies an opportunity to make profits at the expense of consumers.’KPRL has been slapped with a Sh. 119 million claim from Kenol Kobil for failing to issue a letter of credit for the company to facilitate the import of 80,000 tonnes of crude oil in august, resulting in losses to the oil marketer.With the claim on its way in addition to interest piling up on a 21. 2 billion loan that KPLR acquired from Standard Chartered Bank in June this year, consumers are likely to be hard-pressed going forward should KPLR recover these costs from sale of finished fuel products.” [Emphasis supplied].

4. In the plaint, testimony and submissions before the trial court the respondent asserted that the impugned article was widely distributed within the country and elsewhere in the world and that at the material time, the Daily Nation Newspaper had millions of readers within and without this jurisdiction who had free, open and unhindered access to the libellous words complained.

5. That further and in the alternative, the appellants knew or ought to have known that once the impugned article was printed and published in the Daily Nation Newspaper and on the first appellant’s website aforesaid, and distributed in the country and elsewhere, the same would be available for access and must in fact have been accessed by extremely large numbers of readers in Kenya, the region and worldwide.

6. In paragraphs 9 and 10 of the plaint, the respondent set out the meaning of the contents of the said article in their entirety either in their natural and ordinary meaning or by imputation and innuendo. It was pleaded that the appellants’ falsely and maliciously printed, published and distributed or caused to be printed, published and distributed the said article well knowing that the allegations of and concerning the respondent were untrue. Also pleaded was that before the broadcasting of the said libelous article, the respondent in its capacity as a substantial and reputable oil marketer with interests both within and without this urisdiction enjoyed extremely high esteem and respect from the public generally and from other oil marketers, business partners, bankers and clients, in the industry in particular. That the said publication was malicious and calculated to injure, disparage and lower the esteem with which right thinking members of the society in general regarded and held the respondent and as a consequence of the said publication, the respondent had been injured in its character, credit and reputation and it’s standing in the public generally and in the industry in particular and has been brought to great ridicule, scandal, odium and contempt in the eyes of right thinking members of the society. As a result, the respondent pleaded that it suffered monumental loss of business.

7. The appellants were served with the respondent’s claim. They entered appearance and in their defence in rebuttal, admitted having published the article complained of but denied that they were falsely, unjustly, unlawfully and maliciously published of the respondent as alleged and that it was calculated to defame the respondent.

8. The appellants claimed that in so far as the words complained of were concerned and their natural and ordinary meaning or otherwise, the same were published under a sense of public duty and without malice to the respondent. Further, that the article was published in the honest belief that the information contained therein was true, and was further published as fair information on matters of public interest. In addition, the role played by importers of crude and refined oil products as well as the marketers in the regulation of fuel prices in Kenya, which prices have on a number of occasions paralyzed both the transport and industrial sectors of the country, generate concern from the public. In the premises, the article was published on a qualified privileged occasion.

9. Having considered the publication, the pleadings and submissions before her, the learned trial Judge framed issues for determination as: whether the article was defamatory of the respondent; whether the article was false and malicious; whether the article was published by the appellants; whether the article and the words referred to the respondent; whether the respondent is entitled to damages and the quantum thereof; and who was to meet the costs of the suit.

10. In her judgment dated 9th March, 2017 the learned Judge held in part as follows:Taking into account the above awards and the case of Hashi Energy Limited Vs. Nation Media Group HCCC No. 272/2008 recently decided by Mbogholi, J. which is persuasive to this court, where an award of Kshs.15,000,000/- was made, it is my considered view that a sum of Kshs.15,000,000/- is reasonable as general damages.The plaintiff has also claimed exemplary and aggravated damages. In this regard, I wish to rely on the case of John Vs. MGN Limited (1996) 2All E.R 35 where the court of appeal held;The successful plaintiff in a defamatory action is entitled to recover the general compensatory damages such sum as will compensate him for the wrong that he has suffered. That must compensate him for damages to his reputation, vindicate his name, and taken (sic) account of the distress, hurt and humiliation which the defamatory publication caused.Exemplary damages on the other hand goes beyond compensation and are meant to “punish” the defendant. Aggravated damages will be ordered against a defendant who acts out of improper motive and where it is attracted by malice; insistence on a flimsy defence of justification or failure to apologize.Taking into account all the peculiar facts surrounding this case, especially the fact that the defendant has to- date defiantly refused to apologize to the plaintiff, I consider an additional sum of Kshs.5,000,000/- to be an adequate award of exemplary damages. A further sum of Kshs.3,000,000/- is awarded as aggravated damages.The costs of the suit are awarded to the plaintiff.”

11. Aggrieved by that decision, the appellants filed an appeal to this Court raising fourteen (14) grounds of appeal which we find prudent to condense as follows: that the learned Judge erred both in fact and in law: 1) in finding that the article complained of referred to the respondent herein; 2) in finding that the respondent had proven that the article complained of by innuendo referred to the respondent herein or at all; 3) in finding that the natural and ordinary meaning of the publication was defamatory of the respondent herein given the circumstances in which they were published and also considering that the article was published at a time when the prices of petroleum products were on an upward trend and the public was getting tense; 4) in holding that it is trite that malice can be inferred from the circumstances of this case or at all; 5) in finding that the article was not a factual representation as the tender system was strict and was not capable of manipulation by any oil marketer or bidder; that the tender opening in September or for any particular month the cost of the product will come to market two months after and that the Open Tender System (OTS) and the energy regulations are public documents; and 6) in awarding general damages of Kshs.15,000,000/= to the respondent which amount is inordinately high when the evidence is taken into account, the pleadings and all other factors to be considered when assessing damages for defamation.

12. Further, the appellants contend that the learned Judge erred: 7) by failing to take into account and fully consider the various authorities submitted by the appellants before arriving at the sum of Kshs.15,000,000/= which award was not founded on any outlined legal principles or precedent and was inordinately high; 8) in finding that there was any evidence of any conduct on the part of the appellants justifying any award of aggravated damages of Kshs.3,000,000/= which sum was inordinately high taking into account the evidence adduced and all other relevant factors when assessing the same (which in any event should not have been awarded); 9) in finding that there was any evidence of any conduct on the part of the appellants justifying any award of exemplary damages of Kshs.5,000,000/= or any other sum; 10) in conflating aggravated and exemplary damages and treating the same as if they are synonymous which they are not and as such the learned Judge erred in awarding both exemplary and aggravated damages which should not have been awarded; and 11) by basing the award on extraneous considerations and factors.

13. The appeal was canvassed through written submissions with oral highlighting. Senior counsel, Ms. JanMohammed, appeared for the appellants, while Mr. Njoroge Regeru appeared for the respondent.

Appellants’ Submissions 14. Supporting ground 1, counsel for the appellants relied on the decision of Wycliffe A. Swanya v Toyota East Africa Ltd & Anor [2009] eKLR regarding the elements that the court has a duty to consider in a claim of defamation to prove liability. Counsel submitted that it is not in dispute that the impugned article was authored and published by the 1st and 3rd appellants but the same was not defamatory of the respondent as the same did not refer and/or distinctively target the respondent. Counsel asserted that in an action for libel by innuendo, its success depends on the proof by the plaintiff that special circumstances, or extrinsic facts are known to persons who read the offending publication. Further, that the liability of the appellants with respect to the impugned article fully depended on whether a reasonable person could identify the respondent as the entity referred to in the article.

15. Counsel asserted that the particulars of innuendo set out in the plaint are to the effect inter alia that the respondent herein was responsible for the current high prices of fuel and other essential commodities, is self- seeking and a greedy/corrupt company and/or is a beneficiary of corrupt practices. Counsel argued that none of these particulars of innuendo were proved at trial by any of the witnesses who testified in support of the respondent’s case.

16. Counsel emphasized that the testimony of Francis Koome Njogu (PW1), the Chief Executive Officer of the respondent company stated during cross examination that the reference to the respondent was only limited to the first three paragraphs of the impugned article which made no reference to an allegation of petrol prices going up, while Samuel Kang’ethe (PW 2), testified on the Open Tender System (OTS) that resulted in the appointment of the respondent and on the procedural process of the said tender. Kenneth Kariuki Macharia (PW3) testified that after reading the article he got the impression that the responden was wholly responsible for exploiting the public in raising oil prices and was dishonest in the way it carried out its business. As a consequence, he stopped fuelling at the respondent’s fuel stations.

17. It was counsel’s submission that taking the entire publication in context, the impugned article did not refer to the respondent as alleged and particularized in the plaint. Counsel asserted that a cursory perusal of the article reveals that the same was focused on the role played by different stakeholders in the energy sector, in particular the importers of crude and refined oil products as well as the oil marketers in the regulation of fuel in Kenya. Counsel further asserted that reference to the respondent in the publication was intentionally limited to the undisputed fact which in any event was within public knowledge that the respondent had won the crude oil tender for cargo 11B/2012 having re-applied for the same pursuant to the cancellation of the initial tender award by the Ministry of Energy to the respondent, and was confirmed by all the respondent’s witnesses. Counsel asserted that the particulars of innuendo had not been proved and the learned Judge therefore erred in entering judgment in favour of the respondent.

18. In support of the second ground, counsel submitted that the said publication was not defamatory of the respondent. Counsel asserted that it is of germane importance and emphasis that a statement is said to be defamatory if it tends to lower a person in the estimation of right- thinking members of the society or if a statement causes him/her to be shunned or avoided and without proof of damage to a claimant’s reputation or any other proof that as a result of a publication, the plaintiff was shunned or avoided then an action for defamation cannot stand.

19. Counsel further submitted that the appellants in their defence pleaded the defence of fair comment as set out in the said evidence and further went on to add that the article was published on a privileged occasion.Counsel submitted that as rightly stated by the appellants at the trial court, the appellants had a public duty to inform the public on matters that were of public interest namely the prevailing circumstances in the energy sector that were affecting prices of fuel in the country. Counsel asserted that the said article read in its entirety was published as a matter of expression of opinion and were matters of fair comment and fair information upon facts which were matters of public interest namely the role played by importers of crude oil and refined oil products as well as oil marketers in the regulation of fuel of prices in Kenya. Counsel emphasized that at no instance in the whole article was the respondent expressly mentioned and/or depicted as particularized in the plaint. Counsel asserted that the learned Judge erred in finding that the natural and ordinary meaning of the publication was defamatory of the respondent therein notwithstanding the appellant’s defence of fair comment taking into account the prevailing circumstances under which the impugned article was published.

20. Counsel further submitted that this Court should observe the parameters set out in Kemfro Africa Limited t/a Meru Express Services [1976] & another vs A.M.Lubia & another No.2) [1985] eKLR on what this Court should observe when determining whether to interfere with a decision of the trial court on quantum of damages.Counsel asserted that when the trial court proceeds to make an inordinately high or low award based on wrong principles or misapprehension of the evidence on record and/or any material aspect, the appellate court has the discretion to interfere with the said award as was held in the case of Butt vs Khan [1978] eKLR. Counsel further submitted that the learned Judge took into account irrelevant matters and disregarded those that were relevant and thus arrived at an award of Kshs.15,000,000/= as general damages that were inordinately high in the circumstances of the case.

21. It was counsel’s further submission that in making an award for compensatory damages in a claim for defamation, the court must take into consideration the damage of the article complained of on the respondent’s reputation. Counsel argued that the impugned article did not in any way cause reputational damage to the respondent and that no evidence was availed in the trial court by the respondent’s witnesses to demonstrate that it had suffered any actual damage whether materially or otherwise as a result of the impugned publication. Counsel submitted that the trial court ought to have acknowledged that the compensatory damages must be informed and confined to the distress and humiliation suffered by the respondent and the actual proved damage. Further, that the said principle was not reflected in the final award as expected and therefore the award of general damages in the sum of Kshs.15,000,000/= was unwarranted as the same was arrived at without due consideration of the evidence on record and was devoid of any legal basis and should therefore be set aside.

22. Counsel pointed out that it is trite that in awarding damages, a court ought to give due consideration to comparable authorities and that the learned Judge failed to consider the various authorities submitted by the appellants.

23. On exemplary damages, counsel submitted that the rationale for awarding the same is to punish the defendant for wilful commission of a tort. Counsel asserted that the award of Kshs 5,000,000/= by the trial court for the refusal of the appellant to issue an apology is not sufficient reason to warrant such an award.

24. On aggravated damages, counsel submitted that aggravated damages are awarded where the conduct of the defendant increased the injury caused to the plaintiff. Counsel asserted that it has not been shown by evidence that the conduct of the appellants has in any way led to the increase of injury to the respondent and that there is no evidence to demonstrate that the appellants acted oppressively or arbitrarily towards the respondent before filing suit and during the hearing of the suit and that neither has it been shown that the appellants had no honest belief in the truth of what was published.

25. Counsel further submitted that the trial court applied the wrong principles in awarding aggravated damages and the award should be set aside. Counsel urged that should this Court find that the respondent was entitled to an award of aggravated damages, it be guided by Nation Media Group v Gideon Mose Onchwati & Kenya Oil Company Limited [2019] eKLR where this Court set aside Kshs.12,000,000/= awarded by the High Court as aggravated damages and substituted the same with an award of Kshs.1,500,000/=. Further, in Royal Media Services Limited & another v Jakoyo Midiwo [2018] eKLR this Court substituted an award of Kshs 2,000,000/= by the High Court as aggravated damages to Kshs.1,000,000/=.

Respondent’s Submissions 26. Opposing the appeal, learned counsel for the respondent submitted that the trial court considered the testimony of the respondent’s three witnesses as well as the respondent’s documents on record and rightly found on a balance of probabilities that the impugned article referred to the respondent, and that the trial court’s finding was informed by legal principles enunciated in the case law as cited in the judgment. Counsel urged this Court not to interfere with the judgment of the trial court.

27. Counsel asserted that the trial court confirmed having assessed the demeanour of the respondent’s witnesses and found no reason to doubt their evidence and sincerity on the matter and that they were truthful and convincing. Further, that this Court should eschew the appellants’ call and invitation to interfere with the findings of the trial court as it did not have the advantage of seeing and assessing the demeanour of the witnesses.

28. On the question whether the learned Judge erred in finding that the natural and ordinary meaning of the publication was defamatory of the respondent herein, counsel asserted the learned Judge did not err given that the circumstances in which they were published and also considering that the article was published at a time when the process of petroleum products was on an upward trend and the public was getting tense. The decision in Musikari Kombo v Royal Media Services Limited [2018] eKLR was relied on for the proposition that in light of the fact that the appellants did not adduce any evidence in support of their defence and in light of the established legal principle that the circumstances and the timing of the publication are relevant in determining whether a publication is defamatory. Counsel submitted that the trial court did not err in finding that the natural and ordinary meaning of the article was defamatory of the respondent given the circumstances and time in which it was published.

29. On the ground whether the learned Judge erred in law and in fact in holding that malice can be inferred from the circumstances of this case, it was submitted that malice can be either express or implied. Further, that order 2 rule 7(3) of the Civil Procedure Act is operative only in instances when the plaintiff intends to allege that the defendant was actuated by express malice as opposed to implied malice. Counsel asserted that even if the appellants on their part only raised the defence of fair comment they never led any evidence to establish the defence of privilege. Further, that the trial court did not err in finding that malice can be inferred from the circumstances in the case.

30. On the issue whether the learned Judge erred in law and in fact in finding that the article was not a factual representation of the tender system, was strict and was not capable of manipulation by any oil marketer or bidder, that the tender opening in September or for any particular month the cost of the product will come to market two months after and that the OTS and energy regulations are public documents, it was submitted that the trial court considered not only the testimony of PW2, but also all the other evidence on record in arriving at that finding, and that the appellants did not provide any witness(expert or otherwise) to controvert the testimony of the respondent’s witnesses, that the respondent’s witnesses’ testimony was subjected to the test of cross examination and the trial court found that the witnesses were credible and believable,.

31. Counsel further submitted that the respondent tendered evidence that the impugned article caused it to suffer reputational damage and the trial court expressly acknowledged such evidence in the impugned judgment. Further, that by finding that the article was defamatory of the respondent, the principle of compensation being solation rather than a monetary re-compensate as applied by the trial court was equally applied in Johnson Evan Gicheru v Andrew Morton & another [2005] eKLR as applied in Broom v Cassel & Co. [1972] A.C.1027.

32. Counsel submitted that this Court in Johnson Evans Gicheru v Andrew Morton & another (supra) also observed that in Jones v Pollard [1997] EMLR 233. 243 the court considered a checklist of comparable factors in libel actions which were enumerated as: the gravity, its province, the circulation of the medium in which it is published and any repetition, the subjective effect on the plaintiff’s feelings not only from the prominence itself but from the defendant’s conduct thereafter both up to and including the trial itself, matters tending to mitigate damages such as publication of an apology, and matters tending to reduce damages and vindication of the plaintiffs reputation past and future. Counsel submitted that the checklist in Jones vs Pollard (supra) does not lend credence to the appellants’ submission that compensatory damages must be informed by and confined to actual proved damage.

33. Counsel further submitted that this Court in Peter Umbuku Muyaka v Henry Sitati Mmbasu [2018] eKLR reiterated its holding in Kinakie Co-operative Society v Green Hotel [1988] KLR 242 that:where damages are at large and cannot be quantified the court may have to assess damages upon some conventional yardstick. But if the specific loss is to be compensated and the party was given a chance to prove the loss and did not he cannot have more than nominal damages”.

34. Counsel asserted that the respondent never sought nor prayed for any special damages but rather only sought and prayed for general damages on the footing of aggravated and exemplary damages which are clearly damages at large as opposed to special damages. Counsel submitted that there is no basis for this Court to interfere with the decision of the trial court to award general damages of Kshs.15,000,000/-. The case of Clifford Okello Rachuonyo t/a Rachuonyo & Rachuonyo Advocates v Mohammed Yusuf Soroya & 3 others [2020] eKLR was relied on for the proposition that an award of damages is discretionary.

35. Counsel further asserted that the respondent being a non-natural person is likely to suffer more and for a longer period of time from the effects of defamation as compared to a defamed natural person. Counsel asserted that such greater suffering would be attributable to the fact that the respondent has perpetual succession meaning it would suffer the defamation in perpetuity. Further, that the fact that the respondent maintains a continuous presence in multiple geographical locations simultaneously through its officers and agents means that it interacts with far more people per unit of time in comparison to a natural person.

36. On the award of Kshs.3,000,000/- as aggravated damages, counsel submitted that the same is merely one-third or approximately 33. 33% of the amount awarded as general damages and cannot be said to be excessive considering the fact that the appellants were found to have published the impugned article with malice. Further, that the appellants relied on a flimsy defence of justification without producing any witnesses and defiantly refused to apologize to the respondent.

37. On the award of exemplary damages, counsel submitted that whereas the respondent did not lay a basis for the quantum of exemplary damages and left the same to the determination of the trial court, it did justify the award thereof by among other things proving on a balance of probability “…that the defendants did not bother to verify the truthfulness of the article before they published it. There is no evidence from the defendants that they perused the said documents before publishing the article.” Counsel asserted that exemplary damages are damages at large as opposed to special damages and the respondent was therefore never required to lay basis for the quantum to be awarded. Counsel relied on John v MGN Limited [1996] 2ALL ER 35 in support of this proposition.

38. Counsel further submitted that the appellants have at all times admitted that they published the impugned article and that the 1st appellant is a printer, publisher and distributor of the Daily Nation Newspaper. Further, that the appellants have constantly alleged and submitted that the impugned article was not published with the intention of making profit and that it was not published with the intention of hurting or disparaging the respondent’s reputation or name.Further, that the appellants did not call any witnesses in support of such averments or allegations. Counsel argued that it is trite law that he who alleges must prove and that the onus of proving that the impugned article was not published with the intention of making profit rested with the appellants.

39. On the question whether the trial court confused aggravated and exemplary damages, it was submitted that it did not as the trial court was well aware of the distinction between exemplary and aggravated damages and the same were treated differently. Counsel urged us to dismiss the appeal with costs.

Determination 40. We have considered the record, the submissions by counsel, the authorities cited and the law. This is a first appeal from the decision of the High Court in its original jurisdiction. Our mandate as a first appellate court is as stipulated explicitly in Rule 31(1) of the Court of Appeal Rules namely, to re-appraise, re-evaluate and re-analyze the record, consider it in light of the rival submissions and draw our own conclusions thereon and give reasons either way.

41. In Selle & Another vs. Associated Motor Boat Company Limited & 2 others [1968] EA 123, the predecessor of this Court delineated this mandate in the following terms:An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusion. Though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this Court is not bound necessarily to allow the trial Judge’s findings of fact if it appears either that he has clearly failed in some point to take account of particular circumstances or probability materially to estimate the evidence or if the impression based on the demeanor of the witness is inconsistent with the evidence in the case generally.”

42. In Charles Ogolla Obiero vs. Joseph Munyambu Karega [2017] eKLR, this Court stated as follows:A Court of Appeal will not normally interfere with the finding of fact by the trial court unless it is based on no evidence, or on a misapprehension of evidence or a trial court is shown demonstrably to have acted on wrong principles.

43. We have considered our above mandate in light of the totality of the record as assessed above. We discern the following issues for determination in the instant appeal:i.Whether the appellants were liable to the respondent in defamation?ii.On quantum – whether the respondent was entitled to damages and if so, the quantum thereof.

44. The law of defamation is concerned with the protection of a person’s reputation. Patrick O'Callaghan in the Common Law Series: The Law of Tort at paragraph 25. 1 expressed himself as follows:“The law of defamation, or, more accurately, the law of libel and slander, is concerned with the protection of reputation: 'As a general rule, English law gives effect to the ninth commandment that a man shall not speak evil falsely of his neighbour. It supplies a temporal sanction …’ Defamation protects a person's reputation that is the estimation in which he is held by others; it does not protect a person's opinion of himself nor his character. 'The law recognizes in every man a right to have the estimation in which he stands in the opinion of others unaffected by false statements to his discredit' and it affords redress against those who speak such defamatory falsehoods…”

45. In a claim for defamation, the court has a duty to consider whether elements of defamation have been established or proved for a party to be held liable. This position was echoed by this Court in Wycliffe A. Swanya vs. Toyota East Africa Ltd & Another [2009] eKLR which held as follows:“For the purpose of deciding a case of defamation, the Court is called upon to consider the essentials of the tort generally and to see whether these essentials have been established or proved. It is common ground that in a suit founded on defamation, the plaintiff must prove:i.That the matter of which the plaintiff complains is defamatory in character.ii.That defamatory statement or utterance was published by the defendants. Publication in the sense of defamation means that the defamatory statement was communicated to someone other than the person defamed.iii.That it was published maliciously.iv.In slander, subject to certain exceptions, that the plaintiff has suffered special damage.

46. It is not in dispute, as already stated, that the impugned publication was printed and published in articles contained on the front page and page 2 of the Daily Nation Newspaper dated Tuesday,16th October, 2012 with an abridged version that had been published on 15th October, 2012 on the 1st appellant’s website. The said articles have been reproduced in this judgment verbatim with the sections thereof claimed to be defamatory of the respondent underlined for emphasis. It was the appellants’ submission that the publication was not defamatory of the respondent as the article did not refer and/or distinctively target the respondent.

47. Lord Atkin in Knupffer vs. London Express Newspaper Ltd. [1944] 1 ALL ER 495 stated as follows:-“The only relevant rule is that in order to be actionable the defamatory words must be understood to be published of and concerning the plaintiff.”

48. The learned Judge found that the impugned articles referred to the respondent by dint of the particulars of innuendo and held as follows:I have meticulously studied the plaint, in my view, all that ought to have been pleaded for proof in a case of defamation was pleaded by the plaintiff herein. The particulars of innuendo are stated in paragraph 9 of the plaint. All the plaintiff’s witnesses testified that the impugned article referred to the plaintiff. I have seen no reason to doubt their evidence and sincerity on the matter. They sounded truthful and convincing. In all these circumstances, the Court is satisfied on a balance of probability that the impugned publication referred to the plaintiff.”

49. It is clear from the impugned judgment that the respondent satisfied the trial court that the impugned publication by the appellants referred to it.

50. Were the statements or words used in the impugned articles defamatory as against the respondent? This Court in S M W vs. Z W M [2015] eKLR stated as follows:-“A statement is defamatory of the person of whom it is published if it tends to lower him/her in the estimation of right thinking members of society generally or if it exposes him/her to public hatred, contempt or ridicule or if it causes him to be shunned or avoided.”

51. In Musikari Kombo vs. Royal Media Services Limited (supra) this Court stated as follows:-“24. The test for whether a statement is defamatory is an objective one. It is not dependent on the intention of the publisher but on what a reasonable person reading the statement would perceive.” The Court went on to observe that in Halsbury’s Laws of England 4th Edition Vol. 28 at page 23 the authors opined: “In deciding whether or not a statement is defamatory, the court must first consider what meaning the words would convey to the ordinary man. Having determined the meaning, the test is whether, under the circumstances in which the words were published, a reasonable man to whom the publication was made would be likely to understand them in a defamatory sense.”

52. As stated in the persuasive decision of Godwin Wanjuki Wachira vs. Okoth [1977] KLR 24, the High Court stated as follows:I may go further and hold that failure to check the records to ascertain the true position may very well be negligence on their part…the defendants must be deemed to have acted recklessly in publishing the distorted story… I hold that the author published the defamatory statement complained of…with reckless indifference as to whether it was just or unjust.”

53. It is not in dispute that the appellants admitted in their defence to have published the impugned article. They however denied that the same were falsely, unjustly, unlawfully and maliciously published of the respondent. The appellants stated in their defence that the article was published under a sense of public duty and without malice to the respondent and in the honest belief that the information contained therein was true and was further published as fair information on matters of public interest.

54. The legal issue is whether there is a tenable defence available to the appellants. Before the trial court, the appellants raised the defence of qualified privilege.

55. Was the defence of qualified privilege available to the appellants? The essence of the defence of qualified privilege is an attempt to balance two competing but vital interests in society; the individual’s right to have his character and reputation protected and safeguarded from false, unwarranted and malicious or scurrilous attacks on the one hand, and the public’s right to know as exercised and fed by freedom of expression, which is an indispensable feature of a free and democratic society as well as a major tool for public accountability. See Kagwiria Mutwiri Kioga & another vs. Standard Limited & 3 others [2015] eKLR.

56. The defence of qualified privilege is entrenched under Section 7 of the Defamation Act which provides as follows:-“(1)Subject to the provisions of this section, the publication in a newspaper of any such report or other matter as is mentioned in the Schedule to this Act shall be privileged unless such publication is proved to be made with malice.2. In an action for libel in respect of the publication of any such report or matter as is mentioned in Part II of the Schedule to this Act, the provisions of this section shall not be a defence if it is proved that the defendant has been requested by the plaintiff to publish, in the newspaper in which the original publication was made, a reasonable letter or statement by way of explanation or contradiction, and has refused or neglected to do so, or has done so in a manner not adequate or not reasonable having regard to all the circumstances.3. Nothing in this section shall be construed as protecting the publication of any matter the publication of which is prohibited by law, or of any matter which is not of public concern and the publication of which is not for the public benefit.4. Nothing in this section shall be construed as limiting or abridging any privilege subsisting (otherwise than by virtue of section 4 of the Law of Libel Amendment Act, 1888, of the United Kingdom) (Act No. 51 and 52 Vict. c. 64. ) immediately before the commencement of this Act or conferred by this Act.

57. In Reynolds vs. Times Newspapers [1999] 4 ALL ER 609 the House of Lords went on further to set out a criteria for determining whether a publication is subject to qualified privilege in the following terms:Depending on the circumstances, the matters to be taken into account include the following. The comments are illustrative only. (1) The seriousness of the allegation. The more serious the charge, the more the public is misinformed and the individual harmed, if the allegation is not true. (2) The nature of the information, and the extent to which the subject matter is a matter of public concern. (3) The source of the information. Some informants have direct knowledge of the events. Some have their own axes to grind, or are being paid for their stories. (4) The steps taken to verify the information. (5) The status of the information. The allegation may already have been the subject of an investigation which commands respect. (6) The urgency of the matter. News is often a perishable commodity. (7) Whether comment was sought from the plaintiff. He may have information others do not possess or have not disclosed. (8) Whether the article contained the gist of the plaintiff’s side of the story. (9) The tone of the article. A newspaper can raise queries or call for an investigation. It need not adopt allegations as statements of fact. (10) The circumstances of the publication including the timing.”

58. From the record it is notable that the appellants in their defence in the trial court did not contest that the impugned article referred to the respondent herein as they had already admitted that they had been referred to in some few paragraphs in the article. Further, the respondent called three witnesses in support of its case while the appellants did not call any witnesses. Kenneth Kariuki Macharia (PW3) demonstrated the effect of the negative publicity that the impugned article had when he testified that prior to the publication of the impugned article, held the respondent in high esteem and fueled at various of the respondent’s petrol stations. However, after reading the impugned article, the high esteem that he had held of the respondent was severely diminished and he had stopped fueling at the respondent’s petrol stations.

59. The evidence of Francis Koome Njogu, the respondent’s Managing Director was that upon publication of the impugned article, he received numerous phone calls from clients, other companies and individuals seeking to confirm the authenticity of the impugned article. It was also his testimony that website article was made available to many readers worldwide who had unhindered access to the article. Further, that in the said article the appellants invited comments and in barely 12 hours of publication, at least fifty (50) highly defamatory comments had been posted by readers on the website.

60. In the circumstances, we find that the learned Judge did not err in finding that the impugned article referred to the respondent and was defamatory in character.

61. On the question whether the article was published maliciously, in Horrocks v Lowe [1974] 1 All ER 662 Lord Diplock stated that:“Judges and juries, should, however, be very slow to draw the inference that a defendant was so far actuated by improper motives as to deprive him of the protection of the it. It is only where his desire to comply with the relevant duty or to protect the relevant interest plays no significant part in his motives for publishing what he believes to be true that ‘express malice’ can properly be found.”privilege unless they are satisfied that he did not believe that what he said or wrote was true or that he was indifferent to its truth or falsity. The motives with which human beings act are mixed. They find it difficult to hate sin but love the sinner. Qualified Privilege would be illusory and the public interest that it is meant to serve defeated, if the protection which it affords were lost merely because a person, although acting in compliance with a duty or in protection of a legitimate interest, disliked the person who he defamed or was indignant at what he believed to be that person’s conduct and welcomed the opportunity of exposing

62. Further, this Court, (R.S.C. Omolo, J.A.) in J.P. Machira T/A Machira & Company Advocates V Wangethi Mwangi & another [1998] eKLR stated as follows:“I think it is trite law, and I must state it here and not, that qualified privilege can be destroyed by malice whether express or implied…Malice as I have said, can be inferred from a deliberate, reckless, or even negligent ignoring of facts…However, whereas here, a plaintiff has particularized the facts he is relying on to establish malice the burden lies squarely on the defendant or defendants where they are more than one to not only specifically deny those allegations but also to show facts which establish privilege or negative malice.”

63. From the record the appellants raised the defence of fair comment but did not lead evidence to establish privilege. In the circumstances, we find that the trial court did not err in finding that malice can be inferred from the circumstances of this case.

64. The next issue for consideration is quantum of damages. The award of damages lies at the discretion of the trial court and the circumstances under which, and the principle that govern the interference therewith by an appellate court as the appellant invite us to do are well known. In Butt vs. Khan [1981] KLR 349, Law, J.A, expressed the principle thus at p. 356:An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate. It must be shown that the judge proceeded on wrong principles, or that he misapprehended the evidence in some material respect, and so arrived at a figure which was either inordinately high or low.”See also Johnson Evan Gicheru vs. Morton & Anor (supra) where this Court held, and we agree, that;The latitude in awarding damages in an action for libel is very wide, and the one thing a court of appeal must avoid is to substitute its own opinion as to what it would have awarded for the sum awarded by the Judge below.”

65. Did the learned Judge err in principle, in taking into account matters that she ought not to or fail to take into account factors which she ought to have taken into account with the result that she came up with an excessively and wholly erroneous estimate to warrant our interference?This Court in Nation Media Group Limited vs. George Nthenge [2017] eKLR stated as follows:“Starting with general damages for defamation, we take the view that whereas monetary compensation hardly suffices to repair damage done to one’s reputation or good name, nevertheless such awards provide solatium to the injured party and represent the law’s acknowledgment that something of an innate, if intangible, value has been despoiled by the reckless publication of wanton and false words concerning the person defamed. Much as we acknowledge the intrinsic value of freedom of the press, we do not subscribe to the notion that the pen is a passport to experimentation and the taking of liberties with people’s reputations. Indeed, in some instances, a good name is all that a person has when much else is lost or gone, as was so poignantly the case with the respondent in this case who in the nature of its business had so much to lose in terms of business as the record shows.”

66. In Nation Media Group Vs. Gideon Mose Onchwati & Kenya Oil Company Limited [2019] eKLR, this Court stated as follows:“Awards necessarily vary from case to case but it is expected that similarly situated persons, subjected to defamation that is relatable, should be compensated by awards that are close. There should not be wide variations in awards when all things are considered. That is why the entry point for interference on appeal is where an award is inordinately so high or so low as to be, ipso facto, an entirely erroneous estimate. In the instant case, we are alive to what we said in Nation Newspapers Limited vs. Peter Baraza Rabando case (supra), that when assessing damages, courts have to be pragmatic and realistic enough to acknowledge that an award will be influenced, in no small measure, by the social standing of the individual defamed.”

67. Further, this Court in The Standard Limited vs. G. N. Kagia [2010] eKLR and Butt vs. Khan (supra) with regard to a court’s discretion in respect of an award of damages stated that an appellate court interferes only if it is shown that the trial court proceeded on wrong principle or misapprehended the evidence in some material respect and thereby made an award which was inordinately high or low as to represent an entirely wrong estimate.

68. The purpose of an award of damages in a defamation claim was succinctly expressed by the Lord Hailsham of St. Marylebone in Cassel & Company Limited Vs. Broome & Another [1972] All ER 801 in the following terms:It seems to me that, properly speaking a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public, and as a consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money”. [Emphasis supplied].

69. It is trite law that the court should take into account whether the plaintiff has proved the alleged damage to his prospects and/or fortune and/or character. It is also trite that in awarding damages, a court ought to give due consideration to comparable authorities. Further, an award of damages should not enrich a party but restore the said party to the position he was before the alleged injury. In John vs. MGN Limited [1969] I ALL ER 35, the Court held that:-“...in assessing the appropriate damages for injury to reputation, the most important fact is the gravity of libel, the more closely it touches the plaintiff's personal integrity, professional reputation, honour, courage and loyalty, the more serious it is likely to be…”

70. The appellants published the articles complained of and identified the respondent by name. The appellants contended that while they published the impugned article, the said publication was not defamatory of the respondent as the article did not refer and/or distinctively target the respondent. The appellants relied on the defence of qualified privilege.

71. The learned Judge awarded the respondent Kshs 15,000,000 in general damages and relied on a similar award made by the High Court in the case of Hashi Energy Limited vs. Wangethi Mwangi & Another [2017] eKLR.

72. Taking into consideration comparable awards in Ken Odondi & 2 Others vs. James Okoth Ombura t/a Okoth Omburah & Company Advocates, [2013] ekLR this Court substituted the award of the High Court at Kisumu of Kshs 7,000,000 as general damages with an award of Kshs 4,000,000 in 2013. Further, in Standard Limited vs. G. N. Kagia T/A Kagia & Company Advocates, (supra) this Court in 2010 substituted the award of Kshs 6,000,000 with a composite award of Kshs 3,000,000 in 2010.

73. By parity of reasoning, we find that in the circumstances of this case, the award of Kshs 15,000,000 was excessive and lacked judicial basis and justification. In the circumstances, we substitute the same with an award of general damages of Kshs 10,000,000.

74. The appellants have challenged the award of exemplary damages of Kshs. 5 million and aggravated damages of Kshs.3 million that the learned Judge awarded to the respondent. The appellants’ complaint is that the learned Judge had no proper basis for awarding the said sums as exemplary and aggravated damages respectively. The learned Judge in awarding exemplary and aggravated damages reasoned thus:Exemplary damages on the other hand goes beyond compensation and are meant to “punish” the defendant. Aggravated damages will be ordered against a defendant who acts out of improper motive and where it is attracted by malice; insistence on a flimsy defence of justification or failure to apologize.Taking into account all the peculiar facts surrounding this case, especially the fact that the defendant has to-date defiantly refused to apologize to the plaintiff, I consider an additional sum of Kshs.5,000,000/- to be an adequate award of exemplary damages. A further sum of Kshs.3,000,000/- is awarded as aggravated damages.”

75. For a court to award exemplary and punitive damages, it must be certain that firstly; the article complained of was made with cynical disregard of the consequences that naturally flow therefrom and with the belief that the contents of the article were not true; secondly that the publication was made with a contemptuous calculation of profiting from the same. Carelessness alone in the publication does not justify the award for exemplary damages.

76. From the record, there was no evidence by the respondent herein which proved that the appellants had knowledge that the intended publication would be tortious or that the said publication was driven by the need of financial gain, or that the subject article was the sole reason that made readers to buy the publication to profit the 1st appellant’s media house.

77. The fact per se that the article was published in the course of business is itself not reason enough to infer that there was a financial motive or financial gain for that matter. We find that there was no correlation or inference for financial gain as the respondents did not establish that the appellants were willfully negligent in publishing the said article and further that the publication of the said article was aimed at increasing profits for the 1st appellant to warrant the award of Kshs 5,000,000 as exemplary damages.

78. From the evidence on record, there is nothing to show that the appellants herein falsely published the article with a deliberate, overt and calculated attempt to disparage the respondent. In the circumstances, we find that this is not a case fit for an award of exemplary or punitive damages having regard to the facts as proved. It is notable that the learned Judge considered that the appellants’ failure to apologize entitles the respondent to the award of Kshs 5,000,000 as exemplary damages.

79. The law on exemplary damages was held by the predecessor of this Court in Obongo vs. Municipal Council of Kisumu [1971] E.A. 91 to be as authoritatively declared by the former English House of Lords in Rookes vs. Barnard & Others [1964] AC 1129. The Court understood that English decision, per Law JA at P. 96-98:“To be to the effect that exemplary damages are appropriate in two classes of case; oppressive, arbitrary and unconstitutional action by the servants of government, and conduct by a defendant calculated to make a profit for himself which may well exceed the compensation payable to the plaintiff, and these classes should not be extended.”This Court has endorsed that to be the law in this Country in Bank of Baroda (Kenya) Ltd vs. Timwood Products Ltd [2008] eKLR, among others.

80. In Nairobi Star Publication Limited vs. Elizabeth Atieno Oyoo [2018] eKLR, this Court expressed itself as follows:“As regards exemplary damages, the same are only to be awarded in limited instances. The categories of cases in which exemplary damages should be awarded are set out, in paragraph 243 of Halbury’s Laws of England, as follows:- 1. Oppressive, arbitrary or unconstitutional actions by servants of government;

2. Conduct calculated by the defendant to make him a profit which may well exceed the compensation payable to the plaintiff; or

3. Cases in which the payment of exemplary damages is authorized by statute.”

81. By parity of reasoning, we find that the learned Judge applied the wrong principle in awarding exemplary damages. Accordingly, the award under this head is set aside.

82. The learned trial Judge awarded the respondent Kshs 3,000,000 as aggravated damages. Halsbury’s Laws of England on Libel and Slander, 4th Edition, and Reissue Vol. 28 on page 127 paragraph 248 defines aggravated damages as:The general compensatory damages may be increased to take into account the defendant's motives in uttering the words complained of, or his conduct before or during the action; such ‘aggravated damages’ (which must be distinguished from exemplary damages) are meant to compensate the plaintiff from additional injury, going beyond that which would have flowed from the words alone, caused by the presence of the aggravating factors.”

83. Aggravated damages are awarded where the conduct of the defendant increased the injury caused to the plaintiff. In the circumstances of this case, the appellants refused to apologize.

84. In John v MG Limited [supra] the Court stated as follows:“Aggravated damages will be ordered against a defendant who acts out of improper motive e.g. where it is attracted by malice; insistence on a flurry defence of justification or failure to apologize".

85. By parity of reasoning, we find that the learned Judge did not err in awarding aggravated damages. We, however, think that in the circumstances of the case that was before the trial Judge, an award of Kshs.3,000,000/- for aggravated damages was too high in the circumstances and we accordingly reduce it to 2,000,000/- taking into account the nature of the injury, the scope, weight and implications of the defamatory words and also taking into account public interest that demands that awards must not be exorbitant, excessive and unreasonable. In the premises, the appeal partially succeeds.

86. For the sake of clarity, the award of Ksh15,000,000, general damages is reduced to Kshs.10,000,000/-. We set aside the award granted as exemplary damages of Kshs.5,000,000/- and reduce the aggravated damages to Kshs. 2,000,000/-. The parties shall bear their own costs of this appeal.

87. For the avoidance of doubt, interest on damages and costs of the High Court shall be from the date of the judgment of the High Court.

88. Orders accordingly.

DATED AND DELIVERED AT NAIROBI THIS 27TH DAY OF OCTOBER, 2023. HANNAH OKWENGU................................JUDGE OF APPEALASIKE-MAKHANDIA................................JUDGE OF APPEALJAMILA MOHAMMED................................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR