[2008] KEHC 590 (KLR)
The court found that, given the nature of the transaction—where the defendant invested in property with the expectation of profit and traded in a motor vehicle as part payment—it was reasonable to award compound interest rather than simple interest. The judge reasoned that had the defendant invested the funds...
Source-derived case information.
- Citation
- [2008] KEHC 590 (KLR)
- Parties
- Plaintiff: PETER WAWERU WAITITU; Defendant: CYRUS J. KARANJA
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 340 of 1995
- Procedural Posture
- Civil Suit / Post Judgment Application on Interest Computation
- Outcome
- Application for compound interest allowed.
- Judges
- JW Gacheche
- Legal Topics
- Post Judgment Interest, Compound Interest, Enforcement of Judgments
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
PETER WAWERU WAITITU
Plaintiff
CYRUS J. KARANJA
Defendant
Procedural Posture
Civil Suit / Post Judgment Application on Interest Computation
Legal Issues
- 1 Whether the interest awarded in the judgment should be computed as compound interest or simple interest.
Ratio Decidendi
The court found that, given the nature of the transaction—where the defendant invested in property with the expectation of profit and traded in a motor vehicle as part payment—it was reasonable to award compound interest rather than simple interest. The judge reasoned that had the defendant invested the funds elsewhere, he would have earned compound interest, and thus it would be unjust to deny him that expectation. Accordingly, the court ordered that the interest payable be compounded from 20th May, 1985 until payment in full.
Court Disposition
Application for compound interest allowed.
Orders
- Interest payable to the defendant shall be compounded with effect from 20th May, 1985 until payment in full.
Full Case Text
Judgment text and source record
13 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS) Civil Suit 340 of 1995 (OS)
PETER WAWERU WAITITU …………………….……………… PLAINTIFF
versus
CYRUS J. KARANJA ………..………………………………… DEFENDANT
RULING
I delivered judgment in this cause in favour of CYRUS J. KARANJAon 24th May, 2001, and ordered that PETER WAWERU WAITITUwho was the plaintiff, do pay the former interest at the rate of 20% p.a. from 20th May, 1985 till payment in full.
Seven years down the line, the parties are still arguing about the issue of the interest payable for while the judgment creditor seeks compounded interest, the judgment debtor is of the view that it ought to be simple interest. That is why the parties found their way back to me after seven years.
Unfortunately, though Waititu’s Counsel was aware that the matter would proceed on 30th September, 2008, he did not appear in Court and Waititu was thus not represented. The applicant (Karanja) was however represented by Mr. Kimani, who urged me to order that he be paid compound interest.
I have considered the submission of able counsel and I have taken into account the fact that when Karanja decided to acquire the property in question from Waititu, what he must have had in mind would have been to earn a profit from the investment, and this would in my mind explain why he had to trade in his motor vehicle which he transferred to Waititu so that it’s value be considered as part payment for the property which Waititu was supposed to sell to him. Had he invested the money elsewhere he would have earned not simple interest but compound interest. I cannot deny him that expectation and would in the circumstances order that the interest payable to him compounded with effect from 20th May, 1985, till payment in full.
Dated and delivered at Nairobi this 16th day of October 2008.
JEANNE GACHECHE
Judge
Delivered in the presence of: