Shiraku v Commercial Bank of Africa
Court of Appeal, at Nairobi
July 19, 1988
Nyarangi, Platt & Gachuhi JJA
Civil Appeal No 16 of 1985
(Appeal from a decree of the High Court at Nairobi, Aganyanya J)
Damages – general damages – for wrongful dishonour of cheques – bank wrongfully dishonouring client’s cheques and endorsing “account closed” on them – client not a trader – whether client’s reputation damaged – quantum of damages.
Defamation – wrongful dishonour of cheques by bank – client’s cheques wrongfully dishonoured and endorsed “account closed” – client not a trader – whether client’s reputation damaged.
Costs – awarding of costs in suit – plaintiff successful in his claim – court awarding plaintiff only a part of his costs – court not giving reason for not awarding full costs – whether plaintiff entitled to all costs – Civil Procedure Act (cap 21) section 27.
Banking law - dishonour of cheque - wrongful dishonour - whether client’s reputation damaged by the wrongful dishonour - whether client entitled to damages.
The appellant brought a suit against the respondent bank seeking compensation for the wrongful dishonour of his cheques.
The bank, in declining to honour the cheques, had endorsed upon them the words “account closed”.
The High Court found that the appellant had proved his case and awarded him Shs 15,000 in damages and three quarters of his costs of the suit.
The appellant appealed challenging both the award of damages, which he argued was manifestly inadequate and the failure by the trial judge to award him his full costs.
1. The commercial credit of the appellant had been seriously injured by the expression “Account closed” on each of his four cheques and the effect of those words was to lower the reputation of the appellant in the eyes of ordinary right-thinking people.
2. The appellant had issued the cheques for his personal services and not for commercial transactions. He was not a trader.
3. A person who is not a trader is not entitled to recover substantial damages for the wrongful dishonour of his cheque unless the damage which he has suffered is alleged and proved as a special damage. The appellant had not proved the damage he had suffered as a special damage.
4. The trial judge did not adequately consider the ill effect of the bank’s wrongful acts on the reputation of the appellant. In the circumstances of the case, the temperate award of damages would be Shs. 40,000.
5. Contrary to the proviso to section 27 of the Civil Procedure Act (cap 21) the trial judge did not give any reason for not awarding the plaintiff/appellant his full costs. In the absence of an explanation, the judge went wrong in not awarding any costs. The appellant was entitled to his full costs.
1. Gibbons v Westminster Bank Ltd  2 KB 882; 3 All ER 557
2. Wilson v United Counties Bank Ltd  AC 102
3. Patel v National & Grindlays Bank Ltd  EA 76
4. Waiguru v National Bank of Kenya  EA 339
5. Marzetti v Williams (1880) 9 ER 842
6. Rolin v Steward (1854) 139 ER 245; 14 CB 595
7. Addis v Gramophone Co Ltd  AC 488
8. Rae v Yorkshire Bank Plc The Times, October 16 1987
Black, HC (1979) Black’s Law Dictionary St Paul Minnesota: West Publishing 5th Edn p 1339
1. Civil Procedure Act (cap 21) section 27
2. Penal Code cap 63) section 5
Mr. Ombete for the Appellant
Mr. Fraser for the Respondent