Kenya Pipeline Company Ltd v Ndegwa & another (Civil Appeal 235 of 2020)  KECA 226 (KLR) (3 March 2023) (Judgment)
Neutral citation:  KECA 226 (KLR)
Republic of Kenya
Civil Appeal 235 of 2020
DK Musinga, KI Laibuta & PM Gachoka, JJA
March 3, 2023
Kenya Pipeline Company Ltd
Duncan Nderitu Ndegwa
L. Z. Engineering Construction Ltd
(Being an appeal from the Judgment and Decree of the High Court of Kenya at Nairobi (P. Nyamweya, J.) delivered on 1st August 2013 in H.C.C.C No. 2577 of 1990)
1.Under a Building Contract entered into on or about 26th August 1988, the appellant, Kenya Pipeline Company Ltd, engaged the 2nd respondent, L. Z. Engineering Construction Ltd, to develop and construct houses on the appellant’s property known as LR No. 12422/23, which is adjacent to the 1st respondent’s land known as LR No. 12422/22, the two properties being separated by a road measuring 18 metres wide.
2.The Building Contract contained Articles of Agreement in which the appellant was described as “the employer” and the 2nd respondent as “the contractor”. Under the Contract, the appellant undertook to nominate an architect and a quantity surveyor to whose duties and responsibilities we will shortly return. Accordingly, the appellant nominated M/s. Nyanja Associates as its architects and M/s. Murai as its quantity surveyors.
3.Pursuant to the Building Contract, the 2nd respondent embarked on and undertook the development and construction of houses in the appellant’s property between 1989 and 1990. During the construction, the 2nd respondent allegedly trespassed onto the 1st respondent’s property and committed the following torts, namely: excavating large portions leaving large pits and deep gaping holes; making a network of roadway paths; removing therefrom and converting for their use large quantities of red/top soil and rocks forming part of the natural terrain; dumping debri, rubbish, foreign rocks, unwanted materials derived from the works, littering debri and other surplus, and unwanted mud grass; indiscriminately felling numerous indigenous trees; and parking heavy construction machinery on the property.
4.Offended by the 2nd respondent’s conduct aforesaid, the 1st respondent raised a complaint with the appellant in writing on 26th January 1990. In response, the appellant wrote to the 2nd respondent on 31st January 1990 directing it to immediately stop the unauthorized activities complained of. By a letter dated 3rd February 1990 addressed to the appellant, the 2nd respondent undertook to “… restore the plot,” adding that they were awaiting instructions from the 1st respondent on how they were to undertake the restoration. We find nothing on record to suggest that such restoration was ever undertaken as promised.
5.By a plaint dated 25th May 1990, the 1st respondent sued the appellant and the 2nd respondent in the High Court of Kenya at Nairobi in HCCC No. 2577 of 1990 seeking to recover: KShs. 16,700,000 being the value of the property in issue; in the alternative, KShs. 7,284,760 comprised of the value of the wasteland (KShs. 4,000,000), the cost of carting away the debris (KShs. 1,887,360) and the cost of filling the excavation pits with red soil (KShs. 1,397,400); mesne profits at the rate of KShs. 50,000 per month from the date of filing the suit until determination of the suit; general damages; an injunction to restrain the appellant and the 2nd respondent from continuing to commit any of the above-mentioned wrongful acts; interest at court rates; and any other relief that the court deemed just to grant.
6.In its defence dated 18th July 1990, the appellant denied liability for the acts complained of and averred that it had engaged the 2nd respondent as an independent contractor under a building contract; that, as an independent contractor, the 2nd respondent was directly responsible and liable to third parties for any loss, damage, claim or injury arising out of or in the course of the said works; and that the appellant had not at any time managed, controlled or directed the 2nd respondent in the manner in which the construction works were to be carried out.
7.The 2nd respondent filed its defence dated 29th June 1990 in which it denied having trespassed onto the 1st respondent’s property. It averred that it was not liable for any damage alleged by the 1st respondent.
8.By a Notice of Motion dated 25th July 1990, the 1st respondent sought judgment against the 2nd respondent on admission vide its letters dated 3rd and 7th February 1990. The 2nd respondent’s letter of 3rd February 1990 addressed to the appellant read in part:
9.In its letter dated 7th February 1990 addressed to the 1st respondent and copied to the 2nd respondent, the appellant confirmed the 2nd respondent’s admission of liability and undertaking to restore the property in its original condition.
10.Upon hearing the 1st respondent’s Motion, the court (G. P. Mbito, J.) delivered its ruling on 13th May 1991 in which it entered interlocutory judgment against the 2nd respondent on admission and directed that the matter proceeds to determination or assessment of damages on evidence on the nature of the damage occasioned by the trespass.
11.The matter proceeded for assessment and determination of damages before Nyamweya, J. (as she then was) on 20th March 2012. In her judgment dated 1st August 2013, the learned Judge held that the appellant was vicariously liable for the acts of the 2nd respondent. In her view, the 2nd respondent was not an independent contractor, but a servant of the appellant to the extent that the appellant retained a measure of control and authority over the 2nd respondent’s activities. The basis of the trial court’s holding in that regard was because the appellant had engaged a firm of architects and a clerk of works. Accordingly, the learned Judge awarded the 1st respondent as against the appellant and the 2nd respondent, jointly and severally: special damages on account of the cost of reinstatement in the sum of KShs. 3,284,760 with interest at court rates from the date of filing the suit until payment in full; mesne profits/loss of profits at KShs. 50,000 per month with interest at court rates from the date of filing suit until payment in full; and general damages for trespass in the sum of KShs. 100,000. The learned Judge also ordered that the 1st respondent’s costs of the suit be borne by the appellant and the 2nd respondent.
12.Aggrieved by the decision of Nyamweya, J., the appellant moved to this Court on appeal on a whopping 18 grounds set out on its Memorandum of Appeal dated 16th June 2020, which are rendered in narrative and argumentatively against the grain of rule 88(1) of the Court of Appeal Rules, which requires a Memorandum of Appeal to “concisely set forth under distinct heads, without argument or narrative, the grounds of objection to the decision appealed against….”
13.In summary, the appellant faults the learned Judge for, inter alia: not objectively considering the whole agreement between the appellant and the second respondent; concluding that the appellant was vicariously liable for the torts of the 2nd respondent; failing to adjudicate on the facts of admission of the 2nd respondent; awarding the 1st respondent special damages for the cost of reinstatement of the land in the sum of KShs. 3,284,760; awarding the 1st respondent loss of profits as special damages in the sum of KShs. 50,000 per month not pleaded in the plaint; failing to cap the period of time during which the 1st respondent could recover for mesne profits; for awarding general damages without any legal basis; making an award that bestowed unjust enrichment on the 1st respondent; misapprehending the facts presented by the 1st respondent and for taking into account considerations of which she ought not to have taken into account; failing to appreciate the law on award of interest; misdirecting herself in law on the standard and burden of proof; and for substituting and amending her judgment without giving the appellant an opportunity to be heard in that regard. The appellant prayed that the appeal be allowed with costs.
14.Learned counsel for the appellant, M/s. Wekesa & Simiyu Advocates, filed written submissions and list of 27 authorities both dated 22nd February 2021 in support of the appeal. In opposition to the appeal, learned counsel for the 1st respondent, Ms. Njeri Kariuki, also filed written submissions, list of 17 authorities and case digest dated 26th March 2021, all of which we have considered.
15.When the appeal came for hearing on the “GoTo Meeting” virtual platform, Mr. Wekesa represented the appellant and made oral highlights of their submissions, urging us to allow the appeal as prayed. On their part, leading counsel Mr. Njoroge Regeru appeared with Miss. Mutheru, representing the 1st respondent. Mr. Regeru made oral highlights of their submissions and urged us to dismiss the appeal with costs to the 1st respondent. The 2nd respondent, though duly served with the hearing notice, was unrepresented and no submissions were filed on its behalf.
16.This being a first appeal, it is our duty to re-evaluate and re-examine the evidence adduced at the trial and draw our own conclusions. In doing so, we must bear in mind the fact that we have not had the benefit of seeing and hearing the witnesses first-hand and, accordingly, take into account that fact.
17.This approach was adopted in the persuasive decision of our predecessor court in Dinkerrai Ramkrishan Pandya vs. R  EA p.336. In that case, the Court cited with approval the case of Figgis vs. R 19 KLR p.32, which had also adopted the principle in The Glannibanta (2) (1876) 1 PD p.283 where the Court had this to say at p.287:
18.We also take to mind the decision in Highway Developers Limited vs. West End Butchery Limited and 6 others  eKLR citing the case of Selle vs. Associated Motor Boat Co.  EA p.123, which was also a case in point. In Selle’s case (ibid), this Court held:
19.Having carefully examined the record of appeal, the grounds on which it is founded, the written and oral submissions of learned counsel for the appellant and for the 1st respondent, all relevant legal principles and authorities cited in the rival submissions made to us, we are of the considered view that the appeal stands or falls on our findings on the following four main issues of law and fact, and in respect of which learned counsel for the appellant and for the 1st respondent filed comprehensive written submissions as aforesaid, namely: Whether the 2nd respondent was an independent contractor or a servant of the appellant in the nature of a master-and-servant relationship; whether the appellant was vicariously liable for the acts of the 2nd respondent; whether, in any event, the 1st respondent was entitled to the sums awarded in the impugned judgment and, if the answer is in the affirmative, who as between the appellant and the 2nd respondent is liable to the 1st respondent; and what orders ought we to make in determination of the appeal, including orders as to costs.
20.On the 1st issue as to whether the 2nd respondent was an independent contractor or a servant of the appellant in the nature of a master-and-servant relationship, it is imperative that a clear distinction be drawn between an independent contractor and an employee as defined in the Employment Act; and as between a contract of service and a contract for service.
21.Learned counsel for the 1st respondent submitted that the appellant retained a fairly large degree of control over the 2nd respondent; that the nature of the relationship between the appellant and the 2nd respondent revealed a pattern of payment of wages after performance of the contracted duties; that there was mutuality of obligations; and that the appellant was the ultimate bearer of the economic risk. Counsel cited the Industrial Court decision in Christine Adot Lopeyio vs. Wycliffe Mwathi Pere  eKLR, which set the test for determining the difference between an employee and an independent contractor in the following words:
22.Learned counsel for the appellant submitted that “… the learned Judge erred in fact and in law in the manner in which she interpreted the agreement between the appellant and the 2nd respondent by only analysing three clauses … without reviewing or reconciling the remaining twenty clauses that militated against the three clauses and the supposed directions vested in the appellant and pointed to the 2nd respondent being an independent contractor.” Counsel cited the case of National Coal Board vs. Williamneill and Son  QB p.300 at p.319 where the court underscored the need “… to look at the terms of a contract as a whole and not to focus on the meaning of a particular word.”
23.In addition, counsel took issue with the trial court’s interpretation of clauses 8, 9 and 10 of the Building Contract as implying that the 2nd respondent was the appellant’s employee as opposed to an independent contractor.
24.On the authority of Christine Adot Lopeyio (supra), learned counsel for the 1st respondent reiterated that
25.Addressing herself to the provisions of clauses 8, 9 and 10 of the Building Contract, the learned Judge concluded that the 2nd respondent was a servant of the appellant. In her judgment, the learned Judge stated:
26.Turning to the Building Contract, clauses 8, 9 and 10, which must be read with reference to the nature of the works as identified in clause 1, read as follows:
27.In our considered view, clause 1 is clear as to the nature of the works for which the 2nd respondent was contracted to undertake, to wit, the construction and development of a housing project for a “consideration” that cannot reasonably be interpreted to mean a “wage” or “salary” ordinarily payable by an employer in master-and-servant relationships. To our mind, the one-off engagement bound the contractor under an obligation to “carry out and complete the works shown upon the contract drawings and described by or referred to in the contract bills and in the said conditions.”
28.Clause 8 obligated the 2nd respondent to ensure that the works were properly supervised by a competent foreman under its own employment for purposes of perfect performance to the appellant’s satisfaction. Reference to “instructions given to him by the architect” (nominated by the appellant) cannot of itself impute control by the appellant. To our mind, the instructions given by the architects was intended to ensure that the appellant got what it bargained for. Moreover, the architectural drawings had to be adhered to, standards that could only be assured by close supervision and direction of the architects. To this end, clause 9 obligated the 2nd respondent to grant reasonable access to the architects.
29.The fact that the architects were nominated by the appellant did not of itself constitute them the appellant’s servants by whom the appellant would be said to have exercised control over the 2nd respondent. Far from it, the architects were yet another firm of independent contractors engaged to consult and provide professional services.
30.Likewise, the appointment by the appellant of a clerk of works to “act as an inspector on behalf of the employer under the direction of the architects” pursuant to clause 10 of the Building Contract is common trade usage in the construction industry. The clerk of works was tasked with the duty of inspecting the works on the appellant’s behalf to ensure compliance with the building standards anticipated in “… the contract drawings and described by or referred to in the contract bills ….” Indeed, that is what clause 1 made provision for, and no stretch of imagination would suggest that the four clauses aforesaid constituted the 2nd respondent a servant of the appellant within the meaning of the Employment Act, which governs master-and-servant relationships.
31.The elaborate decision in the South African case of Stein vs. Rising Title Productions (2002) 23 ILJ 2017 also drew a clear distinction between an employee and an independent contractor in the following words:
32.In accord with the test in the forgoing South African case, Mbaru, J. correctly observed in Christine Adot Lopeyio (supra):
33.Applying the control test posited in Christine Adot Lopeyio (ibid), we find nothing to suggest that the appellant exercised such control over the 2nd respondent with reference to the manner of performance of the contracted works so as to constitute it a servant of the appellant, and such control cannot be imputed from its engagement of other independent professionals (the architects and clerk of works) to guarantee quality delivery on the contracted works. In our considered view, the 2nd respondent was generally not subject to the control or the instructions of the appellant as to the manner in which it was obligated to perform the contracted works.
34.We say so conscious of the fact that there will be contracts of service where the master cannot control the manner in which the work is done, but they nonetheless remain contracts of service (see Everret Aviation Limited vs. KRA  eKLR).
35.For the avoidance of doubt, control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. However, the right need not be unrestricted (see Mackenna, J. in Ready Mixed Concrete (South East) Ltd. vs. Minister of Pensions and National Insurance  2 QB p.497). . In our considered view, the
36.As respects the “integration test,” we find nothing to suggest that the 2nd respondent was subject to the rules and procedures of the appellant. As an independent contractor, the 2nd respondent was at all times in command of its own workforce, tools and equipment, and was not under the appellant’s management or control in the manner of performance of its part in the Building Contract. The appellant had nothing to do with the source of the material which the 2nd respondent was to use in carrying out the building contract or wherever the 2nd respondent was going to dump any debris.
37.As to the” economic test,” we find nothing to doubt that the 2nd respondent was in business on its own account with liberty to undertake other building contracts. Neither are we persuaded that the appellant took “the ultimate risk of loss or chance of profit” on account of the 2nd respondent’s construction business.
38.Finally, we also find that the “mutuality of obligation” test does not apply to the relationship between the appellant and the 2nd respondent so as to constitute it a servant of the appellant. Indeed, we find nothing to suggest that the two made any commitment to maintain an “employment relationship” over a period of time. The express terms of the Building Contract by which they were bound were clearly indicative of a relationship between an employer and an independent contractor. Indeed, theirs was a contract for service to undertake a specified building project for an agreed consideration, and which ended on completion. Put differently, the 2nd respondent did not undertake to render personal services to the appellant, but to perform a specified piece of work, and to produce a certain specified result for the employer, namely, development and construction of a housing project. Moreover, the appellant was not in the business of housing construction in respect of which it could be said to have employed the 2nd respondent as its servant. Moreover, the houses in question were designed for the appellant’s senior staff.
39.In addition to the foregoing, we take to mind the fact that the terms of payment and degree of control by the employer in the manner of performance, among other considerations, are determinant of the nature of the engagement of labour by an employer – whether it amounts to a contract of service or a contract for service.
40.To illustrate, the Supreme Court of Nigeria in Shena Security Co. Ltd vs. Afropak (Nig.) Ltd & 2 Others  18 NWLR laid down the following factor that should guide courts in determining which kind of contract the parties entered into. In this regard, the Court had this to say:
41.The provisions of clause 2 of the Building Contract is instructive. That clause reads:
42.Our examination of the record as put to us does not disclose what learned counsel for the 1st respondent describes as “a pattern of payment of wages after performance of contractual duties” so as to constitute the 2nd respondent a servant of the appellant. With due respect to counsel, the control test, the economic test, the integration test and the mutuality of obligations test do not by any means suggest that the relationship between the appellant and the 2nd respondent was that of a master and servant. So much for judicial decisions on this issue.
43.Turning to statute law, section 2 of the Employment Act, 2007 sheds light on the distinction between an employee and an independent contractor, and defines an employee thus:
44.On the other hand, a "contract of service" means an agreement, whether oral or in writing, and whether expressed or implied, to employ or to serve as an employee for a period of time, and includes a contract of apprenticeship and indentured learnership but does not include a foreign contract of service to which Part XI of this Act applies.
45.Section 3(1) of the Act provides that “this Act shall apply to all employees employed by any employer under a contract of service.” It follows, therefore, that the 2nd respondent does not fit the definition of an employee within the meaning of sections 2 and 3 of the Act, but of an independent contractor rewarded by the appellant for the construction works on expressly agreed terms under the Building Contract.
46.The Black's Law Dictionary (9th Edition) defines a “contract for service” “under which independent contractors are engaged” as “A contract for a job undertaken by an independent contractor, as opposed to an employee”. It is –
47.Viewed in light of the afore-cited authorities, the evidence on record leads to the inescapable conclusion that the 2nd respondent was an independent contractor, and not an employee of the appellant. Guided by, and in accord with, the afore-cited judicial decisions and statute law, we reach this conclusion on account of the following facts: that the 2nd respondent was a body corporate, and an employer in its own right complete with its own workforce under its command and control; that the appellant engaged the 2nd respondent under a Building Contract for a specified housing project; that the 2nd respondent employed its own skills, workforce, tools and equipment to undertake the housing project for an agreed contract price; that the appellant had no control over the day-to-day operations and management of the 2nd respondent; that the 2nd respondent was in business on its own account, and not on account of the appellant’s business; that the 2nd respondent was not subject to the appellant’s supervision or control in the manner of performance and execution of the Building Contract; that the 2nd respondent’s contractual obligation was confined to the contracted works and delivery of the end product, to wit, the housing project; and that the 2nd respondent was at all material times at liberty to engage in and undertake other works on separate contracts with third parties.
48.That relationship explains the provisions of clause 2 of the Building Contract, which obligates the appellant to pay to the 2nd respondent the agreed “Contract Sum” of KShs. 154,032,026.50 against the requisite completion certificates. Simply put, the 2nd respondent was an independent contractor, and not an employee of the appellant within the meaning of the Employment Act, which governs master-and-servant relationships. That settles the 1st issue before us.
49.As to the 2nd issue, the general rule is that an employer is not vicariously liable for the acts of an independent contractor. As held by the Court of Appeal in Board of Governors St. Mary’s School vs. Boli Festus Andrew Sio  eKLR -
50.In the above cited case, the respondent, a staff member of the appellant school, along with other teachers and pupils of the appellant, had travelled in a bus hired by the appellant on a trip to Mombasa. An accident occurred during the trip and the respondent sustained injuries. The Court of Appeal considered the issue of whether the learned Judge properly concluded that the appellant was vicariously liable for the acts of the owner or driver of the hired motor vehicle and held that:De Lestang, VP, in obiter dictum (stated):
51.What Selle and Another (supra) is saying is that a principal will be responsible for the acts of a servant where the servant is carrying out a task on behalf of the principal. That is not the same when the task involves employment of an independent contractor. This issue is well articulated in Charlesworth on Negligence 4th Edition,page…?.. (Sweet and Maxwell). On the subject of “independent contractors” the learned author declares that an employer is not liable for the negligence of an independent contractor or his servant in the execution of his contract. He says:
52.In Grace Karimi, suing as legal Representative of the estate of SilasKobia Francis vs. Marcello Buantai  eKLR, Gikonyo, J. correctlyobserved:
53.In view of the foregoing, we reach the conclusion that the appellant was not by any means vicariously liable for the 2nd respondent’s acts of trespass and damage occasioned to the 1st respondent’s property. Accordingly, it is the 2nd respondent alone that must bear liability for the acts complained of, and that settles the 2nd issue before us.
54.We now turn to the 3rd issue as to whether, in any event, the 1st respondent was entitled to the sums awarded in the impugned judgment and, if the answer is in the affirmative, who as between the appellant and the 2nd respondent is liable to the 1st respondent. As to whether the sums awarded by the trial court on the respective heads were merited, the appellant’s case is that they were not and that, if they were, they would be borne by the 2nd respondent.
55.Having found that the appellant was not liable for the acts of the 2nd respondent, and that the 2nd respondent was alone liable to the 1st respondent, we could justifiably have stopped there and let the matter take its course in the enforcement of the decree, and more so in light of the fact that the impugned judgment was entered on admission by the 2nd respondent, which did not cross-appeal or contest the appeal. That said, we nonetheless consider it prudent to clarify the law on the respective awards to the 1st respondent of general and special damages.
56.As respects the award of general damages for trespass in the sum of KShs. 100,000, the appellant contends that the award on this head was not on any legal basis. On the other hand, the 1st respondent considers an award under this head to be well deserved and, to that extent, we agree with the 1st respondent, save for the issue of quantum to which we will shortly return.
57.In principle, general damages are a type of compensatory damages, which are granted by a court in a lawsuit to redress loss or damage resulting from another person's wrongdoing. If the plaintiff can prove that the defendant's actions directly led to the loss or damage, the defendant will be ordered to pay damages. The court must then decide how much should be paid in compensation. We need not overemphasize the fact that the quantum of damages on his head depends on many variables on which we need not pronounce ourselves in extenso. Suffice it to observe that quantification or assessment of general damages is subject to the court's discretion, and is not specific or provable. The victim's suffering may be interpreted in different ways depending on the parties and their own interests in the case. In exercise of its discretion, the trial court may consider, among other things, the nature and factual details of the tort or negligence, and recklessness of the party who caused the loss or damage; the loss of enjoyment caused by the injury; and the stress and worry over the particular loss or damage complained of.
58.It is not in contention that the 2nd respondent’s conduct resulted in extensive loss and damage on the 1st respondent’s property, which was undoubtedly a source of grave concern and distress. In our considered view, the sum of KShs. 100,000 awarded to the 1st respondent in general damages is so inordinately low as to represent an entirely erroneous estimate, considering the extent of the damage inflicted on the suit property, the reckless conduct of the 2nd respondent, the Loss of enjoyment caused by the injury, and the stress and worry on the part of the 1st respondent over the particular loss or damage complained of.
59.In reaching this conclusion, we are mindful of the decision of the Court of Appeal for East Africa in Butt vs. Khan (1977) 1 KAR, where the Court held:
60.In Kemfro Africa Limited T/A Meru Express Services & Gathongo Kanini vs. A.M. Lubia & Olive Lubia (1982-88) I KAR 727 at page 730, Kneller, J.A. stated:
61.We also take to mind this Court’s holding in Ken Odondi and 2 Others vs. James Okoth Omburah T/A Okoth Omburah and Company Advocates  eKLR where the Court had this to say:
62.In view of the foregoing, we do not hesitate to disturb and set aside the learned Judge’s award to the 1st respondent of KShs. 100,000 on account of general damages and hereby award the 1st respondent as against the 2nd respondent a sum of KShs. 5,000,000 together with interest thereon at the rate of 14% per annum from the date of the impugned judgment, to wit,1st August 2013 until payment in full.
63.As to the special damages awarded by the trial court in the sum of KShs. 3,284,760 with interest at court rates from the date of filing suit until payment in full on account of the estimated cost of restoring the suit property to its original state, learned counsel for the appellant submitted that:
64.In response, counsel for the 1st respondent contended that “the appellant’s submission in respect of the damage occasioned to the 1st respondent’s property absolved the 1st respondent from the requirement to specifically prove the special damages prior to their award by the trial court.”
65.We are not persuaded by the position taken by counsel for the 1st respondent against the grain of the immutable principle that special damages must not only be specifically pleaded, but strictly proved. Neither do we agree with the words of the learned Judge in awarding the sums in issue. According to her:
66.Of the conclusion reached by the learned Judge, we have this to say with all due respect: that special damages are consequential to, and are intended to compensate the injured party for, loss or damage arising from the conduct of the party at fault; that such damages need not only be pleaded, but strictly proved as having been incurred by the claimant as a direct expense on account of the loss or injury complained of; that special damages are distinct from general damages, and that the two cannot be equated or otherwise awarded as alternative compensation. Each must be separately pleaded. In our considered view, once pleaded, special damages must be strictly proved. They cannot be awarded without strict proof on the grounds that general damages could have been awarded in a similar amount.
67.The general and immutable principle that special damages must be strictly proved was affirmed by this Court in Hahn vs. Singh  KLR 716 at pP. 717, and 721 where the Learned Judges of Appeal - Kneller, Nyarangi, JJA, and Chesoni, Ag. J.A. – held:
68.The cost of removing debris (1,887,360) and cost of filling excavation pits (KShs. 1,397,400), is in the nature of special damages, which must be pleaded and strictly proved. Though pleaded, we find no evidence or proof that the sums claimed were actually incurred in consequence of the damage on the suit property. All that the 1st respondent did was to present to the trial court an unsigned report prepared by a firm of quantity surveyors sometime in April 1990, and containing the estimated costs of removing the debris, filling the excavation pits and bunkers and the diminished value of the land. It is noteworthy that the unsigned report styled “Quantity Surveyor’s Report” did not disclose the maker, and was merely produced at the hearing before the trial court by the 1st respondent’s son, Robin Muriuki Ndegwa, who was his only witness. But for the unsigned report, we find no evidence on the record as put to us of the actual expenses incurred on that account.
69.In Douglas Kalafa Ombeva vs. David Ngama  eKLR, this Court held that:
70.In view of the foregoing, we form the considered view that the special damages awarded by the trial court in the sum of KShs. 3,284,760 with interest at court rates from the date of filing the suit until payment in full on account of the estimated cost of restoring the suit property to its original state was premature and unmerited in so far as there was no evidence that such moneys had actually been expended. Accordingly, we agree with the appellant that this award cannot stand and, consequently, the same is hereby set aside.
71.Turning to the award by the trial court of “mesne profits/loss of profits” at KShs. 50,000 per month with interest at court rates from the date of filing suit until payment in full, we take note that this award is also challenged in the appeal before us and hasten to observe that “mesne profits” are not synonymous to “loss of profits”. The two are distinct terms deserving of separate consideration as we hereby purpose to.
72.In their submissions, learned counsel for the appellant faults the trial court for making an award on this head without proof of actual loss suffered. Counsel questions the existence of unspecified evidence alluded to by the Learned Judge. According to learned counsel, such evidence, other than the allegations made orally by the only witness, did not exist.
73.On their part, counsel for the 1st respondent had this to say in response:
74.The impugned award by the learned Judge of “mesne profits/loss of profits” was couched in the following words:
75.On this head of claim, we cite with approval the decision of the High Court Mativo, J., (as he then was), in Rajan Shah T/A Rajan S. Shah and Partners vs. Vipin P. Shah  eKLR where the learned Judge had this to say:
76.In the same vein, the Court of Appeal in Christine Nyanchama Oanda vs. Catholic Diocese of Homa Bay Registered Trustees  eKLR held that:
77.In the case of Inverugie Investment v Hackett (Lord Lloyds 3 ALL ER 842, it was held thus:
78.Finally, having allowed a sum of KShs. 5,000,000 general damages to compensate the 1st respondent for trespass, the claim for mesne profits would not avail and, in any event, this was not a proper case for an award of mesne profits.
79.In addition to the foregoing, the appellant faults the learned Judge for awarding the 1st respondent “loss of profits” that were not pleaded in his plaint. We hasten to observe that, even if they were pleaded, lost profits are in the nature of special damages, which must be specifically pleaded and strictly proved.
80.Lost profits may be defined as economic damage caused by a disruption in business operations. The damage can be the result of a variety of factors, some of which include patent infringement, breach of contract, liability caused by an accident, negligent acts or physical damage to business property or equipment. The key words here are “economic damage” caused by “disruption of business operations” resulting from negligent acts or trespass as was the case here. The question that arises here is whether there was, on the suit property, evidence of business operations that was disrupted by the 2nd respondent’s conduct resulting in economic loss for which the 1st respondent was entitled to compensation.
81.Learned counsel for the appellant viewed the matter differently. They only fault the trial court for finding “that consequential damages in terms of loss of profits are recoverable as special damages” According to learned counsel, “the question that must be answered is where is the evidence of the said special damages.”. They submit, as we hereby find, that no such evidence was tendered, and that the claim on that head ought to have been dismissed. Counsel further submits that the learned Judge erred in “amending the 1st respondent’s pleaded claim in mesne profits to one of loss of profits”.
82.In answer to the question raised by counsel for the appellant on the issue of lost profits awarded in the impugned judgment, learned counsel for the 1st respondent had this to say in their submissions:
83.A glimpse at the counsel’s submissions electing to address the issue of mesne profits, on which we have separately pronounced ourselves above, does not answer the decisive question posed by counsel for the appellant. It is common ground that lost profits are in the nature of special damages which, if not specifically pleaded and strictly proved, are not recoverable. In any event, mesne profits and lost profits are dissimilar, and one cannot mean the other.
84.We take to mind that, as a general rule, in an adversarial system of justice a court has no jurisdiction to award relief not sought by a claimant or defendant in proceedings before it. This Court in Independent Electoral and Boundaries Commission & another vs. Stephen Mutinda Mule & 3 others  eKLR quoted Stevens & Sons Ltd, Current Legal Problems, Volume 13, Issue 1, 1960, Page 174 thus:
85.Having carefully examined the record as put to us, we find nothing to suggest that “lost profits” were pleaded in the 1st respondent’s plaint dated 25th May 1990, and neither was any evidence adduced at the trial in support of his claim under that head. Moreover, a claim for “mesne profits” cannot be equated with a claim for “loss of profits”. In view of the foregoing, we reach the inescapable conclusion that the learned Judge erred in awarding the 1st respondent KShs. 50,000 per month with interest at court rates from the date of filing the suit until payment in full” in the absence of specific proof of the existence on the suit property of business operations disrupted by the 2nd respondent’s conduct resulting in economic loss.
86.Finally, we turn to the issue of costs in the trial court, which the 1st respondent had not specifically prayed for in his plaint. Neither had the appellant sought to recover costs in its defence. However, the question as to who should bear the costs in the proceedings before the trial court fell to be determined on account of the 2nd respondent’s prayer that the 1st respondent’s claim against it be dismissed with costs. It is on that basis that the learned Judge proceeded to pronounce herself on the issue of costs, and properly so in exercise of the court’s unfettered discretion enshrined in statute law.
87.The 2nd respondent having sought to recover costs in the proceedings, it was incumbent upon the trial court to exercise its unfettered discretion on the authority of section 27 of the Civil Procedure Act (Cap. 21) and pronounce itself on the issue as to who, among the parties, was liable to bear the costs of the suit. In doing so, the trial court was also bound to be guided by the general principle that costs follow the event as expressly stipulated in the proviso to section 27 of the Act, and which has been the subject of numerous judicial decisions a few of which we hereby cite with approval.
88.In the House of Lords decision in Reid, Hewitt and Co. vs. Joseph AIR 1918 Cal 717 and Myres vs. Defries (1880) 5 Ex D 180, the court had this to say:
89.Likewise, the High Court at Machakos in Party of Independent Candidate of Kenya & another vs. Mutula Kilonzo & 2 others (2013) eKLR, which cited with approval the words of Murray, C .J. in Levben Products vs. Alexander Films (SA) (PTY) Ltd 1957 (4) SA 225 (SR) at 227 thus:
90.Section 27 of the Civil Procedure Act, Cap. 21reads:
91.Addressing the issue of costs, Halsbury’s Laws of England (4th Edition) (Re-issue), , Vol. 1. para 16 states:
92.In the same vein, the learned author, the Hon. Justice (Retired) Kuloba in his Judicial Hints on Civil Procedure 2nd edition, Law Africa EA Publishing Ltd Nairobi 2011) had this to say at p.94:
93.In view of the foregoing, we can understand why the learned Judge had good reason to exercise her unfettered discretion to make an award on costs. However, in view of our finding that the appellant was not vicariously liable for the acts of the 2nd respondent, the learned Judge ought to have found, ordered and directed that the 1st respondent’s costs of the suit be borne by the 2nd respondent.
94.Having carefully considered the record of appeal, the grounds on which it is anchored, the impugned judgment and the decree of the trial court, the written and oral submissions of the learned counsel for the appellant and counsel for the 1st respondent, and the authorities cited in the rival submissions of the parties, we hereby find that the appeal partially succeeds to the extent of our finding that:a.The 2nd respondent was at all material times an independent contractor, and not an employee or servant of the appellant;b.The appellant was by no means vicariously liable for the acts of the 2nd respondent;c.The second respondent was alone liable to the 1st respondent for the loss and damage suffered in consequence of the 2nd respondent’s trespass onto the suit property and, accordingly, we hereby order and direct that –i.The 2nd respondent do pay to the 1st respondent a sum of KShs. 5,000,000 general damages together with interest thereon at the rate of 14% per annum with effect from 1st August 2013 until payment in full;ii.The 2nd respondent do pay to the appellant and the 1st respondent costs of this appeal and of the proceedings in the trial court together with interest thereon at the rate of 14% per annum from the date hereof until payment in full; andd.Subject to our foregoing orders and directions in (a), (b) and (c) above, the judgment and decree of the High Court of Kenya at Nairobi (P. Nyamweya, J.) dated 1st August 2013 be and is hereby set aside.It is so ordered.
DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF MARCH, 2023.D. K. MUSINGA, (P)..................................JUDGE OF APPEALDR. K. I. LAIBUTA..................................JUDGE OF APPEALM. GACHOKA, CIArb, FCIArb..................................JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR