Weekly Newsletter 009/2019



Kenya Law

Weekly Newsletter


Court awards damages to a third party in a medical negligence suit
JOO and 2 others v DR Praxedes P Mandu Okutoyi and 2 others
Civil Case 25 of 2008
High Court at Nairobi
G V Odunga, J
January 29, 2019
Reported by Ian Kiptoo
Download the Decision
Tort Law-negligence-medical negligence-duty and standard of care of medical practitioners-general practitioners vis-à-vis a specialists-what was the difference in the standard of care exercised between a general practitioner and a specialist-whether a medical practitioner or institution was liable, save for emergencies, for any major treatment; surgical operation; or invasive investigation performed on a patient without first obtaining informed consent
Tort Law-negligence-medical negligence-liability-liability of medical practitioners vis-à-vis hospitals-who between a hospital and a patient was liable for the actions or omissions of doctors-whether a surgeon, being a team leader in a theater, was liable for the actions and/or omissions of the team members
Jurisdiction-jurisdiction of the high Court-jurisdiction of the Medical Practitioners and Dentists Board- jurisdiction of the High Court vis-à-vis the Medical Practitioners and Dentists Board-who between the High Court and the Medical Practitioners and Dentists Board was the appropriate forum to determine professional misconduct relating to practice of a medical practitioner or institution- Medical Practitioners and Dentists Act, Section 20
Civil Practice and Procedure-damages-award of damages-award of damages in medical negligence cases-factors a court takes into consideration in awarding damages-what were the factors considered by a court in award of damages to an injured person
Civil Practice and Procedure -damages-award of damages in medical negligence cases-award of damages to third party parties-foreseeability as test for liability-whether a court could award damages to a third party for nervous shock in a medical negligence case

 Brief Facts:
The 1st Plaintiff sustained a nasal fracture and was taken to Nairobi Hospital, 3rd defendant, by his father, the 2nd Plaintiff, for a surgery to rectify the nasal fracture. The 1st Plaintiff was admitted into the Day Care Surgery Unit of the Nairobi Hospital (hospital) for the scheduled surgery where the 1st defendant was the anesthetist, the 2nd defendant the surgeon and assisted by other support staff of the Hospital.
The Plaintiffs stated that arising from the defendants’ careless, negligent and/or reckless execution of that surgery for his nasal fracture reduction the 1st Plaintiff in the process sustained hypoxic brain damage and which, according to the 1st and 2nd defendants, they only noticed when the 1st plaintiff’s head was being undraped after the completion of the nasal fracture reduction operation.
In addition, the plaintiffs stated that the 1st and 2nd defendants were at all material times to the suit employees, servants, professionals and/or agents of the 3rd defendant and that the 3rd Defendant was liable for the acts, omissions and negligence of the 1st and 2nd defendants and other support staff of the said 3rd Defendant.

 
Issues:
  1. What was the difference in the standard of care exercised between a general practitioner and a specialist?
  2. Whether a medical practitioner or institution was liable, save for emergencies, for any major treatment; surgical operation; or invasive investigation performed on a patient without first obtaining informed consent.
  3. Who between a hospital and a patient was liable for the actions or omissions of doctors?
  4. Whether a surgeon, being a team leader in a theater, was liable for the actions and/or omissions of the team members.
  5. Who between the High Court and the Medical Practitioners and Dentists Board was the appropriate forum to determine professional misconduct relating to practice of a medical practitioner or institution?
  6. What were the factors considered by a court in award of damages to an injured person?
  7. Whether a court could award damages to a third party for nervous shock in a medical negligence case.

Relevant Provisions of the Law
Medical Practitioners and Dentists Act
Section 20

If a medical practitioner or dentist registered or a person licensed under this Act is convicted of an offence under this Act or under the Penal Code (Cap. 63),whether the offence was committed before or after the coming into operation of this Act, or is, after inquiry by the Board, found to have been guilty of any infamous or disgraceful conduct in a professional respect, either before or after the coming into operation of this Act, the Board may, subject to subsection (9), remove his name from the register or cancel any licence granted to him.


Held:

  1. Nothing turned upon the 1st defendant’s failure to use Atropine. The medical opinions in the field seemed to be at variance as to whether the said drug ought to have been used in those circumstances. Differences of opinion and practice existed, and would always exist, in the medical as in other professions. There was seldom any one answer exclusive of all others to problems of professional judgement. A court could prefer one body of opinion to the other, but that was no basis for conclusion of negligence. In the case of a medical man, negligence meant failure to act in accordance with the standards of a reasonably competent medical man at the time. There could be one or more perfectly proper standards, and if he conformed to one of those proper standards, then he was not negligent.
  2. It was accepted in medical profession that there was no objective test for determining the negligence of a doctor. Whereas doctors were supposed to operate within certain known parameters of diagnosis, the profession was not straight-jacketed to the extent that all doctors had to respond in exactly the same way when confronted with a set of circumstances. As long as the doctor did not go outside the well-known medical procedures, it was accepted that there could be variation in approaches to particular cases. It was only in cases where a doctor decided for reasons only known to him to deviate from well-known procedures that in the event that that deviation led to injury to a patient that the Court would find fault with the doctor concerned.
  3. For one to prove professional negligence against a professional person one had to call evidence that the professional conducted himself with less than the competence, diligence and skill expected of an ordinary professional in his field or otherwise persuade the Court that the acts or omissions complained of were manifestly or patently negligent. From the evidence adduced before the Court, what came out was that the volatile agent which was Halothane could have caused the problem. It was agreed that the concentration of Halothane needed to be titrated to effect during maintenance. There was no evidence that the titration was done. Furthermore, there was evidence that the problem could have been caused by the malfunctioning of the anaesthetic machine to deliver oxygen to the patient. Therefore at the surgical stage, those were the only possible causes of the incident. However surgical procedure as a cause of the incident was ruled out.
  4. From the evidence and even the findings of the (Board) and the Standards Audit and Ethics Committee (SAEC). It was clear that there was failure to observe reasonable intra-operative care of the patient including observance of the equipment. It was clear that the 1st defendant did not pay proper attention to the machines during the operation. Had she done so, the readings would have indicated either that there was something wrong with the machines or that the 1st plaintiff was in danger. By the time the 1st defendant realized that there was a problem it was too late. Her account regarding the oxygen concentration was discounted by her witness DW2 who stated that that would not have led to the damage that was caused to the 1st plaintiff.
  5. It was stated by the experts that apart from the machines the anesthetists ought to carry out clinical observation since it was not unknown that machines could be faulty. From the evidence of the 1st defendant, it seemed that she relied wholly on the machines and hence derelicted her duties. There existed a duty of care between the patient and the doctor, hospital or health provider. Once that relationship had been established, the doctor had the following duty to;-
    1. Possess the medical knowledge required of a reasonably competent medical practitioner engaged in the same specialty;
    2. possess the skills required of a reasonable competent health care practitioner engaged in the same specialty;
    3. exercise the care in the application of the knowledge and skill to be expected of a reasonably competent health care practitioner in the same specialty; and
    4. use the medical judgment in the exercise of that care required of a reasonably competent practitioner in the same medical or health care specialty.
  6. The 1st defendant was not just a general practitioner but was a specialist in her field. If a physician held himself out as a specialist, a higher degree of skill was required of him than of one who did not profess to be so qualified by special training and ability. A different standard of care and skill therefore was required of a specialist than of a general practitioner.
  7. The 1st defendant though possessed of the necessary medical skills and knowledge, failed to exercise the care in the application of that knowledge and skill expected of a reasonably competent health care practitioner in the same medical or health care specialty and further failed to use the medical judgment in the exercise of that care. Her records did not indicate that she titrated the volatile agent to effect as she was expected to do, that seemed to have left the inspection of the machines completely in the hands of the anesthetic technician; did not properly monitor the 1st plaintiff during the surgery in order for her to have realized when things were going wrong and taken remedial action in good time and failed to clinically monitor the 1st plaintiff using other medically known procedures as was the practice in her specialty.
  8. If for example a doctor, in excess of his or her zeal for doctrines which were believed in by but a few of his or her fellow practitioners, willfully shut his or her eyes to the symptoms and procedure in his or her specialty and persuaded himself or herself to believe the opposite of what was widely accepted and practiced in his or her field or specialty, that would be neglect on his or her part of so gross a character that it had to amount to a failure to exercise a duty of care.
  9. A doctor’s first care had to be to his or her patient and not the airing and practice of his or her own peculiar views. Therefore, if it were shown by statistics that most of her colleagues were in favour of the use of a particular procedure or remedy, a doctor ought not to allow a patient to run the risk which would not exist if the patient were given a well-known treatment in the profession. It would be very unfortunate if any one doctor were to shut his or her eyes to well-known and accepted procedure in the medical profession as a whole and to say to follow his/her own way of treatment and not believe in the general mode of treatment.
  10. When a doctor was consulted by a patient, the doctor owed to his patient certain duties which were:
    1. duty of care in deciding whether to undertake the case;
    2. duty of care in deciding what treatment to give; and
    3. duty of care in the administration of that treatment.
  11. A breach of any of the above duties could give a cause of action for negligence and a patient could on that basis recover damages from his doctor. Therefore where it was proved that a doctor was in breach of the duty of care, it mattered not that there was an element of risk involved since the doctor was expected to exercise a duty of care commensurate with the magnitude of the case and his specialty whether the procedure involved was risky or not.
  12. Expectations of a patient were twofold:
    1. doctors and hospitals were expected to provide medical treatment with all the knowledge and skill at their command; and
    2. they would not do anything to harm the patient in any manner either because of their negligence, carelessness, or reckless attitude of their staff.
  13. Though a doctor could not be in a position to save his patient’s life at all times, he was expected to use his special knowledge and skill in the most appropriate manner keeping in mind the interest of the patient who had entrusted his life to him. Therefore, it was expected that a doctor carry out a report from the patient. Furthermore, unless it was an emergency, he obtained informed consent of the parties before proceeding with any major treatment, surgical operation, or even invasive investigation. Failure of a doctor and hospital to discharge that obligation was essentially a tortuous liability
  14. On the issue as to whether the 1st defendant secured the consent of the parents of the 1st plaintiff before subjecting him to the procedure. No issue arose from that contention since the 2nd plaintiff, a medical doctor, stated that once he was assured by the 2nd defendant that she was comfortable with the 1st defendant as the anaesthetist, he had no objection to the procedure. However, doctors ought to expressly obtain consents from their patients or parents unless the case was an emergency one before proceeding with surgery.
  15. The Hospital or the 3rd Defendant was not liable for the actions and omissions of the 1st defendant. The liability of doctors on the permanent staff depended on: Who employed the doctor or surgeon – the patient or the hospital authorities. If the patient himself selected and employed the doctor or the surgeon, the hospital authorities were not liable for his negligence, because he was not employed by them.
  16. In many cases, a patient was referred by a general practitioner to a surgeon for advice. The patient then retained the surgeon to perform the operation and the surgeon picked the hospital where he had operating privileges. In such a situation, it could be that the hospital was only providing the necessary facilities for the use of the surgeon and really was not much more than a specialized kind of hotel. Thus, no liability rested on the hospital for the negligence of the surgeon but only for negligence in connection with the facilities provided.
  17.  It was clear that the problem would have been arrested had the machines been in good working order. Further, that the level of oxygen concentration went far below the minimum set limit. Yet the machines did not alarm as they were expected to do. The only person who testified that the machines alarmed was DW5. DW6, the Scrub Nurse, seemed to have confused the alarm of the monitor as a sign that something was wrong with the normal. The evidence could not therefore be taken to have corroborated the evidence of DW5 that there was in fact an alarm. There were however two machines and if the 1st defendant switched off the first one, there was no reason why the second one did not alarm when he hooked it to the 1st plaintiff. There could only be two explanations for this. Either the machines did not alarm or they were wrongly set. In either circumstance, the 3rd defendant could not escape liability.
  18. In the first instance, it would mean that the 3rd defendant supplied defective machines while in the second scenario it would be liable to the negligence of the technician or the biomeds. However, the Court agreed with the findings of the Board that it was improbable that out of the six people in the theatre, it was only DW5, himself the theatre technician who was under the obligation to set the machines, who heard the alarm. His evidence had to be taken with a pinch of salt considering that the evidence to the contrary was likely to indict him as having not properly checked the machines to confirm that they were in good working condition.
  19. The law was that where the doctor or surgeon, be he a consultant or not, was employed and paid, not by the patient but by the hospital authorities. The hospital authorities were liable for his negligence in treating the patient. It did not depend on whether the contract under which he was employed was a contract of service or a contract for services. That distinction, important as it was, did not apply in cases where the hospital authorities were themselves under a duty to use care in treating the patient.
  20. It was clear law and good sense that where a person was himself under a duty of care, he could not get rid of his responsibility by delegating the performance of it to someone else, no matter whether the delegation of it be to a servant under a contract of service or to an independent contractor under a contract of services. Therefore:
    1. if a person was admitted as a patient to a hospital and suffered injuries through the negligence of some member of the staff it was unnecessary for him to pick upon any particular employee; and
    2. the law applied the principle of respondeat superior in the case of a hospital just as it did in the case of master and servant in any other sphere of activity, professional, industrial or otherwise and it mattered not that the servant did work of a skillful character for which he was specially qualified.
  21. The hospital was responsible for all those in whose charge the patient was. Whereas the 3rd defendant would not be responsible for the acts and omissions of the 1st and 2nd defendants, it was clearly liable for the acts and omissions of its employees such as DW5, DW6 and DW7.
  22. The initial problem was caused by the 1st defendant which was what triggered the cardiac arrest and the resultant cyanosis leading to hypoxic brain damage as well as inadequate monitoring of the 1st plaintiff which led to the failure on the part of the 1st defendant to discover early enough that the oxygen level had dropped below the acceptable minimum. However, the situation would have been arrested and the 1st plaintiff would not have reached where he did had the machines been in good working condition which they were not.
  23. It was clear that the evidence of DW8, as to what happened to the machines after the incident was not helpful at all despite the overwhelming evidence that the machine ought to have been isolated and checked before being used again. The report of such inspection ought to have been availed by the 3rd Respondent since those were records which were exclusively within their possession. However according to DW7, the machine was actually checked by the biomedics, who were employees of the 3rd defendant. For some reason, the said biomedics were neither called to testify as to what they found nor was their report or the transcript produced. As most of the witnesses agreed that the transcript would have been helpful in finding where and when the problem started, and as the 3rd defendant who was in possession of the same declined, despite requests to avail the same, inference could only be made that had the same been availed, it would have been adverse to the 3rd Respondent’s case.
  24. Failure by a party to call as a witness any person whom he might reasonably be expected give evidence favourable to him could prompt a court to infer that the person’s evidence would not have helped the party’s case and would have been prejudicial to its case and that the witnesses could have technically avoided to testify to escape being embarrassed on cross-examination.
  25. The 3rd defendant knew right from the proceedings before the SAEC that the issue of the necessity to have had the machine isolated and inspected was a live issue in those proceedings. It took a calculated risk not to adduce the transcript of the said inspection. That was a classic case where adverse inference ought to be made. Accordingly, the failure by the 3rd defendant to adduce the results of the inspection of the machine was due to the fact that the said evidence would have been adverse to the 3rd defendant’s case in so far as the condition of the anaesthetic machine was concerned.
  26. The blame on the 2nd defendant was however due to the fact that as the surgeon she was the team leader and therefore if something went wrong she had to share responsibility. It was agreed by the witnesses that in such cases, the surgeon was the team leader. However in theatre, responsibilities were well defined and a surgeon could not take the responsibilities of an anaesthetist. He could only share them if he did not have the service of an anaesthetic in which case if any surgeon decided to operate without a qualified anaesthetic he took responsibility since he was the only qualified medical practitioner.
  27. The procedure was very short and the patient was fully draped and the only opening left to the 2nd defendant was the nose. In those circumstances, it would not have been possible for the 2nd defendant to notice when cyanosis was setting in. A doctor could not be held negligent simply because something went wrong. A doctor could be found guilty only if he failed short of standards of reasonable skillful medical practice. The true test, therefore, to hold a medical practitioner guilty of negligence was to have a positive finding of such failure on his part as no doctor of ordinary skill would be guilty of acting with reasonable and ordinary care. Whereas it was true that something went wrong during the procedure that was being carried out by the 1st and 2nd defendant, there was no evidence that the 2nd defendant fell short of standards of reasonable skillful medical practice as a medical profession of her calibre would have been expected to meet.
  28. Lateness per se could not have occasioned the incident unless as a result of the same, the due of care was breached. However, it was true that a surgeon ought not to start degloving before the reversal was complete. What was expected was for the surgeon to step aside in order to give room for the anaesthetist to complete the degloving. However being the team leader, the surgeon ought to ensure that the reversal was complete before degloving. Therefore to that extent, the 2nd defendant prematurely left the 1st plaintiff’s side. However, mere negligence would not necessarily lead to liability on the part of the defendants. The plaintiff had to go further and prove that the injury, loss and damage which he alleged to have suffered would have been avoided but for the said negligence.
  29. The issues complained of in regards to post-operative management when the 1st plaintiff was in the ICU ought to be considered in light of the work of Professor Ellen Picard in the article The Liability of Hospitals in Common Law Canada, Volume 26 McGill Law Journal (1981) at page 1008 which summarized the duties of a hospital to its patients as follows:
    1. to select competent and qualified employees;
    2. to instruct and supervise them;
    3. to provide proper facilities and equipment; and
    4. to establish systems necessary to the safe operation of the hospital.
  30. Since the-other components of tort law applied, the hospital had to carry out those duties as competently as the reasonable hospital in the circumstances and, even if found sub-standard, would have to be found to have caused the patient's injuries before liability would result. All of the protection of tort law normally available to defendants was available to the hospital. In the instant case, it had not been proved to the satisfaction of the Court that the management or mismanagement of the 1st plaintiff in the ICU contributed to the 1st plaintiff’s condition.
  31. It had been held in various decisions that a disciplinary committee was the best possible people for weighing the seriousness of professional misconduct, and that the Board would be very slow to interfere with the exercise of the discretion of such a committee. However, those decisions applied where the Court was seized of the matters which the other bodies were seized of and the Court was being called upon to confirm or vary the same. In the instant case, the professional bodies were undertaking disciplinary proceedings. It was clear that under section 20 of the the Board’s disciplinary powers were expressly restricted to determining infamous or disgraceful conduct in a professional respect, against a medical practitioner or dentist. The standard of proof in disciplinary matters was not the same as the standard in civil matters. Disciplinary matters were quasi-criminal in nature and that could clearly be discerned from section 20.
  32. Having considered the issues raised, it was the Court’s finding that the hypoxic brain injury that the 1st plaintiff suffered occurred as a result of want of and failure to exercise the duty of care imposed on the 1st and 3rd defendants. The 1st defendant was negligent in failing to properly monitor the 1st plaintiff and the anaesthetic machines. She failed to titrate the halothane to effect as she was required to do hence leading to the 1st plaintiff’s cardiac arrest. On the part of the 3rd defendant, it failed to ensure that the anesthetic machines were in good working condition and as a result the same did not alarm in order to enable the 1st and 2nd defendants take corrective measures in good time. Thus, in the premises the 1st and 3rd defendants were jointly and severally liable for the injuries occasioned to the 1st plaintiff
  33. It was not in doubt that the 1st plaintiff, before the incident was a very active young man in exceptionally perfect health. When he was examined by the 1st defendant, he was found to be in good general condition with unremarkable past medical history, reporting no allergies with adequate fasting; the 1st Plaintiff was a Form 4 student; he was a bubbly boy with good academic track record and active in various sports where he won prizes at competitions including swimming, basketball and music. PW3 who was once his schoolmate and close friend gave an account of the 1st Plaintiff’s academic and co-curriculum prowess that made the 1st Plaintiff very popular in school. PW3 stated the 1st Plaintiff was heavily influenced by his parents and he had desired to pursue the path of medicine and the 1st Plaintiff’s Reports/Certificates of Excellence were highlighted. However all those changed after the incident and the change was clearly captured by the 3rd defendant who testified that she looked at the 1st Plaintiff and saw a shell.
  34. In awarding damages, the principles which were formulated were that; the general picture, the whole circumstances, and the effect of injuries on the particular person concerned had to be looked at, some degree of uniformity had to be sought, and the best guide in that respect was to have regard to recent awards in comparable cases in the local courts. It was eminently desirable that so far as possible comparable injuries should be compensated by comparable awards. The Court had to strike a balance between endeavouring to award the plaintiff a just amount, so far as money could ever compensate, and entering the realms of very high awards, which could only in the end have a deleterious effect.
  35. General damages had to be assessed on the combined effect of all the injuries on the person injured and not calculated as the sum of all the independent assessment for each injury. The resultant consequences of the injuries sustained by the 1st plaintiff were more serious than in those other cases. Taking that into consideration as well as the period that had lapsed since those decisions were handed down, the 1st plaintiff was awarded Kshs 5,000,000.00 being general damages for pain, suffering and loss of amenities.
  36. With respect to the costs of a full-time helper, the Plaintiffs filed a Statutory Affidavit for the helper who confirmed that he was paid Kshs 10,000/- per month as at January 2008. That the 1st plaintiff would require a minder for the rest of his life was confirmed by PW1, PW4 and PW6. The Court adopted a multiplier of 50 years taking into account the fact that the payment would be in lump sum which gave the plaintiff a period of 33 years since the 1st plaintiff was aged 17 years at the time of the accident. Accordingly the plaintiff would be entitled to Kshs 10,000.00 x 33 x 12 = 3,960,000.00.
  37. The 1st plaintiff was 17 years old. He must have had some idea as to what he aspired to be in future. That however had to remain merely his wish as an aspiration was not necessarily a reality since there were several imponderables in life. However, apart from his academics, the 1st plaintiff had shown his prowess in extra-curriculum activities. It therefore could not be said that the 1st plaintiff was a hopeless young man with a bleak future whose future could not be assessed. While the Court was not amenable to treating him exactly in the position of his father, the 2nd plaintiff, there were real prospects that the 1st plaintiff would earn a realistic income if not from his academics, from his participation in games in which he had shown excellence.
  38. Taking into account all the imponderables the 1st plaintiff would have earned at least a modest sum of Kshs 150,000.00 per month. Accordingly adopting the same multiplier of 50 and a multiplicand of 25 he was entitled to Kshs 150,000.00 x 12 x 25 = 45,000,000.00. Discount the amount by 30% hence the net sum awarded was Kshs 31,500,000.00.
  39. The circumstances under which the 1st plaintiff suffered hypoxic brain damage were clearly inapprehensible for the parents. The surgery was, admittedly, a simple one taking not more than 10 minutes and thereafter the 1st plaintiff was scheduled to proceed to class the same day. To suddenly be confronted with a situation where that would not happen but the parents would never relate to the 1st plaintiff was clearly a very painful experience to the parents.
  40. The test of liability for damages for nervous shock was reasonable foreseeability of the Plaintiff being injured by nervous shock as a result of the defendant’s negligence. Applying that test, the Plaintiff was entitled to recover damages from the defendant because even though the Plaintiff was not at or near the scene of the accident at the time or shortly afterwards, the nervous shock suffered by her was a reasonably foreseeable consequence of the defendant’s negligence. Without any doubt the 2nd and 3rd plaintiffs were shocked to the bone. According to PW5, the 1st plaintiff’s parents could require emotional counselling apart from financial component and expectation which could result in family instability despite the fact that they were resilient.
  41. Whereas the 1st plaintiff did not lose his life, the 2nd and 3rd plaintiffs had clearly lost any expectation of any acutance from the 1st plaintiff. Exercising its discretion and taking into account the circumstances of the instant case, an award of Kshs 1, 000,000.00 was awarded to the 2nd and 3rd plaintiffs.
Claim allowed
Orders:
  1. The 1st plaintiff awarded a total of Kshs 43,460,000.00 being general damages for pain, suffering, loss of amenities, costs of the minder, future medical expenses and loss of earning capacity to be paid jointly and severally by the 1st and 3rd defendants.
  2. Kshs 1,071,080.00 being special damages to be paid jointly and severally by the 1st and 3rd defendants to the 1st plaintiff.
  3. Kshs 1,000,000.00 each to the 2nd and 3rd plaintiffs.
  4. A declaration that the purported acknowledgement of Debt/Guarantee dated February 4, 2005 extracted given by the 2nd plaintiff to the 3rd Defendant to pay Kshs. 1,056,490.26 being hospital costs was unenforceable as against the 2nd Plaintiff.
  5. The awards in (i) and (iii) above would accrue interests at court rates from the date of the Judgement till payment in full.
  6. The award in (ii) would accrue interests at court rate from the date of filing of the suit till payment in full.
  7. The costs of the suit were awarded to the plaintiffs and the 2nd defendant at the normal scale to be paid jointly and severally by the 1st and 3rd defendants.
Kenya Law
Case Updates Issue 010/2019
Case Summaries

INTELLECTUAL PROPERTY LAW To establish a trade mark infringement claim proof of likelihood of deception and confusion as opposed to actual deception and confusion is required.

Landor LLC & another v Wagude Lui T/A Landor & Associates & 2 others
Civil Case 266 of 2015
High Court at Nairobi
F Tuiyott, J
January 25, 2019
Reported by Beryl A Ikamari

Download the Decision

Intellectual Property Law-trade marks-rights of a proprietor-exclusive use-infringement of a trade mark-conditions to be met in an action for trade mark infringement-use of a mark causing confusion or deception and mistaken association of certain goods and services with those offered under a registered trade mark-whether proof of actual confusion or deception was required as opposed to proof of a likelihood of confusion or deception-Trade Marks Act (Cap 506), section 7.
Intellectual Property Law-trade marks-infringement of trade marks-defences to an action of trade mark infringement-prior use-establishing bona fide and continuous prior use in evidence-whether there was an infringement where evidence of prior use showed that the defendant was aware of the existence of the trade mark at the time he used a mark that resembled it-Trade Marks Act (Cap 506), section 10.

Brief facts:
The 1st plaintiff, a company known as Landor LLC, had a name derived from the surname of its founder. The founder's name was Walter Landor. The 2nd plaintiff was registered to do business under the name Landor Associates. The plaintiffs were involved in the business of global branding, advertising, public relations, marketing and communication. “Landor” and “Landor Associates” were their trade marks which were registered in over 20 countries. “Landor” was registered with the Kenya Industrial Property Institute (KIPI) as a trade mark of the 2nd plaintiff with effect from June 23, 2010. The plaintiffs enjoyed a market reputation under the trade names “Landor” and “Landor Associates.”
In September 2015, the plaintiffs discovered another business operating under the name "Landor and Associates." The business name “Landor and Associates” was registered under the Business Name Certificate of Registration Number BN/2009/53796 on November 28, 2009 and the business "Landor and Associates" was registered as "Landor and Associates Limited" under company registration number CPR/2014/129132 on January 23, 2014. The business names belonged to the 1st and 2nd defendants and they were involved in construction, security installation, information communication technology, project management and consulting.
The plaintiffs asserted that the registration of the 1st and 2nd defendants under those business names was creating confusion in the market. They said it was likely to cause the public to believe that the defendants' services were those of the plaintiffs or were offered in association or collaboration with the plaintiffs. In that sense, they stated that the defendants were gaining an unfair commercial advantage from the good will and reputation of the plaintiffs' trade marks. The plaintiffs filed a suit based on infringement of trade marks and passing off.
The 3rd defendant explained that he formed the name "Landor" by combining his daughter's name with the word "or" which meant gold in French. He said that the company he formed was registered in Kenya and Uganda and that the goods and services it offered were not similar to those of the plaintiffs. Therefore, he said that customers were unlikely to frequent the company on the basis of misrepresentations. The 3rd defendant explained that the company had accumulated market presence, reputation and customer loyalty in Kenya and in the East and Central African region.

Issues:

  1. What were the conditions to be met in an action for trade mark infringement?
  2. Whether it was necessary to prove actual confusion and deception as opposed to a likelihood of confusion or deception, amongst members of the public as concerned the question as to whether a mark related to goods and services on offer was connected with a certain trade mark.
  3. When would the defence of prior use be available in a trade mark infringement action? Read More..

Held :

  1. Section 7(1) of the Trade Marks Act guaranteed the exclusive right of a proprietor to use a registered trade mark. Under section 7 of the Trade Marks Act, the conditions to be met in an action for trade mark infringement were that:-
    1. the Plaintiff was the registered proprietor of the trade mark;
    2. the alleged infringement was a mark identical which or so nearly resembled that of the registered mark so as to be likely to deceive or cause confusion in the course of trade or in connection with the provision of the services in respect of which it was registered;
    3. the use of the mark was without the consent or authority of the proprietor; and
    4. the use of the mark was such that it was likely to cause injury or prejudice to the proprietor or licensee of the trade mark.
  2. On June 23, 2010, the 2nd defendant was registered as the proprietor of the trade mark "Landor" under trade mark no. 68507 in class 35. The 1st defendant had undertaken business in the name of “Landor and Associates” since November 28, 2009 when the business name was registered in favour of the 3rd defendant under the provisions of the Registration of Business Names Act. Therefore, the defence of prior use as provided for in section 10 of the Trade Marks Act was applicable to the circumstances and warranted consideration.
  3. The 2nd plaintiff was the registered proprietor of the trade mark “Landor”. It was necessary for the plaintiff to adduce evidence of a member of the public to show confusion in the passing off of his goodwill. However, proof of actual deception or confusion was not necessary. It was enough to show that deception or confusion was likely.
  4. In proving the likelihood of deception or confusion, witnesses would provide views on whether deception or confusion was likely. The final call on the likelihood of deception or confusion was the Court's view for which reasons had to be assigned.
  5. The defendants did not contend that the word "Landor" being a registered mark did not resemble "Landor and Associates Limited." Such a challenge would have failed because the common feature in the two was the word "Landor." There was a resemblance between the mark "Landor" and the name "Landor and Associates Limited."
  6. There was a similarity between the plaintiffs' marks and the defendants' marks and it was necessary to assess whether the trade or services offered by them made the apprehension of confusion or deception credible. The 2nd Plaintiff was engaged in advertising, media investment management, public relations and public affairs, branding and identity. The defendants stated that their business involved construction, ICT, security solutions, architectural designs and investment but failed to mention that the 2nd defendant also did branding.
  7. The defendants later explained that the branding the 2nd defendant did was not the ordinary branding but the placement of brands on construction sites in a creative manner and it was a component of construction. However, the evidence tendered showed that the 2nd defendant was engaged in branding that was intended to create buzz in the market and that the intention was to manage brands and create an atmosphere of excitement and activity about the brands. That was not a component of construction.
  8. Branding was not the 2nd defendant's peripheral activity. The 2nd defendant engaged in branding as a separate activity from construction.
  9. There was a similarity between the registered trade mark of the 2nd plaintiff and the name of the 2nd defendant. The 2nd defendant offered a service affiliated with advertising and the 2nd defendant's name was likely to confuse the public and cause them to believe that branding services offered by the 2nd defendant originated from or were connected to the 2nd plaintiff.
  10. Section 10 of the Trade Marks Act provided for the defence of prior use. Only continuous and bona fide prior use of a trade mark deserved protection. Evidence indicated that the 3rd defendant was aware of Landor at the time he registered his business name in 2009. The Plaintiffs showed that he had worked for companies that were associated with Landor as subsidiaries in the WPP family. As a high ranking official in those companies it was very likely that he was aware that WPP was using the name Landor. Therefore, it was doubtful that he conjured up the name "Landor" by combining letters from his daughter's name and a French word.
  11. It was not necessary to consider the claim of passing off because although the plaintiffs claimed general and aggravated damages and submitted that it should be presumed, there was no proposal made on quantum. It seemed to have been abandoned.
  12. The company name “Landor and Associates Limited” infringed on the registered trade mark of the 2nd Plaintiff. The company name could not be allowed to stand and the 2nd Defendant would have to change its name. Section 58(1) of the Companies Act provided a sufficient statutory framework for effecting a change of name of a company.

Judgment entered for the plaintiffs against the defendants.

STATUTES Extension of limitation periods under section 27 of the Limitation of Actions Act is for actions based on tort only.

Corporate Insurance Co Ltd v Reuben Murigi Mwangi
Civil Case 72 of 2017
High Court at Nairobi
L Njuguna, J
November 5, 2018
Reported by Beryl A Ikamari

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Statutes-interpretation of statutory provisions-interpretation of section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act-requirements relating to issuance of a notice to repudiate liability and filing a declaratory suit-effect of failure to comply with those requirements-Insurance (Motor Vehicle Third Party Risks) Act (Cap 405), section 10(4)
Statutes-interpretation of statutory provisions-interpretation of section 27 of the Limitation of Actions Act-limitation of actions-extension of limitation period-extension of limitation period in cases of ignorance of material facts in actions based on negligence, nuisance & breach of duty, under section 27 of the Limitation of Actions Act-whether the Court could extend the limitation period for actions based on contract and not tort under section 27 of the Limitation of Actions Act-Limitation of Actions Act (Cap 22), section 27.

Brief Facts:
On August 15, 2014, a vehicle which was insured by the applicant under its commercial cover policy was involved in an accident. On April 10, 2015, Civil Suit No. Milimani CMCC. No.1904 of 2015 was filed and it was about the accident. The applicant received documents relating to the accident on August 11, 2015. When the suit was filed, the applicant did not realize that at the time of the accident, the respondent used the vehicle to carry passengers and for hire and reward contrary to the policy which said that it was to be used exclusively for carrying own commercial goods. By then, under section 10 of the Insurance (Motor Vehicles Third Party Risk Act), the 14 days within which the applicant could have repudiated liability and the 3 months within which to file a declaratory suit had lapsed.
The applicant sought extension of time in Milimani CMCC Misc. 781/2015 and leave was granted on January 25, 2017. On February 3, 2017, judgment was delivered in CMCC No. 1904/2015 and the defendants were held jointly and severally liable at 100% and the plaintiff was awarded Kshs.500,000 in general damages. The applicant then made an application for leave to file a declaratory suit against the respondent and for a stay of execution of the orders in the judgment delivered in Milimani CMCC No. 1904 of 2015 and any suit relating to the accident in question. The applicant had already filed pleadings relating to the declaratory suit and explained that the application was made out of abundance of caution as leave had already been granted on January 25, 2017 in CMCC Misc. No. 781 of 2015.

Issues:

  1. When would an insurer be allowed to avoid making payments under a policy within the terms of section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act?
  2. Whether section 27 of the Limitation of Actions Act allowed for the extension of limitation periods for claims that were based on contract. Read More...

Relevant provisions of the law.
Insurance (Motor Vehicle Third Party Risks) Act (Cap 405), section 10(4)
(4) No sum shall be payable by an insurer under the foregoing provisions of this section if in an action commenced before, or within three months after, the commencement of the proceedings in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it:
Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such action is so given shall be entitled, if he thinks fit, to be made a party thereto.

Held:

  1. Section 10(4) of the Insurance (Motor Vehicles Third Party Risk Act) was to the effect that the applicant ought to have obtained a declaration that it was entitled to avoid the claim for non-disclosure of material facts by the respondent. Additionally, the applicant should have given the respondent notice specifying the non-disclosure or false representation in question. That was not done.
  2. Section 27 of the Limitation of Actions Act provided for the extension of limitation periods but only in cases of ignorance of material facts in actions for negligence, nuisance or breach of duty, where damages were claimed in respect of personal injuries of any person. It was applicable to an action based on tort. The declaratory suit in question was not based on tort but on contract. Section 27 of the Limitation of Actions Act did not give the Court jurisdiction to extend time for the filing of suits in cases involving contract or other causes of action other than those based on torts.
  3. The declaratory suit had already been filed. Therefore the prayers for leave to file that declaratory suit and for stay of execution were redundant. Additionally, there was a long delay in bringing the application and the applicant had already commenced satisfying the decree in the Lower Court.

Originating summons dismissed with costs to the respondent.

CONSTITUTIONAL LAW Delayed demands for short levied taxes have to be made with sufficient reasons even though legislative provisions allowed for the making of the demands.

Export Trading Company v Kenya Revenue Authority
Petition 148 of 2013
High Court at Nairobi
W A Okwany, J
January 9, 2019
Reported by Beryl A Ikamari

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Constitutional Law-fundamental rights and freedoms-right to fair administrative action-belated demands for short levied taxes-where 135(3) of the East African Community Customs Management Act (EACCMA), allowed the Kenya Revenue Authority to make demands for short levied taxes within 5 years of the initial assessment and payment of taxes-whether there was need for reasons or sufficient explanations to be provided, as part of the right to fair administrative action, for belated demands for short levied taxes made 4 years after the initial assessment and payment of taxes-Constitution of Kenya 2010, article 47.
Judicial Review-grounds for the grant of judicial review remedies-legitimate expectation-whether after the Kenya Revenue Authority had verified entries, the applicable taxation rate and the duty payable as correct, a taxpayer had a legitimate expectation that the duty assessed was correct.

Brief facts:
In 2008 and 2009, the petitioner imported rice from Burma, Vietnam and Thailand and the respondent imposed an import duty of 35% which the petitioner paid in full. The respondent alleged that the correct import duty ought to have been 75% and not 35% and that there had been a system and human error in the imposition of import duty. In a letter dated February 27, 2013, the respondent demanded payment of additional taxes related to rice imports amounting to Kshs. 378,016,680/-.
On or about July 2005, pursuant to the provisions of the East African Community Customs Management Act (EACCMA), 2004, the East African Community (EAC) promulgated the Common External Tariff (CET) which set the import duty rate for rice imported from regions outside the EAC at 75%. The respondent implemented those rates for a short time but reduced them from 75% to 35% for all rice imported from outside the EAC regardless of origin. For Pakistani rice, the Council of Ministers of the EAC issued Legal Notice No. 1 of 2005 on December 15, 2005 which stayed the application of the CET rate of 75%. When two years lapsed, the Council of Ministers of the EAC issued Legal Notice No. EAC/10/2007 on June 18, 2007, suspending the applicability of 75% rate on Pakistani rice, for another 2 years. The respondent continued to maintain an import duty rate of 35% for all rice regardless of the origin, until June 26, 2009 when the rate of 75% was effected in the Simba system. Importers were informed by the respondent that only Pakistani rice imports would have an import duty rate of 35%.
On July 26, 2007, the petitioner sought clarification on the applicable rate after noting that the rate of 35% was imposed for all rice imports in the Simba system despite the passing of Legal Notice No. EAC/10/2007. There was no response to the request for clarification. After the respondent demanded for the payment of additional taxes, the petitioner, on February 18, 2013, sought a review of the respondent's decision for the payment of taxes under the provisions of the East African Community Customs Management Act, 2004. There was no response to the request for a review except that enforcement action was threatened with respect to the additional taxes.

Issues:

  1. Whether despite the provisions of section 135(3) of the EACCMA which allowed the Kenya Revenue Authority to demand for short levied taxes within 5 years, there was need for sufficient reasons to be provided for the making of demands for short levied taxes 4 years after the initial assessment and payment of duty.
  2. Whether the making of demands for short levied taxes 4 years after the initial assessment and payment of taxes without providing sufficient explanations, was a violation of the right to fair administrative action.
  3. Whether a taxpayer had a legitimate expectation that the duty assessed by the Kenya Revenue Authority was correct, particularly after its officers had verified entries, the applicable rate and assessed the duty as correct. Read More...

Held:

  1. The importance of taxation for any government could not be gainsaid. However, the processes and procedure related to the collection of taxes had to meet the applicable legal and constitutional thresholds in order to protect the rights of the citizenry.
  2. EACCMA was a valid law that derived its force from the provisions of section 8 of the Treaty for the Establishment of the East African Community, 2000. It came into force on January 1, 2005 and various Kenyan statutes were amended in order to implement it.
  3. The fact that the respondent was empowered to conduct post clearance audit and demand short levied duty did not preclude the respondent from doing so in a reasonable, fair, efficient and effective manner. The respondent's obligation to act fairly was guaranteed under article 47 of the Constitution, which provided for every person's right to administrative action that was expeditious, efficient, lawful, reasonable and procedurally fair.
  4. The respondent could not be said to have acted fairly or reasonably because it did not furnish the Court with a satisfactory explanation as to why the post clearance audit and the subsequent demand for alleged short levied duty was made almost 4 years after the initial assessment and payment of the duty.
  5. Section 135(3) of the EACCMA allowed the respondent to make demands for short levied duty within 5 years. However, the respondent should not wait until the tail end of that period to make a demand. There ought to be sufficient reasons as to why the audit and demand were made late and at the tail end of the given period.
  6. In the absence of a satisfactory explanation as to why the post clearance audit and resulting demand for short levied duty was made after such a long time, the demand for taxes was irrational and not in tandem with the requirements of article 47(1) of the Constitution. That was especially the case considering that a letter from the petitioner dated July 26, 2007, which sought the respondent's clarification on the applicable duty rate, was not responded to.
  7. The identification of the applicable rate of duty and assessment of duty payable was done by the Simba System which was owned and controlled by the respondent. It was therefore unreasonable for the respondent to blame the petitioner by contending that the petitioner was aware of the rate set in Legal Notice No. EAC/10/2007.
  8. It was the respondent's officers that verified entries and inspected consignments. Those officers could not be said to have acted as a conveyor belt performing a perfunctory exercise while being oblivious of their solemn duty to provide accurate information regarding the applicable taxation rate.
  9. The respondent abdicated its duty to taxpayers by remaining tight-lipped, even when prompted to give clarification by the petitioner on the correct applicable tax rate via a letter dated July 26, 2007, only to demand underpaid taxes several years later. The respondent was expected to verify the entries and the duty payable before clearance of the consignments in question.
  10. After the respondent verified the entries in issue, the rate applicable and assessed the duty as correct, a legitimate expectation arose in favour of the petitioner. The petitioner had a legitimate expectation that the assessed duty was correct and the respondent could not hide behind the provisions of the EACCMA and make belated demands for taxes.
  11. By failing to inform the petitioner of the applicable taxation rate within reasonable timelines and by purporting to demand alleged short levied taxes six years after the rice consignment was assessed, cleared and sold, the respondent abused its statutory powers. The respondent’s demand for taxes was unreasonable, irrational and not in accordance with articles 10 and 47 of the Constitution.

Petition partly allowed.
Orders:-

  1. A declaration that the demand of taxes by the respondent constituted an infringement of the petitioner’s rights under articles 40 and 47 of the Constitution.
  2. An order of certiorari to bring to the Court and quash the decision to demand and the demand contained in the respondent’s letter dated February 27, 2013.
  3. A permanent injunction restraining the respondent whether by itself, its officers, employees and/or agents from commencing, instituting or proceeding with any enforcement or prosecution against the petitioner or its directors and/or officers in relation  to or on account of the disputed taxes in the sum of Kshs. 378,016,680/- and the interest and penalties claimed therein
STATUTES Prisoners who were convicted and sentenced between December 8, 2014 and December 15, 2015, when section 46 of the Prisons Act, which provided for remission of sentence, was not in effect, are entitled to remission of sentence.

Hudson Okunda Ochola v Republic
Constitutional Petition 6 of 2018
High Court at Malindi
W Korir, J
December 19, 2018
Reported by Beryl A Ikamari

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Statutes-interpretation of statutory provisions-interpretation of section 46 of the Prisons Act-extent of applicability of section 46 of the Prisons Act on remission of sentence-where section 46 of the Prisons Act had been deleted on December 8, 2014 via statute and reinstated on December 15, 2015, via statute-whether prisoners who were convicted and sentence during the period in which the provision was inoperative were entitled to remission of sentence-Prisons Act (Cap 90), section 46(1).

Brief facts:
The petitioner was convicted and sentenced to death for the offence of murder at the High Court. On appeal, the Court of Appeal substituted the offence of murder with that of manslaughter and sentenced the petitioner to 12 years imprisonment. The petitioner filed a High Court petition claiming that he was entitled to remission of the sentence under section 46 of the Prisons Act and a declaration that the executive order against remission of sentences imposed between May 8, 2015 and December 1, 2015 was discriminatory.
The Statute Law (Miscellaneous Amendments) Act, 2014, deleted section 46 of the Prisons Act which provided for remission of sentence. Section 46 of the Prisons Act was reinstated on December 15, 2015 through the Statute Law (Miscellaneous Amendments) Act, 2015. The petitioner was convicted and sentenced between December 8, 2014 and December 15, 2015
The respondent filed a preliminary objection stating that the Court lacked jurisdiction to adjudicate issues of remission of sentence as they were exclusively within the purview of the Kenya Prisons Service.

Issue:

  1. Whether a prisoner who was convicted and sentenced between December 8, 2014 and December 15, 2015, when section 46 of the Prisons Act, which provided for remission of sentence, was not in effect, was entitled to remission of sentence.
  2. Read More..

Relevant provisions of the law.
Prisons Act (Cap 90), section 46(1);
46. Remission of sentence
(1) Convicted criminal prisoners sentenced to imprisonment, whether by one sentence or consecutive sentences, for a period exceeding one month, may by industry and good conduct earn a remission of one-third of their sentence or sentences.
Provided that in no case shall —
(i) any remission granted result in the release of a prisoner until he has served one calendar month;
(ii) any remission be granted to a prisoner sentenced to imprisonment for life or for an offence under section 296(1) of the Penal code or to be detained during the President's pleasure.

Held:

  1. When remission of sentence was reintroduced the petitioner had been convicted and sentenced and was a prisoner. His sentence was not within the proviso to section 46(1) of the Prisons Act which barred the grant of remission to a prisoner sentenced to life imprisonment under section 296(1) or 297(1) of the Penal Code or to be detained at the President's pleasure. He was therefore entitled to remission on the strength of being a convicted prisoner.
  2. It was immaterial that the law was amended when the petitioner was already serving his sentence. Had Parliament intended to deny remission to those imprisoned when remission had been removed from the statute books it would have said so. Denying the Petitioner the right to remission was equivalent to saying that anybody born prior to the promulgation of the Constitution of Kenya, 2010 was not entitled to the good tidings brought by the Constitution.
  3. Denying the Petitioner remission of sentence would be in breach of article 27(1) of the Constitution which provided that every person was equal before the law and had the right to equal protection and equal benefit of the law. When section 46 of the Prisons Act was reinstated on December 15, 2015, it did not apply to those convicted after December 15, 2015 only. It also applied to every person who was already serving a sentence.

Petition allowed.
Orders:-

  1. The Commissioner General of Prisons was directed to consider the petitioner for remission of sentence in compliance with section 46 of the Prisons Act.
  2. A directive was issued for the judgment to be served upon the Commissioner General of Prisons who was to ensure that all prisoners, who were still serving sentences and were convicted between December 8, 2014 and December 15, 2015, were considered for remission of sentence in accordance with section 46 of the Prisons Act.

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