Haco Industries Limited & another v Doshi Ironmongers Limited & another [2023] KEHC 25887 (KLR)

Haco Industries Limited & another v Doshi Ironmongers Limited & another (Civil Appeal 141 of 2021) [2023] KEHC 25887 (KLR) (21 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25887 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Appeal 141 of 2021

DKN Magare, J

November 21, 2023

Between

Haco Industries Limited

1st Appellant

Societe Bic

2nd Appellant

and

Doshi Ironmongers Limited

1st Respondent

Ashok Labdhanker Doshi

2nd Respondent

Judgment

1. The Appeal herein arises from Mombasa CMCC 2368 of 2015, wherein Hon. Francis Kyambia delivered judgment in favour of the Respondent on 17/9/2021. The judgment was for Kshs. 15,000,000/=. The Appellant being aggrieved wrote a propitious 12 page 16 paragraph Memorandum of Appeal in the context of the judgment, the appeal raises for many issues that it is unfathomable how the Appellant wishes to deal with the precision of their Appeal.

2. Doing the best I can, I can discern the following grounds: -i.Violations of the Right to be heard.ii.Failing to have regard to the letter of complaint dated 24/9/2022 not being defamatory, as it was privileged.iii.Failing to hold that it was in public domain that the respondent was dealing with counterfeit goods.iv.Finding there was sufficient evidence contrary to the status on the record.

Duty Of The First Appellate Court 3. This being a first Appeal, this court is under a duty to re-evaluate and assess the evidence and make its own conclusions. It must, however, keep at the back of its mind that a trial court, unlike the appellate court, had the advantage of observing the demeanour of the witnesses and hearing their evidence first hand.

4. In the case of Mbogo and Another v Shah [1968] EA 93 where the Court stated:“…that this Court will not interfere with the exercise of judicial discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which is should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.”

5. The duty of the first appellate Court was settled long ago by Clement De Lestang, VP, Duffus and Law JJA, in the locus Classicus case of Selle and another v Associated Motor Board Company and Others [1968] EA 123, where the law looks in their usual gusto, held by as follows;-“.. this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of re-trial and the Court of Appeal is not bound to follow the trial Court’s finding of fact if it appears either that he failed to take account of particular circumstances or probabilities or if the impression of demeanour of a witness is inconsistent with the evidence generally.”

6. The Court is to bear in in mind that it had neither seen nor heard the witnesses. It is the trial court that has observed the demeanor and truthfulness of those witnesses. However, documents still speak for themselves. The observation of documents is the same as the lower court as parties cannot read into those documents matters extrinsic to them.

7. In the case ofPeters v Sunday Post Limited [1958] EA 424, court therein rendered itself as follows:-“It is a strong thing for an appellate court to differ from the findings on a question of fact, of the judge who had the advantage of seeing and hearing the witnesses…But the jurisdiction to review the evidence should be exercised with caution: it is not enough that the appellate court might have come to a different conclusion…”

8. In Nyambati Nyaswabu Erick v Toyota Kenya Ltd & 2 Others (2019) eKLR, Justice D.S Majanja held as doth:“General damages are damages at large and the Court does the best it can in reaching an award that reflects the nature and gravity of the injuries. In assessing damages, the general method approach should be that comparable injuries would as far as possible be compensated by comparable awards but it must be recalled that no two cases are exactly the same.”

9. The duty of the court regarding damages is settled that the state of the Kenya economy and the people generally and the welfare of the insured and injury public must be at the back of the mind of the trial Court.

10. The foregoing was settled in the cases of Butter v ButterCivil Appeal No. 43 of 1983 (1984) KLR where the Court of Appealed held as follows as paragraph 8. “In awarding damages, a Court should consider the general picture of all prevailing circumstance and effect of the injuries of the claimant but some degree of ……is to be sought in the awards, so regard would be paid to recent awards in comparable cases in local Courts. The fall of value of monies generally, the levelling up and down of the facts of exchange between currencies…should be taken into consideration.”

11. Finally, in deciding whether to disturb quantum given by the Lower Court, the Court should be aware of its limits. Being exercise of discretion the exercise should be done Judiciously conclusively are circumstances to ensure that the award is not too high or too low as to be an erroneous estimate of damages.

12. Therefore, for me to interfere with the award it is not enough to show that the award is high or had I handled the case in the subordinate court, I would have awarded a different figure.

13. So my duty as the appellate court is threefold regarding quantum of damages:a.To ascertain whether the Court applied irrelevant factors or left out relevant factors.b.To ascertain whether the award is too high as to amount to an erroneously assessment of damages.c.The award is simply not justified from evidence.

14. To be able to do this, I need to consider similar injuries, take into consideration inflation and other comparable awards.

15. Similarly, in the duty of the first appellate court remains as set out in the Court of Appeal for Eastern Africa in Pandya v Republic [1957] EA 336 is as follows: -“On a first appeal from a conviction by a Judge or magistrate sitting without a jury the appellant is entitled to have the appellate court’s own consideration and views of the evidence as a whole and its own decision thereon. It has the duty to rehear the case and reconsider the witnesses before the Judge or magistrate with such other material as it may have decided to admit. The appellate court must then make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it. When the question arises which witness is to be believed rather than another and that question turns on manner and demeanor, the appellate court must be guided by the impression made on the Judge or magistrate who saw the witness but there may be other circumstances, quite apart from manner and demeanor which may show whether a statement is credible or not which may warrant a court differing from the Judge or magistrate even on a question of fact turning on the credibility of witnesses whom the appellate court has not seen.”

16. The foregoing statement had been ably elucidated by Sir Kenneth O’Connor P, in restating the Common Law Principles earlier enunciated in the case at the Privy Council, that is, Nance v British Columbia Electric Co Ltd, in the decision of Henry Hilanga v Manyoka 1961, 705, 713 at paragraph c, where the Learned Judge ably pronounced himself as doth regarding disturbing quantum of damages:-“The principles which apply under this head are not in doubt. Whether the assessment of damages be by the Judge or Jury, the Appellate Court is not justified in substituting a figure of its own for that awarded simply because it would have awarded a different figure if it had tried the case at the first instance…”

17. For the appellate court, to interfere with the award it is not enough to show that the award is high or had I handled the case in the subordinate court, I would have awarded a different figure.

Pleadings 18. The suit was initially filed as HCC 57 of 2003 before being transferred to the lower court as Mombasa CMCC 2368 of 2021.

19. The same related to a letter dated 29/9/2002 which was published. The letter was set out in full as doth: -“1. Societe BIC and Industries are the proprietors of the “BIC” trade mark and the “HACO” trademarks – both duly registered in Kenya pursuant to the provisions of the Trademarks Act (Cap 506) – and Haco Industries is Societe BIC’s licence for the manufacture of certain BIC products.2. You may recollect that, on or about 2nd October, 2001, Doshi Orinmongers Limited of Mombasa, Kenya, was found by officers of the Kenya Revenue Authority in possession of a consignment of counterfeit BIC ballpoint pen products, such products purporting to bear(1)the “BIC” and “HACO” registered trademarks(2)the name “Haco Industries Kenya Limited”, and(3)the stamp of the Kenya Bureau of Standards.3. Our clients had reason to believe the circumstances might disclose the offences under any one or more of(1)The Customs and Excise Act (Cap 472).(2)The value Added Tax Act (Cap 476)(3)The Standards Act (Cap 496).(4)The weights and Measures Act (Cap 513) and(5)The Trademarks Act (Cap 506) and we wrote to you accordingly on our client’s behalf on 16th October, 2001 (a copy of our letter is enclosed for your ease of reference).4. Our clients were also of the view that the circumstances gave rise potentially to civil claims against Doshi ironmongers of trade mark infringement and passing off.2. The mater was subsequently settled between the parties by a Settlement agreement dated 20th February 2, 2002 made between (1) Societe BIC of the first part, (2) Haco Industries of the second part, (3) Doshi Ironmongers of the third part, and (4) one Ashok Labshnaker Doshi (a director of, and principal shareholder in, Doshi ironmongers) of the fourth part.1. We advised the Kenya revenue Authority of the settlement in due course (we enclose a copy of our letter to the Chief Legal Officer, Kenya authority dated 18th April, 2002).2. Under the terms of the settlement agreement, Doshi Ironmongers and Ashok Doshi under took (inter alia) not at any time (1) to infringe our client’s trade marks, or (2) to “…. Possess manufacture, process, package, distribute, buy, sell, export or trade, or otherwise deal in or with … “any counterfeit BIC ballpoint pen products.3. We have been instructed by our clients that, on about 23rd August, 2002, Doshi Ironmongers was found by officers of the Weight and Measures Department, at customs bonded warehouse NO. 204 at Magongo Road at Jomvu in Mombasa, to be in possession of a further consignment of counterfeit BIC ballpoint pen products, being either or both our clients’ trademarks.4. Our clients take the view the maters set out in paragraph 8 (1) constitute a breach of the Settlement agreement, and (2) once again prima facie disclose some or all of the criminal offences referred to in paragraph 3. We are instructed to communicate to you the with which our clients are treating this matter it is considered unconscionable that Doshi ironmongers should be found yet again (and in breach of the terms of the settlement) in possession of counterfeit BIC products, and more so in a customs bonded warehouses. We are instructed to make – which we hereby do a formal complain to your selves on our clients’ behalf, and to request that you take steps forthwith to investigate this matter, and to make appropriate action.We trust that the foregoing is clear, and we look forward to hearing from you - needless to say, should you require any clarification or further information, please do not hesitate to contact the undersigned.Yours faithfullyFor MBOYAO MBOYA”

20. The defendants filed Defense. They stated the letter was a formal complaint to relevant bodies that is: -a.The Commissioner General, Kenya Revenue Authority at Nairobi.b.The Commissioner of Customs and Excise at Nairobi.c.The Commissioner of value o added Tax at Nairobi.d.The Registrar of Trade Marks at Nairobie.The Director of Kenya Bureau of Standards at Nairobif.The provincial Director of Weights and Measures at Nairobi

21. There were stated to be statement of facts, the Defendants were found in possession of Haco and Bic counterfeits. There is an admission that goods were counterfeit.

Appellant’s Submissions 22. The Appellant filed written submission dated 2nd June 2023.

23. It was submitted that the Learned Trial Magistrate erred in finding that the Respondents discharged their burden of proof.

24. Counsel referred to Section 107 and 108 of the Evidence Act and submitted that there was no evidence produced to prove on a balance of probabilities inter alia that the Respondents were acquitted in Mombasa CMCR No. 2158 of 2002, the products were released after the conclusion of that case and were similar consignment with the products of the year 1996.

25. Reliance was placed on the case of Abdirahman Mohamed Elmi t/a Elmi Traders & 2 Others v Nyambeki (2023) eKLR to canvas the argument that the standard if prove was not discharged.

26. Counsel further submitted that the letter dated 24th September 2002 was not defamatory, reliance was placed on the case of Musikari Kombo v Royal media Services & Another to submit that a reasonable person would not have perceived the words to be defamatory. Also cited was the case of SMN v ZWM (2015) eKLR.

27. Further, it was submitted for the trial court erred in not giving the parties a chance to elect that the matter starts de novo following the departure of the magistrate who was handling the case. Counsel referred to the case of Hussein Khalid & 16 Others vb A.G (2020) eKLR.

28. It was also submitted that it was in error when the court failed tom find the defense of qualified privilege as applicable to the Appellant. To support this argument, counsel referred to the case of Reynods v Times Newspaper (2002)2 A.C to submit that reports made to the police were privileged information.

29. I was asked to allow the Appeal.

Respondent’s Submissions 30. The Respondents filed submissions dated 4th July 2023. It was submitted that the trial court correctly found that the ingredients of defamation were pleaded and proved.

31. Counsel submitted that the words were defamatory, referred to the Respondents, were published and were false.

32. It was further submitted that the statements as reports ny the Appellant were malicious and with no purpose other than tainting the character of the Respondents in the right-thinking members if the society who readily came across the information. Carousel cited the case of KL v Standard Limited (2014) eKLR to canvass the point that malice could be inferred from the language used.

33. Counsel also submitted that the defence of qualified privilege was not available to the Appellant and relied on the case of Charles Katiambo Musungu v Dorine Lusweti (2021)e KLR to argue that the trial court correctly found malice and which destroyed the defence of privilege.

34. The Respondents urged me to dismiss the Appeal.

35. The matter is fairly straight forward.

36. The Respondent was complaining not on the falsity of the publication but breach of confidentiality. However, there is no suit on breach of confidentiality.

37. In page 25 there is a settlement agreement. The agreement deals with and agrees that there was infringement of copyright.

38. The Respondent agreed on a settlement sum of Kshs. 15,000,000.

39. The charges related to CR Case No. 2158/02 relates to breach of the law, for which the inspector of weights and measures was the complainant.

40. The Ruling did not exonerate the Respondent. It only stated that the importers may not have the necessary mens rea.

41. It is my finding that none of the Rulings amount to declaration of innocence.

Proceedings 42. The matter proceeded several times before the suit was transferred to the lower court. Judgment was entered on 17/9/2023.

43. The same was for coverage in the media. None of the media houses show the source of their information.

44. There was no evidence of publication. Further, the letter was privileged by virtue of being a complaint against breach of copy right. The case for breach of the plaintiff’s confidentiality agreement had not been dis pleaded.

45. I hold and find that there was no defamation proved.

Quantum 46. The Appellant was to pay 15,00,000/= over defamation. The entire set of the letter is true in all its aspects. I am unable to fathom how damages were arrived at.

47. In Kemfro Africa Ltd v Meru Express Servcie v A.M Lubia & Another 1957 KLR 27 as follows: -“The principles to be observed by an appellate Court in deciding whether it is justified in distributing the quantum of damages awarded by the trial Judge were held in the Court of Appeal for the former East Africa to be that it must be satisfied that either the Judge in assessing the damages, took into account an irrelevant facts or left out of account a relevant one or that short of this, the amount is so inordinately low or so inordinately high that it must be a wholly erroneous estimate of damages.

48. The foregoing statement had been ably elucidated by Sir Kenneth ‘Connor P, in restating the Common Law Principles earlier enunciated in the case at the Privy Counsel, that is Nance v British Columbia Electric Co Ltd, in the decision of Henry Hilanga v Manyoka 1961, 705, 713 at paragraph c, where the Learned Judge ably pronounced himself as doth regarding disturbing quantum of damages:-“The principles which apply under this head are not in doubt. Whether the assessment of damages be by the Judge or Jury, the Appellate Court is not justified in substituting a figure of its own for that awarded simply because it would have awarded a different figure if it had tried the case at the first instance…”

49. The court cannot interfere with the discretion the Magistrate’s Court unless it is not exercised judiciously. In this case, the discretion was not exercised judiciously. Consequently, I find and hold that no damages were suffered.

50. The court is under duty to assess damages even where it dismisses the suit. In Gladys Wanjiru Njaramba –v- Globe Pharmacy & Another (2014) eKLR the Court stated-“It is trite law that the trial Court was under duty to assess the general damages payable to the Plaintiff even after dismissing the suit. This position is confirmed by the Court of Appeal in the case of Mordekai Mwangi Nandwa V Bhogals Garage Ltd Ca No. 124 OF 1993 report in [1993]KLR 4448 where the Court held that the practice that damages be assessed even if the case is dismissed does not imply writing an alternative judgment and in the case of Matiya Byabaloma & Others V Uganda Transport Co. Ltd Uganda Supreme Court Civil Appeal No. 10 OF 1993 IV KALR 138 where the Court held that the Judge erred in not assessing the damage he would have awarded had the appellant been successful in her claim. From the above authorities it is clear that the trial Court fell into error by not assessing the award of general damages he would have awarded to the Appellant had she been successful in proving her case.”

51. In the circumstances I will have given normal damages of Kshs. 500,000/=. This is because no actual damages was pleaded and proved.

52. If for any reason the Plaintiff suffered special damages, the same should be particularly pleaded and proved. In the case of DAVID BAGINE v MARTIN BUNDI [1997] eKLR, the court of Appeal stated as follows: -“It has been held time and again by this Court that special damages must be pleaded and strictly proved. We refer to the remarks by this Court in the case of Mariam Maghema Ali v. Jackson M. Nyambu t/a sisera store, Civil Appeal No. 5 of 1990 (unreported) and Idi Ayub Sahbani v. City Council of Nairobi (1982-88) IKAR 681 at page 684: "....special damages in addition to being pleaded, must be strictly proved as was stated by Lord Goddard C.J. in Bonham Carter v Hyde Park Hotel Limited [1948] 64 TLR 177 thus:“Plaintiffs must understand that if they bring actions for damages it is for them to prove damage, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, 'this is what I have lost, I ask you to give me these damages.' They have to prove it"

53. I therefore make the following orders: -

a.The Appeal is allowed and I set aside the Judgment of the Lower Court given on 17/9/2021 and in lieu thereof substitute the same with an order dismissing the suit with costs.b.The Appellant shall have costs of Kshs. 225,000 for this Appeal.c.The Appellant to have cost in the Lower Court.d.Stay of execution for 30 days.e.The file is closed.

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 21ST DAY OF NOVEMBER, 2023. KIZITO MAGAREJUDGEJudgment delivered through Microsoft Teams Online Platform.In the presence of:-Mr. Oluga for the RespondentNo appearance for the AppellantCourt Assistant - Brian