(Being an appeal against the judgment and decree of Hon. V. K. Momamyi, Adjudicator delivered on 23rd July 2024 in Milimani Small Claims Court SCCCOMM. CLAIM NO. E4861 of 2024)
JUDGMENT
1. This appeal arises from the judgment of the Small Claims Court (SCC) dated 23rd July 2024 in which the court allowed the respondent’s claim against the 1st appellant Africa Nesia International Ltd. The claim by the respondent was against both appellants, with the 2nd appellant sued as the managing director of the 1st appellant. The claim was that the appellants had failed to pay USD 3,055/= at the conversion rate of KShs 155/= per Dollar being the amount owed by the appellants to the respondent for purchase of flight tickets by the respondent on behalf of the 1st appellant.
2. The SCC found that the claim against the 2nd appellant was unsustainable based on the principle of Salomon vs. Salomon & Co. Ltd [1897] AC, 22 where it was held that directors cannot be held personally liable for the debts of the company, otherwise, than as stated under the Companies Act.
3. Upon analyzing the evidence by the parties, considering the law and the submissions and authorities by learned counsels, the learned Adjudicator concluded that the 1st appellant owed the respondent the sum claimed. The court therefore found that the respondent had proved its claim against the 1st appellant to the required standard and he allowed the same.
4. The appellants were dissatisfied with the judgment and filed the appeal herein through the memorandum of appeal dated 22nd August 2024 raising the following grounds:
a) The learned trial magistrate erred in law in relying on the evidence of the respondent which was in variance with the pleadings on record. In so doing, disregarded the maxim that parties are bound by their pleadings.
b) The trial court erred in law in adopting a wide interpretation of section 32 of the Small Claims Court Act by considering evidence that was inconsistent with the pleadings and this occasioned a failure of justice upon the 1st appellant.
c) The trial magistrate erred in law and fact in admitting new evidence and/or issues in the respondent’s submissions when the same had not been raised in the pleadings thus denying the appellant a fair hearing.
d) The learned magistrate erred in law in arriving at a determination that the 1st appellant acknowledged the debt, in so doing entered a judgment on admission.
e) The learned magistrate erred in law in law in failing to consider and be bound by precedent on judgment on admission.
f) The learned magistrate erred in law in when she ignored (and therefore refused to consider) evidence adduced by the 1st appellant in support of the payments made to the respondent.
g) The learned magistrate erred in law in when she ignored (and therefore refused to consider) the 1st respondent’s admissions pertaining to the payments received from the 1st appellant thus arrived at an erroneous finding that the respondent had proved its claim on a balance of probability.
h) The learned magistrate erred in law in by taking into account irrelevant facts and failing to take into account relevant facts thus arriving at an erroneous conclusion.
i) The court erred in failing to exercise its judicial discretion judiciously to award the 2nd appellant costs of the suit.
5. A worthy reminder to learned counsel is that the SCC is presided over by an Adjudicator and not a magistrate in as much as the Judicial Officer holds the rank of magistrate.
6. The appellants therefore pray that the appeal be allowed and the judgment and finding of the learned Adjudicator be vacated and set aside, costs of the appeal be borne by the respondent and/or the court grants any other relief that it deems just.
7. The appeal was disposed of by way of written submissions filed by learned counsels for the parties. The same are considered in the analysis that follows.
8. While the appeal was pending determination, the respondent filed a preliminary objection dated 25th July 2025 on grounds that this court lacks jurisdiction to entertain the appeal in light of Section 38(1) of the Small Claims Court Act, which limits appeals from the Small Claims Court to matters of law only, whereas the Appeal raises no point of law and instead challenges factual findings made by the trial court.
9. The court directed that the preliminary objection be disposed of together with the appeal and learned counsels filed submissions on the same.
10. It is true that on an appeal based on points of law only, as the case herein, this court has to confine itself to issues of law, unless it finds that on the facts presented the trial court reached a clearly erroneous decision that no reasonable tribunal would have reached as was held in the case of M’Riungu vs Republic [1983] KLR 445 by Chesoni, Ag. JA (as he then was), in the following manner;
“ … We would agree with the views expressed in the English case of Martin v Glyneed Distributors Ltd (t/a MBS Fastenings) [1983] 1 CR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court(s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decision of the trial or first appellate court unless it is apparent that; on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad law.”
11. In my assessment I do not think that it was necessary to file the preliminary objection since in any case, this court, in considering the appeal has to determine whether the particular ground was on point of law or of fact or both law and fact. In that case, this court has jurisdiction to consider the appeal. The preliminary objection was therefore not well taken and is dismissed.
12. The appellant reduced the grounds of appeal into four issues for determination as follows:
a) Whether the learned Magistrate erred in law in relying on the evidence of the respondent which was in variance with the pleadings on record. In so doing, disregarded the maxim parties are bound by their pleadings.
b) Whether the learned magistrate erred in law in arriving at a determination that the 1st appellant acknowledged the debt, in so doing entered a judgement on admission.
c) The learned magistrate erred in law when she ignored (and therefore refused to consider) the 1st respondent’s admission pertaining to the payments received from the 1st appellant. Thus arrived at an erroneous finding that the Respondent had proved its claim on a balance of probabilities.
d) Whether the trial magistrate erred in law in failing to exercise its judicial discretion judiciously to award the 2nd appellant costs of the suit.
13. The appellant submits that the evidence presented by the respondent to support the claim was at variance with the pleadings in the claim and for that reason, however strong the evidence, it was for rejection. Learned counsel for the appellant has cited various authorities in support of that submission. For instance in Migore v South Nyanza Sugar Co Ltd [2018] KEHC 5465 (KLR) and the Malawian case of Malawi Railways Ltd v Nyasulu (MSCA Civil Appeal 13 of 1992) [1998] MWSC 3 (10 November 1998) it was held that parties are bound by their pleadings and cannot be allowed to raise a fresh case without due amendment properly made, so that each party knows the case it has to meet at trial and is not taken by surprise. Also that evidence which tends to be at variance with the pleadings, however strong must be disregarded. Further, that the court is bound by the pleadings of the parties and has to adjudicate upon the specific matters in dispute which the parties have raised by the pleadings.
14. The gist of the appellants’ appeal is found in learned counsel’s submission that:
“The 1st Appellant submits that pleadings on record reveals that the agreement entered into between the 1st Appellant and the Respondent for the financing and booking of flight tickets was for the sum of USD 3055. As such, the Court was confined to determining the liability of the 1st Appellant given the fact that the said agreement was not in dispute.”
15. Learned counsel has submitted that the learned Adjudicator relied on the agreement for flight financing dated 10th November 2023 produced by the respondent and also relied on the Whatsapp message correspondences between the respondent and the 2nd appellant as supplied by the respondent to court which revealed that the total cost of five flight tickets was USD 7083 to make her finding that the 1st appellant had not disputed the indebtedness. For that reason, learned counsel submits that the learned Adjudicator expanded the scope of the dispute by relying on evidence that was at variance with the pleadings.
16. In response learned counsel for the respondent submits the issues for determination to be as follows:
a) Whether the learned magistrate relied on evidence inconsistent with pleadings.
b) Whether there was a valid acknowledgment of debt by the 1st appellant.
c) Whether the court erred in disregarding the 1st appellant’s unsubstantiated claim of payment.
d) Whether the learned magistrate erred in declining to award the 2nd appellant costs.
17. Learned counsel submits that the Agreement between the parties and the Whatsapp messages were tendered before the SCC without objection by the appellants and under section 32 of the SCCA the court was entitled to consider all the material tendered before it.
18. Learned counsel maintains that the 1st appellant did not deny the debt in its correspondences with the respondent as well as the Whatsapp communications between the respondent’s manager, CW 1 and the 2nd appellant, DW 1 and this constituted admission of the debt by conduct. Further that an admission may be express or implied through the pleadings or otherwise, for example, through correspondence as was held in the case of Choitram & another v Nazari [1984] KECA 47 (KLR).
19. Learned counsel for the respondent submits further that the 1st appellant failed to substantiate its allegation that it had paid USD 3,000/= in settlement of the sum of USD 3,055/= claimed by the respondent.
20. Finally, learned counsel submits that the trial court exercised its discretion not to award costs to the 2nd appellant.
21. I have considered the grounds set out in the Memorandum of Appeal, the record of appeal and the submissions by learned counsels for the parties. The four issues for determination set out by each of the parties are similar. The court will proceed to consider them as such.
22. As submitted by learned counsel for the respondent, an appeal to this court from the SCC is on points of law only. This is provided for under section 38 of the SCC Act. The manner in which an appellate court should proceed to consider such an appeal is as stated in the case of M’Riungu v. Republic (supra).
23. It was common ground before the SCC that the parties entered into an agreement dated 10th November 2023 for booking and financing of return flight tickets by the respondent to the appellant. I have looked at the agreement produced in evidence before the SCC and I note that in paragraphs numbered (b) and (c) it indicates 4 return flight tickets but afterwards in paragraphs numbered (1) and (2) the number of flight tickets is indicated as 5. The paragraph numbered 1 also lists down details of five flight tickets showing the cost of each, the route and the passenger name. In the pleadings and evidence of both parties, reference was made to 4 flight tickets. It was not disputed that the respondent provided the said services as per the agreement.
24. Paragraph 2 of the said agreement was as follows:
“The Company will purchase the 5 return flight tickets as outlined in clause (1), the cost of which amounts to USD 7083.00 (Seven Thousand and eighty-three USD) for and on behalf of the client.”
25. Paragraph 3 then provided as follows:
“The tickets purchase price shall be paid back to the Company by the Client without deductions, set-off or counterclaim, as follows:
3.1 The whole sum of USD 7083.00 (Seven Thousand and eighty three), shall be paid by the Client to the Company on or before 20th November 2023.”
26. The amount was to be paid through the respondent’s bank account number details which were provided in the agreement. In the Agreement, the Company was the respondent herein while the Client was the 1st appellant. Addition of the cost of each of the five flight tickets which were USD 1390/=, USD 1743/=, USD 1899/=, USD 954/=, and USD 1097/= gives a total of USD 7,083/=.
27. The respondent filed its claim dated 17th April 2024 before the SCC in which it stated that the agreement was for the booking and financing of four return flight tickets and that the total cost of the four return flight tickets was USD 3,055.00 at a conversion rate of KShs 155 per Dollar. Further that as per the Agreement, the entire sum of USD 3,055.00 was to be repaid by the 1st respondent (now the 1st appellant) to the claimant (now the respondent) within the stipulated timeframe. Further that the respondents had failed to honour their repayment obligation as per the agreement, and were indebted to the claimant to the sum of USD 3,055.00 or KShs 473,525/= which included the outstanding balance plus any additional costs or fees accrued due to the delay in repayment and which it was claiming.
28. The claim was supported by a witness statement dated 13th May 2024 of Eunice Etemesi a manager of the respondent herein who testified as CW 1. In the statement she stated in part that, the agreement was for the booking and financing of four return air tickets and further that “the agreement stipulated that the claimant would purchase the tickets on behalf of the 1st respondent, totaling USD 3,055.00 at an exchange rate of KSH 150 ...” (not KShs 155 as per the pleading in the claim).
29. The 1st appellant’s response to the claim was that it admitted the contents of the statement of claim on the agreement that the four return flight tickets were at a total cost of USD 3,055. It however denied that it was indebted to the respondent in the sum of USD 3,055/= and averred that it had paid the respondent USD 3,000/= and therefore it owed the respondent a balance of USD 55/= at the conversion rate of KShs 131 per Dollar but the respondent had neglected and/or refused to acknowledge the said payments. However, in a subsequent paragraph, the 1st appellant averred that that it had paid the respondent USD 3,055/= through the respondent’s account number.
30. Further that the 1st appellant was keen to repay the outstanding balance of USD 55/= but it was experiencing financial difficulties due to unexpected delay in payments from its debtors.
31. The case was heard through the testimony of the witnesses for the parties who adopted their respective filed witness statements as evidence in chief. The respondent testified through its director Eunice Etemesi (CW 1) while the appellants testified through the 2nd appellant who is the 1st appellant’s managing director as RW 2.
32. In her testimony before court, CW 1 said that after offering the services, the 2nd appellant, Patricia, gave the respondents a cheque which they banked but it bounced. A copy of that cheque was however not produced in evidence. It would have helped to show how much was being paid at the time which would have confirmed whether it was USD 7,083/= or 3,055/=. CW 1 went further and said that the 2nd appellant subsequently did a transfer of part of the money and a balance remained outstanding. She did not expressly state how much was transferred nor how much was outstanding. She then produced Whatsapp communication between herself and what she termed as staff of the 1st appellant who is clearly the 2nd appellant. But again, those Whatsapp communications bear no particular amount owed.
33. In cross-examination CW 1 acknowledged that in her filed witness statement she indicated that the agreement between them was for USD 3,055/=. She then went on to say that the respondent had paid them USD 1,000/= but did not pay a further USD 2,000/= as claimed by the 1st respondent in its response to the claim. She then said that the agreement was for USD 7,000/= (not USD 7,083 as was shown in the agreement). She then referred to the demand letter dated 23rd January 2024 by the respondent to the 1st appellant which indicated that the respondent was claiming USD 3,055/=.
34. I have looked at that demand letter and it simply states that the appellants were indebted to the respondent in the sum of USD 3,055/= being a remainder of monies owed to them pursuant to the agreement for the financing of flight tickets and that only one installment of the monies owed had been paid. The amount of the installment paid is not indicated in the letter. The letter then indicated that it was a demand for repayment of monies owed to the respondent being USD 3,055/=.
35. In another letter dated 12th February 2024 from the respondent’s advocates to the appellants, the respondent referred to a letter by the appellants to the respondent on a date not indicated which according to the respondent was an acknowledgement of the monies owed being USD 3,055/= and a proposed payment plan. Again, this letter by the 1st respondent to the appellant was not made available to court as an exhibit. It would have helped to determine what amount the 1st appellant had acknowledged as owing, if at all it was indicated there. The respondent then offered its proposed repayment plan to the 1st appellant which obviously was not honoured and thus the claim before the SCC.
36. The Whatsapp correspondences between the CW 1 and the 2nd appellant were also produced as exhibits in the case. However, there is no indication of what amount was owed even as they clearly show that indeed the appellants acknowledged that they were indebted to the respondent as they kept promising to pay, to no avail.
37. In further cross-examination, the respondent said that the amount agreed to be paid for the services was USD 7,000/= (not USD 7,083/=). She repeated the same amount of USD 7,000/= in re-examination and that the amount owed by the appellants was USD 3,055/=.
38. In her witness statement the 2nd respondent reiterated the averments of the 1st respondent in its statement of response without more as its evidence in chief. She relied on a bank statement from Stanbic Bank dated 1st July 2024 for the period 14th December 2023 to 14th December 2023. From the statement the only transaction in respect of Uniq Group UG Regional Tours and Tr. (the respondent herein) was for USD 1,000/=.
39. On that evidence, the learned Adjudicator found that the existence of the contract between the parties, the contractual sum of USD 7, 083/=, that the respondent had indeed performed its part of the contract to book the flights and purchase the tickets and that the sum was to be refunded to the respondent on or before 20th November 2023 was not disputed. The learned Adjudicator then considered the evidence and was satisfied that the entire sum had not been repaid and that the respondent had made demands to the appellants where the appellants had never disputed that the balance was indeed owing.
40. It is apparent that the learned Adjudicator’s finding that the contract sum was USD 7,083/= was not disputed was not correct. The appellant’s case completely disputed this sum right from the response to the written witness statement and the testimony of RW 2 in court and insisted that the contract sum was USD 3,055/= even as it did not offer any other written agreement apart from that tendered by the respondent.
41. Therefore, whereas the 1st appellant did not dispute the fact that the written agreement indicated the contract sum as USD 7,083/= the respondent’s pleadings and witness statement which was her evidence in chief clearly indicated that the total sum for the air tickets (whether 4 or 5) was 3,055/=. So that the pleadings (that is the claim) and the evidence in chief of CW 1 were in tandem that the total contract sum was USD 3,055/=. But the written agreement showed the contract sum as USD 7,083/=. In that case, the pleadings and the oral written statement were in conflict with the written Agreement. As submitted by learned counsel for the appellants, in spite of that conflict, the respondent never sought to amend its claim to correct it to read USD 7,.083/=. The 1st appellant thus responded to the pleading as per the claim and not the Agreement.
42. In fact, the learned Adjudicator found correctly afterwards in his judgment that the respondent’s case was that the total cost of the four return flight tickets was USD 3,055.00. He then stated that the only issue for determination was whether the claimant had proved its claim against the respondent on a balance of probability. But then, he went back to the Agreement where it was indicated that the flight tickets were five (not four as he had earlier indicated) and they were worth USD 7,083/=. The learned Adjudicator then found on the basis of the demand letters and the Whatsapp messages that the 1st appellant had never denied that the amount owing was USD 3,055/=. Further that the appellants had not produced any proof that the debt which was clearly acknowledged had been settled save for an outstanding sum of USD 55/=.
43. With respect to the learned Adjudicator, he sidestepped determining the issue of what the contract sum was yet it was at the heart of the dispute between the parties.
44. The respondent’s pleadings and witness statement stated that the total contract sum was USD 3,055/=. Although CW 1 appeared to acknowledge that the 1st appellant had only paid part of the money, she never in her correspondences with the appellants nor the evidence tendered mentioned the sum of 7,083/= nor stated the amount so far paid. She only mentioned the amount paid during cross-examination and the time she mentioned the amount owing was in the respondent’s demand letters from her advocates to the appellants. But even after making the demand as such, the respondent went ahead in its claim and witness statement of CW 1 to state that the total contract sum, (not outstanding sum) was USD 3,055/=. It is apparent then that the written Agreement could not support the claim.
45. The respondent did not produce primary documents such as copies of the tickets purchased and the amounts paid for them or its bank statement or any other mode of payment to show that indeed it had expended USD 7,083/= on the purchase of the flight tickets. That is not to say that it did not purchase any tickets, it is that it did not provide evidence to show that it purchased tickets worth USD 7,083/= as indicated in the Agreement. In view of the respondent’s clear pleading and witness statement that the total sum for purchase of the tickets was USD 3,055/= and the 1st respondent’s insistence that indeed that was the amount, one must be forgiven for imagining that the written agreement may have been for the parties’ own other uses while the correct amount was USD 3,055/= perhaps by way of oral agreement.
46. It is material to note that in spite of the respondent acknowledging that the appellant paid only USD 1,000/= out of the outstanding sum, its claim was not for USD 2,055/= as one would have expected as per the claim in the pleadings and witness statement nor for USD 6,083/= as per the written Agreement or even USD 6,000/= as per CW 1’s answers during her testimony.
47. However, the parties were in agreement that indeed a contract was entered into between the 1st appellant and the respondent, that the respondent would and did purchase some flight tickets for the 1st appellant and that the 1st appellant would refund the full sum. The respondent pleaded and the 1st appellant conceded that the total amount for the services was USD 3,055/=. The respondent’s correspondence with the 1st appellant was to the effect that there was an outstanding sum to be paid. The 1st appellant conceded that indeed there was an outstanding sum. It alleged to have paid USD 3,000/= but it did not tender evidence to prove such a payment. The evidence it tendered in the form of a bank statement showed that only USD 1,000/= had been paid to the respondent.
48. In the circumstances, the only logical conclusion that a reasonable person considering the facts would arrive at is that out of the USD 3,055/= claimed by the respondent, a sum of USD 1,000/= had been paid by the 1st appellant thereby leaving a balance of USD 2,055/=.
49. It is correct that an important feature to bear in mind while considering the appeal is that section 32 of the SCC Act exempts the Small Claim court’s proceedings from the rigid application of the standards of evidence applicable in other court proceedings and permits the court to include as evidence any material that it deems credible or trustworthy (emphasis by underlining supplied). It follows from this provision that it is largely upon the Adjudicator to determine the material to rely upon.
50. Section 32 of the Act provides that the strict evidentiary rules applicable in other courts are not wholly applied in the Small Claims Court. It further, provides that the Court may admit as evidence any oral or written testimony, record, or other material even though the same is not admissible as evidence in any other Court under the law of evidence (emphasis by underlining supplied). My understanding of this provision is that the Adjudicator has the discretion to admit evidence which may be helpful in establishing whether or not the claim is proved if the material is credible and trustworthy.
51. In the present case, it is apparent that the respondent presented conflicting evidence in the form of witness statements and the written agreement, and the learned Adjudicator chose to go with the agreement. The written Agreement did not however support the case as pleaded but the witness statement which was the evidence in chief did. Under section 32 of the SCCA, the learned Adjudicator can rely upon any evidence which he found credible and trustworthy. What this court needs to determine is whether his decision was reasonable in the circumstances. I find that it was not because it relied wholly on the written Agreement which was not credible and trustworthy since it was not clear on the number of flight tickets to be purchased but most importantly it did not support the respondent’s case as pleaded. Secondly, it was not supported by any other credible evidence such as copies of the flight tickets or the purchase transactions showing the amount expended.
52. I therefore find that the learned Adjudicator’s judgment is for setting aside as there was an error of law in failing to take into account a material factor, being the variance between the pleadings and the evidence of the written Agreement.
53. The learned Adjudicator also failed to take into account material evidence in his finding that the outstanding sum was USD 3,055/= equivalent to 464,360/=, yet the respondent conceded in the testimony of its witness, CW 1 in court that the 1st appellant had paid it USD 1,000/=. The learned Adjudicator did not deduct this sum from the said outstanding sum.
54. Consequently, I find that the appeal has merit and the same is allowed only to the extent that the judgment of the SCC is set aside. The appellants prayed in the grounds of appeal that this court could grant the relief that it deemed appropriate. The judgment of the SCC is substituted with a judgment allowing the respondent’s claim but only to the tune of USD 2,055/= which according to the rate applied by the SCC and which was not disputed by the appellant was KShs 151 per USD making the amount KShs310,305/=.
55. On the issue of costs, as submitted by learned counsel for the respondent, the learned Adjudicator exercised his discretion not to award costs to the 2nd respondent and I find no reason to fault his decision.
56. Each party will bear its own costs of the appeal.
57. Orders accordingly.
58. Delivered, dated and signed on the Virtual Platform, Teams this 18th day of May 2026 and uploaded on the CTS for access by parties.
ANDAYI W. F.
JUDGE
In the presence of:
Mwongera (Ms) h/b for Etemesi for the Appellant appearing earlier in the day and the judgment being delivered later.
N/A for the Respondent.
Ummu h/b for Amina: Court Assistant.
JUDGMENT
1. This appeal arises from the judgment of the Small Claims Court (SCC) dated 23rd July 2024 in which the court allowed the respondent’s claim against the 1st appellant Africa Nesia International Ltd. The claim by the respondent was against both appellants, with the 2nd appellant sued as the managing director of the 1st appellant. The claim was that the appellants had failed to pay USD 3,055/= at the conversion rate of KShs 155/= per Dollar being the amount owed by the appellants to the respondent for purchase of flight tickets by the respondent on behalf of the 1st appellant.
2. The SCC found that the claim against the 2nd appellant was unsustainable based on the principle of Salomon vs. Salomon & Co. Ltd [1897] AC, 22 where it was held that directors cannot be held personally liable for the debts of the company, otherwise, than as stated under the Companies Act.
3. Upon analyzing the evidence by the parties, considering the law and the submissions and authorities by learned counsels, the learned Adjudicator concluded that the 1st appellant owed the respondent the sum claimed. The court therefore found that the respondent had proved its claim against the 1st appellant to the required standard and he allowed the same.
4. The appellants were dissatisfied with the judgment and filed the appeal herein through the memorandum of appeal dated 22nd August 2024 raising the following grounds:
a) The learned trial magistrate erred in law in relying on the evidence of the respondent which was in variance with the pleadings on record. In so doing, disregarded the maxim that parties are bound by their pleadings.
b) The trial court erred in law in adopting a wide interpretation of section 32 of the Small Claims Court Act by considering evidence that was inconsistent with the pleadings and this occasioned a failure of justice upon the 1st appellant.
c) The trial magistrate erred in law and fact in admitting new evidence and/or issues in the respondent’s submissions when the same had not been raised in the pleadings thus denying the appellant a fair hearing.
d) The learned magistrate erred in law in arriving at a determination that the 1st appellant acknowledged the debt, in so doing entered a judgment on admission.
e) The learned magistrate erred in law in law in failing to consider and be bound by precedent on judgment on admission.
f) The learned magistrate erred in law in when she ignored (and therefore refused to consider) evidence adduced by the 1st appellant in support of the payments made to the respondent.
g) The learned magistrate erred in law in when she ignored (and therefore refused to consider) the 1st respondent’s admissions pertaining to the payments received from the 1st appellant thus arrived at an erroneous finding that the respondent had proved its claim on a balance of probability.
h) The learned magistrate erred in law in by taking into account irrelevant facts and failing to take into account relevant facts thus arriving at an erroneous conclusion.
i) The court erred in failing to exercise its judicial discretion judiciously to award the 2nd appellant costs of the suit.
5. A worthy reminder to learned counsel is that the SCC is presided over by an Adjudicator and not a magistrate in as much as the Judicial Officer holds the rank of magistrate.
6. The appellants therefore pray that the appeal be allowed and the judgment and finding of the learned Adjudicator be vacated and set aside, costs of the appeal be borne by the respondent and/or the court grants any other relief that it deems just.
7. The appeal was disposed of by way of written submissions filed by learned counsels for the parties. The same are considered in the analysis that follows.
8. While the appeal was pending determination, the respondent filed a preliminary objection dated 25th July 2025 on grounds that this court lacks jurisdiction to entertain the appeal in light of Section 38(1) of the Small Claims Court Act, which limits appeals from the Small Claims Court to matters of law only, whereas the Appeal raises no point of law and instead challenges factual findings made by the trial court.
9. The court directed that the preliminary objection be disposed of together with the appeal and learned counsels filed submissions on the same.
10. It is true that on an appeal based on points of law only, as the case herein, this court has to confine itself to issues of law, unless it finds that on the facts presented the trial court reached a clearly erroneous decision that no reasonable tribunal would have reached as was held in the case of M’Riungu vs Republic [1983] KLR 445 by Chesoni, Ag. JA (as he then was), in the following manner;
“ … We would agree with the views expressed in the English case of Martin v Glyneed Distributors Ltd (t/a MBS Fastenings) [1983] 1 CR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court(s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decision of the trial or first appellate court unless it is apparent that; on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad law.”
11. In my assessment I do not think that it was necessary to file the preliminary objection since in any case, this court, in considering the appeal has to determine whether the particular ground was on point of law or of fact or both law and fact. In that case, this court has jurisdiction to consider the appeal. The preliminary objection was therefore not well taken and is dismissed.
12. The appellant reduced the grounds of appeal into four issues for determination as follows:
a) Whether the learned Magistrate erred in law in relying on the evidence of the respondent which was in variance with the pleadings on record. In so doing, disregarded the maxim parties are bound by their pleadings.
b) Whether the learned magistrate erred in law in arriving at a determination that the 1st appellant acknowledged the debt, in so doing entered a judgement on admission.
c) The learned magistrate erred in law when she ignored (and therefore refused to consider) the 1st respondent’s admission pertaining to the payments received from the 1st appellant. Thus arrived at an erroneous finding that the Respondent had proved its claim on a balance of probabilities.
d) Whether the trial magistrate erred in law in failing to exercise its judicial discretion judiciously to award the 2nd appellant costs of the suit.
13. The appellant submits that the evidence presented by the respondent to support the claim was at variance with the pleadings in the claim and for that reason, however strong the evidence, it was for rejection. Learned counsel for the appellant has cited various authorities in support of that submission. For instance in Migore v South Nyanza Sugar Co Ltd [2018] KEHC 5465 (KLR) and the Malawian case of Malawi Railways Ltd v Nyasulu (MSCA Civil Appeal 13 of 1992) [1998] MWSC 3 (10 November 1998) it was held that parties are bound by their pleadings and cannot be allowed to raise a fresh case without due amendment properly made, so that each party knows the case it has to meet at trial and is not taken by surprise. Also that evidence which tends to be at variance with the pleadings, however strong must be disregarded. Further, that the court is bound by the pleadings of the parties and has to adjudicate upon the specific matters in dispute which the parties have raised by the pleadings.
14. The gist of the appellants’ appeal is found in learned counsel’s submission that:
“The 1st Appellant submits that pleadings on record reveals that the agreement entered into between the 1st Appellant and the Respondent for the financing and booking of flight tickets was for the sum of USD 3055. As such, the Court was confined to determining the liability of the 1st Appellant given the fact that the said agreement was not in dispute.”
15. Learned counsel has submitted that the learned Adjudicator relied on the agreement for flight financing dated 10th November 2023 produced by the respondent and also relied on the Whatsapp message correspondences between the respondent and the 2nd appellant as supplied by the respondent to court which revealed that the total cost of five flight tickets was USD 7083 to make her finding that the 1st appellant had not disputed the indebtedness. For that reason, learned counsel submits that the learned Adjudicator expanded the scope of the dispute by relying on evidence that was at variance with the pleadings.
16. In response learned counsel for the respondent submits the issues for determination to be as follows:
a) Whether the learned magistrate relied on evidence inconsistent with pleadings.
b) Whether there was a valid acknowledgment of debt by the 1st appellant.
c) Whether the court erred in disregarding the 1st appellant’s unsubstantiated claim of payment.
d) Whether the learned magistrate erred in declining to award the 2nd appellant costs.
17. Learned counsel submits that the Agreement between the parties and the Whatsapp messages were tendered before the SCC without objection by the appellants and under section 32 of the SCCA the court was entitled to consider all the material tendered before it.
18. Learned counsel maintains that the 1st appellant did not deny the debt in its correspondences with the respondent as well as the Whatsapp communications between the respondent’s manager, CW 1 and the 2nd appellant, DW 1 and this constituted admission of the debt by conduct. Further that an admission may be express or implied through the pleadings or otherwise, for example, through correspondence as was held in the case of Choitram & another v Nazari [1984] KECA 47 (KLR).
19. Learned counsel for the respondent submits further that the 1st appellant failed to substantiate its allegation that it had paid USD 3,000/= in settlement of the sum of USD 3,055/= claimed by the respondent.
20. Finally, learned counsel submits that the trial court exercised its discretion not to award costs to the 2nd appellant.
21. I have considered the grounds set out in the Memorandum of Appeal, the record of appeal and the submissions by learned counsels for the parties. The four issues for determination set out by each of the parties are similar. The court will proceed to consider them as such.
22. As submitted by learned counsel for the respondent, an appeal to this court from the SCC is on points of law only. This is provided for under section 38 of the SCC Act. The manner in which an appellate court should proceed to consider such an appeal is as stated in the case of M’Riungu v. Republic (supra).
23. It was common ground before the SCC that the parties entered into an agreement dated 10th November 2023 for booking and financing of return flight tickets by the respondent to the appellant. I have looked at the agreement produced in evidence before the SCC and I note that in paragraphs numbered (b) and (c) it indicates 4 return flight tickets but afterwards in paragraphs numbered (1) and (2) the number of flight tickets is indicated as 5. The paragraph numbered 1 also lists down details of five flight tickets showing the cost of each, the route and the passenger name. In the pleadings and evidence of both parties, reference was made to 4 flight tickets. It was not disputed that the respondent provided the said services as per the agreement.
24. Paragraph 2 of the said agreement was as follows:
“The Company will purchase the 5 return flight tickets as outlined in clause (1), the cost of which amounts to USD 7083.00 (Seven Thousand and eighty-three USD) for and on behalf of the client.”
25. Paragraph 3 then provided as follows:
“The tickets purchase price shall be paid back to the Company by the Client without deductions, set-off or counterclaim, as follows:
3.1 The whole sum of USD 7083.00 (Seven Thousand and eighty three), shall be paid by the Client to the Company on or before 20th November 2023.”
26. The amount was to be paid through the respondent’s bank account number details which were provided in the agreement. In the Agreement, the Company was the respondent herein while the Client was the 1st appellant. Addition of the cost of each of the five flight tickets which were USD 1390/=, USD 1743/=, USD 1899/=, USD 954/=, and USD 1097/= gives a total of USD 7,083/=.
27. The respondent filed its claim dated 17th April 2024 before the SCC in which it stated that the agreement was for the booking and financing of four return flight tickets and that the total cost of the four return flight tickets was USD 3,055.00 at a conversion rate of KShs 155 per Dollar. Further that as per the Agreement, the entire sum of USD 3,055.00 was to be repaid by the 1st respondent (now the 1st appellant) to the claimant (now the respondent) within the stipulated timeframe. Further that the respondents had failed to honour their repayment obligation as per the agreement, and were indebted to the claimant to the sum of USD 3,055.00 or KShs 473,525/= which included the outstanding balance plus any additional costs or fees accrued due to the delay in repayment and which it was claiming.
28. The claim was supported by a witness statement dated 13th May 2024 of Eunice Etemesi a manager of the respondent herein who testified as CW 1. In the statement she stated in part that, the agreement was for the booking and financing of four return air tickets and further that “the agreement stipulated that the claimant would purchase the tickets on behalf of the 1st respondent, totaling USD 3,055.00 at an exchange rate of KSH 150 ...” (not KShs 155 as per the pleading in the claim).
29. The 1st appellant’s response to the claim was that it admitted the contents of the statement of claim on the agreement that the four return flight tickets were at a total cost of USD 3,055. It however denied that it was indebted to the respondent in the sum of USD 3,055/= and averred that it had paid the respondent USD 3,000/= and therefore it owed the respondent a balance of USD 55/= at the conversion rate of KShs 131 per Dollar but the respondent had neglected and/or refused to acknowledge the said payments. However, in a subsequent paragraph, the 1st appellant averred that that it had paid the respondent USD 3,055/= through the respondent’s account number.
30. Further that the 1st appellant was keen to repay the outstanding balance of USD 55/= but it was experiencing financial difficulties due to unexpected delay in payments from its debtors.
31. The case was heard through the testimony of the witnesses for the parties who adopted their respective filed witness statements as evidence in chief. The respondent testified through its director Eunice Etemesi (CW 1) while the appellants testified through the 2nd appellant who is the 1st appellant’s managing director as RW 2.
32. In her testimony before court, CW 1 said that after offering the services, the 2nd appellant, Patricia, gave the respondents a cheque which they banked but it bounced. A copy of that cheque was however not produced in evidence. It would have helped to show how much was being paid at the time which would have confirmed whether it was USD 7,083/= or 3,055/=. CW 1 went further and said that the 2nd appellant subsequently did a transfer of part of the money and a balance remained outstanding. She did not expressly state how much was transferred nor how much was outstanding. She then produced Whatsapp communication between herself and what she termed as staff of the 1st appellant who is clearly the 2nd appellant. But again, those Whatsapp communications bear no particular amount owed.
33. In cross-examination CW 1 acknowledged that in her filed witness statement she indicated that the agreement between them was for USD 3,055/=. She then went on to say that the respondent had paid them USD 1,000/= but did not pay a further USD 2,000/= as claimed by the 1st respondent in its response to the claim. She then said that the agreement was for USD 7,000/= (not USD 7,083 as was shown in the agreement). She then referred to the demand letter dated 23rd January 2024 by the respondent to the 1st appellant which indicated that the respondent was claiming USD 3,055/=.
34. I have looked at that demand letter and it simply states that the appellants were indebted to the respondent in the sum of USD 3,055/= being a remainder of monies owed to them pursuant to the agreement for the financing of flight tickets and that only one installment of the monies owed had been paid. The amount of the installment paid is not indicated in the letter. The letter then indicated that it was a demand for repayment of monies owed to the respondent being USD 3,055/=.
35. In another letter dated 12th February 2024 from the respondent’s advocates to the appellants, the respondent referred to a letter by the appellants to the respondent on a date not indicated which according to the respondent was an acknowledgement of the monies owed being USD 3,055/= and a proposed payment plan. Again, this letter by the 1st respondent to the appellant was not made available to court as an exhibit. It would have helped to determine what amount the 1st appellant had acknowledged as owing, if at all it was indicated there. The respondent then offered its proposed repayment plan to the 1st appellant which obviously was not honoured and thus the claim before the SCC.
36. The Whatsapp correspondences between the CW 1 and the 2nd appellant were also produced as exhibits in the case. However, there is no indication of what amount was owed even as they clearly show that indeed the appellants acknowledged that they were indebted to the respondent as they kept promising to pay, to no avail.
37. In further cross-examination, the respondent said that the amount agreed to be paid for the services was USD 7,000/= (not USD 7,083/=). She repeated the same amount of USD 7,000/= in re-examination and that the amount owed by the appellants was USD 3,055/=.
38. In her witness statement the 2nd respondent reiterated the averments of the 1st respondent in its statement of response without more as its evidence in chief. She relied on a bank statement from Stanbic Bank dated 1st July 2024 for the period 14th December 2023 to 14th December 2023. From the statement the only transaction in respect of Uniq Group UG Regional Tours and Tr. (the respondent herein) was for USD 1,000/=.
39. On that evidence, the learned Adjudicator found that the existence of the contract between the parties, the contractual sum of USD 7, 083/=, that the respondent had indeed performed its part of the contract to book the flights and purchase the tickets and that the sum was to be refunded to the respondent on or before 20th November 2023 was not disputed. The learned Adjudicator then considered the evidence and was satisfied that the entire sum had not been repaid and that the respondent had made demands to the appellants where the appellants had never disputed that the balance was indeed owing.
40. It is apparent that the learned Adjudicator’s finding that the contract sum was USD 7,083/= was not disputed was not correct. The appellant’s case completely disputed this sum right from the response to the written witness statement and the testimony of RW 2 in court and insisted that the contract sum was USD 3,055/= even as it did not offer any other written agreement apart from that tendered by the respondent.
41. Therefore, whereas the 1st appellant did not dispute the fact that the written agreement indicated the contract sum as USD 7,083/= the respondent’s pleadings and witness statement which was her evidence in chief clearly indicated that the total sum for the air tickets (whether 4 or 5) was 3,055/=. So that the pleadings (that is the claim) and the evidence in chief of CW 1 were in tandem that the total contract sum was USD 3,055/=. But the written agreement showed the contract sum as USD 7,083/=. In that case, the pleadings and the oral written statement were in conflict with the written Agreement. As submitted by learned counsel for the appellants, in spite of that conflict, the respondent never sought to amend its claim to correct it to read USD 7,.083/=. The 1st appellant thus responded to the pleading as per the claim and not the Agreement.
42. In fact, the learned Adjudicator found correctly afterwards in his judgment that the respondent’s case was that the total cost of the four return flight tickets was USD 3,055.00. He then stated that the only issue for determination was whether the claimant had proved its claim against the respondent on a balance of probability. But then, he went back to the Agreement where it was indicated that the flight tickets were five (not four as he had earlier indicated) and they were worth USD 7,083/=. The learned Adjudicator then found on the basis of the demand letters and the Whatsapp messages that the 1st appellant had never denied that the amount owing was USD 3,055/=. Further that the appellants had not produced any proof that the debt which was clearly acknowledged had been settled save for an outstanding sum of USD 55/=.
43. With respect to the learned Adjudicator, he sidestepped determining the issue of what the contract sum was yet it was at the heart of the dispute between the parties.
44. The respondent’s pleadings and witness statement stated that the total contract sum was USD 3,055/=. Although CW 1 appeared to acknowledge that the 1st appellant had only paid part of the money, she never in her correspondences with the appellants nor the evidence tendered mentioned the sum of 7,083/= nor stated the amount so far paid. She only mentioned the amount paid during cross-examination and the time she mentioned the amount owing was in the respondent’s demand letters from her advocates to the appellants. But even after making the demand as such, the respondent went ahead in its claim and witness statement of CW 1 to state that the total contract sum, (not outstanding sum) was USD 3,055/=. It is apparent then that the written Agreement could not support the claim.
45. The respondent did not produce primary documents such as copies of the tickets purchased and the amounts paid for them or its bank statement or any other mode of payment to show that indeed it had expended USD 7,083/= on the purchase of the flight tickets. That is not to say that it did not purchase any tickets, it is that it did not provide evidence to show that it purchased tickets worth USD 7,083/= as indicated in the Agreement. In view of the respondent’s clear pleading and witness statement that the total sum for purchase of the tickets was USD 3,055/= and the 1st respondent’s insistence that indeed that was the amount, one must be forgiven for imagining that the written agreement may have been for the parties’ own other uses while the correct amount was USD 3,055/= perhaps by way of oral agreement.
46. It is material to note that in spite of the respondent acknowledging that the appellant paid only USD 1,000/= out of the outstanding sum, its claim was not for USD 2,055/= as one would have expected as per the claim in the pleadings and witness statement nor for USD 6,083/= as per the written Agreement or even USD 6,000/= as per CW 1’s answers during her testimony.
47. However, the parties were in agreement that indeed a contract was entered into between the 1st appellant and the respondent, that the respondent would and did purchase some flight tickets for the 1st appellant and that the 1st appellant would refund the full sum. The respondent pleaded and the 1st appellant conceded that the total amount for the services was USD 3,055/=. The respondent’s correspondence with the 1st appellant was to the effect that there was an outstanding sum to be paid. The 1st appellant conceded that indeed there was an outstanding sum. It alleged to have paid USD 3,000/= but it did not tender evidence to prove such a payment. The evidence it tendered in the form of a bank statement showed that only USD 1,000/= had been paid to the respondent.
48. In the circumstances, the only logical conclusion that a reasonable person considering the facts would arrive at is that out of the USD 3,055/= claimed by the respondent, a sum of USD 1,000/= had been paid by the 1st appellant thereby leaving a balance of USD 2,055/=.
49. It is correct that an important feature to bear in mind while considering the appeal is that section 32 of the SCC Act exempts the Small Claim court’s proceedings from the rigid application of the standards of evidence applicable in other court proceedings and permits the court to include as evidence any material that it deems credible or trustworthy (emphasis by underlining supplied). It follows from this provision that it is largely upon the Adjudicator to determine the material to rely upon.
50. Section 32 of the Act provides that the strict evidentiary rules applicable in other courts are not wholly applied in the Small Claims Court. It further, provides that the Court may admit as evidence any oral or written testimony, record, or other material even though the same is not admissible as evidence in any other Court under the law of evidence (emphasis by underlining supplied). My understanding of this provision is that the Adjudicator has the discretion to admit evidence which may be helpful in establishing whether or not the claim is proved if the material is credible and trustworthy.
51. In the present case, it is apparent that the respondent presented conflicting evidence in the form of witness statements and the written agreement, and the learned Adjudicator chose to go with the agreement. The written Agreement did not however support the case as pleaded but the witness statement which was the evidence in chief did. Under section 32 of the SCCA, the learned Adjudicator can rely upon any evidence which he found credible and trustworthy. What this court needs to determine is whether his decision was reasonable in the circumstances. I find that it was not because it relied wholly on the written Agreement which was not credible and trustworthy since it was not clear on the number of flight tickets to be purchased but most importantly it did not support the respondent’s case as pleaded. Secondly, it was not supported by any other credible evidence such as copies of the flight tickets or the purchase transactions showing the amount expended.
52. I therefore find that the learned Adjudicator’s judgment is for setting aside as there was an error of law in failing to take into account a material factor, being the variance between the pleadings and the evidence of the written Agreement.
53. The learned Adjudicator also failed to take into account material evidence in his finding that the outstanding sum was USD 3,055/= equivalent to 464,360/=, yet the respondent conceded in the testimony of its witness, CW 1 in court that the 1st appellant had paid it USD 1,000/=. The learned Adjudicator did not deduct this sum from the said outstanding sum.
54. Consequently, I find that the appeal has merit and the same is allowed only to the extent that the judgment of the SCC is set aside. The appellants prayed in the grounds of appeal that this court could grant the relief that it deemed appropriate. The judgment of the SCC is substituted with a judgment allowing the respondent’s claim but only to the tune of USD 2,055/= which according to the rate applied by the SCC and which was not disputed by the appellant was KShs 151 per USD making the amount KShs310,305/=.
55. On the issue of costs, as submitted by learned counsel for the respondent, the learned Adjudicator exercised his discretion not to award costs to the 2nd respondent and I find no reason to fault his decision.
56. Each party will bear its own costs of the appeal.
57. Orders accordingly.
58. Delivered, dated and signed on the Virtual Platform, Teams this 18th day of May 2026 and uploaded on the CTS for access by parties.
ANDAYI W. F.
JUDGE
In the presence of:
Mwongera (Ms) h/b for Etemesi for the Appellant appearing earlier in the day and the judgment being delivered later.
N/A for the Respondent.
Ummu h/b for Amina: Court Assistant.