1. This is an appeal arising out of a dispute filed and litigated before the Small Claims Court strictly as a commercial claim for goods sold and delivered.
Background Facts
2. The genesis of the dispute traces back to a transaction executed on 28th June, 2023. The Respondent purchased building materials from the Appellant's hardware store. The total purchase price was Kshs. 358,700/=. The Respondent paid the sum in full. The Appellant issued Receipt No. 2487. The transaction was executed strictly as a cash sale.
3. The Respondent subsequently approached the Small Claims Court at Malindi. He filed a Statement of Claim seeking Kshs. 164,500/=. He alleged non-delivery of 150 iron bars. He claimed he collected only a portion of the materials. He asserted he left the remaining goods behind to attend to an urgent Court matter in Meru. He averred the Appellant subsequently refused to release the remaining goods. The Appellant entered appearance and filed a Response to the Statement of Claim. It denied the claim in its entirety. It averred the Respondent collected all goods concurrently with payment. It relied on the receipt endorsed with the words "cleared" and "paid" by its storekeeper.
4. The Appellant also raised a preliminary point of law. It pleaded that it was a sole proprietorship. It asserted it was not a body corporate capable of being sued in its own name. The Trial Court proceeded to hear the matter fully. It ignored the preliminary objection. Hon. Grace Mutemi, Resident Magistrate, delivered her judgment on 16th April, 2025. She found in favour of the Respondent. She awarded him the claimed sum of Kshs. 164,500/= together with costs and interest.
5. The Appellant was aggrieved by the Trial Court's decision. It lodged this appeal. It challenges the judgment on points of law and evidentiary evaluation.
6. The Appellant filed a Memorandum of Appeal dated 2nd May, 2025 raising the following grounds:
1. THAT the learned trial Magistrate erred in law by failing to hold that the Appellant is not a legal person hence incapable of suing or being sued in its name.
2. THAT the Learned Trial Magistrate erred in law by failing to appreciate that a non-existent entity lacks locus standi to be sued or appear before a Court of law.
3. THAT the Learned Trial Magistrate erred in law by holding that the Respondent proved his case on the required standard of the law.
4. THAT the Learned Trial Magistrate erred in law by shifting the burden of proof on the Appellant.
5. THAT the Learned Trial Magistrate erred in law by admitting extrinsic evidence to vary the contents of a written document.
6. THAT the Learned Trial Magistrate erred in law by taking into account matters she ought not to have taken into account.
7. THAT the Learned Trial Magistrate erred in law by failing to take into account matters she ought to have taken into account.
8. THAT the Learned Trial Magistrate erred in law by failing to find and hold that a cash sale receipt is evidence of both payment and collection of goods.
9. THAT the Learned Trial Magistrate was biased in all fairness.
10. THAT the Learned Trial Magistrate erred in law by failing to address any of the issues tabled before her by the Appellant.
7. The reliefs sought in the Memorandum of Appeal are as follows:
"REASONS WHEREFORE the Appellant prays that the Resident Magistrate's judgment delivered on the 16th day of April, 2025 be set aside and be substituted with the judgment of this court by dismissing the Respondent's claim in the subordinate court with costs to the Appellant."
8. The Appellant filed written submissions dated 20th January, 2026. It focused strictly on points of law. It submitted that "Chebra Enterprises" is a mere business name. It is not a legal person. It lacks locus standi. It argued the suit was incurably defective. It further argued the Trial Court unlawfully shifted the burden of proof. It submitted the Trial Court erred by admitting extrinsic evidence to vary a written receipt.
9. The Respondent filed written submissions dated 27th February, 2026. He argued the Trial Court properly evaluated the evidence. He submitted he proved his case on a balance of probabilities. He argued the Appellant failed to call evidence to rebut his claims. He asserted an Appellate Court should not interfere with factual findings unless they are plainly wrong. He deliberately avoided addressing the preliminary point of law regarding the Appellant's legal capacity.
Issues for Determination
10. Arising from the pleadings, the grounds of appeal, the rival submissions by Counsel for the parties and the statutory constraints of Section 38 of the Small Claims Court Act, the Court frames two issues for determination as follows:
(a) Whether the Appellant is a legal person capable of being sued.
(b) Whether the Trial Court committed an error of law by shifting the evidentiary burden of proof and admitting extrinsic evidence.
Analysis
11. This is a first and final appeal from the Small Claims Court. The appellate jurisdiction of this Court is restricted. Section 38 of the Small Claims Court Act, No. 2 of 2016, limits appeals, strictly to matters of law. Section 38(1) states:
"A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law."
12. This Court cannot disturb factual findings unless the Trial Court acted on no evidence or applied flawed legal principles. While dealing with second Appeals, the Court of Appeal has established that an Appellate Court restricted to points of law, will only interfere with factual findings if they are perverse or based on a misapprehension of the law. This Court finds itself in a similar place as the Court of Appeal dealing with a second Appeal. Both Courts are restricted to determinations arising out of points of law only. In Chemagong v Republic [1984] KECA 64 (KLR) the Court of Appeal stated as follows:
“A court on appeal will not normally interfere with a finding of fact by the trial court whether in a civil or criminal case unless it is based on no evidence, or on a misapprehension of the evidence, or the judge is shown demonstrably to have acted on wrong principles in reaching the findings he did.”
(a) Whether the Appellant is a legal person capable of being sued.
13. Locus standi is a foundational pillar of civil litigation. A party must possess the legal capacity to sue or be sued. The Appellant pleaded in its Response to the Statement of Claim that it was not a body corporate. The Respondent acknowledged this factual reality. In his Statement of Claim, the Respondent ticked the box categorizing the Appellant as a "Sole Proprietorship".
14. The law is absolute. A business name registered under the Registration of Business Names Act is not a juristic person. It has no independent legal existence separate from its proprietor. It cannot sue in its own name. It cannot be sued in its own name. The proprietor must be the target of the suit.
15. The Appellant cited West FM Media v JMK [2023] KEHC 692 (KLR) where Nyakundi J. stated as follows:
"I have perused the judgment of the trial court and it reveals that the trial magistrate agreed that the appellant was wrongly sued. It is therefore contradictory that he went ahead and issued a judgment against a party it acknowledges as non-suited... The burden of proof rests on the respondent as it is he who alleges that West FM is a legal entity capable of being sued... The judgment should have ended at the juncture that the trial magistrate acknowledged that the appellant was non-suited as the appellant lacked locus standi."
16. The Court has also considered Order 30 Rule 9 of the Civil Procedure Rules. It permits a person carrying on business in a name other than his own to be sued in that style. However, this does not confer corporate personality on the business name. The Court is not persuaded that Order 30 Rule 9 of the Civil Procedure Rules has any application in the Small Claims Act. The Appellant cited Consumer’s Pride Cafe v King’ori [2023] KEELRC 2131 (KLR). This Court finds the reasoning persuasive. Makau J. stated as follows:
"There is no doubt that the above rule allows any person carrying on business to be sued in the name or style in which he carries the business as if it were a firm. My interpretation of Rule 9 above is that the suit should target the proprietor essentially but using his business name... The case before the court is not about non-joinder which is a procedural question but rather legal capacity of the defendant which goes to the substance of the suit. Where there is no competent defendant, the suit is a nullity and it amounts to abuse of the process of the court."
17. The Respondent completely ignored this fatal point of law in his submissions. He urged this Court to uphold the Trial Court's factual findings based on Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. This is a grave misapprehension of the law. Jurisdictional competence precedes factual evaluation.
18. The Trial Court erred in law. It ignored a properly pleaded preliminary objection. By entering judgment against a non-existent legal entity, the Trial Court issued an unenforceable decree. The suit against the Appellant was a nullity ab initio. On this ground alone, the appeal must succeed.
(b) Whether the Trial Court committed an error of law by shifting the evidentiary burden of proof and admitting extrinsic evidence.
19. Having determined that the suit was a nullity, the Court is of the considered opinion that it need not consider the second issue. The conclusion reached on the first issue has conclusively determined this Appeal.
20. The Small Claims Court is engineered for expeditious justice. However, expedition cannot serve as a cloak for illegality. Substantive rules of jurisdiction, legal capacity, and statutory burdens of proof remain mandatory. The Trial Court acted on wrong legal principles. It assumed jurisdiction over a non-existent legal entity
21. These are grave and incurable errors of law. The judgment cannot be sustained. Consequently, the appeal is highly merited.
22. As to costs, the same ordinarily follow the event and lie at the discretion of this Court. The Court is of the considered view that no costs can lie in favour of a non-existent Respondent in the Small Claims Court and also in this Appeal. The result of this Appeal is that the parties remain at the very same point they were in when all this started. The Respondent demanding for delivery of the balance of his goods or a refund in lieu and the Appellant vehemently denying the claims. It maybe that this Appeal has just provided the parties with a pause to reload their guns. They are not precluded from resuming their duel. There will be no orders as to costs.
Determination
23. The Appeal is HEREBY allowed in the following terms:
(a) The Judgment and Decree of the Resident Magistrate, Hon. Grace Mutemi, delivered on 16th April, 2025 in Malindi Small Claims Court Claim No. E045 of 2025, is HEREBY quashed and set aside in its entirety.
(b) The same is instead substituted and replaced with an order striking out the Respondent's suit before the Small Claims Court as having been filed as against a non-existent party.
(c) There will be no orders as to costs in this Appeal or the Small Claims Court.
24. It is so ordered.
DATED, SIGNED AND DELIVERED AT MALINDI THIS 17TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Otara for the Appellant.
Mr. Mouko for the Respondent.
Mr. Mohamed - Court Assistant.
Background Facts
2. The genesis of the dispute traces back to a transaction executed on 28th June, 2023. The Respondent purchased building materials from the Appellant's hardware store. The total purchase price was Kshs. 358,700/=. The Respondent paid the sum in full. The Appellant issued Receipt No. 2487. The transaction was executed strictly as a cash sale.
3. The Respondent subsequently approached the Small Claims Court at Malindi. He filed a Statement of Claim seeking Kshs. 164,500/=. He alleged non-delivery of 150 iron bars. He claimed he collected only a portion of the materials. He asserted he left the remaining goods behind to attend to an urgent Court matter in Meru. He averred the Appellant subsequently refused to release the remaining goods. The Appellant entered appearance and filed a Response to the Statement of Claim. It denied the claim in its entirety. It averred the Respondent collected all goods concurrently with payment. It relied on the receipt endorsed with the words "cleared" and "paid" by its storekeeper.
4. The Appellant also raised a preliminary point of law. It pleaded that it was a sole proprietorship. It asserted it was not a body corporate capable of being sued in its own name. The Trial Court proceeded to hear the matter fully. It ignored the preliminary objection. Hon. Grace Mutemi, Resident Magistrate, delivered her judgment on 16th April, 2025. She found in favour of the Respondent. She awarded him the claimed sum of Kshs. 164,500/= together with costs and interest.
5. The Appellant was aggrieved by the Trial Court's decision. It lodged this appeal. It challenges the judgment on points of law and evidentiary evaluation.
6. The Appellant filed a Memorandum of Appeal dated 2nd May, 2025 raising the following grounds:
1. THAT the learned trial Magistrate erred in law by failing to hold that the Appellant is not a legal person hence incapable of suing or being sued in its name.
2. THAT the Learned Trial Magistrate erred in law by failing to appreciate that a non-existent entity lacks locus standi to be sued or appear before a Court of law.
3. THAT the Learned Trial Magistrate erred in law by holding that the Respondent proved his case on the required standard of the law.
4. THAT the Learned Trial Magistrate erred in law by shifting the burden of proof on the Appellant.
5. THAT the Learned Trial Magistrate erred in law by admitting extrinsic evidence to vary the contents of a written document.
6. THAT the Learned Trial Magistrate erred in law by taking into account matters she ought not to have taken into account.
7. THAT the Learned Trial Magistrate erred in law by failing to take into account matters she ought to have taken into account.
8. THAT the Learned Trial Magistrate erred in law by failing to find and hold that a cash sale receipt is evidence of both payment and collection of goods.
9. THAT the Learned Trial Magistrate was biased in all fairness.
10. THAT the Learned Trial Magistrate erred in law by failing to address any of the issues tabled before her by the Appellant.
7. The reliefs sought in the Memorandum of Appeal are as follows:
"REASONS WHEREFORE the Appellant prays that the Resident Magistrate's judgment delivered on the 16th day of April, 2025 be set aside and be substituted with the judgment of this court by dismissing the Respondent's claim in the subordinate court with costs to the Appellant."
8. The Appellant filed written submissions dated 20th January, 2026. It focused strictly on points of law. It submitted that "Chebra Enterprises" is a mere business name. It is not a legal person. It lacks locus standi. It argued the suit was incurably defective. It further argued the Trial Court unlawfully shifted the burden of proof. It submitted the Trial Court erred by admitting extrinsic evidence to vary a written receipt.
9. The Respondent filed written submissions dated 27th February, 2026. He argued the Trial Court properly evaluated the evidence. He submitted he proved his case on a balance of probabilities. He argued the Appellant failed to call evidence to rebut his claims. He asserted an Appellate Court should not interfere with factual findings unless they are plainly wrong. He deliberately avoided addressing the preliminary point of law regarding the Appellant's legal capacity.
Issues for Determination
10. Arising from the pleadings, the grounds of appeal, the rival submissions by Counsel for the parties and the statutory constraints of Section 38 of the Small Claims Court Act, the Court frames two issues for determination as follows:
(a) Whether the Appellant is a legal person capable of being sued.
(b) Whether the Trial Court committed an error of law by shifting the evidentiary burden of proof and admitting extrinsic evidence.
Analysis
11. This is a first and final appeal from the Small Claims Court. The appellate jurisdiction of this Court is restricted. Section 38 of the Small Claims Court Act, No. 2 of 2016, limits appeals, strictly to matters of law. Section 38(1) states:
"A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law."
12. This Court cannot disturb factual findings unless the Trial Court acted on no evidence or applied flawed legal principles. While dealing with second Appeals, the Court of Appeal has established that an Appellate Court restricted to points of law, will only interfere with factual findings if they are perverse or based on a misapprehension of the law. This Court finds itself in a similar place as the Court of Appeal dealing with a second Appeal. Both Courts are restricted to determinations arising out of points of law only. In Chemagong v Republic [1984] KECA 64 (KLR) the Court of Appeal stated as follows:
“A court on appeal will not normally interfere with a finding of fact by the trial court whether in a civil or criminal case unless it is based on no evidence, or on a misapprehension of the evidence, or the judge is shown demonstrably to have acted on wrong principles in reaching the findings he did.”
(a) Whether the Appellant is a legal person capable of being sued.
13. Locus standi is a foundational pillar of civil litigation. A party must possess the legal capacity to sue or be sued. The Appellant pleaded in its Response to the Statement of Claim that it was not a body corporate. The Respondent acknowledged this factual reality. In his Statement of Claim, the Respondent ticked the box categorizing the Appellant as a "Sole Proprietorship".
14. The law is absolute. A business name registered under the Registration of Business Names Act is not a juristic person. It has no independent legal existence separate from its proprietor. It cannot sue in its own name. It cannot be sued in its own name. The proprietor must be the target of the suit.
15. The Appellant cited West FM Media v JMK [2023] KEHC 692 (KLR) where Nyakundi J. stated as follows:
"I have perused the judgment of the trial court and it reveals that the trial magistrate agreed that the appellant was wrongly sued. It is therefore contradictory that he went ahead and issued a judgment against a party it acknowledges as non-suited... The burden of proof rests on the respondent as it is he who alleges that West FM is a legal entity capable of being sued... The judgment should have ended at the juncture that the trial magistrate acknowledged that the appellant was non-suited as the appellant lacked locus standi."
16. The Court has also considered Order 30 Rule 9 of the Civil Procedure Rules. It permits a person carrying on business in a name other than his own to be sued in that style. However, this does not confer corporate personality on the business name. The Court is not persuaded that Order 30 Rule 9 of the Civil Procedure Rules has any application in the Small Claims Act. The Appellant cited Consumer’s Pride Cafe v King’ori [2023] KEELRC 2131 (KLR). This Court finds the reasoning persuasive. Makau J. stated as follows:
"There is no doubt that the above rule allows any person carrying on business to be sued in the name or style in which he carries the business as if it were a firm. My interpretation of Rule 9 above is that the suit should target the proprietor essentially but using his business name... The case before the court is not about non-joinder which is a procedural question but rather legal capacity of the defendant which goes to the substance of the suit. Where there is no competent defendant, the suit is a nullity and it amounts to abuse of the process of the court."
17. The Respondent completely ignored this fatal point of law in his submissions. He urged this Court to uphold the Trial Court's factual findings based on Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. This is a grave misapprehension of the law. Jurisdictional competence precedes factual evaluation.
18. The Trial Court erred in law. It ignored a properly pleaded preliminary objection. By entering judgment against a non-existent legal entity, the Trial Court issued an unenforceable decree. The suit against the Appellant was a nullity ab initio. On this ground alone, the appeal must succeed.
(b) Whether the Trial Court committed an error of law by shifting the evidentiary burden of proof and admitting extrinsic evidence.
19. Having determined that the suit was a nullity, the Court is of the considered opinion that it need not consider the second issue. The conclusion reached on the first issue has conclusively determined this Appeal.
20. The Small Claims Court is engineered for expeditious justice. However, expedition cannot serve as a cloak for illegality. Substantive rules of jurisdiction, legal capacity, and statutory burdens of proof remain mandatory. The Trial Court acted on wrong legal principles. It assumed jurisdiction over a non-existent legal entity
21. These are grave and incurable errors of law. The judgment cannot be sustained. Consequently, the appeal is highly merited.
22. As to costs, the same ordinarily follow the event and lie at the discretion of this Court. The Court is of the considered view that no costs can lie in favour of a non-existent Respondent in the Small Claims Court and also in this Appeal. The result of this Appeal is that the parties remain at the very same point they were in when all this started. The Respondent demanding for delivery of the balance of his goods or a refund in lieu and the Appellant vehemently denying the claims. It maybe that this Appeal has just provided the parties with a pause to reload their guns. They are not precluded from resuming their duel. There will be no orders as to costs.
Determination
23. The Appeal is HEREBY allowed in the following terms:
(a) The Judgment and Decree of the Resident Magistrate, Hon. Grace Mutemi, delivered on 16th April, 2025 in Malindi Small Claims Court Claim No. E045 of 2025, is HEREBY quashed and set aside in its entirety.
(b) The same is instead substituted and replaced with an order striking out the Respondent's suit before the Small Claims Court as having been filed as against a non-existent party.
(c) There will be no orders as to costs in this Appeal or the Small Claims Court.
24. It is so ordered.
DATED, SIGNED AND DELIVERED AT MALINDI THIS 17TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Otara for the Appellant.
Mr. Mouko for the Respondent.
Mr. Mohamed - Court Assistant.