The Appellant herein claimed Kshs. 57,300/=from the Respondent on account of a soft loan to be returned with an interest of Kshs. 500/= daily and in default a penalty of Kshs. 100/= was to be charged. The Respondent is alleged to have failed to make good the loan and failed blatantly to respond to the claimant’s demands. The Claimant therefore sought judgment for the said amount together with interest from 1st December 2022. Costs of the claim was also sought.
According to the Claimant’s statement Kshs. 15,000/= was advanced to the Respondent on 30th January 2023 at an interest rate of 30% and the said loan and interest was to be paid at 500/= per day for 39 days. However the Respondent is said to have paid only 500/= and subsequently defaulted thus giving rise to the claim herein.
The Claimant’s witness said that the Respondent repaid only Kshs. 1500/= for which she witnessed repayment of Kshs, 1000/= only. The Claimant’s witness said that the twin sister of the Respondent was their employee and she tampered with the file and / or falsified the documents used to process the Respondent’s loan and the ones in court were not the ones signed by the Respondent. She said that a report of the falsification of documents had been filed at Nyanchwa Police Station against one Vane K. Mogoi
Upon consideration of the claim the Adjudicator dismissed the same with cost of Kshs. 6,000/= as not having been proved on a balance of probabilities.
The Respondent denied ever taking any loan from the Claimant and she also denied knowing the person who was said to have guaranteed her loan. The 2nd Respondent also denied having taken any loan from the Claimant.
The Appellant was dissatisfied by the judgment and decree of the Hon. Adjudicator and lodged the appeal herein vide Memorandum of Appeal dated 8th August 2024 on the following grounds:-
1. THAT the Trial Magistrate erred in law and fact by determining issues which were not before the court especially regarding the figure that the Claimant had claimed as per the statement of claim.
2. THAT the Trial Magistrate erred in law and fact by making a finding that the Appellant had failed to prove it’s case against the Respondent instead of making a finding to the contrary, thus arriving at a wrong judgment.
3. THAT the Trial Magistrate erred in law and fact by making findings of law and fact without any legal basis hence misleading herself and thus arriving at a wrong judgment.
4. THAT the Trial Magistrate erred in law and fact by making a finding that the forms filed in court and of which the Appellant’s relied on as proof that the Respondent took the loan in issue had been disowned by the Appellant himself and also by finding that the Appellant’s Credit Officer had disowned her testimony, whereas there was no such evidence of such disowning.
5. THAT the Trial Magistrate erred in law and fact by failing to accord to the Appellant herein a fair hearing in that the Learned Trial Magistrate denied the Appellant an opportunity for a physical hearing in court and the Appellant was adversely affected and hence the Appellant’s constitutional/ legal rights were violated.
6. THAT the Trial Magistrate erred in law and fact by misapprehending , misunderstanding, mis-applying, misinterpreting and / or concorting or manufacturing the evidence/ testimony of the Appellant’s witnesses, especially CW2 the Credit Officer and thereby arriving at the wrong judgment.
7. THAT the Trial Magistrate’s judgment is totally untenable in law and is against the weight of evidence tendered by or on law of the Appellant.
8. THAT the Trial Magistrate’s judgment does not meet the legal threshold and criteria and should be overturned/
REASONS WHEREFORE the Appellant prays that this court issues orders that:
- The appeal is allowed as prayed.
- The judgement and / or orders be set aside.
- That the Appellant’s claim be allowed as prayed in the lower court.
- That costs of the appeal and costs in the lower court be awarded to the Appellant.
This appeal was canvassed by way of written submissions. Both parties complied and filed their respective submissions dated 5th December 2024 for the Appellant and 6th February 2025 for the Respondent.
The Appellant condensed its grounds and argued grounds 2,3,7 and 8 together to the effect that the Respondent having admitted that the particulars of her ID Card were the ones in the loan application form that was sufficient evidence to find that the Appellant had proved its case on a balance of probabilities. It was submitted that the evidence of the Appellant’s witness was not shaken that she was indeed the one who disbursed the loan to the Respondent in the presence of CW1 Henry Nyabuto Ondieki. It was also submitted that the Respondent admitted that the signature and ID No on the loan application form belonged to her. According to the Appellant the fact that the Respondent signed the Delivery Credit Note was enough proof she had received the money and it is final and conclusive that the Appellant gave the loan.
On grounds 4, 5 and 6 the Appellant submitted that there was no evidence CW2 disowned her evidence but rather she said that Vane tampered with the original loan file.
The Appellant also argued that he was denied fair hearing when he was not allowed to testify physically in court.
The Respondent on the other hand submitted that Section 38 of the Small Claims Court is clear that appeals to the High Court are only on points of law.
The Respondent’s Counsel submitted that there was no single issue of law raised in the Appellant’s submissions and the court cannot be faulted that it reached a decision on no evidence. It was submitted that the duty of 1st appellate court is not to interfere with the exercise of the trial court’s discretion unless it is established that it was exercised wrongly in principle or perversely on the facts of the case. The Respondent urged the court to dismiss the appeal with costs.
Analysis and Determination
The appeal from the Small Claims Court is on issues of law only. This is pursuant to Section 38 of the Small Claims Court. It provides as follows:-
(1) A person aggrieved by the decision or an order Appeals. of the Court may appeal against that decision or order to the High Court on matters of law.
(2) An appeal from any decision or order referred to in subsection (1) shall be final.”
I have considered the grounds of appeal, the record of appeal and re-evaluated the evidence adduced before the trial court together with the rival submissions by both parties. The only issue for this Court to consider is whether the grounds of appeal raised by the Appellant are issues of law as provided under section 38 of the Small Claims Court Act.
The Adjudicator found that the document which the Claimant based its claim was not the one for which the Respondent appended her signature as alleged and there was no evidence left upon which to find that the claim had been proved to the required standards.
This is a claim based on contractual relationship and the court is merely supposed to rely on the contractual document to establish whether any of the parties have breached the terms of the contract. Looking at the judgment I have not seen and it has not been shown in the submissions how the Trial Adjudicator failed to consider the law and how she misled herself and arrived at a wrong conclusion.
The Trial Adjudicator considered Credit Transaction Form which shows the Applicant’s purchase price as Kshs. 3000/= and the value of business in figures as Kshs. 20,000/=. ID Card is indicated as 27888324. The details of guarantor are all indicated as N/A. The signature on the application and the guarantors declaration all appear similar and/ or made by the same hand. There is nothing to show how the loan was disbursed and the Delivery Credit Note does not contain the terms of the loan agreement. There was no evidence the Respondent repaid part of the alleged loan through Pay bill No 400200 Account 40078525. The Trial Magistrate was therefore right to find that there was no sufficient evidence to sustain the claim.
CW2 in her statement said that the Respondent signed the credit transaction form by her thumb print but the documents produced do not have thumb print. CW2 also said that the Respondent applied for the loan through Vane K. Mogoi whom she alleged tampered with the loan file and falsified documents by removing the Credit Transaction Form. The question to ask and the Trial Magistrate commented on it is where the Appellant obtained the documents filed in support of the claim.
The Respondent’s ID Card number was not sufficient evidence to prove the Respondent applied for and obtained a loan from the Appellant.
On whether the Appellant’s right to fair trial was violated I have gone through the record of the trial court and found that the procedure adopted in the proceedings in the Small Claims Court were not peculiar to the Respondent alone. The purpose of the Small Claims Court Act is to deal with matters of a lower subject value in a cost effective way.
Section 32 of the Small Claims Court Act, provides for exclusion of strict Rules of evidence in the following terms:
(1) The Court shall not be bound wholly by the Rules of evidence.
(2) Without prejudice to the generality of subsection (1), the Court may admit as evidence in any proceedings before it, any oral or written testimony, record or other material that the Court considers credible or trustworthy even though the testimony, record or other material is not admissible as evidence in any other Court under the law of evidence.
(3) Evidence tendered to the Court by or on behalf of a party to any proceedings may not be given on oath but that Court may, at any stage of the proceedings, require that such evidence or any part thereof be given on oath whether orally or in writing.
(4) The Court may, on its own initiative, seek and receive such other evidence and make such other investigations and inquiries as it may require.
(5) All evidence and information received and ascertained by the Court under subsection (3) shall be disclosed to every party.
(6) For the purposes of subsection (2), an Adjudicator is empowered to administer an oath.
(7) An Adjudicator may require any written evidence given in the proceedings before the Court to be verified by statutory declaration.
The latitude allowed is meant to achieve the purpose and objectives of the Act and not to subject litigants to any form of hardships and where it is expedient the Court may even decide to allow a party to give evidence without taking oath.
Based on the analysis above this court finds that the appeal lacks merit and the same is dismissed with costs to the Respondent.
Signed dated and delivered at Migori this 27th day of March 2025.