The appellant’s case;
1. On 17.7.24 The respondents entered into an agreement with the appellant for purposes of helping the Appellant to secure a buyer for his 20 Acre property wherein the appellant was supposed to pay the Respondents Commission.
2. The Respondents argued that they secured a buyer for the appellant but the appellant refused to pay their commission.
3. The dispute escalated before Kaianyu Gathu the area senior assistant chief of Gatei Sub - location.
4. Since the commission was ultimately not paid,the Respondents filed a claim in the small claims court where they pleaded and prayed for the sum of 420,000,costs and interest.
5. After the trial,the adjudicator awarded them ksh 150,000 in a judgment delivered on 3rd March 2023.
6. The appellant is aggrieved as a result of which he filed the instant appeal seeking the following orders that;
1) This Appeal be allowed;
2) The Judgment, Decree and all consequential orders of the Small Claims Court of Kenya at Nairobi (Hon. M. Mutua) dated and delivered virtually on 3rd March 2023 in SCCCOM E180 of 2021 David Kanyora Mutungu, Jeremiah Kibunja Ndung'u & John Gitari Mutungu us. James Ireri Mwaniki be set aside; and
3) The costs of this Appeal and of the suit and proceedings in in SCCCOM E180 of 2021 David Kanyora Mutungu, Jeremiah Kibunja Ndung'u & John Gitari Mutungu vs. James Ireri Mwaniki be borne by the Respondents.
7. The appeal is predicated on the Memorandum of Appeal dated 3rd April 2023 wherein he advances the grounds that;
1) The Learned Adjudicator misdirected himself in law by entering Judgment in the Respondents' favour for the sum of Kshs. 150,000/= where no prayer for the award of this amount was made in the Plaint dated 15th June 2020.
2) The Learned Adjudicator misdirected himself in law by entering Judgment in the Respondents favour for the sum of Kshs. 150,000/= where there was no valid written agreement or contract duly accepted and executed by the parties for the payment of this amount for purposes of securing a Purchaser, on the Appellant's behalf, for the 20-acre portion of Land Title No. Nyandarua/Malewa/482 situate in Malewa Area of Nyandarua County.
8. He submits that the Respondents herein, and two (2) others, entered into an agreement with the Appellant as agents/ brokers for purposes of securing a purchaser for a portion of the Appellant's property in exchange of a payment in the form of a commission.
9. As of the date of the agreement the parties entered into for this purpose, the agents had expressly confirmed that they had already secured a purchaser, who was unknown to the Appellant.
10. However, no such purchaser had been secured by the agents at the time or at all and the remaining two (2) agents, secured a buyer under a separate and distinct agreement.
11. The appellant submits that the Court erroneously found that the Respondents herein were entitled to a sum of Kshs. 150,000 without giving him a chance to be heard.
12. He submits that at no point in their pleadings or submissions did the Respondents seek the sum awarded or seek monetary compensation or any damages whatsoever, based on the contested Minutes of the chief.
13. He submits that the veracity and authority of the Minutes had been contested by the Appellant and the contention was not comprehensively addressed by the Court and the Court issued the award suo moto.
14. He further submits that parties are bound by their pleadings and courts can only grant orders that have been sought in the pleadings.Reliance is placed in the case of Caltex Oil (Kenya) Limited v Rono Limited [2016] KECA 457 (KLR) emphasized that a prayer for damages must be specifically pleaded and particularized. The Court stated that;
"The court has no inherent jurisdiction to award damages|sic|where no such plea was made in its pleadings. Damages cannot be plucked from the air simply because a party alleges to have suffered an injury or loss."
The Respondent's case;
15. The Respondents oppose the appeal arguing the grounds of appeal together.
16. They argue that the Small Claims Court found the following after hearing the evidence of the parties;
"(5). Afterwards a dispute arose and the parties went to mediation at the chief office where the Respondent was willing to pay a sum of Kshs. 150,000/- to the Claimants.
(7). The Respondent paid some of the brokers a commission at 4% vide an agreement dated 11/9/2014 and offered to pay the Claimants a sum of Kshs. 150,000/- during mediation session at the chief office in the offer, the Respondent construes by design that although the land fetched a lower sum he was willing to at least compensate the Claimants for the energy that they had initially put in the matter which offer was rejected by the Claimants.
(8). This Court is convinced that the Respondent was acting in good faith and it shall adopt his offer."
17. The Respondents submit that insofar as the grounds of appeal are seeking to impugn the above factual findings in the Small Claims Court judgment, the instant appeal is unmerited and fails on its own for offending Section 38 of the Small Claims Court Act.
18. Section 38 provides thus;
1) A person aggrieved by the decision or an order of the Court may appeal against that decision or an order to the High Court on matters of law;
2) An appeal from any decision or order referred to in sub section (1) shall be final.
19. Reliance is placed in the case of Amunga Versus- Muisu (Civil Appeal E725 of 2022) 2024 KEHC2504 (KLR) (Civ) (8 March 2024) (Judgment) where the superior court held thus;
"The foregoing determination was arrived at upon analysis of the factual material presented before the trial court. By her appeal, the Appellant is inviting this court to re-evaluate the trial evidence, contrary to the provisions of Section 38 of the Small Claims Court Act and to make contrary findings thereon. As held in Bashir Haji Abdullahi (supra) an appellate court faced with a situation of this kind is at liberty to strike out any grounds of appeal that offend the above provision, while retaining those that are compliant. In this case, having reviewed the Appellant's grounds of appeal the court is inclined to strike out grounds 1, 2 and 4 for the tacit invitation contained therein to this court to address factual issues. Therefore, only is grounds 3 & 5 in the memorandum of appeal which appear to raise issues of law can be entertained on this appeal."
20. They further submit that the Small Claims Court findings on facts that the Appellant was willing to pay a sum of Kshs. 150,000/- to the Respondents was based on material evidence being the Claimant's exhibit-6 and the oral testimony of CW-2, Paul Kihianyu Gathu, a Senior Assistant Chief, Gitei Sub-location and, consequently, under section 38 of the Small Claims Court Act, 2016 this Honourable Court is not permitted to reevaluate and/or substitute the said Small Claims Court findings with its own conclusions based on its own analysis and appreciation of the facts.
21. Further and on another front they submit that the Respondents' claim was premised upon a claim for payment of commission arising from the Appellant's instructions to the Respondents to scout for a buyer of his (Appellant's) 20 acres parcel of land and according to the Respondents, both parties had executed a commission agreement dated 17.07.2014.
22. The Appellant has not cited any legal provision which prohibits the court from awarding any other or further relief it deems fit so long as the relief granted is incidental to the main relief claimed.
23. The Respondents had pleaded for Kshs.420,000/-, however, the court upon hearing the parties had legally allowed the Respondents' claim to the extent of Kshs. 150,000/- which was based on its factual findings as submitted above.
24. Further, they submit that the general rule relied upon by the Appellant that the court is bound by the pleadings and the reliefs claimed has exceptions which were long settled by the Court of Appeal for Eastern Africa in the case of Odd Jobs -Versus- Mubia [1970) A 476, Law, JA; where the Court stated that;
"A court may allow evidence to be called, and may base its decision, on an unpleaded issue if it appears from the course followed at the trial that the unpleaded issue has in fact been left to the court for decision."
Analysis and determination;
25. The issues for determination are;
1) Whether the appeal has merit.
2) Who shall bear the costs.
Whether the appeal has merit.
26. The court has looked at the rival submissions and identified the issue jurisdiction which though not raised by the parties has an impact on the issue of merit.
27. Section 18 (1)(a) of the Estate Agents Act provides that, after the expiration of six months from the commencement of this Act or such further period as the Cabinet Secretary may, by notice in the Gazette, allow either generally or in respect of any particular person or class of persons, no individual shall practise as an estate agent unless he is a registered estate agent.
28. In the instant suit it is not in dispute that on 17.7.24 The respondents entered into an agreement with the appellant for purposes of helping the appellant to secure a buyer for his 20 Acre property where in the appellant was supposed to pay the Respondents Commission.
29. It is this court’s finding that the Respondents were practising as land agents or brokers.They did not demonstrate to the court that they were licenced as agents.
30. If they had valid licences then they would have tendered them as evidence.They lacked the legal capacity to act as agents.
31. The Supreme Court in the case of Nasra Ibrahim Ibren V. Independent Electoral and Boundaries Commission & 2 others, Supreme Court Petition No. 19 of 2018, the court stressed the fact that jurisdiction is everything and that a court may even raise a jurisdictional issue suo motu. It said:
“40 A jurisdictional issue is fundamental and can even be raised by the court suo motu as was persuasively and aptly stated by Odunga J in Political Parties Dispute Tribunal & another v Musalia Mudavadi & 6 others Ex Parte Petronila Were [2014] eKLR. The learned Judge drawing from the Court of Appeal precedent in Owners and Masters of The Motor Vessel “Joey” vs. Owners and Masters of The Motor Tugs “Barbara” and “Steve B” [2008] 1 EA 367 stated thus:
“25. What I understand the Court to have been saying is that it is not mandatory that an issue of jurisdiction must be raised by the parties. The Court on its own motion can take up the issue and make a determination thereon without the same being pleaded…”
32. The legal effect that flows from this is that the Respondents lacked the capacity to file the suit to enforce the agreement in any court without locus standi.This took away the Small Claims Court’s jurisdiction and I so hold.
33. Without jurisdiction no binding judgment could flow from that court. The appeal has merit and it succeeds on the basis of this legal issue.
Costs;
34. In The Civil Procedure Act (Cap. 21, Laws of Kenya), the primary law of judicial procedure in civil matters, thus stipulates (Section 27(1)): “Subject to such conditions and limitations’ as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction shall be no bar to the exercise of those powers: Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order” [emphases supplied]. Halsbury’s Laws of England, 4th ed Re-Issue (2010), Vol. 10, para. 16: “The court has discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are to be paid. Where costs are in the discretion of the court, a party has no right to costs unless and until the court awards them to him, and the court has an absolute and unfettered discretion to award or not award them. This discretion must be exercised judicially; it must not be exercised arbitrarily but in accordance with reason and justice”
35. The appellant is entitled to costs.
Determination;
36. The appeal has merit.
Order;
1) The appeal is allowed.
2) The Judgment in Milimani Small Claims Court passed on 03.03.2023 in the SCCCOMM/ E180 of 2021 is hereby set aside.
3) Costs to the Appellant.
1. On 17.7.24 The respondents entered into an agreement with the appellant for purposes of helping the Appellant to secure a buyer for his 20 Acre property wherein the appellant was supposed to pay the Respondents Commission.
2. The Respondents argued that they secured a buyer for the appellant but the appellant refused to pay their commission.
3. The dispute escalated before Kaianyu Gathu the area senior assistant chief of Gatei Sub - location.
4. Since the commission was ultimately not paid,the Respondents filed a claim in the small claims court where they pleaded and prayed for the sum of 420,000,costs and interest.
5. After the trial,the adjudicator awarded them ksh 150,000 in a judgment delivered on 3rd March 2023.
6. The appellant is aggrieved as a result of which he filed the instant appeal seeking the following orders that;
1) This Appeal be allowed;
2) The Judgment, Decree and all consequential orders of the Small Claims Court of Kenya at Nairobi (Hon. M. Mutua) dated and delivered virtually on 3rd March 2023 in SCCCOM E180 of 2021 David Kanyora Mutungu, Jeremiah Kibunja Ndung'u & John Gitari Mutungu us. James Ireri Mwaniki be set aside; and
3) The costs of this Appeal and of the suit and proceedings in in SCCCOM E180 of 2021 David Kanyora Mutungu, Jeremiah Kibunja Ndung'u & John Gitari Mutungu vs. James Ireri Mwaniki be borne by the Respondents.
7. The appeal is predicated on the Memorandum of Appeal dated 3rd April 2023 wherein he advances the grounds that;
1) The Learned Adjudicator misdirected himself in law by entering Judgment in the Respondents' favour for the sum of Kshs. 150,000/= where no prayer for the award of this amount was made in the Plaint dated 15th June 2020.
2) The Learned Adjudicator misdirected himself in law by entering Judgment in the Respondents favour for the sum of Kshs. 150,000/= where there was no valid written agreement or contract duly accepted and executed by the parties for the payment of this amount for purposes of securing a Purchaser, on the Appellant's behalf, for the 20-acre portion of Land Title No. Nyandarua/Malewa/482 situate in Malewa Area of Nyandarua County.
8. He submits that the Respondents herein, and two (2) others, entered into an agreement with the Appellant as agents/ brokers for purposes of securing a purchaser for a portion of the Appellant's property in exchange of a payment in the form of a commission.
9. As of the date of the agreement the parties entered into for this purpose, the agents had expressly confirmed that they had already secured a purchaser, who was unknown to the Appellant.
10. However, no such purchaser had been secured by the agents at the time or at all and the remaining two (2) agents, secured a buyer under a separate and distinct agreement.
11. The appellant submits that the Court erroneously found that the Respondents herein were entitled to a sum of Kshs. 150,000 without giving him a chance to be heard.
12. He submits that at no point in their pleadings or submissions did the Respondents seek the sum awarded or seek monetary compensation or any damages whatsoever, based on the contested Minutes of the chief.
13. He submits that the veracity and authority of the Minutes had been contested by the Appellant and the contention was not comprehensively addressed by the Court and the Court issued the award suo moto.
14. He further submits that parties are bound by their pleadings and courts can only grant orders that have been sought in the pleadings.Reliance is placed in the case of Caltex Oil (Kenya) Limited v Rono Limited [2016] KECA 457 (KLR) emphasized that a prayer for damages must be specifically pleaded and particularized. The Court stated that;
"The court has no inherent jurisdiction to award damages|sic|where no such plea was made in its pleadings. Damages cannot be plucked from the air simply because a party alleges to have suffered an injury or loss."
The Respondent's case;
15. The Respondents oppose the appeal arguing the grounds of appeal together.
16. They argue that the Small Claims Court found the following after hearing the evidence of the parties;
"(5). Afterwards a dispute arose and the parties went to mediation at the chief office where the Respondent was willing to pay a sum of Kshs. 150,000/- to the Claimants.
(7). The Respondent paid some of the brokers a commission at 4% vide an agreement dated 11/9/2014 and offered to pay the Claimants a sum of Kshs. 150,000/- during mediation session at the chief office in the offer, the Respondent construes by design that although the land fetched a lower sum he was willing to at least compensate the Claimants for the energy that they had initially put in the matter which offer was rejected by the Claimants.
(8). This Court is convinced that the Respondent was acting in good faith and it shall adopt his offer."
17. The Respondents submit that insofar as the grounds of appeal are seeking to impugn the above factual findings in the Small Claims Court judgment, the instant appeal is unmerited and fails on its own for offending Section 38 of the Small Claims Court Act.
18. Section 38 provides thus;
1) A person aggrieved by the decision or an order of the Court may appeal against that decision or an order to the High Court on matters of law;
2) An appeal from any decision or order referred to in sub section (1) shall be final.
19. Reliance is placed in the case of Amunga Versus- Muisu (Civil Appeal E725 of 2022) 2024 KEHC2504 (KLR) (Civ) (8 March 2024) (Judgment) where the superior court held thus;
"The foregoing determination was arrived at upon analysis of the factual material presented before the trial court. By her appeal, the Appellant is inviting this court to re-evaluate the trial evidence, contrary to the provisions of Section 38 of the Small Claims Court Act and to make contrary findings thereon. As held in Bashir Haji Abdullahi (supra) an appellate court faced with a situation of this kind is at liberty to strike out any grounds of appeal that offend the above provision, while retaining those that are compliant. In this case, having reviewed the Appellant's grounds of appeal the court is inclined to strike out grounds 1, 2 and 4 for the tacit invitation contained therein to this court to address factual issues. Therefore, only is grounds 3 & 5 in the memorandum of appeal which appear to raise issues of law can be entertained on this appeal."
20. They further submit that the Small Claims Court findings on facts that the Appellant was willing to pay a sum of Kshs. 150,000/- to the Respondents was based on material evidence being the Claimant's exhibit-6 and the oral testimony of CW-2, Paul Kihianyu Gathu, a Senior Assistant Chief, Gitei Sub-location and, consequently, under section 38 of the Small Claims Court Act, 2016 this Honourable Court is not permitted to reevaluate and/or substitute the said Small Claims Court findings with its own conclusions based on its own analysis and appreciation of the facts.
21. Further and on another front they submit that the Respondents' claim was premised upon a claim for payment of commission arising from the Appellant's instructions to the Respondents to scout for a buyer of his (Appellant's) 20 acres parcel of land and according to the Respondents, both parties had executed a commission agreement dated 17.07.2014.
22. The Appellant has not cited any legal provision which prohibits the court from awarding any other or further relief it deems fit so long as the relief granted is incidental to the main relief claimed.
23. The Respondents had pleaded for Kshs.420,000/-, however, the court upon hearing the parties had legally allowed the Respondents' claim to the extent of Kshs. 150,000/- which was based on its factual findings as submitted above.
24. Further, they submit that the general rule relied upon by the Appellant that the court is bound by the pleadings and the reliefs claimed has exceptions which were long settled by the Court of Appeal for Eastern Africa in the case of Odd Jobs -Versus- Mubia [1970) A 476, Law, JA; where the Court stated that;
"A court may allow evidence to be called, and may base its decision, on an unpleaded issue if it appears from the course followed at the trial that the unpleaded issue has in fact been left to the court for decision."
Analysis and determination;
25. The issues for determination are;
1) Whether the appeal has merit.
2) Who shall bear the costs.
Whether the appeal has merit.
26. The court has looked at the rival submissions and identified the issue jurisdiction which though not raised by the parties has an impact on the issue of merit.
27. Section 18 (1)(a) of the Estate Agents Act provides that, after the expiration of six months from the commencement of this Act or such further period as the Cabinet Secretary may, by notice in the Gazette, allow either generally or in respect of any particular person or class of persons, no individual shall practise as an estate agent unless he is a registered estate agent.
28. In the instant suit it is not in dispute that on 17.7.24 The respondents entered into an agreement with the appellant for purposes of helping the appellant to secure a buyer for his 20 Acre property where in the appellant was supposed to pay the Respondents Commission.
29. It is this court’s finding that the Respondents were practising as land agents or brokers.They did not demonstrate to the court that they were licenced as agents.
30. If they had valid licences then they would have tendered them as evidence.They lacked the legal capacity to act as agents.
31. The Supreme Court in the case of Nasra Ibrahim Ibren V. Independent Electoral and Boundaries Commission & 2 others, Supreme Court Petition No. 19 of 2018, the court stressed the fact that jurisdiction is everything and that a court may even raise a jurisdictional issue suo motu. It said:
“40 A jurisdictional issue is fundamental and can even be raised by the court suo motu as was persuasively and aptly stated by Odunga J in Political Parties Dispute Tribunal & another v Musalia Mudavadi & 6 others Ex Parte Petronila Were [2014] eKLR. The learned Judge drawing from the Court of Appeal precedent in Owners and Masters of The Motor Vessel “Joey” vs. Owners and Masters of The Motor Tugs “Barbara” and “Steve B” [2008] 1 EA 367 stated thus:
“25. What I understand the Court to have been saying is that it is not mandatory that an issue of jurisdiction must be raised by the parties. The Court on its own motion can take up the issue and make a determination thereon without the same being pleaded…”
32. The legal effect that flows from this is that the Respondents lacked the capacity to file the suit to enforce the agreement in any court without locus standi.This took away the Small Claims Court’s jurisdiction and I so hold.
33. Without jurisdiction no binding judgment could flow from that court. The appeal has merit and it succeeds on the basis of this legal issue.
Costs;
34. In The Civil Procedure Act (Cap. 21, Laws of Kenya), the primary law of judicial procedure in civil matters, thus stipulates (Section 27(1)): “Subject to such conditions and limitations’ as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction shall be no bar to the exercise of those powers: Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order” [emphases supplied]. Halsbury’s Laws of England, 4th ed Re-Issue (2010), Vol. 10, para. 16: “The court has discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are to be paid. Where costs are in the discretion of the court, a party has no right to costs unless and until the court awards them to him, and the court has an absolute and unfettered discretion to award or not award them. This discretion must be exercised judicially; it must not be exercised arbitrarily but in accordance with reason and justice”
35. The appellant is entitled to costs.
Determination;
36. The appeal has merit.
Order;
1) The appeal is allowed.
2) The Judgment in Milimani Small Claims Court passed on 03.03.2023 in the SCCCOMM/ E180 of 2021 is hereby set aside.
3) Costs to the Appellant.