Introduction
1. This is an appeal from the decision of the lower court in Milimani Small Claim Court Comm Suit No. E3882/2022 in which the trial court struck out the Appellant’s suit for being an abuse of the court process.
2. The background of this matter is that by a Statement of Claim dated 21st June 2022, the Appellant (then a Claimant) instituted a suit in the lower court against the Respondent seeking payment of Kshs. 435,000/- arising from a contractual relationship (Sub-consultancy Agreement) between the parties.
3. The Respondent, in its response to the claim denied the allegations. The Respondent’s witness told the trial court that the suit was premature since, under the Sub-Consultancy Agreement, payment of the amount claimed by the Claimant was contingent on the receipt of funds from a third party (Client). According to the Respondent, no such payments had been received from the Client.
4. On 28th October 2022, the lower court in delivering its judgment, striking out the suit on the basis that the same was instituted prematurely since the cause of action had not accrued.
The Appeal
5. Aggrieved by the lower court’s judgment, the Appellant lodged an appeal to this court, vide its Memorandum of Appeal dated 11th November 2022, on the grounds that;
a. The learned magistrate erred in law, in disregarding the rules of evidence, and admitting evidence produced via written submissions, which was highly prejudicial, and infringed on the Appellant’s right to equality of arms
b. The learned magistrate erred in law, in relying on evidence produced, contrary to submissions which the Appellant was not given an opportunity to comment on, or disclosed to the Appellant.
c. The learned magistrate erred in law, in assigning probative value to documents produced via written submissions, which were altered contrary to Section 35 (3) of the Evidence Act.
d. The learned magistrate erred in law, in failing to find that the Respondent had made a clear and unequivocal admission of indebtedness in the witness statement dated 4th August 2022
e. The learned magistrate erred in law, by failing to consider the Appellant’s submissions and in doing so, arrived at an erroneous conclusion
Submissions
6. Both parties filed their respective written submissions. The Appellant’s submissions are dated 16th October 2024, whereas the Respondent’s submissions are dated 1st November 2024.
7. The Appellant submitted that the trial court erred by relying on the evidence produced via the Respondent’s submissions contrary to Section 32 (5) of the Small Claims Court Act and Section 35 (3) of the Evidence Act. According to the Appellant, the aforesaid provisions of the law that all evidence that a party intends to rely on must be disclosed to every party to the suit failing which the same cannot form part of the court record as evidence can only be adduced after it is produced and a party adopts the same as its evidence.
8. It was further the Appellant’s submissions that where the court delivers its judgment by relying on evidence introduced via written submissions (as was the case herein) then the Judgment and trial is a nullity. In support of this, counsel placed reliance on the case of Jackson Ndwiga v Elizabeth Thara Ngahu [2021] eKLR, wherein the court rendered the whole trial a nullity since the documents relied upon by the learned magistrate were not formally produced at trial.
9. In view of the above, the Appellant urged this court to find that the judgment delivered by the learned magistrate/adjudicator, in Nairobi SCCC No. E3882 of 2022, was contrary to Section 35 (3) of the Evidence Act, and Section 32 (5) of the Small Claims Act No. 2 of 2016, and was, therefore, a nullity, which ought to be set aside.
10. Secondly, it was the Appellant’s further submissions that the trial court erred in striking the suit despite the fact that the Respondent had, in the witness statement of RW1 dated 4th August 2022 admitted the Respondent’s indebtedness to the Claimant in the sum of Kshs. 435,790/-.
11. The Appellant therefore urged this Court to allow the appeal with costs in its favour.
12. On its part, the Respondent supported the trial court’s judgment and urged this court to dismiss the appeal. According to the Respondent, the suit was an abuse of the court process since according to Clause 4 of the Agreement, the cause of action had not accrued.
Analysis and determination
13. This court has considered the Appellant’s memorandum of appeal dated 11th November 2022, the record of appeal before it, and I have equally considered the parties’ submissions before the court.
14. This being an appeal from the Small Claims Court, is governed by Section 38 (1) of the Small Claims Court, Cap 10A of the Laws of Kenya. It stipulates who may appeal, what should be the grounds for such appeal;
“38 Appeals
1. 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
2. An appeal from any decision or order referred to in subsection (1) shall be final”
15. The Court of Appeal in Charles Kipkoech Leting v Express (K) Ltd & another [2018] eKLR, stated as follows on the duty of an appellate court where a right of appeal is confined to issues of law only:
“……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 and law, and, it should not interfere with the decisions 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 in law “
16. In this appeal, the only issue of law raised by the Appellant is that the trial court erred in relying on evidence adduced by the Respondent only through its written submissions. According to the Appellant, the evidence having not been produced and admitted at trial, ought not to have been considered by the trial court in arriving at its decision.
17. First it is critical to note that Section 32 of the Small Claims Act expressly stipulates that the Small Claims Court shall not be bound wholly by Rules of evidence. The Section is premised as follows:
“32. Exclusion of strict Rules of evidence
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.”
18. In this case, while agree with the Appellant’s submissions that evidence ought first to be adduced and admitted before the same is considered in a judgment, I find the Appellant’s allegations that the trial court relied on the evidence adduced by the Respondent through the submissions not to be the correct position.
19. I have carefully perused the proceedings and note that the RW1, Lucy Kibe in her witness statement of 4th August 2022 told the trial court that under Clause 4 of the Sub-contract Agreement dated 11th October 2019, which formed the basis of the Claim, payment to the Appellant was contingent on the Respondent receiving payment from the parties’ ultimate client – Kenya National Highways Authority (KENHA). Mrs. Kibe testified that while the suit was instituted on 27/06/2022, payment from KENHA (Client) was received by the Respondent on 18/7/22.
20. I have carefully gone through Clause 4 of the subject Agreement and note that it provides as follows; -
“4.3.1 The Consultant shall pay to the Sub-consultant for the agreed inputs once the consultant receives payment from the amount invoiced by the Sub-consultant’s invoice and subsequently included in the Consultant’s invoice to the Client
Payment to the Sub-consultant will be made within seven (7) days of the Consultant receiving payment from the Client subject to receipt by the Consultant of the Invoice from the Sub-consultant with all relevant documents.”
21. From the above, it is evident that the Appellant needed to first prove that the Consultant (Respondent herein) had received monies from the Client and that seven days had lapsed. No such evidence was adduced by the Appellant at trial. Consequently, I find no reason to depart from the reasoning of the trial court.
22. Before I pen off, it is critical to point out that from the evidence on record, I note that the Respondent admitted their indebtedness to the Appellant and that they were willing to pay to the Appellant the balance of the contractual sum. I do not agree with the Respondent’s reasoning for withholding payment to the payment. The mere fact that there was an existing dispute between the parties was/is not reason enough to withhold the payment.
Determination
23. The upshot is that the appeal herein is found unmeritorious and is hereby dismissed.
24. The Respondent is hereby directed to pay to the Appellant the balance of the contractual sum, less withholding tax at the applicable rate.
25. Each party to bear their own costs.
26. It is so ordered.
SIGNED DATED and DELIVERED IN VIRTUAL COURT
THIS 20TH DAY OF MARCH 2025
ADO MOSES
JUDGE
In the presence of:
Moses – Court Assistant.