MAISHA STEEL (EA) LIMITED VS SR TRANDING LIMITED

1. This appeal arises from the judgment of the learned Adjudicator in the Small Claims Court delivered on 19/7/2022 in which the claim by the appellant against the respondent for an outstanding sum of KShs 432,500/= for supply and delivery of Korie Supreme rice was dismissed.
2. Dissatisfied with the learned Adjudicator’s decision the appellant now appeals to this court through its memorandum of appeal dated 25/10/2022 based on four grounds of appeal laid out the memorandum and praying that the appeal be allowed and the judgment of the learned Adjudicator be set aside and be substituted with an order allowing the appellant’s claim. The grounds of appeal are that the learned trial magistrate erred in law and fact by:
   1. dismissing the claim against the weight of the evidence.
   2. failing to find that the issuance of dishonoured cheques by the respondent amounted to an admission of goods supplied for KShs 1,219.500/=.
   3. failing to give the evidence of PW 1 Manishkumar Patel due regard and weight.
3. The claim proceeded by way of testimony where each party called one witness in its case. The witnesses adopted their witness statements as filed as their evidence in chief and produced documents in support of their respective cases and were cross-examined thereon.
4. The appellant called CW 1, Manishkumar Patel, the its director. The evidence tendered by PW 1 by way of his written witness statement and testimony in court was that the Claimant supplied the Respondent with 600 bags of Korie supreme rice on 10/5/2021 and on 18/5/2021 amounting to KShs 1,219,500/= on credit. On two occasions, on 29/6/2021 and on 3/7/2021 the respondent attempted to make partial payment for the goods by issuing cheques in the sum of KShs 516,000/= and 703,500/= both which were banked but returned unpaid due to insufficient funds thereby attracting a penalty of KShs 3,500/= on each occasion. This made the total outstanding amount to be KShs 1,226,500/=. The Respondent subsequently paid KShs 800,000/= on 12/7/2021 by way of cheque, leaving a balance of KShs 426,000/= which the respondent has never paid to-date.
5. On its part, the respondent through RW 1, John Kikoze in his written statement and testimony in court conceded the business relationship between the parties. He however said that the claimant only delivered 400 bags of rice at a price of KShs 400/= per bag and the respondent paid KShs 800,000/= in full settlement of the same. Therefore, the respondent owes no money to the defendant for the supply of that rice. According to the respondent, the claimant supplied the rice in two batches. They first supplied 258 bags and the respondent issued a cheque for KShs 516,000/= on agreement that it will be banked at the appropriate time. However, 108 bags of the rice were found to be grade 2 and not grade 1 as ordered. The same were returned to the claimant and the cheque issued recalled.
6. The claimant then supplied the balance of 250 bags of rice and again 94 bags were found to be grade 2 and the same were returned and later replaced after much negotiation.
7. Upon analysing the evidence, the learned Adjudicator concluded that the respondent’s evidence was more reliable than the claimant’s. Consequently, she dismissed the claim with costs to the respondent thereby eliciting this appeal.
8. The appeal was canvassed by way of written submissions filed by the appellant only. The respondents did not file any submissions in spite of being granted time and notified to do so.
9. There are a few house-keeping issues that should be addressed before delving into the substance of the appeal. All the grounds of appeal start with the standard phrase of “…the learned trial magistrate erred in law and in fact…” To begin with, claims before the SCC are not conducted by a magistrate but by an Adjudicator as per section 5(a) of the SCCA (Cap. 10A) Laws of Kenya, the fact that an Adjudicator is at the same time a magistrate notwithstanding. Therefore, the jurisdiction to preside over a SCC is conferred by statute upon an Adjudicator and not a magistrate.
10. Secondly, appeals from the SCC to this court are only on points of law and not on issues of fact. Therefore, use of the standard byline of “… erred on matters of law and fact…” is not appropriate. While considering the issue of when an appeal is on points of law only, the Court of Appeal stated in the case of Independent Electoral and Boundaries Commission & another v Stephen Mutinda Mule & 3 others [2014] eKLR that:

“Those points in an appeal of the kind before us, being from an election court’s decision, are further circumscribed by Section 85A of the Elections Act which limits appeals to the Court of Appeal to matters of law only. It is therefore quite strange and improper that each of the seventeen grounds, without exception, commences with a standard expression “the judge erred in fact and law” or “the learned Judge erred in law and in fact.” Clearly the drafters of the memorandum did not have the legal provision in active contemplation. Had they done so, they would have found that by invoking factual errors, they were inviting jurisdictional objections to their entire appeal.”

1. This court will therefore only consider the grounds of appeal that are on points of law only.
2. In determining an appeal on points of law only, the Court of Appeal in M’Riungu v. Republic [1983] KLR 455, has given guidance thus:

“where a right of appeal is confined to question of law, 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 fact and law and it should not interfere with the decision of the trial court or the first appellate court unless it is apparent that on evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding that the decision is bad in law”.

1. In view of the law and the foregoing decisions, with respect, I find the submission by learned counsel for the appellant citing the case of Bwire v Wayo & Sailoki (Civil Appeal 032 of 2021) [2022] KEHC 7 (KLR)(Judgment) where the High Court in considering the provisions of section 78 of the CPA on the duty of a first appellate court is not applicable here. The High Court, Mativo, J. (as he then was) said thus:

“A first appellate court is the final court of fact ordinarily and therefore a litigant is entitled to a full, fair, and independent consideration of the evidence at the appellate stage. Anything less is unjust. In the first appeal parties have the right to be heard on both questions of law as also on facts and the first appellate court is required to address itself to all issues and decide the case by giving reasons. While considering the scope of Section 78 of Civil Procedure Act, a court of first appeal can appreciate the entire evidence and come to a different conclusion.”

1. The appellate court may however interfere with the findings of the trial court where it is demonstrated that there was no evidence at all upon which such findings were based or that the evidence relied upon was of such a nature that no reasonable tribunal, properly addressing its mind on it, could have made such findings as has been held in numerous decisions. (see for instance Bashir Haji Abdullahi v Adan Mohammed Nooru & 3 others [2014] eKLR.
2. The procedure in the SCC is not governed by the CPA or the Rules made thereunder. The SCC Act in section 17 provides that the Court shall have control of its own procedure in the determination of claims before it and, in the exercise of that control, the Court shall have regard to the principles of natural justice.
3. In my assessment therefore, the principles of natural justice take centre stage in a matter before the SCC. These principles are as enunciated in the case of Msagha vs. Chief Justice & 7 Others Nairobi HCMCA no. 1062 of 2004 (Lesiit, Wendo & Emukule, JJ on 3/11/06) (HCK) [2006] 2 KLR 553 thus:

“The ingredients of fairness or natural justice that must guide all administrative decisions are, firstly, that a person must be allowed an adequate opportunity to present their case where certain interests and rights may be adversely affected by a decision-maker; secondly, that no one ought to be judge in his or her case and this is the requirement that the deciding authority must be unbiased when according the hearing or making the decision; and thirdly, that an administrative decision must be based upon logical proof or evidence material.” 

1. In my considered view therefore, the failure to import the use of the Civil Procedure Act and Rules into the SCC Act was deliberate in order to keep the proceedings simple and straightforward for an expedited hearing and determination of the claim. That I believe is why the proceedings in a SCC are in the form of summaries of the facts of the issues in dispute in respect of those claims as determined and recorded by the Court during the hearing of the claims as per section 22(b) of the SCC Act. This is contrasted with the provisions of Order 18 Rule of the CPR which requires that the evidence of each witness is to be taken down in the form of a narrative and this forms the record of the court. Where only summaries are available to the appellate court, it cannot then be expected that it will go into a fresh evaluation of the evidence and arrive at its own conclusion on the facts because there is no record of narrative evidence taken from each witness but only summaries of the facts.
2. The SCC Act further exempts the 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. It is upon the Adjudicator to determine the material to rely upon. In that case, the appellate court has no means to overturn the findings of fact by the trial court and substitute them with its own findings. 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. This means the Adjudicator has the discretion to admit evidence which may be helpful in establishing whether or not the claim is worthy.
3. The issues raised by the appellant herein touch are on the facts presented by the parties and the learned adjudicator’s appraisal of the same.  
4. It would appear to me that the standard of proof in a SCC is as per the determination of the adjudicator who is seised of the matter properly applying her mind to the facts and law of the case having followed the rules of natural justice as provided under the Act and not the usual standard in civil cases on a balance of probabilities.
5. Since the High Court will only be seised of the facts as appeared to be relevant to the Adjudicator it follows that it cannot proceed with the case by way of a rehearing and re-evaluation of evidence as is the norm in other civil matters.
6. Therefore, the submission that this court to adjudicate and review the entire evidence on record and the law and arrive at an informed and inclusive conclusion is without merit as that is not provided for under the SCC Act. 
7. The other ground of appeal is that the learned Adjudicator failed to give reasons for his findings. I do not find any such requirement under the SCC Act as is contained in the Civil Procedure Rules. Rule 23(4) of the SCC Rules provides that at the end of the hearing, the Court shall prepare a written record of its decision in final determination of the claims before it and:

(a)    pronounce its decision in accordance with section 34(2) of the Act; or

(b)    send a copy of its written decision to the parties.

1. This is unlike Order 21 Rule 4 of the Civil Procedure Rules which provides that “Judgement in defended suits shall contain a concise statement of the case, the points for determination, the decision thereon and the reasons for such decision.”
2. Under section 41 of the SCC Act, the trial court has jurisdiction to review its orders or awards where there was an error of law on the face of the record. Perhaps, parties would be advised to better take this route before making their way to the High Court on appeal because when the matter lands on the High Court desk on appeal, it will be determined on the narrow parameters of issues of law as circumscribed by the SCC Act.
3. I have considered the grounds set out in the Memorandum of Appeal and the submissions by learned counsel for the appellant. On the only issue of law which I find raised in this appeal that the learned Adjudicator failed to give due regard and weight to the evidence of CW 1 Manishkumar, I find the same has no merit because the learned adjudicator considered it and arrived at the conclusion that it was not credible. She believed and for good reason the evidence of the respondent which I am satisfied was a proper finding. The reasons for the learned adjudicator arriving at that decision are well articulated from paragraph 29 to 36 of the judgment. Those paragraphs capture the dispute herein concisely, including a summary of the facts, the learned Adjudicator’s evaluation of the facts, his application of the law thereon, his findings thereon and the reasons for so finding. I find no reason to interfere with those findings.
4. Consequently, I find the appeal to be without merit and the same is dismissed with costs to the respondent
5. Delivered, dated and signed at Kiambu on the Virtual Platform, Teams this 19^th day of September, 2024.

In the presence of:

Muthoni (Ms)for the Appellant.

N/A for the Respondent.

Etropia: Court Assistant.