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Small ClaimsPartially AllowedKitale SCC CC. No. E003 of 2023

East African Business Company Ltd v Kiptoo t/a Moshkip Enterprises (Commercial Case E003 of 2023) [2024] SCC 13 (KLR)

Small Claims Court
29 February 2024
TOT.O. Omono
1,314 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~5 min to read original · ~4 min brief

The bottom line

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A Kitale court ruled a supplier could refuse late-returned expired goods and treat post-dated cheques as promises to pay, not actual payments.

What this practically means

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Executive summary

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This was a Small Claims Court claim at Kitale arising from a contract for the supply of agricultural farm inputs by the Claimant to the Respondent between 2021 and 7th December 2022, valued at Kshs. 140,541.74/=. The Respondent acknowledged receipt of the goods but asserted that 270 pieces of expired Mongare, valued at Kshs. 13,441.60/=, were returned to the Claimant through its employee Martin Kidonyi, and that he had paid Kshs. 79,000/= through cheques and Mpesa. The court framed three issues: whether the Mongare was returned, the amount due, and whether interest of 3% per month applied. On the first issue, WhatsApp exchanges showed the Claimant rejected the returned expired goods because of delayed return, and the Respondent produced no delivery note acknowledging receipt; the court upheld the rejection, holding that allowing returns at a merchant's whims would lead to absurd commercial outcomes. On quantum, the court held that post-dated cheques are not proof of payment, but found from the Respondent's ABSA bank statement and Mpesa records that Kshs. 48,000/= had been paid, leaving Kshs. 45,074.80/= owed, with no credit for the rejected goods. On interest, the invoices showed a contractual term of 3% monthly interest on overdue invoices, running from the demand letter dated 17th October 2023. Judgment was entered for the Claimant for Kshs. 45,074.80/= with 3% monthly interest from 17th October 2023 till payment in full, with each party bearing their own costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether 270 pieces of Mongare were returned to the Claimant
  2. 2.What is the amount due to the Claimant
  3. 3.Whether interest of 3% per month ought to be levied on the amount due to the Claimant

Key legal issues

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01

Whether the 270 pieces of Mongare were validly returned

Holding

The returned expired goods were rejected by the Claimant on account of delayed return, and the Respondent is bound to pay for them

Reasoning

The WhatsApp exchanges showed the Claimant rejected the returned expired goods because of delayed return, and sought to return them to the Respondent. The Respondent did not produce the delivery note allegedly signed by Kidonyi acknowledging receipt, nor the delivery note he declined to sign. The court held the Claimant could not be faulted, as allowing returns at a merchant's whims would lead to absurd commercial outcomes.

p. 3
02

What amount is due to the Claimant

Holding

Kshs. 93,074.80/= less Kshs. 48,000/= paid, equalling Kshs. 45,074.80/=

Reasoning

The Claimant conceded Kshs. 69,074.80/= was owed exclusive of interest; the Respondent's statement showed Kshs. 93,074.80/=. Post-dated cheques were not proof of payment, but the ABSA bank statement showed Kshs. 36,000/= paid and Mpesa payments of Kshs. 12,000/=, a total of Kshs. 48,000/=. No credit was given for the rejected returned goods.

p. 4
03

Whether interest of 3% per month is payable

Holding

Yes; the 3% monthly interest term was contractual, running from the date of the demand letter (17th October 2023)

Reasoning

All the invoices, including the one the Respondent claimed not to have signed, provided for interest of 3% per month on overdue invoices, making it a term of the contract. Since the statement of account stated accounts were due on demand, the accounts became due from the date of the demand letter dated 17th October 2023.

p. 4

Legal principles established

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  • A post-dated cheque cannot be used as proof of payment of money due
  • A supplier is entitled to reject returned goods where the return is unreasonably delayed

Court orders

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  1. 1.A declaration that the Respondent is indebted to the Claimant the sum of Kshs. 45,074.80/= only
  2. 2.The sum of Kshs. 45,074.80/= shall attract interest at the rate of 3% per month with effect from 17th October 2023 till payment in full
  3. 3.Each party to bear their costs of this claim

The bench

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One judgment of the whole court — no separate or dissenting opinions.

TO
T.O. OmonoAdjudicator
majority

Wrote the judgment

Jurisdiction invoked
Small Claims Court Act (Kitale SCC CC. No. E003 of 2023)

Relief refused

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Credit for the 270 returned pieces of Mongare valued at Kshs. 13,441.60/=

The court found the returned expired goods were rejected by the Claimant on account of delayed return, and for good reason

p. 3

Costs

Each party to bear their costs of this claim

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

A post-dated cheque only expresses an intention to pay. Such a cheque may bounce or may be cleared. For those reasons, a post-dated cheque cannot be used as proof of payment of money due.
p. 4Post-dated cheques as proof of payment
This court cannot fault the Claimant for rejecting those returned goods on account of delayed return since allowing goods to be returned to a supplier at the whims of a merchant is likely to lead to absurd outcomes in the commercial world.
p. 3Rejection of delayed returns of goods
a) A declaration is hereby made that the Respondent is indebted to the Claimant the sum of Kshs. 45,074.80/=(Kenya Shillings Forty-Five Thousand and Seventy-Four Shillings and Eighty Cents) only
p. 5Final orders - declaration of indebtedness
c) Each party to bear their costs of this claim
p. 5Final orders - costs

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "East African Business Company Ltd v Kiptoo t/a Moshkip Enterprises (Commercial Case E003 of 2023) [2024] SCC 13 (KLR)", Case Analysis (2024). Kitale SCC CC. No. E003 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2024/13/eng@2024-02-29

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.