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Small ClaimsAllowedKitale SCC CC. No. E024 of 2024· [2024] SCC 15 (KLR)

Ibm Automobile Ltd v China State Construction Engineering Ltd (Commercial Case E024 of 2024) [2024] SCC 15 (KLR)

Small Claims Court
6 May 2024
TOT.O. Omono
781 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kitana Small Claims Court ordered a road contractor to pay over Kshs. 832,000 plus interest for an unpaid equipment lease, after ignoring the court case entirely.

What this practically means

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Executive summary

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The Claimant sued the Respondent in the Small Claims Court at Kitale seeking judgment of Kshs. 832,950.97/=, costs and interest, arising from a lease contract dated 28th December 2021 under which the Respondent hired the Claimant's smooth roller for the Endebess-Suam road project at Kshs. 650,000/= per month, used from 5th January 2022 to 15th February 2022. The Respondent acknowledged the indebtedness through an interim payment certificate dated 18th February 2022, and the Claimant issued an invoice and fiscal receipt for the claimed sum. Clause 4.1 of the lease required payment within one month of the invoice; the Respondent defaulted despite a demand letter, and although duly served, it neither entered appearance nor filed a response, so the claim proceeded by formal proof. The court framed two issues: whether the claim was proved to the required standard, and the question of costs. Relying on Photo Production Ltd v Securicor Transport Ltd on the compensatory purpose of damages, and applying the three elements of a breach of contract claim (contract, breach, loss), the Adjudicator found the claim uncontroverted and adequately supported by the documents, and held it proved. On costs, section 33(1) of the Small Claims Court Act and Rule 37 of the Small Claims Court Rules were applied, and costs were assessed at Kshs. 30,000/= given the Claimant's representation by counsel. Judgment was entered for Kshs. 832,950.97/= with interest at court rates from 21st March 2022 until payment in full.

Key legal issues

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01

Whether the Claimant proved the lease contract, its breach and the resulting loss

Holding

Yes - the claim was proved on a formal proof since the Respondent, though duly served, did not enter appearance or file a response, and the documentary evidence supported the indebtedness of Kshs. 832,950.97/=

Reasoning

The court noted the lease contract (Cexh.11), the interim payment certificate (Cexh.6), invoice (Cexh.3) and fiscal receipt (Cexh.4) acknowledging the debt. Clause 4.1 required payment within one month of the invoice. The Respondent's non-participation left the evidence uncontroverted, and the court was persuaded the claim was proved to the required standard.

p. 3
02

Costs recoverable in the Small Claims Court

Holding

Costs awarded to the Claimant assessed at Kshs. 30,000/= under section 33(1) of the Small Claims Court Act read with Rule 37 of the Small Claims Court Rules

Reasoning

Section 33(1) of the Small Claims Court Act grants the court discretion on costs, and Rule 37 directs the court to be guided by the Second Schedule. Considering that the Claimant was represented by counsel and the matter proceeded by formal proof, costs were assessed at Kshs. 30,000/=.

p. 3

Legal principles established

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  • The principal remedy under common law for breach of contract is an award of damages to compensate the injured party for loss suffered
  • A claimant in breach of contract must prove existence of the contract, its breach, and resulting loss

Court orders

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  1. 1.Judgment entered against the Respondent for Kshs. 832,950.97/=
  2. 2.Interest at court rate on Kshs. 832,950.97/= from 21st March 2022 till payment in full
  3. 3.Costs of the claim assessed at Kshs. 30,000/= payable to the Claimant
Jurisdiction invoked
Small Claims Court Act (claim for a liquidated money demand within the Small Claims Court's pecuniary jurisdiction)

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, "Ibm Automobile Ltd v China State Construction Engineering Ltd (Commercial Case E024 of 2024) [2024] SCC 15 (KLR)", Case Analysis (2024). Kitale SCC CC. No. E024 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2024/15/eng@2024-05-06

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