Lungaho v Nyamiobo (Claim E779 of 2026) [2026] SCC 167 (KLR)
The bottom line
#A Kenyan court threw out a Sh500,000 'friendly loan' claim because the lender had no written proof, and you can't sue a company's director personally for company debts.
What this practically means
#Executive summary
#Key legal issues
#Whether the payment of Kshs. 500,000/= was a friendly loan or payment for professional services
The claimant failed to prove it was a loan; the evidence overwhelmingly demonstrated a commercial arrangement connected to the Giving Tuesday Project with Twinkle World Agency Limited as service provider
Beyond proof of the transfer of funds, the claimant produced no loan agreement, acknowledgement of debt, repayment schedule or promise to repay. The respondent produced a quotation of Kshs. 750,000/= reflecting a deposit of Kshs. 500,000/= matching the claimed sum, plus evidence of delivery of services for the Naivasha project. The claimant's own documents confirmed the professional relationship.
Whether the respondent could be held personally liable for the company's obligations
No; the company has separate legal personality and the claimant produced no evidence of the respondent assuming personal liability
It is trite that a limited liability company is separate from its directors and shareholders. There was no evidence of fraud, personal guarantees or circumstances justifying lifting the corporate veil. The claimant also did not establish any basis for a claim against the company itself.
Whether the demand messages established acknowledgement of debt by the respondent
No; there was no evidence the telephone number was registered in the respondent's name, so the correspondence could not be attributed to him
Although the claimant filed correspondence containing payment demands, no registration records were produced to identify the respondent as the user of the number from which the alleged acknowledgements or requests originated. Accordingly nothing supported the conclusion that the correspondence was made to the respondent.
Legal principles established
#- The standard of proof in civil claims is on a balance of probabilities
- A limited liability company has a legal personality separate from its directors, and absent fraud, personal guarantees or other grounds, a director cannot be held personally liable for the company's contractual obligations
- The burden of proof of a fact lies on the person who wishes the court to believe in its existence
Court orders
#- 1.The claim is dismissed in its entirety
- 2.The respondent is granted costs of the claim assessed at Kshs. 30,000/=
- 3.Costs payable after the lapse of 30 days, which period shall act as stay of execution
- Jurisdiction invoked
- Section 30 of The Small Claims Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lungaho v Nyamiobo (Claim E779 of 2026) [2026] SCC 167 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/167/eng@2026-07-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.