Danson Karanja Kamau T/A Sokoni Hardware v Gerald Wanjara Nyutu

of claim. That he is a stranger to the claimant’s purported claim of contract between the parties, in particular where it states that payment would be efiected upon delivery. 6. The particulars of the goods delivered and unpaid balance was denied. Furthermore, the respondent stated that he has not been issued with a credit note or a demand note on the outstanding sum claimed, and neither has a demand or notice of intention been served upon him. The respondent prayed that, the claimant’s suit be dismissed 7. In addition, the respondent filed a counter-claim claiming that the claimant forcefully collected unused construction materials and/or items purchased and which he paid in the sum of Kshs 102, 370. Particulars of the said items is stated at paragraph 18 of the counter-claim. That the collection of that material was illegal. Hence, the respondent prays for a refund of Kshs 102,370, costs of the claim and interest, costs of the counter-claim and interest thereof and any other relief the court deems fit to grant. 8. In response to the counter claim, the claimant reiterated the contents of the claim in its entirety. In particular, that the claimant denied that the subject goods were sold in cash or any cash receipts issued, and that receipts produced are a subject of CMCRC No. E709 of 2021; R Vs Gerald Wanjara Nyutu where the respondent is charged with the ofience of obtaining goods by false pretence. 9. The claimant argued the ETR receipts are not proof of purchase and payments. That, the allegations in paragraph 16 to 20 of the counter claim were investigated by DCI and found to be false and respondent charged. Further the right procedure was followed in collecting the goods from the respondent 10. At the hearing of the matter, the claimant’s case was supported by the evidence of Danson Karanja who relied entirely on the statement filed alongside the claim reiterating averments in the claim. The case was further supported by the evidence of (CW2) Raphael Muemo who relied on his statement dated 9th October 2023, and stated that he is the one who delivered the goods to the respondent 11. On the other part, the respondent’s case was supported by his evidence wherein he relied on the statement filed alongside the response and counter claim. That he ordered for goods on phone and ETR receipts were left with his driver, and were accompanied by hand written receipts. That ETR receipts do not show unpaid amount, and that, he never consented to release of goods collected. In cross-examination he stated that, Mr. Nganga paid for the good. 12. The parties filed their respective submissions and by a judgment dated 9th November 2023, the claimant claim was dismissed and judgment entered in favour of the respondent on the counter claim with costs. 13. However, the claimant is aggrieved by the decision of the Adjudicator and appeal against it on the following grounds a. That the learned Adjudicator erred in law in failing to hold that the small claim court is not bound by rules of evidence pursuant to section 32 of the Small Claim Act b. That the learned Adjudicator erred in law in failing to hold that parole evidence rule was not applicable to the claim c. That the learned Adjudicator erred in law in failing to hold that evidence seeking to invalidate receipts for want of consideration was admissible by virtue of section 98(1) of the Evidence Act d. The learned Adjudicator erred in law in failing to hold that the respondent was bound by his pleadings and a departure was not permissible in law e. The learned Adjudicator erred in law in failing to properly analyze and evaluate the evidence presented by the parties https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19340/eng@2025-11-04 2

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14. The appeal was disposed of vide filing of submissions. The appellant in submissions dated 15th September 2024 argued that, the trial court erred by holding that the parole evidence rule applied and therefore oral evidence was not admissible. 15. The appellant further argued that the parole rule was not applicable as the receipt produced by the respondent were not an agreement neither did they capture the agreed terms between the parties. That the agreement was oral and was not reduced into writing. Further, it was not agreed or intended that the receipts would constitute the agreement. That in the circumstances the intention of the parties could only be deduced from or through oral evidence. 16. The appellant relied on the case of; Fidelity Commercial Bank Limited v Kenya Garage Vehicle Industries Limited (Nairobi Civil Appeal No. 61 of 2013), where the Court of Appeal stated that the mere production of a written agreement does not legally render inadmissible evidence of other terms not included expressly or by reference and that where parties intended the contract to be partly oral and partly written, extrinsic evidence is admissible to prove the oral part. 17. The appellant submitted that section 98 (1) of the Evidence Act is an exception to the parole rule as it allows the presentation of oral evidence to invalidate a document. That his oral evidence that the he was not paid despite issuing the receipts invalidates the receipts for want of consideration and was admissible as it constitutes a statutory exception to the parole rule. 18. Further that, the trial court failed to appreciate section 32(1) & (2) of the Small Claims Court Act, which provides that the court is not strictly bound by the rules of evidence and may admit oral testimony that might otherwise be inadmissible under strict rules of evidence and therefore the trial court erred in refusing to admit his oral evidence. 19. The appellant argued that the respondent’s evidence was full of contradictions. That in his pleadings and witness statements, the respondent pleaded and stated that he personally paid for the materials and was issued receipts. However, in cross-examination the respondent departed from his pleadings and claimed that payments were made by his agent, Mr. Nganga raising doubts as to whether the purchase price was ever paid. 20. That the trial court erred by failing to find that the respondent was bound by his pleadings. The decision of the Court of Appeal in Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & Another (Civil Appeal No. 219 of 2013) and Adetoun Oladeji (Nig) Ltd v Nigeria Breweries PLC, was cited which states that parties are bound by their pleadings and any a departure therein is impermissible in law. 21. That furthermore, the respondent's testimony regarding payment by Mr. Nganga was hearsay and therefore inadmissible as the respondent was not present when the alleged payments were made. The Appellant argued that the burden of proof lay with the respondent under Section 112 of the Evidence Act to prove payment, a fact especially within his knowledge. That the respondent did not call Mr. Nganga as a witness and therefore the trial court ought to have drawn an adverse inference against the respondent. The case of Saj Ceramic Limited v Robinson Mongare (Nairobi HCCA No. 597 of 2008) and Joseph C. Chepkwony v Kiptagich Tea Estate Limited (Nakuru HCCC No. 51 of 2007) was relied. 22. Lastly, the appellant submitted that the trial court erred in failing to analyse the evidence, particularly the discrepancy between the receipts produced for Ksh 187,720 and the value of goods delivered being Ksh 215,400. The Appellant prays for the appeal to be allowed in terms of the memorandum of appeal. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19340/eng@2025-11-04 3

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23. However, the respondent in response submissions dated 6th November 2024, cited section 30 of the Small Claims Act that states an appeal lies to the High Court on matters of law only. The respondent argued that the appeal lacks merit as it raises matters of fact rather than matters of law, as the appellant alleges that the trial court failed to appreciate his oral evidence challenging the admission of cash sale receipts and the applicability of the parole rule of evidence. 24. That, the appellant cannot hide behind the applicability of the Evidence Act on matters before the Small Claims Court. That the intention of Section 32 of the Small Claims Act, which provides that the court is not bound by rules of evidence, is to help litigants acting in person and laymen who would not be tied down by technical issue and/or the strict rules of evidence. 25. That, in the instant case the appellant was ably represented by counsel through out the hearing and cannot therefore seek refuge in this provision to overlook inadequacies in his case. 26. The respondent argued that the transaction between the parties was an ordinary transaction where an order was placed, payment made and receipts issued. That the cash sale receipts produced as exhibits emanated from the appellant's shop acknowledged by both parties. Further, by invoking Section 100 of the Evidence Act, it was clear that the exhibit was a cash receipt and leaves no ambiguity over whether the respondent paid or not. 27. The Respondent relied on the case of; Muthuuri vs National Industrial Credit Bank Ltd [2003] KLR 145, where the Court stated that the history preceding a contract is superseded by the subsequent written contract, and no extrinsic evidence is admissible to contradict, vary, add to or subtract from the terms of the document. 28. The respondent further submitted that the appellant did not avail a demand note, invoice and/or credit note to show that the cash receipts were not intended to indicate that it was a cash sale and urged the court to apply Section 3 (3) and 3 (4) of the Evidence Act and find that the appellant's failure to adduce evidence of the sale of goods on credit was fatal. 29. The respondent argued that the appellant was required to prove that he sold the goods on credit to satisfy the requirements of Section 107 (1) of the Evidence Act, as the burden does not shift. 30. The respondent further submitted that at no time did he depart from his pleadings but maintained that he paid for the goods and was issued receipts, and therefore the appellant was guilty of unjust enrichment. He prays that the court dismiss the appeal with costs as no proper reason has been presented to interfere with the lower court's findings. 31. At the conclusion of arguments by the parties on the appeal and in considering the appeal, I note that, the provisions of section 38 of Small Claims Court Act states as follows: (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. 32. In that regard, it is important to interrogate the grounds of appeal as to whether they relate to matters of facts or law and/or both. As per the submissions of the appellant; the appeal falls on two limbs discussed at page 1 of the submissions. 33. However, from the outset I note that, the issues in the claimant’s submissions relating to; whether consideration was paid for building materials delivered, failure to call Nganga as a witness and/or his absence being adverse evidence against the respondent, failure to to analyse evidence adduced and/ https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19340/eng@2025-11-04 4

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or legal authorities cited by the claimant/appellant and/or distinguish them are matter of evidence therefore factual not of law. 34. In the same vein, the respondent’s submissions as to; whether the trial court erred by the failure to consider the oral evidence by the claimant, whether the cash sale receipt were evidence of payment, whether the claimant satisfied the requirement of section 107 of Evidence Act, whether goods were sold on credit or not and what constitute a cash sale receipt, are also matters of evidence and/or facts and not purely law/ 35. In summation, it is the finding of this court that based on section 38 of Small Claims Court Act, grounds No(s). 3, 4 and 5 of appeal are evidently matters of evidence and therefore facts and not law. Even then, ground 1 and 3 all speak to the application of section 32 the Small Claims Act and section 98 of the Evidence Act and can be both a matter of fact and/or law and so is the application of the parole rule., 36. Be that as it were, at page 2 of claimant’s submissions, the claimant deals with the issue of parole rule as already stated herein. The appellant submits that; oral evidence was applicable in the absence of any written agreement. In that regard, at paragraph 26 of the judgment, the trial court stated as follows: “ Perhaps it would have been safe for the claimant to indicate on the face of the ‘cash sale’ unpaid, amount outstanding or anything that would give the impression that the amount was not paid. As it stands, I am inclined to agree with the respondent that the parole evidence rule applies which as defined in the book ‘The Law of Contract’ by Treitel to also include evidence. It reads ‘…the parol evidence rules stated that evidence cannot be admitted (or, even if admitted, cannot be used) to add, to vary or contradict a written instrument…” 37. Pursuant to the aforesaid, the trial court’s judgment was based heavily on cash sale and/or receipts produced by the respondent. The trial court evaluated the receipts in the light of other evidence and stated as follows at paragraph 24 of the judgment: “ Whereas section 98(1) of the evidence Act is concerned, I am unable to trace any evidence presented by the Claimant to demonstrate that these receipts in its nature of operation would be treated as an invoice, demand note or acknowledgment of debt” And at paragraph 19 and 21 of the judgment, the trial court states that, the claimant confirmed the cash sale were receipts. 38. To interrogate the afore, this court must descend into the arena of evidence, to decide whether the trial court erred by deciding that; the cash sale were receipts and therefore evidence of payment for the goods delivered. 39. It is also quite evident from the afore that, the trial court also relied on the evidence of these “receipts” to dismiss the claimant’s case. If the receipts and other documents issued by the claimant were deemed to be evidence of “written engagement or contract” between the parties, and in particular, evidence of payment by the respondent and then the claimant’s oral evidence to the contrary dismissed, then the question that arises is; did the trial court rely on oral evidence to allow the counter claim?. 40. The appellant submits that there was contradictory evidence in the respondent’s case as regard who made payment, and yet that the trial court admitted respondent’s evidence on payment and dismissed the claimants. Notably the evidence by the respondent on the counter claim is that a third party made the payment which is the subject of the claim. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19340/eng@2025-11-04 5

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41. However, the respondent did not plead as to who made the payment and in evidence in chief, stated it was made by his agent. That evidence of payment made by his agent was given orally and is hearsay as that agent did not testify. Yet the court relied on it to allow the respondent’s counter claim. 42. In addition, there is no indication in the judgment that the claimant’s oral evidence was dismissed as the court simply stated that the receipts produced and acknowledged by the claimant are adequate proof of payment. If that was so, then court failed to consider oral evidence by the claimant and should not have considered the respondent’s. 43. Furthermore, taking into account the fact that, the aim of the Small Claim Court Act requires that, the trial court does not apply the rules of evidence strictly, the court could not arrive at a finding that the parole rule applies and if the court was well guided, then it should have applied to both parties as aforesaid, as both were relying on documents in their possession. 44. Moreover, the respondent too was bound to prove the claim in counter claim, yet from the judgment the trial court did not analyse the respondent’s case, yet section 107 of the Evidence Act is applicable to both claim/counter claim. 45. Therefore, if the claimant’s suit was dismissed for lack of adequate evidence, the respondent who alleged to have paid did not support the same, as his claim too should have been dismissed. 46. It is the finding of this court that whether adduced orally or otherwise the finding that receipts issued evidence payment was proper and supported the respondent’s case. It can therefore be argued that, the trial court erred dismissing the claim. 47. Pursuant to the aforesaid, judgment on the claimant’s claim is upheld and judgment on counter claim set aside. Each party bears costs of both on trial and appeal. 48. That is the order of the court. DATED, DELIVERED AND SIGNED THIS 4TH DAY OF NOVEMBER, 2025. GRACE L. NZIOKA JUDGE In the presence of: Mr. B. G Wainaina for the appellant Mr. Wairegi for the respondent Ms. Hannah: court assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19340/eng@2025-11-04 6

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