Odhiambo & 10 others v Branch Microfinance Bank Limited (Commercial Claim E13069 of 2024) [2025] SCC 56 (KLR)

Parties, thereafter, filed their respective written submissions. ANALYSIS & DETERMINATION This court has duly considered the pleadings, written statements, documents, written submissions and authorities placed before this court by each party. It is undisputed that on or about 05th June 2024, the parties herein entered into a Consultancy Agreement for the provision of Sales Consultant Services by the Claimants for the Respondent. Whereas the 1 st Claimant’s pay, inclusive of all taxes, was Kshs. 40,500/= the other Claimants’ monthly pay was Kshs. 33,500/= inclusive of all taxes. The gist of this claim was that the Respondent breached the agreement between the parties herein. It is trite that where a party seeks a remedy based on breach of contract, the particulars of breach must be pleaded. The Claimants pleaded in their Statement of Claim herein that the Respondent breached the agreement between them by failing to pay the Claimants Kshs. 375,000/= for sales consultancy services. This court notes that the Respondent submitted at length in their written submissions on the question of whether the termination of the agreement herein was lawful. The question of termination of the agreement herein was also raised in the Claimants’ demand letters herein. The law in this jurisdiction is that parties are bound by their pleadings. Parties can not seek to raise new issues for determination by a court through submissions or demand letters. Demand letters and submissions are not pleadings. In the words of Magare J in Mwavula v Waweru t/a Antique Auctioneers Agencies & another (Civil Appeal E374 of 2023) [2024] KEHC 5988 (KLR) (24 May 2024) (Ruling), submissions are neither pleading nor

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evidence. Beautiful submissions are akin to watching warm fire in television. It will not remove any morning chilly weather. The issue of whether the termination of the agreement herein was lawful having not been pleaded in the pleadings herein, this court declines the invitation by the Respondent to engage I a frolic of its own beyond the four corners of the pleadings before this court. The foregoing inclines this court to find that the only issue for determination is whether the Claimants’ proved that the Respondent breached the agreement by failing to pay them Kshs. 365,0000/=. The Black’s Law Dictionary, 9th Edition, Page 213, defines a breach of Contract as; “a violation of a contractual obligation by failing to perform one’s own promise, by repudiating it, or by interfering with another party’s performance. A breach may be one by non-performance or by repudiation or by both. Every breach gives rise to a claim for damages and may give rise to other remedies. Even if the injured party sustains no pecuniary loss, or is unable to show such loss, with sufficient certainty, he has at least a claim for nominal damages.” The court in Gatobu M’ibuutu Karatho – Versus - Christopher Muriithi Kubai [2014]eKLR cited the High Court in Kampala case “Nakana Trading Co. Ltd – Versus - Coffee Marketing Board 1990-1994 EA 448”, which dealt with the issue of breach of contract as follows:“In contract, a breach occurs when one or both parties fail to fulfill the obligations imposed by the terms since the contract between the parties was reduced into writing, the duty of the court is to look at the documents itself and determine whether it applies to existing facts.” Having fully appreciated what breach of contract entails, this court will proceed to determine whether the Claimants proved to the required

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standards that the Respondent breached the contract between the parties herein by failing to pay the Claimants Kshs. 375,000/=. Parties are bound by their pleadings……questions of whether termination was in order, whether the Respondent sought to vary the terms of the initial agreement through another agreement raised in the Claimants’ demand letters dated 12th August 2024 are not up for determination by this court….and whether the termination of the agreement between the parties herein was lawful It is trite law that the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue. That is the purport of section 107(1) of the Evidence Act (Chapter 80 of the Laws of Kenya), which provides: 107. (1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. Section 109 of the Evidence Act on the other hand stipulates that the burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence. Whereas section 30 of the Act provides that the court will not be wholly bound by the rules of evidence, it is this court’s considered view that the said provision only applies when dealing with admissibility of evidence before the court. Therefore, every party before the court still bears the burden to prove their respective cases to the required standards under the Act. In determining this claim, this court is reminded of the holding by the Court of Appeal in Pius Kimaiyo Langat v Co-operative Bank of Kenya Limited [2017] eKLR, where the court, Waki, Makhandia & Ouko, JJ.A, stated as doth: -

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“38.We are alive to the hallowed legal maxim that it is not the business of courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, fraud or undue influence are pleaded and proved. See National Bank of Kenya Ltd vs Pipeplastic Samkolit (K) Ltd [2002]2 EA 503. The primary task of the court is to construe the contract and any terms implied in it. See Megarry, J. in the case of Coco vs A. N. Clark (Engineers) Ltd. - [1969] RPC 41.“ This court will thus determine this claim in accordance with the terms of the agreement that the parties herein executed. A perusal of the Statement of Claim does not disclose with specificity whether the claim herein relates to the services rendered by the Claimants to the Respondent in the month of June 2024 or the month of July 2024. Regarding pay for the month of June 2024, the Respondent placed before this court proof of payment for the month of June 2024 showing that all the Claimants were paid their dues for that month through their Branch Bank Accounts as set out in clause 4 of the Consultancy Agreements herein. The foregoing and considering that the invoices placed before this court were raised in the month of July 2024 incline this court to hold and find that the claim by the Claimants is a claim for the services they reportedly rendered for the Respondent in July 2024. In the circumstances, this claim turns on the question of whether the Respondent was expected to have settled the invoices raised by the Claimants between 18th and 19th July 2024 as at the time of filing this claim. The mere fact that an invoice has been raised does not mean that the amount stated in such an invoice should be paid. An invoice is simply a payment request. An invoice is only honoured by the payer when the payer is satisfied that whoever raised the invoice has fulfilled their end of the bargain. The place of stand-alone disputed invoices in claims for debts was well enunciated by Majanja J (may his gentle soul find peace) in Securex

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Agencies (K) Limited v Resort Kenya Limited & another (Commercial Appeal E015 of 2023) [2023] KEHC 21751 (KLR) (Commercial and Tax) (29 August 2023) (Judgment) where the learned judge rendered himself in his usual eloquent self thus:‘Since the Respondents did not admit the debt and the Appellant did not produce the delivery notes in support of the invoices, the trial court was correct to conclude that the Appellant did not prove its claim. I also cannot fault the trial court for stating that production of invoices alone was not enough to prove the amount claimed and that the delivery notes were important to prove the Appellant’s claim as the same were expressly sought by the Respondents. The Appellant’s claim thus remained unsupported. In E.P Communications Limited v East Africa Courier Services Limited [2019] eKLR the court held that: “Therefore, invoices and LPOs alone do not prove delivery or receipt of the goods… The other invoices dated 23/20/08 and 20/08/09 were not supported by any delivery note or notes to show receipt of the goods stated therein. The Appellant may have supplied the goods, but courts of law act on hard evidence not sympathy or speculation. In the absence of a delivery note or evidence of receipt of the goods, it becomes doubtful whether the goods were delivered….…Personal statements authored by the Appellant is not sufficient evidence to prove liability especially considering the supporting documentation relied on is invoices and LPOs without the evidence of delivery of the goods. The appellant failed to prove on a balance of probability the extent to which the respondent was liable.”(Emphasis added) The authorities above show that where a Claimant seeks payment of a debt through a disputed invoice, a stand-alone disputed invoice is not enough to prove the debt. A party that seeks to rely on an undisputed invoice needs to

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provide further evidence to prove that the amount claimed through the disputed invoice is due. Turning to the circumstances of this case, the question is whether the invoices raised by the payees were to be honored by the payer as stand-alone documents. The contract signed by the parties herein was explicit that the fees payable to the Claimants would be paid at the end of each month upon receipt of an invoice from the consultant/claimant (see clause 4 of the agreement). Clause 6 of the agreement further required the Claimants to deliver the agreed upon sales consultancy services in line with a Separate Statement of Work provided by the company/Respondent. The above shows that the Claimants’ contracts of consultancy were to be read together with the Statement of Work before a determination on the circumstances under which the amounts raised in the invoices were to be settled. The Lipa Na Branch Statement of Work placed before this court by the Respondent shows at deliverable 3 that the consultants were to onboard a minimum of 300 new customers every month. Clause 5 of the said Statement of work further provided that the consultant would only be paid the monthly fee agreed upon submission and approval of the monthly report. The foregoing shows that for the amount of money raised in the Claimants’ invoices for July 2024 to be due, the Claimants were expected to have:a) Onboarded at least 300 new customers by the end of July 2024 b) Raised the invoices at the end of July 2024 c) Submitted a monthly report for July 2024 d) Approval of the monthly report for July 2024 The Claimants placed before this court a WhatsApp message extract of 23 rd August 2024 to show that the Claimants onboarded 339 new customers as

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demanded of them under the agreement. A perusal of that document shows that the said document does not indicate the identity of the person to whom the said document was sent. Further, that document does not indicate the month/period to which the list of onboarded new customers was applicable. Therefore, that document falls short of proof of the number of new customers that the Claimants onboarded in July 2024. Further, the invoices raised by the Claimants herein were not raised at the end of July 2024, the Claimants did not place before this court any evidence that they submitted to the respondent the monthly report of July 2024, and there is no evidence that the monthly report for July 2024 was approved by the Respondent. The claimants having failed to demonstrate that they complied with the conditions precedent to the raising of the invoices for July 2024, it follows that the said invoices were raised prematurely. That also means that the claim herein was filed prematurely. What the Claimants did in this case was akin to throwing figures on the head of this court and then making a demand that they be awarded those figures without proof. To borrow the words of Lord Goddard C.J. in Bonham Carter vs. Hyde Park Hotel Limited [1948] 64 TLR 177 “Plaintiffs must understand that if they bring actions for damages, it is for them to prove damages, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, 'this is what I have lost, I ask you to give me these damages.' They have to prove it" Given the above, this court holds and finds that the evidence on record did not prove that the Respondent owed the Claimants the money claimed in the Statement of Claim herein.

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DISPOSITION The upshot of the foregoing is that the Claimants’ claim is dismissed with costs of Kshs. 30,000/= to the Respondent. Judgment accordingly. READ, SIGNED and DELIVERED in open court at Bungoma this 01 st day of July of 2025 T.O. OMONO ADJUDICATOR In the presence of: C/A: Albert

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