https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11532

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **COMMERCIAL & TAX DIVISION** **HCCA E221 OF 2024** **AGA KHAN UNIVERSITY HOSPITAL..........................................................APPELLANT** **VERSUS** **BROADCOM LIMITED............................................................................RESPONDENT** **JUDGMENT** 1. This is an appeal from the judgment and order of the Small Claims Court (SCC) at Nairobi Milimani (Hon. V.M Mochache (RM)) dated the 18.7.2024 in SCC COMM E4608 OF 2024). **Background** 1. In brief, the background is that the respondent lodged a claim before the SCC for Kshs. 594,434.21 for supply of LED lights. The appellant denied the claim citing that the LED lights started deteriorating and becoming feint within 6 months of installation. 2. The appellant contacted the respondent’s representatives within 30 days as required under the warranty policy but they failed to replace them prompting it to source from another supplier. The appellant stated that the respondent’s representatives visited the premised and noted but took no action. The appellant counterclaimed for Kshs. 102,664.70. 3. The trial court allowed the respondent’s claim and dismissed the appellant’s counterclaim. It entered judgment for the respondent for Kshs. 594,434.21 with costs and interest at court rates until payment in full. 4. The appellant filed the memorandum of appeal dated 16.8.2024, on the following grounds, contending that the learned magistrate erred in the following ways: - 5. **placing on the appellant the burden of proving whether the goods supplied by the respondent were of merchantable quality.** 6. **failing to find and take cognizance that the respondent's failure to address or respond to the appellant's express notification and pleas that the goods supplied by the respondent were defective was by law and fact an admission by the respondent as to their latent defect.** 7. **failing to take cognizance that the appellant had no opportunity nor means of examining the goods supplied by the respondent at delivery.** 8. **finding that the appellant's counterclaim for recovery of the price paid under the first LPO of Kshs. 102,664.70 could not be maintained.** 9. **considering irrelevant matters and ignoring relevant matters and thereby arriving at an erroneous decision to the detriment of the appellant.** **Directions** 1. The appeal was canvassed through written submissions. The appellant and the respondent filed written submissions dated 5.6.2025 and 20.8.2025 respectively. **Appellant's submissions** 1. The appellant submitted that the trial court misdirected itself in law and in fact and failed to apply the correct legal standards and misapprehended the evidentiary burden. 2. The appellant’s case is that the LED lights supplied by the respondent under the contract were defective. It contended that it discharged the burden of proving that the LED lights were defective. It also contended that once it raised a timely and specific complaints regarding the latent defects, the burden of proving the merchantable quality of the goods shifted to the respondent. 3. The appellant relied on **Safaricom Limited v Jack K. Khanjira & another [2018] eKLR** to assert that uncontroverted allegations of fact are, in law deemed admitted. It also relied on **Raila Amolo Odinga & Another v IEBC & 2 others (2017) eKLR** to argue that although the legal burden of proof does not shift, evidential burden of proof shifts. 4. The appellant submitted that since sale of the goods supplied was by description, sections 15 and 16 of the Sale of Goods Act are applicable. It relied on the protection under section 16 since the LED lights were not examined at delivery, the had to be installed first. Its witness testified that the defectiveness was only discovered post-installation. 5. The appellant faulted the trial court for equating installation to examination. It highlighted that both parties agree that the defect manifested post-installation as the respondent confirmed being notified after 6 months. 6. The appellant urged the court to allow the appeal with costs, set aside the judgment delivered on 18.7.2024 and substitute it with an order dismissing the respondent’s claim and allowing the appellant’s counterclaim for the refund of Kshs. 102,664.70 together with interest and costs of the suit. **Respondent’s submissions** 1. The respondent submitted that the appellant is not entitled to the reliefs sought as it did not produce any evidence before the trial court as to the merchantability or lack thereof of the goods supplied. It asserted that the appellant owes it Kshs. 594,431.21. 2. The respondent submitted that the goods were ordered by way of local purchase orders (LPOs) which contained the description of the item, quantity, unit costs and total values. He also submitted that there are delivery notes which were received by the appellant. 3. The respondent asserted that the goods were of merchantable quality and that the appellant did not present any evidence that the goods were not of merchantable quality. 4. The respondent relied on **Farah Awad Gullet v CMC Motors Group Limited [2017] eKLR** to submit that the appellant had a duty to present evidence of the faultiness of the goods and the loss incurred. 5. The respondent also relied on **Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR** to assert that the appellant cannot run away from its contractual obligation and that courts cannot rewrite an agreement. 6. The respondent urged the court to dismiss the appeal with costs. **Analysis and Determination** **Duty of court** 1. This is an appeal from a judgment of the Small Claims Court (SCC). The court’s jurisdiction on an appeal from the SCC is limited to matters of law only. **Section 38 of the Small Claims Court Act** provides that: - ***“(1) A person aggrieved by the decision or an order of the that: -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.”*** 1. However, the court has power to interfere with findings that are based on no evidence or on wrong principles or are decisions so perverse that no reasonable tribunal would make it. See **Bashir Haji Abdullahi v Adan Mohammed Nooru & 3 others [2014] eKLR** 2. I have considered the memorandum of appeal, the record of appeal and the submissions. The issue for determination is whether the trial court erred by placing the burden of proving that LED lights supplied were not of merchantable quality on the appellant. 3. The LED lights were procured through LPOs containing a description column describing the goods. Therefore, I agree with the trial court that the sale was by description. **Sections 15 and 16 (b) of the Sale of Goods Act** are appliable. 4. **Section 15 of the Sale of Goods Act** states that: - ***“Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description; and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.”*** 1. **Section 16 (b) of the Sale of Goods Act** states that: - ***“Subject to the provisions of this Act and of any Act in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplies under a contract of sale except as follows –*** ***b) where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality.*** ***Provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which that examination ought to have revealed.”*** **Examination of the goods** 1. The appellant faulted the trial court for failing to take cognizance that the appellant had no opportunity nor means of examining the goods supplied by the respondent at delivery. 2. The trial court observed that the evidence was that the LED lights were tested during delivery and installation. Thus, the appellant had the opportunity to examine the goods. 3. The appellant’s claim that it had no means of examining the LED lights is not supported by the evidence. 4. Ground 3 therefore fails. 5. The appellant faulted the trial court for equating installation to examination. At para. 18 of the impugned judgment, the trial court observed that: - ***"Facts in this suit show that the Respondent had an opportunity to examine the goods at delivery. The goods were accepted and installed, which is consistent with ownership or inconsistent with the Claimant's ownership of the goods."*** 1. At para. 18, the trial court was addressing the point that breach of warranty does not automatically translate to a right to reject the goods. The trial court went on to find at para. 16 that even if there was breach of the condition, the same would not entitle the respondent to refuse the contract price. 2. The appellant appears to have conflated two distinct issues, the examination of the goods at the delivery and the discovery of the defects post installation. 3. The appellant contended that the defects in the LED light manifested about 6 months after their installation. 4. Thus, these alleged defects were not those that the examination conducted upon delivery would reveal. 5. The proviso to section 16 excludes the implied condition only in respect of defects that such examination ought to have revealed. 6. The mere fact that the goods were tested and installed did not, without more, determine whether the defects complained of were patent or latent. 7. The trial court was therefore required to determine whether the examination conducted upon delivery could reveal the defects subsequently complained of. 8. Even though it did not, the trial court still found that there was a warranty that the goods were of merchantable quality as section 16 (b) was applicable. **Burden of proof** 1. As to whether there was a breach of warranty, the trial court was not satisfied that the goods were not of merchantable quality. It held that the burden was still upon the appellant to prove that the LED lights were not of merchantable quality. 2. The appellant faulted the trial court for placing on it the burden of proving whether the goods supplied by the respondent were of merchantable quality. 3. The trial court reasoned that the respondent (now appellant) did not present an expert report to help the court to conclude that the goods were not of merchantable quality. 4. It observed at para. 15 that it was not enough for the respondent (now appellant) to claim that it held meetings or wrote emails. When the claimant (now respondent) disputed the issue of merchantability, evidence was required to tilt the scale of justice. 5. This is in line with sections 107 to 109 of the Evidence Act. 6. The implied condition is like a rebuttable presumption. I concur with the trial court that the appellant had the burden to rebut. 7. I also concur with the trial court that it was not enough for the appellant to claim that it held meetings or wrote emails. The appellant was still required to prove that the defects in the LED lights were not caused by some intervening cause rather by inherent defects. 8. Grounds 1,2,4 and 5 also fail. **Conclusion** 1. From the foregoing, I find no merit in the appeal. It is dismissed with no order as to costs given the nature of the claim. **Dated, signed and delivered at Nairobi through Microsoft Teams online application this 16th day of July, 2026** **------------** **F. Gikonyo M** **Judge** **In the presence of: -** Ms. Gitari for Tolo for Appellant Mola for Respondent CA- Ivan/Aggrey