https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11838

**REPUBLIC OF KENYA** **IN THE HIGH COURT AT NAKURU** **CIVIL APPEAL NO. E183 OF 2024** **ALFRED KAGIRI KAHURO ……………………………….APPELLANT** **VERSUS** **PETER NJOROGE ……………………………………..….… RESPONDENT** ***(Being an Appeal from the judgment of the Small Claims Court, Nakuru (Hon. Dominic Macharia- Adjudicata ) dated 9th August, 2024 in Nakuru SCC COMM Case No. E477 of 2024 Peter Njoroge vs Alfred Kagiri Kahuro*)** **JUDGMENT** 1. The background of this appeal is that by way of Statement of Claim dated 19th April, 2024, the Respondent sued the Appellant vide ***Nakuru*** ***SCC Comm. Case No. E477 of 2024*** claiming Kshs. 962, 000 /= as well as costs and interest. 2. The Respondent claimed that the Appellant approached the Respondent seeking to partner with him in his money business. That it was orally agreed that the Respondent would be entitled to Kshs. 8,000 per month for every Kshs.100,000 deposited with the Appellant. 3. The Respondent advanced the Appellant with a loan facility of Kshs. 962,000 and that he was entitled to monthly payments in interest. That the Appellant kept paying the interest till sometime mid 2020 when the Covid-19 pandemic hit that the Appellant started using excuses of economic hardship brought about by the pandemic. 4. The Appellant, through his Response to Statement of Claim dated 13th May, 2024 denied knowledge of the Respondent as a creditor or as business partner or entering into an oral agreement. The Appellant alluded to being introduced to the Respondent by one Hillary Korir for investment purposes with Sparkle Investments Company, where both Hillary and the Appellant were investors. 5. He claimed that he introduced the Respondent to Sparkle Investments where he invested his initial capital of Kshs. 200,000 and topped up as they progressed on diverse dates between December, 2014 and September, 2015 through the Appellant's account to a cumulative figure of Kshs. 850,000, as the Respondent had no account with Sparkle and the money would be deposited into his account for onward transmission. 6. The Appellant admitted that the Respondent was entitled to 8% monthly interest on the sum invested and that the Respondent was paid Kshs. 56,000 for March, April, May and June, 2015 and between Kshs. 56,000 and Kshs. 68,000 between July and November, 2015 electronically. 7. He contended that after November, 2015, Sparkle Investment Limited collapsed and closed shop and not due to COVID. That the investment was a forex trading business between DELTA STOCK AD and the investors of SPARKLE INVESTMENTS and not the Appellant’s personal investment. 8. Upon hearing both parties, the trial Court rendered its judgement on 9th August, 2024 in favour of the Respondent in the sum of Kshs. 850,000, costs of the claim and interest from the date of judgment. 9. Aggrieved by the whole judgment, the Appellant preferred the instant appeal on the following grounds: 10. ***That the Learned Trial Magistrate erred in law in considering issues not raised by the Claimant, therefore travelling beyond the pleadings, the Claimant having pleaded that the amount in contention was a loan that the Respondent/Appellant was bound to refund.*** 11. ***That the Learned Trial Magistrate erred in law in ignoring the Claimant's admission that the amount in contention was not a loan.*** 12. ***That the Learned Trial Magistrate erred in law in ignoring the Claimant's admission that he had no evidence of the amount in contention being subject to reimbursement.*** 13. ***That the Learned Trial Magistrate erred in law in ignoring the Claimant's own evidence to the effect that the amount in contention was an investment, hence subject to the vicissitudes of investments.*** 14. ***That the Learned Trial Magistrate erred in law in rewriting the oral contract between the parties despite the absence of evidence that the amount in contention was neither a loan nor subject to reimbursement upon issuance of a notice by the Claimant.*** 15. ***That the Learned Trial Magistrate's judgment was delivered outside the statutory timeline set under section 34 of the Small Claims Act, hence made without jurisdiction*.** 16. He therefore prayed that:- 17. ***The judgment of the trial Court dated 25th July, 2024 and all consequential orders flowing therefrom be set aside.*** 18. ***The Court enters judgment in favour of the Appellant as prayed in his response to the statement of claim dated 13th May,2024.*** 19. ***The costs of the appeal and of the trial court be awarded to the Appellant.*** **Appellant’s submissions** 1. He submittedon three (3) issues namely:- 2. ***Whether the trial Court's judgment of 9th August, 2024 is a nullity having been delivered outside the statutory timeline stipulated under Section 34 of the Small Claims Court Act.*** 3. ***Whether the foregoing notwithstanding, the Respondent proved his claim on a balance of probabilities.*** 4. ***Who should bear the costs of this appeal.*** 5. On the issue of jurisdiction, the Appellant submitted that **Section 34(1)** of the **Small Claims Court Act** is couched in mandatory terms and the import of its application to the Respondent's claim is that the claim ought to have been determined by 23rd June, 2024, which was 60 days from the date of filing thereof. 6. In that regard, he placed reliance on the decisions in ***Kartar Singh Dhupar & Company Limited v Arm Cement PLC (In Liquidation)* *[2023] KЕHC 2417 (KLR)*** and ***Wasya V GithinjI* *[2025] KЕНC 8295 (KLR)*** on the jurisdiction and procedural timelines of the Small Claims Court, with the former dismissing an appeal and the latter allowing it due to procedural irregularities. 7. On whether the Respondent proved his case on a balance of probabilities, it is submitted that although he specifically pleaded that the sum of Kshs. 962,000/= constituted a loan facility, his testimony in cross‑examination contradicted this position by stating that the money was in fact an investment. The assertion that he was entitled to a refund of the money invested was never pleaded. 8. In support, he relied on the decision in ***Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others* *[2014] eKLR***to submit that parties are bound by their pleadings. Further reliance was placed on the case of ***Galaxy Paints Company Ltd V Falcon Guards LTD* [2000] KECA 215 (KLR),** where the Court of Appeal emphasised that issues for determination must flow from the pleadings. 9. On costs, the Appellant submitted that the award of costs is discretionary and ordinarily, costs follow the event. He prayed to be awarded costs. **Respondent’s submissions** 1. He raised the following issues for determination: - 2. ***Whether the judgment dated 9/8/2024 is a nullity having been delivered outside the statutory time under the Small Claims Court Act.*** 3. ***Whether the appeal raises triable issues.*** 4. Regarding the first issue, the Respondent submitted that Section 34 of the Small Claims Court Act is titled Expeditious disposal of cases. 5. He therefore placed relied on the following Court of Appeal decisions:- ***Esther Jepkemei v Selly Jemutai [2022) eKLR*; *Manchester Outfitters Services Limited and Another v Standard Chartered Financial Services Limited and Another [2002] eKLR*; *Rugut v Jemutai 3 others (Civil Appeal 110 of 2018)*** and ***Nyagwoka Ogora alias Kennedy Kemoni Bwogora v Francis Osoro Maiko Civil Appeal No 271 of 2000 (UR)*** to submit that Appellant does not contend that the failure to deliver the judgment within the stipulated timelines is prejudicial to him. 6. Further, it is argued that ordering transfer or retrial would be subjecting the parties to further costs related to litigation and unconscionable delay, thereby defeating the very purpose of **Article 159** of the **Constitution** and **Section 34** of the **Small Claims Court Act**. The overall result would be serving injustice instead of justice to the parties due to the prolonged delay. 7. The Respondent relied on the following decisions where Courts of Concurrent jurisdiction have held that Section 34 of the **Small Claims Court Act** is declaratory rather than mandatory:- 8. ***Biosystems Consultants v Nyali Links Arcade (Civil Appeal E185 of 2023) КЕНС 21068 (KLR).*** 9. ***Crown Beverages Limited v MFI Document Solutions Limited (Civil Appeal E833 of 2021) [2023] КЕНС 58 (KLR).*** 10. ***Lusoi Greens Limited v Tibi (Civil Appeal E530 of 2023) [2025] КЕНC 3307 (KLR).*** 11. The Respondent therefore submitted that this Court ought to depart from its earlier holding in ***Kartar Singh Dhupar & 22. the Company Limited v ARM Cement PLC (In Liquidation) (Civil Appeal 129 of 2022*** in which it heavily relied on ***Parliamentary Service Commission v Public Procurement Administrative Review Board; Arprim Consultants (Interested Party) [2021] eKLR*** which was essentially premised under **Section 175** of the **Public Procurement and Asset** Disposal Act. **Analysis and Determination** 1. This Court has considered the appeal, the grounds thereof, the rival submissions, and the applicable law. The matter arose from the Small Claims Court and **Section 38** of the **Small Claims Court Act** provides that an appeal shall lie from the decision of the Court to the High Court on matters of law only. 2. This being an appeal from the Small Claims Court, this Court is reminded of its duty to confine itself strictly to points of law. It is not the province of this Court to re‑evaluate evidence or substitute its own factual conclusions. Its mandate is limited to interrogating whether the trial Court properly applied the law to the issues before it and whether any errors of law apparent on the record warrant appellate intervention. 3. Before delving into the merits of the appeal, the Appellant has raised the question whether the trial Court’s judgment delivered on 9th August 2024 was rendered outside the statutory timeline of 60 days as stipulated under **Section 34 (1)** of the **Small Claims Court Act**, thereby divesting the Court of jurisdiction. 4. As Nyarangi JA observed in ***Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd* [1989] KECA 48 (KLR)** that jurisdiction is everything and without it a Court cannot divest itself of it. He stated thus:- ***“…I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction…”*** 1. It follows that any proceedings conducted without jurisdiction are nullity ab initio. In this case, **Section 34(1)** of the **Small Claims Court Act** provides that:- ***“All proceedings before the Court on any particular day so far as is practicable shall be heard and determined on the same day or on a day-to-day basis until final determination of the matter which shall be within sixty days from the date of filing the claim.”*** 1. The Statement of Claim was filed in the Small Claims Court on 24th April 2024, and the judgment was delivered on 9th August, 2024. The Judgment should have been delivered sometime in June of 2025, but it was delivered about 45 days outside the statutory period. 2. The Appellant contends that this provision is couched in mandatory terms. The judgment was delivered outside the statutory window, and therefore, the trial Court was divested of jurisdiction to do so. 3. For that argument, the Appellant has drawn the attention of this Court to the case of ***Kartar Singh Dhupar & Company Ltd v ARM Cement PLC (In Liquidation)* [2023] KEHC 2417 (KLR*)*** where this Court found that the judgment of the Adjudicator was delivered outside the statutory period and hence lacked jurisdiction. 4. On the other hand, the Respondent relied on decisions that have delivered contrary positions. In ***Crown Beverages Limited v MFI Document Solutions Limited [2023] КЕНС 58 (KLR*),** Majanja J emphasised that the Small Claims Act’s purpose is to expedite cases and that a judgment's validity should not be automatically invalidated due to institutional delays. Further reliance was placed on ***Lusoi Greens Limited v Tibi [2025] КЕНC 3307 (KLR).*** 5. It is not lost to this Court that the jurisprudence by Courts of Concurrent Courts reveal two divergent positions; one is strictly treating lapse of time as fatal to jurisdiction and the other is flexible by treating **Section 34** of the **Small Claims Court Act** as directory, with jurisdiction preserved unless prejudice or denial of fair hearing is demonstrated***.*** 6. This Court is of the viewthat to permit adjudicators to ignore the sixty-day limit under **Section 34(1)** of the **Small Claims Court Act** and then invoke **Article 159 (2) (d)** of the **Constitution** as a saving clause would be to invite disregard of the well-founded principle that jurisdiction is everything. Jurisdiction is not a matter of convenience but a matter of law. 7. The sixty-day limit must be respected as a statutory imperative. The expiration of time effectively terminates the active life of the suit. This Court’s position is supported by the decision in ***Muiruri v Mkalama [2025]KEHC 10689 (KLR)*** where Musyoka J addressed the key features and scope of the jurisdiction of the Small Claims Court and held that:- ***[81]To my mind, the problem is not with the jurisdiction of the Small Claims Court or its objects, but rather the lack of appreciation of what the Small Claims Court is supposed to be, and the desire to mould it into the likeness of the High Court and the Magistrate’s Court. The problem is with the Small Claims Court being used to handle disputes other than those for which it was designed, claims or suits that are not suitable for determination or disposal within its framework.*** ***[82].I believe that I have said enough to demonstrate that there is a whole background or context to section 34(1) of the Small Claims Court Act, particularly that aspect which limits the jurisdiction of the Small Claims Court to just 60 days. Given that background or context, it cannot be that that aspect of the provision is not intended to make it mandatory, but directory. My understanding is that that provision is intended to be mandatory, and an Adjudicator, who handles a matter or claim outside the 60 days, does so without jurisdiction, and their determination is invalid and a nullity.*** ***[83].So, what is the position here? The original trial court records were availed. The statement of claim was filed on 6th June 2023. Going by section 34(1) of the Small Claims Court Act, the determination by the trial court should have come 60 days thereafter, which should have been on or about 5th August 2023, for the trial court could only exercise jurisdiction within that 60-day period. Judgement was delivered on 8th December 2023, way outside the 60 days. Indeed, delivery came 185 days outside the 60-day deadline. The proceedings conducted after August 5, 2023, were without jurisdiction, and that made the determination of 8th December 2023 null and void.”*** 1. This Court is alive to the fact of increased litigation in the Small Claims Court that causes constraints on the timeliest for determination of the cases. A solution to the issue regarding Section 34 of the Act would be an Amendment through Legislation. In the circumstances herein, the trial Court having delivered judgment outside the statutory window, acted without jurisdiction and therefore, the determination of 9th August 2024 is invalid. 2. In light of this finding, this Court does not need to delve into the other five grounds of appeal and the merits thereof. 3. Consequently, the following Orders are issued:- 4. **The appeal herein is allowed to the extent that the judgment and decree, passed in Nakuru SCCCOMM No. E477 of 2024 is null and void for want of jurisdiction, hence set aside.** 5. **Each party to bear his own costs.** **Dated and signed at Nairobi this 21st Day of July, 2026.**  **PATRICIA GICHOH** **JUDGE** **Delivered at Nakuru this 29th Day of July, 2026.** **………………………** **DR. JOSEPH SERGON** **JUDGE**