https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9171

Nyaoro v Oburu (Small Claims Appeal E384 of 2025) [2026] KEHC 9171 (KLR) (Civ) (25 June 2026) (Judgment) Neutral citation: [2026] KEHC 9171 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Small Claims Appeal E384 of 2025 JC Mutai, J June 25, 2026 Between Alice Akinyi Opiyo Nyaoro Appellant and Loise Wanjiru Oburu Respondent Judgment 1.This appeal arises from the decision of Hon. J.W. Nasimiyu, Adjudicator, delivered on 10th February 2025 in SCCCOMM/E4044/2025. The learned Adjudicator suo motu raised the issue of jurisdiction and, upon hearing submissions from counsel for the Appellant, found that the Small Claims Court lacked jurisdiction to hear and determine the dispute and consequently struck out the Statement of Claim. 2.The Appellant challenges that decision on seven grounds, which may be distilled as follows: that the learned Adjudicator erred in holding that the Statement of Claim did not fall within the jurisdiction of the Small Claims Court; erred in finding that the claim arose from a tenancy relationship; erred in holding that the claim fell outside Section 12(1) of the Small Claims Court Act; erred in misapplying the decision in Akinyi & 4 Others v Kenya Medical Research Institute (KEMRI) & Another and in her approach to conflicting judicial authorities; failed to distinguish the authorities relied upon from the facts of the present case; and erred in disregarding that the claim related to the refund of a rental deposit after the termination of the tenancy. Background 3.The Appellant entered into a tenancy agreement in June 2020 with the previous owner of the premises known as Kent Garden. Under that agreement, the Appellant paid a refundable deposit totalling Kshs. 95,000.00, comprising a rent deposit of Kshs. 80,000.00, an electricity deposit of Kshs. 10,000.00, and a water deposit of Kshs. 5,000.00. 4.By a letter dated 30th July 2024, the Appellant was informed that the property had been sold to the Respondent. The Appellant thereafter entered into a fresh lease agreement with the Respondent on substantially similar terms and remained in occupation of the premises. Through an email dated 2nd October 2024, the Respondent acknowledged having taken over the deposit previously paid by the Appellant and undertook to refund the same upon termination of the tenancy. 5.The Appellant issued a notice terminating the tenancy on 30th September 2024 and subsequently surrendered vacant possession to the Respondent upon expiry of the notice period. The dispute arose when the Respondent allegedly failed and/or refused to refund the deposit of Kshs. 95,000.00, prompting the Appellant to file a claim before the Small Claims Court seeking judgment for that amount, general damages, interest at commercial rates, and costs. Submissions of the parties 6.The Appellant submitted that the learned Adjudicator erred in declining jurisdiction on the basis that the dispute arose from a tenancy relationship. Counsel submitted that by the time the suit was filed, the tenancy had already been terminated and vacant possession had been surrendered. What remained, it was argued, was a purely civil monetary claim for refund of a deposit — not a landlord-and-tenant dispute. The Appellant further submitted that once a tenancy terminates, disputes relating to refund of a security deposit cease to be tenancy disputes and become ordinary civil claims recoverable before any competent court of jurisdiction. Reliance was placed on the Court of Appeal decision in Nandla Jivraji Shah & 2 Others (t/a Jivaco Agencies) v Kingfisher Properties Limited [2015] eKLR, where the Court held that a controlled tenancy comes to an end the moment the notice period specified in the notice lapses, whereupon there is no longer a landlord-and-tenant relationship. Issue For Determination 7.The sole issue arising for determination is: whether the Small Claims Court had jurisdiction to hear and determine the dispute before it. Analysis And Determination 8.It is a foundational principle that jurisdiction is everything. Without it, a court must decline to hear a matter however meritorious it may appear. Conversely, where jurisdiction has been properly conferred, the court is mandated to exercise it. The jurisdiction of the Small Claims Court is conferred by Section 12 of the Small Claims Court Act, which provides as follows:Subject to this Act, the Rules and any other law, the Court has jurisdiction to determine any civil claim relating to —a.a contract for sale and supply of goods or services;b.a contract relating to money held and received;c.liability in tort in respect of loss or damage caused to any property or for the delivery or recovery of movable property;d.compensation for personal injuries; ande.set-off and counterclaim under any contract. 9.The question for determination is whether the claim before the Small Claims Court fell within one of the above categories, or whether it constituted a tenancy dispute falling outside the Court's jurisdiction. 10.There is no dispute that a tenancy relationship existed between the Appellant and the Respondent and that the Appellant paid deposits under that relationship. The crucial question, however, is whether the tenancy relationship still subsisted at the time the claim was filed. 11.The record establishes that the Appellant issued a valid termination notice, vacated the premises, and surrendered vacant possession to the Respondent on or about 30th October 2024. The email correspondence confirms that the Respondent was notified of the vacation and the completion of repainting obligations. Upon surrender of vacant possession, the tenancy relationship between the parties came to an end. 12.What remained before the Small Claims Court was a claim for refund of Kshs. 95,000.00. This Court is of the view that a claim for refund of a security deposit after termination of a tenancy is materially distinguishable from a dispute relating to possession, rent arrears, controlled tenancy, termination notices or the occupation of premises. A security deposit is not rent payable as consideration for occupation; it is money held as security against potential breaches of the tenancy agreement, such as unpaid utility bills, property damage beyond fair wear and tear, unpaid rent, or other tenancy obligations. Once the tenancy terminates and possession is surrendered, a dispute confined to the refund of that deposit assumes the character of an ordinary civil monetary claim. 13.The learned Adjudicator relied upon Maworks Investment Company Limited v Mwilitsa [2024] KEHC 10525 (KLR) and Christoffersen v Kavneet Kaur Sehmi t/a The Random Shop (Civil Appeal E036 of 2022) [2022] KEHC 14035 (KLR) in concluding that the dispute arose from a tenancy relationship. This Court has carefully considered those authorities and finds the present appeal materially distinguishable from them. 14.In Christoffersen, the dispute concerned unpaid residential rent allegedly arising from a verbal tenancy arrangement. The claim before the Small Claims Court was essentially one for rent arrears founded on a subsisting landlord-and-tenant relationship. In Maworks Investment Company Limited, the dispute involved commercial premises, rent deposits,The Judiciary of 3/4 possession of premises, termination notices, occupation during the Covid-19 period, and other issues directly touching on the ongoing tenancy relationship. As Musyoka J. correctly observed in that matter, the issues fell within the jurisdiction of specialised tribunals established under landlord-and-tenant legislation precisely because they concerned live questions of tenancy law. 15.The present appeal is materially different. By the time the claim was filed, the Appellant had vacated the premises and surrendered possession. There was no dispute relating to ongoing occupation, rent arrears, controlled tenancy, or termination notices. The claim before the Small Claims Court was confined to recovery of the Kshs. 95,000.00 that the Respondent had acknowledged receiving and had undertaken to refund. 16.This Court is therefore satisfied that the learned Adjudicator erred in treating the claim as an active tenancy dispute. The claim as pleaded was a claim for money held and received, falling squarely within Section 12(1)(b) of the Small Claims Court Act. The Small Claims Court had jurisdiction to hear and determine it. Ordersa.The appeal is merited and is hereby allowed.b.The decision of Hon. J.W. Nasimiyu, Adjudicator, delivered on 10th February 2025 in SCCCOMM/E4044/2025 is hereby set aside.c.The matter is hereby remitted to the Small Claims Court for hearing and determination before any Adjudicator other than Hon. J.W. Nasimiyu.d.There shall be no order as to costs. Judgement delivered virtually on 25th June 2026 In the presence of;Onyango for the Appellant. N/A for the Respondent C/A Irene ChelangatSIGNED BY/FOR:TH E JUDICIARY O F KENY A HON. LADY JUSTICE CHELANGAT MUTAIMilimani High Court