[2024] KEHC 2504 (KLR)

Amunga v Muisu (Civil Appeal E725 of 2022) [2024] KEHC 2504 (KLR) (Civ) (8 March 2024) (Judgment)

Neutral citation: [2024] KEHC 2504 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E725 of 2022

CW Meoli, J

March 8, 2024

Between

Hellen Amunga

Appellant

and

Susan Ndinda Muisu

Respondent

(Being an appeal from the judgment of D.S. Aswani (Adjudicator) (RM) Small Claims Court delivered on 23**{{^**rd**}}** August 2022 in Nairobi Milimani SCCC No. E657 of 2022)

Judgment

1. This appeal emanates from the judgment delivered on 23. 08. 2022 in Nairobi Milimani SCCC No. E657 of 2022 (hereafter the lower court claim). The claim in the lower court was brought by Susan Ndinda Muisu, the claimant before the lower court (the Respondent herein) against Hellen Amunga, the respondent before the lower court (the Appellant herein) in respect loss or damage to property valued at Kshs. 301,000/- (Kenya Shillings Three Hundred and One Thousand), which loss or damage allegedly occurred on 23. 02. 2022.

2. It was averred that on 24. 11. 2019 the Respondent purchased a business premises from one Mutua Kithukuma at a cost of Kshs. 115,000/- (Kenya Shillings One Hundred and Fifteen Thousand) and that the Appellant was a tenant in the said premises. That it was agreed between the Respondent and Mutua Kithukuma that the Appellant would refund the Respondent Kshs. 10,000/- (Kenya Shillings Ten Thousand) paid as deposit when he took up the premises and it was additionally agreed between the Respondent and Appellant that the monthly rent would be Kshs. 11,000/- (Kenya Shillings Eleven Thousand). And that subsequently, the Respondent purchased new items worth Kshs. 153,300/- (Kenya Shillings One Fifty-Three Thousand Three Hundred) for the business premises. However, on the material date, the Appellant without any legal foundation or prior notice jointly with others broke into the Respondent’s premises and took away her tools of trade and Kshs. 35,000/- that was kept within the premises.

3. The Appellant filed a response dated 19. 04. 2022 denying the key averments in the statement of claim and asserted that she was not privy to any agreement between Respondent and one Mutua Kithukuma. She averred that any tenancy agreement in respect of the suit premises was directly between Appellant and Mutua Kithukuma and that upon the latter’s default on monthly rent payments, the Appellant had evicted her from the premises.

4. The claim proceeded to hearing. In its judgment, the lower court found that the Respondent discharged her burden of proof and thereafter entered judgment in her favour in the sum of Kshs. 153,300/- (Kenya Shillings One Fifty-Three Thousand Three Hundred), with costs and interest.

5. Aggrieved with the outcome, the Appellant preferred this appeal challenging the whole judgment based on the following grounds; -“1. That the learned magistrate erred in law by failing to hold that there was no privity of contract between the Appellant and the Respondent.

2. That the learned magistrate erred in law by holding that an order of court could and indeed did confer privity of contract between the Appellant and the Respondent.

3. That the learned magistrate misdirected herself by holding that there exists circumstances that could imply privity of contract between the Appellant and the Respondent.

4. That the learned magistrate erred in law when she implied terms of tenancy contract between the Appellant and the Respondent which terms never existed in law.

5. That the learned magistrate erred in law when she shifted and imposed a burden of proof of privity of contract and forgery upon the Appellant which burden is not known in law.

6. That the learned magistrate erred in law when she held that the Respondent had proved her case on a balance of probabilities contrary to the evidence on record.

7. That in all the circumstance of the case, the learned magistrate failed to do justice before her.” (sic)

6. The appeal was canvassed by way of written submissions. Counsel for the Appellant first addressed the question of jurisdiction. Placing reliance on the decisions in Kenya Port Authority v Modern Holding (EA) Ltd, MSA CA Civil Appeal No. 108 of 2016 [2017] eKLR and Christoffersen v Kavneet Kaur Sehmi t/a The Random Shop (Civil Appeal E036 of 2022) [2022] KEHC 14035 (KLR), argued that the trial court lacked the requisite jurisdiction to entertain the dispute before it. That even though the Appellant did not raise the issue of jurisdiction before the trial court, it could be raised at this stage for consideration. It was further contended that the dispute before the lower court as per the statement of claim related to breach of a tenancy agreement and conversion/theft of goods and money, all of which are not within the purview of Section 12 of the Small Claims Court Act. That the trial court having made a conclusive finding that there existed a tenancy agreement, ought to have found that the claim should have been filed in the Environment and Land Court pursuant to Article 162 of the Constitution as read with Section 13 of the Environment and Land Court Act.

7. Concerning whether there was privity of contract between the parties herein, counsel reiterated the Respondent’s evidence before the trial court that the agreement dated 24. 11. 2019 was between herself and one Mutua Kithukuma , redering the Appellant a stranger to the agreement in question. Citing the decision in Nairobi HCCC No. 261 of 2001, Alsafra Health Care Ltd v KAM Pharmacy Ltd & Anor, counsel contended that the Appellant could not be made liable under a contract to which she was not a party. He therefore the court to set aside the trial court’s finding on the ground that there was no privity of contract between the parties herein.

8. Submitting on whether the award to the Respondent, counsel argued that the Respondent’s claim lay with Mutua Kithukuma with whom she had contracted. It was further submitted while it is settled law that damages pleaded must be specifically pleaded and proved, in the instant matter, the Respondent failed to prove the specific items claimed in her statement of claim. That any demand relating to Mutua Kithukuma could not be made from the Appellant. Besides, the receipts tendered in support of the Respondent’s claim were inadmissible for want of stamp duty/revenue stamp or were forgeries or prepared before the alleged contract. In summation, the court was urged to allow the appeal as prayed.

9. The Respondent in defending the trial court’s findings anchored his submissions on the decision Oluoch Eric Gogo v Universal Corporation Ltd [2015] eKLR as cited in Peter Ngigi Kuria & Another (suing as the legal representative of the estate of Joan Wambui Ngigi) v Thomas Ondili Oduol & Another [2019] eKLR on duty of this court as the first appellate court. Addressing the question whether there was privity of contract between the parties herein, counsel contended that the conclusion of the trial court was based on the exception to privity of contract.

10. That the lower court did not error finding that the continued occupation by the Respondent of the premises in question demonstrated clear intention by the parties to continue to be bound by the terms of the agreement between the Appellant and Mutua Kithukuma which was not disputed. It was further argued that there existed a controlled tenancy in respect of the suit premises and that the Appellant approached the court with unclean hands. It was thus submitted that the trial court arrived at its finding on the basis of evidence placed before it and the Appellant has not demonstrated that the court failed to consider any of the material evidence. The decision in Mwangi v Wambugu (1984) KLR 453 as quoted in Patrick Sosio Lekakeny v Tomito Alex Tamoushi & 3 Others [2018] eKLR was relied on in the latter regard.

11. Responding the Appellant’s contention on the trial court’s jurisdiction to entertain the claim, counsel argued that the Respondent’s claim was for compensation for her lost goods at the hands of the Appellant following the orders issued by the Business Premises Tribunal that it lacked jurisdiction the tenant having vacated the premise in question. That the Respondent proved her claim for Kshs. 153,300/- through receipts and inventory of the items carted away by the Appellant. And that the Appellant failed to prove the allegation of forgery in relation to the receipts. In conclusion, the court was urged to dismiss the appeal with costs.

12. The court has considered the memorandum of appeal, the record of appeal as well as the submissions by the respective parties. This is a first appeal. Section 38 of the Small Claims Court Act prescribes the nature of appeals that lie from the Small Claims Court to the High Court by providing that; -“(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.”

13. In ordinary appeals, the first appellate Court will only interfere with a finding of fact made by a trial Court when such finding was based on no evidence, or if it is demonstrated that the court below acted on wrong principles in arriving at the finding it did. See Ephantus Mwangi & Another vs Duncan Mwangi Wambugu (1982 – 1988) 1 KAR 278. Nevertheless, by dint of Section 38 of the Small Claims Court Act this is no ordinary first appeal and the court must first satisfy itself that the appeal before it falls within the purview of section 38 of the Small Claims Court Act.

14. In considering its mandate on a second appeal, that is, on points of law only, the Court of Appeal in Kenya Breweries Ltd v Godfrey Odoyo [2010] eKLR, distinguished between matters of law vis-à-vis matters of fact by stating that: -“I have anxiously considered the pleadings, the evidence on record, the judgment of the learned Senior Resident Magistrate and the judgment of the superior court, the grounds of appeal, the submissions of the learned counsel as well as the authorities to which we were referred. First, this is a second appeal. In a first appeal the appellate court is by law enjoined to revisit the evidence that was before the trial court and analyse it, evaluate it and come to its own independent conclusion. In other words, a first appeal is by way of a retrial and facts must be revisited and analysed a fresh, - see Selle and Another vs. Associated Motor Boat Company Ltd and Others (1968) EA 123. In a second appeal however, such as this one before us, we have to resist the temptation of delving into matters of facts. This Court, on second appeal, confines itself to matters of law unless it is shown that the two courts below considered matters they should not have considered or failed to consider matters they should have considered or looking at the entire decision, it is perverse.”

15. Black’s Law Dictionary states as follows; -“Matter of fact as: A matter involving a judicial inquiry into the truth of alleged facts and Matter of law: A matter involving a judicial inquiry into the applicable law.”

16. The Court of Appeal in its subsequent decision in Bashir Haji Abdullahi v Adan Mohammed Nooru & 3 others [2014] eKLR while addressing the question whether a memorandum of appeal on a second appeal raised factual issues and the distinction between a matter of fact and matter of law, observed that; -“One of the best expositions on the distinction between the two is to be found in the judgment of Denning J in the English case of BRACEGIRDLE Vs. OXLEY (2) [1947] 1 ALL E.R. 126 at p 130;“The question whether a determination by a tribunal is a determination in point of fact or in point of law frequently occurs. On such a question there is one distinction that must always be kept in mind, namely, the distinction between primary facts and conclusions from those facts. Primary facts are facts which are observed by the witnesses and proved by testimony; conclusions from those facts are inferences deducted by a process of reasoning from them. The determination of primary facts is always a question of fact. It is essentially a matter for the tribunal who sees the witnesses to assess their credibility and to decide the primary facts which depend on them. The conclusions from those facts are sometimes conclusions of fact and sometimes conclusions of law. In a case under the Road Traffic Act, 1930, s. 11, the question whether a speed is dangerous is a question of degree and a conclusion on a question of degree is a conclusion of fact. The court will only interfere if the conclusion cannot reasonably be drawn from the primary facts, and that is the case here. The conclusion drawn by these justices from the primary facts, was not one that could reasonably be drawn from them.”

17. The Court of Appel the continued to state that: -“That reasoning has been adopted in this jurisdiction. In A.G. Vs. DAVID MURAKARU [1960] EA 484, for instance, Chief Justice Ronald Sinclair sitting with Rudd J. adverted to the factual foundations of legal questions by stating that an appellate court restricted to determining questions of law may yet quite properly interfere with the conclusion of a lower court if the same is erroneous in point of law. This is the case where that lower court arrives at a conclusion on the primary facts that it could not reasonably come to. Such a conclusion or decision becomes an error in point of law. See also PATEL Vs. UGANDA [1966] EA 311 and SHAH Vs. AGUTO [1970] EA 263. There is no denying from the cases we have referred to, that in not a few cases the determination of whether a particular complaint on appeal a question of law is or of fact is not always a very straight-forward one, not least because the determination of whether a lower court drew the correct legal conclusions inevitably entails an examination of the factual basis of the decision. That reality has with it the inherent danger that legal ingenuity may attempt to dress-up and camouflage purely factual issues with the borrowed garb of “legalness.” This is what the majority of this Court had in mind in M’RIUNGU AND OTHERS Vs. R [1982-88] 1 KAR 360 when it stated, (per Chesoni AJA) at p366;“We would agree with the views expressed in the English case of Martin v Glyneed Distributors Ltd (t/a MBS Fastenings) [1983] 1 CR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court(s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decision of the trial of first appellate court unless it is apparent that; on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad law.”

18. Applying the decision in Bashir Haji Abdullahi (supra), which was an appeal arising from an election dispute, to the grounds of appeal herein, the same would appear to exemplify “an attempt at legal ingenuity to dress-up and camouflage purely factual issues with the borrowed garb of “legalness” in a bid to escape the stricture of Section 38 of the Small Claims Court Act. A purposeful examination of the grounds of appeal and arguments raised in support, undoubtedly reveals the Appellants’ intent. The issues raised challenge the lower court’s inferences and decision on facts and not exclusively on the “law”. The key thrust of the Appellants’ case being that there was no privity of contract between the parties herein regarding the purported tenancy agreement between the Respondent and one Mutua Kithukuma.

19. In essence the Appellant disputed the existence of a tenancy agreement between herself and the Respondent. This was patently a factual issue dependent on material evidence. Indeed, the trial court after considering the respective parties’ pleadings and material relied on in support of the pleadings, stated in its decision that; -“On whether there has been established to have existed a tenancy-landlord relationship between the parties?The claimant produced an agreement dated 24/11/2019 which was entered into by the claimant and the said mutual for the purchase of the barbershop and items therein listed. The order dated 03/03/2020 also produced proves that the dispute as claimed by the claimant on the eviction from the premises and closure of premises by the Respondent did exist as pleaded. This I find to prove that the claimant did indeed take over the shop from Mutua and proceeded to occupy the same hence the dispute…….I find that the claimant has proved to have taken over tenancy of the shop. The Respondent on the other hand disputes this but fails to provide tangible proof….. I find that the on a balance of probabilities the claimant has established and proved to the required standard that there existed a legally binding contract between the parties herein and a landlord and tenant relationship existed from 24/11/2019 until 23/02/2020. ” (sic)

20. The foregoing determination was arrived at upon analysis of the factual material presented before the trial court. By her appeal, the Appellant is inviting this court to re-evaluate the trial evidence, contrary to the provisions of Section 38 of the Small Claims Court Act and to make contrary findings thereon. As held in Bashir Haji Abdullahi (supra) an appellate court faced with a situation of this kind is at liberty to strike out any grounds of appeal that offend the above provision, while retaining those that are compliant. In this case, having reviewed the Appellant’s grounds of appeal the court is inclined to strike out grounds 1, 2 and 4 for the tacit invitation contained therein to this court to address factual issues. Therefore, only is grounds 3 & 5 in the memorandum of appeal which appear to raise issues of law can be entertained on this appeal.

21. This brings the court to the Appellant’s preliminary contestation that trial court lacked the requisite jurisdiction to entertain the dispute before it. That even though the Appellant did not raise the issue of jurisdiction before the trial court, the same could be raised at this stage for consideration. It was further contended that the dispute before the lower court as per the statement of claim related to breach of a tenancy agreement and conversion/theft of goods and money, all of which are not within the purview of Section 12 of the Small Claims Court Act. Moreover, the court having positively determined the existence of a tenancy agreement, ought to have found that the claim belonged in Environment and Land Court under Article 162 of the Constitution as read with Section 13 of the Environment and Land Court Act.

22. In Mukisa Biscuits Manufacturing Company Ltd v. West End Distributors (1969) EA 696, Law JA stated:-“So far as I am aware, a preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings, and which if argued as a preliminary point, will dispose of the suit. Examples are objection to jurisdiction of the court, a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the matter to arbitration…...A preliminary objection is in the nature of what used to be a demurrer: It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and, or occasion, confuse the issues, and this improper practice should stop.”See also; Oraro v Mbaja [2005] KLR 141, Kigwor Company Limited v Samedy Trading Company Limited [2021] eKLR and Mulemi v Angwenye & Another (Civil Appeal 170 of 2016) [2021] KECA 214

23. The key objection raised by the Appellant relates to jurisdiction. I`n a proper case such an objection constitutes a pure point of law. The locus classicus on the question of jurisdiction is the case of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1 where Nyarangi. JA (as he then was) famously stated:“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.”

24. Recently, the Court of Appeal in Kenya Port Authority v Modern Holding (supra) cited with approval the High Court decision in Adero Adero & another v Ulinzi Sacco Society Ltd [2002] eKLR by stating;-“We have stressed that jurisdiction is such a fundamental matter that it can be raised at any stage of the proceedings and even on appeal, though it is always prudent to raise it as soon as the occasion arises. It can be raised:“….at any time, in any manner, even for the first time on appeal, or even viva voce and indeed, even by the Court itself - provided only that where the Court raises it suo motu, parties are to be accorded an opportunity to be heard.”

25. The jurisdiction of the Small Claims Court is conferred by dint of Section 12 of the Small Claims Court Act which provides that;-“(1)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; and(e)set-off and counterclaim under any contract.(2)Without prejudice to the generality of subsection (1), the Court may exercise any other civil jurisdiction as may be conferred under any other written law.(3)The pecuniary jurisdiction of the Court shall be limited to one million shillings.(4)Without prejudice to subsection (3), the Chief Justice may determine by notice in the Gazette such other pecuniary jurisdiction of the Court as the Chief Justice thinks fit”.

26. As held in Samuel Kamau Macharia & Another v Kenya Commercial Bank Limited & 2 others [2012] eKLR a court’s jurisdiction flows from either the Constitution or legislation or both. Thus, a court of law can only exercise jurisdiction as conferred by the constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. It would appear that the Appellant’s jurisdictional challenge arises from the averments by the Respondent at paragraphs 1, 2, 3, 4, 5 and 6 of the statement of claim earlier set out in this judgment.

27. The foundation of the Respondent’s cause of action can easily be discerned from her pleadings and requires no further examination. Her claim was essentially predicated on what was perceived to be a “constructive tenancy agreement” with the Appellant on account of the agreement she executed with Mutua Kithukuma and alleged conversion by the Appellant. The Respondent’s argument in response is that the court was cloaked with sufficient jurisdiction as her cause of action related to compensation for lost goods lost or damaged at the hands of the Appellant, the Business premises Tribunal having found that it lacked jurisdiction due to the fact that as a tenant the Respondent had already vacated the premises in question.

28. A review of the statement of claim reveals that the cause of action as pleaded or however perceived does not fall within the purview of Section 12 of the Small Claims Court Act. Neither Section 12(1)(b) of the same Act nor Section 12(1)(a)(c)(d) or (e), grant succor to the Respondent’s arguments, given the cause of action pleaded and actually canvassed at the trial. Given the decision of the Business Premises Tribunal the Respondent’s initial claim may not lie with Environment and Land Court. It seems to the Court that the Respondent’s claim lay with the Magistrates’ Court, the tenancy having terminated. Consequently, the court finds that the Small Claims Court lacked jurisdiction to entertain the claim as presented. The appeal must be allowed on this ground alone.

29. The decision of the Small Claims Court is hereby set aside and substituted with an order that the Respondent’s claim before the Small Claims Court is struck out with costs. The costs of the appeal are awarded to the Appellant.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 8 TH DAY OF MARCH 2024. C.MEOLIJUDGEIn the presence ofFor the Appellant: Mr.MerokaFor the Respondent: Ms. AwuorC/A: Carol