https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10768

 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KISUMU COUNTY COURT NAME: KISUMU HIGH COURT CASE NUMBER: HCCA/E223/2025 THE BOARD OF GOVERNORS -TOM MBOYA LABOUR COLLEGE VS POLYVIEW HOTEL JUDGMENT ***(Being an Appeal from the Judgement and Decree of Hon. K. Cheruiyot (MR) SPM, delivered on 1st October, 2025)*** # INTRODUCTION/BRIEF FACTS * 1. In the trial court, the Plaintiff, who is the Respondent herein, instituted a suit vide a Plaint dated 23rd August, 2019. The claim was for payment of outstanding amounts owed to the Plaintiff for goods and services rendered to the Defendant. 2. The Plaintiff alleged that they entered into oral agreements for the said services and delivery of goods, amounting to Kshs. 2,216,824/= plus Kshs. 35,000/= from lost bed sheets. The Plaintiff’s prayer was for the payment of the said outstanding debt and the costs of the suit together with interest thereon. 3. In defence, the Defendant denied all the claims raised in the Plaint and put the Plaintiff to strict proof thereof. * 1. The trial court reviewed the evidence of both parties and found that although the Plaintiff's claim was based on an oral arrangement and no written contract existed, the parties had maintained a cordial business relationship for over ten years in which catering, accommodation, bedding, and related services were routinely provided on credit and paid for later. The court acknowledged that there was no direct evidence of the telephone orders allegedly made by the Defendant's officials, but noted that the Plaintiff had supplied the services while the Defendant merely denied having requested or received them. 2. PW1 testified that in December 2018, the Defendant's principal requested the release of bed sheets, blankets, and towels on hire, promising to reduce the outstanding debt through cheque payments. PW1 further stated that after a change in administration, the new principal requested additional mattresses, bed sheets, beds, towels, and slippers for eight days. An invoice for Kshs.180,000 was subsequently raised and settled through cheques. PW1 also testified that some borrowed items, including ten pairs of bed sheets valued at Kshs.35,000, were never returned or replaced. Further, the new administration made a payment of Kshs.134,960, which PW1 regarded as partial settlement of the outstanding invoices. 3. On the other hand, DW1 testified that he was unfamiliar with certain LPOs relied upon by the Plaintiff and maintained that LPOs were ordinarily used as guarantees for services. He conceded that he joined the Defendant in 2019 and lacked personal knowledge of transactions undertaken between 2015 and 2019, relying instead on documents. He admitted that there were no formal handover reports for the relevant years and that no documentary evidence was produced to support the alleged financial policies governing third-party transactions. 4. DW1 further admitted that there were no audit queries, bank statements, stopped-cheque records, reimbursement demands, fraud complaints, police reports, affidavits, or internal communications disputing the transactions. He also acknowledged that the Defendant maintained records of its transactions, that suppliers could be paid even without delivery notes or receiving stamps, that outsourcing services when accommodation capacity was exceeded was normal practice, and that no counterclaim had been filed to recover sums allegedly paid in error. Additionally, no evidence was produced to show that the Defendant's former officials who allegedly handled the transactions were unavailable to testify. * 1. After examining the essential elements of a contract; offer, acceptance, intention to create legal relations, consideration, capacity, and legality, the court found that the Plaintiff's evidence established that the Defendant requested the services, the Plaintiff accepted and provided them, and payments had previously been made against some invoices. The court held that these payments, together with the continuous flow of documents and the longstanding business relationship, demonstrated the existence of a valid contract. 2. The court rejected the Defendant's reliance on undocumented policies introduced after changes in management, finding that its position amounted to a mere denial in the face of documentary evidence produced by the Plaintiff. Consequently, the court held that the Plaintiff had proved its case on a balance of probabilities and was entitled to recover the outstanding amounts for services rendered and for unreturned beddings and towels. 3. Judgment was therefore entered in favor of the Plaintiff against the Defendant for Kshs. 2,252,824/= together with interest from the date of filing suit until payment in full. The Plaintiff was also awarded the costs of the suit and interest thereon from the date of judgment # SUBMISSIONS BY PARTIES **Appellant’s Submissions** 1. The Appellant, being dissatisfied by the judgement of the trial court, appealed to this Appellate court, raised 17 grounds in the Memorandum of Appeal which the Appellant reduced to four (4) issues for determination in its submissions. 2. The Appellant submitted that the trial magistrate erred in finding that the Respondent had proved its claim despite the absence of critical documentary evidence linking the alleged supplies and services to the Appellant. Counsel argued that in a supply contract, proof of delivery and acceptance of goods or services ordinarily requires production of the relevant LPOs, delivery notes, acknowledgements, or other supporting documents. It was contended that the Respondent failed to produce such evidence for many of the invoices relied upon. 3. The Appellant further argued that the Respondent did not call any witness from its company to confirm receipt of goods, issuance of LPOs, or acknowledgement of supplies. Reliance was placed on the decision in Daniel Waitanji Mwangi (suing as administrator of the Estate of Joseph K. Jongo, deceased) v Brightstone Holdings Ltd & Another, where the court held that documents unsupported by credible testimony remain self-serving and of limited probative value. 4. On the issue of payment, the Appellant submitted that the trial court failed to appreciate that payments were only made pursuant to valid LPOs and services actually rendered. According to the Appellant, the Respondent merely produced invoices for unpaid amounts without demonstrating that the corresponding services had been requested, provided, or accepted. The Appellant maintained that there was no guest list, acknowledgement, or other documentary proof confirming that accommodation services had been offered to its guests. 5. The Appellant also challenged the trial court's conclusion that payments made by the Appellant amounted to proof of liability for all invoices. It was argued that the existence of some paid invoices could not automatically validate all other invoices, especially where there were no accompanying LPOs or evidence showing that the services were requested. The Appellant contended that the burden of proving the disputed invoices remained with the Respondent and did not shift merely because some invoices had previously been settled. 6. With respect to accommodation services, the Appellant submitted that its witness had testified that accommodation arrangements ordinarily originated from an LPO, followed by an invoice and eventual payment. Since many of the invoices relied upon by the Respondent were not accompanied by LPOs or guest lists, the Appellant argued that there was no proof that the alleged guests were ever accommodated. The trial court was therefore said to have erred by assuming that services had been rendered without first requiring strict proof. 1. The Appellant nevertheless acknowledged that some payments had been made and pointed to bank deposit slips, cheques, and invoices appearing in the record of appeal to demonstrate that several claims had already been settled. Specific examples relating to invoices for bedding supplies and accommodation services were cited to show that corresponding payments had been made. Counsel argued that the trial magistrate failed to properly analyze this evidence and instead treated the existence of unpaid invoices as conclusive proof of indebtedness. 2. In conclusion, the Appellant submitted that the trial court misdirected itself by failing to evaluate the evidence as a whole, by overlooking evidence of payments already made, and by holding the Appellant liable for invoices that were not supported by LPOs, delivery documents, guest lists, or other evidence proving that the goods and services were actually supplied. The appellate court was therefore urged to interfere with the judgment and allow the appeal. 3. The Appellant submitted that the Respondent should have produced a signed guest list which the respondent would prove that the said guests were hosted and that in the trial magistrate was wrong in finding that the respondent offered services to the Appellant which has not been paid for. **Respondent’s Submissions** 1. The Respondent submitted that sufficient evidence existed to establish a valid oral contract for catering, accommodation, and bedding hire services. PW1 testified that the Appellant initiated the transactions orally and that services were provided on credit over a 90-day period, a practice that had existed for several years. Although the Appellant denied any oral agreements and relied on LPO Nos. 2528 and 106, the Respondent argued that the documents lacked receiving stamps or signatures and were never received by the Respondent, thereby supporting the claim that the parties conducted business orally. 1. The Respondent further submitted that the Appellant’s conduct confirmed the existence of the contractual relationship. PW1 testified that the new management sought time to review outstanding invoices but neither disputed the debts nor raised any adverse audit findings. Instead, it continued engaging the Respondent through similar oral arrangements and made payments of Kshs. 180,000/= in two instalments, as well as Kshs. 134,960/= towards outstanding invoices, which the Respondent argued amounted to acknowledgment of the debt and prior dealings. 2. The Respondent relied on Section 24 of the Evidence Act and the case of *Choitram v Nazari*, submitting that admissions must be plain, obvious, and unequivocal. On whether the trial magistrate properly evaluated the evidence, the Respondent argued that DW1, an acting accountant, admitted that he was not employed by the Appellant between 2015 and 2018 when the transactions occurred, and therefore lacked personal knowledge of the events in question. 3. The Respondent further contended that DW1 sought to testify as an expert witness without producing any qualifications to establish expertise, rendering his evidence speculative and devoid of professional weight, contrary to the requirements of Section 48 of the Evidence Act. It was also submitted that DW1 failed to disclose the sources of his information, while the Appellant did not produce handover reports from previous accountants or administrators. Although questioned about former officials such as Ms. Oundo and Ms. Odera, DW1 stated that they were not on trial, despite being the most suitable witnesses to provide primary evidence on the disputed transactions. 4. The Respondent highlighted several admissions made by DW1 during cross-examination, including that no fraud complaint had been lodged with the police against the Respondent; no affidavits or statements had been obtained from Ms. Oundo or Ms. Odera disputing the transactions; no internal communications existed denying that the transactions occurred; and that payments had previously been made even in the absence of delivery notes or receiving stamps. According to the Respondent, these admissions substantially corroborated its case and undermined the Appellant’s denial of the oral contract. 1. The Respondent maintained that it had proved, on a balance of probabilities, the existence of a trust-based oral business relationship with the Appellant between 2015 and 2018. It argued that the burden shifted to the Appellant to rebut this evidence, which could only have been done through production of handover reports, audit reports, or bank statements capable of explaining or disputing payments made through two cheques totaling Kshs. 180,000/= and a further cheque of Kshs. 143,960/= issued during the tenure of the new administration. The Respondent submitted that the Appellant’s failure to produce such records suggested that the evidence would have been adverse to its case and demonstrated that DW1’s testimony was based on speculation rather than actual knowledge of events. 2. On the issue of the applicable standard of proof in civil proceedings, the Respondent relied on Section 107 of the Evidence Act and argued that it had discharged its burden by producing numerous invoices received and stamped by the Appellant without objection, evidence of a long-standing oral contractual relationship supported by over a decade of conduct, PW1’s testimony regarding the parties’ mode of business, DW1’s admission that some payments had been made without LPOs or delivery notes, and evidence that the new management continued making oral requests and paying for goods and services without LPOs. In support of this position, the Respondent relied on *Evans Nyakwana v Cleophas Bwana Ongaro.* 3. The Respondent further emphasized that DW1 did not produce any affidavits or statements from Ms. Oundo or Ms. Odera disputing the transactions, nor did the defence tender any handover reports despite his testimony that formal handovers were customary. He acknowledged that no handover reports existed for 2015, 2018, or 2019, even though such reports would ordinarily have contained information relevant to the transactions before the court. 4. Regarding whether the judgment was supported by the evidence, the Respondent submitted that the trial court correctly found, at paragraph 32 of the judgment, that the Appellant’s requests for services constituted an offer which was accepted by the Respondent, thereby establishing a valid contract based on the totality of the evidence. The Respondent also argued that the trial court’s observation at paragraph 29 concerning the absence of evidence of phone calls referred only to the lack of phone records and did not amount to a finding that no oral requests for services had been made. # ISSUES FOR DETERMINATION 1. **Whether the Respondent proved the existence of a valid and enforceable contract between the parties.** 2. **Whether the Respondent proved that the goods and services were supplied and that the amounts claimed remained outstanding** 3. **Whether the learned trial magistrate properly evaluated the evidence and correctly applied the law on burden and standard of proof** 4. **Whether there is any basis for interfering with the judgment of the trial court** # ANALYSIS OF THE ISSUES FOR DETERMINATION **Issue 1: Whether the Respondent proved the existence of a valid and enforceable contract between the parties** 1. As a first appellate court, this court is under a duty to re-evaluate and re-analyze the evidence tendered before the trial court and arrive at its own independent conclusions while bearing in mind that it neither saw nor heard the witnesses testify. This principle was enunciated in the case of **Selle &** **Another v Associated Motor Boat Co. Ltd & Others** *[1968] EA 123* (Court of Appeal for East Africa).The Appellant's principal complaint is that no written contract, signed guest lists, delivery notes or valid LPOs were produced to support the Respondent's claim. The court does not find merit in that argument. 1. The law does not require every contract to be reduced into writing. A valid contract may arise orally provided the essential ingredients of a contract are proved. In ***Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd (2017) eKLR***, the Court of Appeal reiterated that a contract is founded upon offer, acceptance, consideration, intention to create legal relations and capacity of the parties. 1. The evidence before the trial court established that the parties had maintained a business relationship spanning more than ten years. PW1 testified that services relating to accommodation, catering and bedding hire were routinely requested orally and supplied on credit. Significantly, this evidence was not displaced by any witness with personal knowledge of the transactions. 2. DW1 expressly admitted that he joined the Appellant in 2019 and had no personal knowledge of the transactions undertaken between 2015 and 2018. His evidence was therefore largely inferential and based on documents he reviewed after the fact. Further, he conceded that the institution occasionally paid suppliers without delivery notes or receiving stamps and that outsourcing accommodation services whenever the institution's capacity was exceeded was normal practice. 3. The court further notes that the Appellant did not call the former Principal, Accountant, Procurement Officer or any Officer who allegedly dealt with the transactions in question. No explanation was offered for their absence. The persons who possessed direct knowledge of the transactions were therefore withheld from the court. 4. The conduct of the parties is equally instructive. The evidence showed that after the change of administration, the Appellant continued engaging the Respondent, requested additional supplies and subsequently made payments of Kshs.180,000/= and Kshs.134,960/=. Such conduct is inconsistent with the position that no contractual relationship existed. It instead demonstrates acknowledgment of prior dealings and continuation of an existing business arrangement. 5. The court therefore agrees with the finding of the learned trial magistrate that the Respondent established the elements of offer, acceptance, consideration and intention to create legal relations. The existence of a valid oral contract was proved on a balance of probabilities. **Issue 2: Whether the Respondent proved that the goods and services were supplied and that the amounts claimed remained outstanding** 1. Sections 107, 108 and 109 of the Evidence Act place the burden of proof upon the party who asserts a fact. However, once a claimant adduces prima facie evidence supporting its claim, an evidential burden shifts to the opposing party to rebut that evidence. 2. In **Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR**. The court observed that proof on a balance of probabilities means a party's version is more probable than not when weighed against the opposing evidence. 1. The Respondent produced numerous invoices, records of supplies and evidence of previous payments made by the Appellant. PW1 gave a detailed account of how the transactions were undertaken and explained the outstanding balance. The Appellant did not demonstrate that the invoices were fabricated, altered or fraudulently generated. 2. Equally important are the admissions made by DW1 during cross-examination. He admitted that there were no audit queries challenging the transactions, no police reports alleging fraud, no internal memoranda disputing the supplies, no affidavits from former officers denying the transactions and no counterclaim seeking recovery of monies allegedly paid in error. 3. If indeed the supplies had never been rendered, one would reasonably expect the Appellant's records to contain audit reports, correspondence, reimbursement demands or other internal documents disputing the invoices. None was produced. 4. The court draws guidance from Section 119 of the Evidence Act which permits a court to draw adverse inferences against a party who withholds evidence within its possession. The Appellant admittedly maintained financial records and handover procedures, yet failed to produce handover reports, bank records, audit reports or internal communications that would have clarified the disputed transactions. 1. The court therefore finds that the Respondent's evidence remained largely unchallenged and that the outstanding sums were proved on a balance of probabilities. 2. The Appellant's contention that every invoice had to be accompanied by an LPO, delivery note or guest list cannot be sustained in the circumstances of this case. The evidence established a long-standing oral arrangement under which services were regularly rendered and payments made. The absence of some supporting documents did not negate the overwhelming evidence of the parties' course of dealing. **Issue 3: Whether the learned trial magistrate properly evaluated the evidence and correctly applied the law on burden and standard of proof** 1. An appellate court will not ordinarily interfere with findings of fact unless they are based on no evidence, a misapprehension of the evidence or wrong principles of law. This principle was stated by the Court of Appeal in **Peters v Sunday Post Ltd [1958] EA 424.** 1. Having reviewed the record, this court is satisfied that the learned trial magistrate meticulously analyzed the evidence from both parties. The trial court considered the invoices produced by the Respondent, the admitted payments made by the Appellant, the oral nature of the parties' dealings and the concessions made by DW1 during cross-examination. 2. The trial court did not shift the burden of proof to the Appellant. Rather, it correctly found that the Respondent had established a prima facie case through documentary and oral evidence. Once that burden was discharged, the evidential burden shifted to the Appellant to rebut the claim. The Appellant failed to do so. 3. The court further notes that DW1's evidence carried limited probative value regarding transactions that occurred before his employment. While he attempted to challenge the invoices and transactions, he produced no primary evidence to support his assertions. The trial court was therefore entitled to accord greater weight to the direct testimony of PW1 and the contemporaneous documents produced. 4. The court finds no error in the trial court's application of Sections 107, 108 and 109 of the Evidence Act. **Issue 4: Whether there is any basis for interfering with the judgment of the trial court** 1. The role of this court is not to substitute its own view merely because it may have reached a different conclusion. Interference is only warranted where the findings are unsupported by evidence or founded on an erroneous application of the law. 2. The findings reached by the trial court were supported by the evidence on record. The learned magistrate correctly considered the parties' long-standing business relationship, the admitted payments, the oral nature of the transactions and the absence of any credible rebuttal evidence from the Appellant. 3. The court is therefore unable to identify any misdirection of fact or law that would justify disturbing the judgment. # DISPOSITION 1. In the result, this court finds that the Respondent proved the existence of a valid oral contract and established, on a balance of probabilities, that the goods and services claimed were supplied to the Appellant and that the outstanding sum remained unpaid. The learned trial magistrate properly evaluated the evidence, correctly applied the law and arrived at a sound conclusion. In the premises, this court pronounces itself as thus; 1. The Appeal lacks merit and is hereby dismissed in its entirety. 2. The Judgment and Decree of Hon. K. Cheruiyot (SPM) delivered on 1st October 2025, are hereby upheld. 3. The Award of Kshs. 2,252,824/= together with interest from the date of filing suit until payment in full is affirmed. 4. The Award of costs in the trial court is affirmed. 5. The Respondent shall have the costs of this Appeal together with interest thereon at court rates. It is so ordered. SIGNED BY/FOR: **□ TH E JUDICIAR Y O F KENY A ★** **HON. JUSTICE ABDI M. HASSAN** Kisumu High Court High Court Civil Date: 2026-07-17 11:52:46