https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7210

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **CIVIL SMALL CLAIMS APPEAL NO. E029 OF 2025** **DANLEX PARTNERS LLP…………………................ APPELLANT** **-VERSUS-** **ERIC JAMES MURIITHI..………...….............1ST RESPONDENT** **PROJECT SYNDICATE LIMITED………………2ND RESPONDENT** ***(Being an appeal from the judgment of Hon. Okumu (Adjudicator/RM) in Nairobi SCCC No. E7823 of 2024 delivered on 4/4/2025)*** **JUDGMENT** 1. The appellant was the claimant in Nairobi SCCC No. E7823 of 2024 where it alleged that the 1st respondent represented himself as an office designer and architect and offered to design the appellants office at a price of kshs.1,090,120 as the overall costs of the said works. 2. The respondents requested the appellant to pay 50% of the costs incurred (kshs.545,060). The 1st respondent acknowledged receipt of the money by singing on behalf of the 2nd respondent. 3. The 2nd respondent commenced the works and added kshs.15,000 for wooden poles and a further kssh.14,000 for extra windows. 4. The appellant proceeded to make payments as follows: ***17/6/2024 - kshs.150,000*** ***20/6/2024 - kshs.177,000*** ***27/6/2024 - kshs.109,012*** ***1/7/2024 - kshs. 79,000*** ***5/7/2024 - kshs.119,000*** 1. That kshs.79,000 was the initial deposit for delivering furniture and the balance of ksh.40,000 was to be paid on delivery of the furniture. 2. The appellant paid the entire amount of the quotation of kshs.1,060,072 leaving a balance of ksh.59,048. 3. The appellant further stated that the quotation for the kitchen was kshs.87,000. The 2nd respondent failed to deliver its obligations and the appellant engaged a new contractor who undertook completion of the works at ksh.210,829. 4. Further that the 2nd respondent broke the landlord’s glasses and the appellant was surcharged ksh.46,632. 5. The respondent filed a defence and counterclaim stating that it was the appellant who owed the respondent kshs.59,048. 6. The trial court also found that the 2nd respondent did not complete the work and struck out the counter claim. The damage to the landlord’s windows were not proved. 7. Costs of khs.20,000 were awarded with interest from the date of filing suit. 8. The appellant has filed this appeal on the following grounds: 9. ***THAT the Learned Trial Adjudicator failed to uphold the established principles of burden of proof in civil proceedings in so far as failing to recognize that the appellant had discharged the burden of proof to the required standard in a claim for special damages.*** 10. ***THAT the Learned Trial Adjudicator failed to consider the import of Sections 107, 108 and 109 of the Evidence Act and the binding precedents of the superior courts thereby denying the appellant the legitimate expectation that such precedents would be applicable to the appellant when it presented its claim before the adjudicator.*** 11. ***THAT the Learned Trial Adjudicator erred in law by not taking into account the provisions of law relating to the salient features of a contract which were present in this contract.*** 12. ***THAT the Learned Trial Adjudicator erred in law by failing to find that there was a valid contract between the appellant and the 1st respondent thereby discharging the 1st respondent and consequently arriving at a flawed decision.*** 13. ***THAT the Learned Trial Adjudicator erred in law by failing to consider in totality the pleadings, documents, facts and submissions of the appellant thereby arriving at the unjust decision.*** 14. ***THAT the Learned Trial Adjudicator erred in law by failing to adequately evaluate the evidence and exhibits and thereby arrived at a decision unsustainable in law.*** 15. ***THAT the Learned Trial Adjudicator erred in law by misapplying the settled principles in awarding costs by assessing costs that were negligible as against the value of the subject matter.*** 16. ***THAT the Learned Trial Adjudicator erred in law by failing to consider the binding authorities and the submissions by the appellant and in doing so arrived at an erroneous conclusion.*** 17. The parties filed written submissions as follows; The appellant submitted that the appeal herein in is on a point of law as it challenges the misapplication of the law and legal principles in assessing evidence on record. 18. The Appellant has taken issue on how the trial adjudicator applied the established precedents and principles in assessment of the claim presented before it. 19. Such errors on the part of the trial court constitute what is considered a point of law. 20. Upon filing of the claim before the trial court, the Appellant herein had a legitimate expectation that the trial court would apply the law as it is as well as precedents binding upon it in determining the Appellant’s claim. 21. The appellant argued that the trial court grossly misinterpreted the provisions of section 107, 108 and 109 of the Evidence Act in determining the Appellant’s claim. 22. The Appellant at trial presented documentary evidence to prove the existence of a contract between the two Respondents. The court in its determination ought to have considered the proper import of Section 109 of the Evidence Act in making a determination as to the claim before court. 23. The trial Adjudicator in her judgment made an award of Kshs. 146, 048; albeit in favour of the Appellant. The said award was not sound in law and as per the principles governing the award of damages. 24. The claim before the trial court was a liquidated claim which claim was supported by documentary evidence. 25. The court did not provide a computation as to how it arrived at the said figures. 26. Further, the Claimant pleaded Kshs. 119, 000/- as the costs for furniture which was undelivered. The Appellant discharged the burden of proof by providing Mpesa payment advice to substantiate the same. 27. The Appellant in its documentary evidence provided a bill of quantities issued by the 2nd Respondent outlining each yardstick and the cost thereto. 28. The total cost of the project was Kshs. 1, 090, 120/-. In pursuance to the bill of quantities, the Appellant made the payments on various dates to the tune of Kshs. 1, 060, 072/- leaving a balance of Kshs. 59,048/- out of the entire amount quoted. 29. Further to it, the 1st Respondent made a proposal for the costs of furniture which were invoiced at Kshs. 119, 000 where the Respondent made a deposit of Kshs. 79,000 was paid and the balance was to be paid upon the delivery. 30. The 1st Respondent asked for the balance of Kshs. 40, 000 to expedite the delivery of furniture which again the Claimant paid. The Claimant produced bank transfer advice dated 1st July 2024 indicating the payment together with copies of cheques and copies of bank payments to that effect. 31. The Appellant at trial also produced a quotation from Primeace Interiors Exterior designers indicating the cost for window repair at Kshs. 46, 632/- as well as mpesa payments showing payments made to other contractors to carry out corrective works and finish up on the areas where the 2nd Respondent did not work on. 32. The appellant argued that the duty to prove payment of money lay with the Appellant which duty the Appellant sufficiently discharged to the required standard. 33. The appellant consequently urged this court to find and hold that the Appellant made payments to the Defendant to the tune of Kshs. 1,119,120 which the Respondents were mandated to provide the services as contracted. 34. The Appellant at trial discharged the burden of proof in accordance with Section 107 of the Evidence Act to show the existence of two contracts between the Appellant and the Respondents. 35. The evidence before the court showed that the Appellant made the payments to the Respondents and the Respondents failed to provide services as required under the contract and that no furniture was delivered nor was the fit out works completed as per the yardsticks in the bill of quantities. 36. The 1st and 2nd respondent on the other hand submitted that the appellants failed to; Produce receipts linking alleged costs to the Respondent, demonstrate breach of contract by the Respondent and Prove liability for third-party transactions. 37. The 1st and 2nd respondent in agreement with the trial court submitted that the 1st respondent, a director could not be held personally liable in the absence of fraud, misrepresentation or evidence of personal assumption of liability. 38. This is alignment with Section 19 of the Companies Act, 2015, and the long-standing principle in **Salomon v Salomon & Co Ltd [1897] AC 22,** that a company’s separate legal personality is not displaced absent fraud, illegality, or express personal assumption of liability. 39. The issues for determination in this appeal are as follows; 40. ***Whether the trial adjudicator erred in law and fact by failing to find the 1st respondent personally liable for the breach of contract despite his involvement in the transactions.*** 41. ***Whether the appellant discharged the burden of proof required under Sections 107 and 108 of the Evidence Act to establish the claim for special damages, specifically regarding undelivered furniture and corrective works.*** 42. ***Whether the trial adjudicator’s award of Kshs. 146,048 was based on a sound evaluation of the evidence and whether the court provided a proper legal basis for the computation of that sum.*** 43. ***Whether the trial court misapplied the principles of awarding costs by assessing an amount that was disproportionate to the value of the subject matter and the complexity of the suit.*** 44. On the issue of personal liability, the trial court correctly applied the principle of separate legal personality established in **Salomon v Salomon & Co Ltd [1897] AC 22** and codified under Section 19 of the Companies Act, 2015. 45. A director is generally not liable for the debts or contractual breaches of a limited liability company unless it is shown that the director used the corporate veil as a cloak for fraud or personal gain. 46. In this instance, the 1st respondent signed on behalf of the 2nd respondent, and there was no evidence of fraud or a personal guarantee that would warrant piercing the corporate veil. 47. Consequently, the 1st respondent was properly discharged from the suit. 48. Regarding the assessment of damages, the court finds that the trial adjudicator erred in law by failing to properly evaluate the uncontroverted documentary evidence presented by the appellant. 49. Under Sections 107 and 108 of the Evidence Act, the burden of proof lies on the party who desires the court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts. 50. The appellant provided M-Pesa payment advices, bank transfers, and receipts totaling Kshs. 1,060,072 for the fit-out works and Kshs. 119,000 for undelivered furniture. 51. Special damages must be specifically pleaded and strictly proved. 52. By providing the bill of quantities and the corresponding proof of payment for services that the trial court itself acknowledged were not completed, the appellant discharged this burden. 53. The trial court's award of Kshs. 146,048 was arbitrary and lacked a clear mathematical nexus to the proved loss, constituting a misapprehension of the evidence. 54. The appellant produced a quotation from Primeace Interiors and proof of payment to third-party contractors to remedy the 2nd respondent's defaults. 55. Where evidence is unchallenged and not inherently incredible, a court should not ignore it. 56. The 2nd respondent did not provide evidence of completion or receipts for the alleged balance of works. 57. Therefore, the appellant is entitled to the refund of the Kshs. 119,000 paid for furniture never delivered and the proved costs of completing the works, less any legitimate balances owed. 58. The trial court's award of negligible costs also failed to reflect the value of the subject matter and the effort expended. 59. This court therefore sets aside the judgment of the Small Claims Court and substitutes it with an order for the 2nd respondent to pay the appellant proved special damages, plus interest at court rates from the date of filing the original suit made up as follows; 60. ***Refund for furniture Kshs.119,000*** 61. ***Costs for completing the works Kshs.210,892*** 62. ***Costs of cabinetry Kshs. 87,000*** ***Total Kshs.416,892*** 1. ***Less balance owed Kshs.59,048*** 2. The amount proved is Kshs. 357,844. 3. Judgment be and is entered in favour of the appellant against the 2nd respondent in the sum of Kshs.357,844 plus interest at court rates from the date of filing the original suit until payment in full. 4. Each party shall bear their own costs of this appeal, but the costs of the lower court are awarded to the appellant. 5. Orders to issue accordingly. **Dated, Signed and Delivered online via Microsoft Teams at Nairobi this 20th day of May, 2026.** **………….…………….** 1. **N. ONGERI** **JUDGE** **In the presence of:** Mr Ochieng for the Appellant Miss Apiyo for the Respondent Ubah – Court Assistant