https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7638

Ongong'a t/a Oasis Doctors Plaza v Africare Ltd (Civil Appeal E212 of 2023) [2026] KEHC 7638 (KLR) (29 May 2026) (Judgment) Neutral citation: [2026] KEHC 7638 (KLR) Republic of Kenya In the High Court at Kisumu Civil Appeal E212 of 2023 LM Wachira, J May 29, 2026 Between Dr Dedan Ongong'a T/A Oasis Doctors Plaza Appellant and Africare Limited Respondent (Being a first appeal arising from the judgment and Decree of Hon. Mr. Dickson O. Onyango [Chief Magistrate, delivered on 29th November 2023 in the original Kisumu CMCC No. 383 of 2020) Judgment Background 1.The appeal arises from the judgment and decree of the Chief Magistrate’s Court at Kisumu delivered on 29th November 2023 in Kisumu CMCC No. 383 of 2020, wherein the learned trial magistrate entered judgment in favour of the Respondent against the Appellant for the sum of Kshs.3,817,589/= together with costs and interest. 2.The Respondent was the Plaintiff while the Appellant was the Defendant in the lower court. The Appellant/Defendant being dissatisfied with the Judgment, filed the instant appeal, seeking to set aside the lower court decision, and in its place pleading to have the suit in the lower court dismissed with costs Trial Court Evidence 3.The plaintiff/Respondent had filed an Amended plaint dated 25.5.2022 and a witness statement. The Respondent’s claim before the lower court was for recovery of a sum of Kshs.3,817,589/= which it claimed to be owing from the Appellant as at 15.2.2019. The claim is said to have arisen from the Defendant’s/Appellant’s financial dishonesty characterized by irregular remittances of monies rightfully owed to the Respondent. In addition, the Respondent sought General Damages for an alleged breach of contract. 4.The facts were that the parties entered into a written agreement dated 22nd January 2016, in which the Appellant was engaged to manage and operate a pathology laboratory within the Respondent’s premises known as Oasis Doctors Plaza, Milimani, Kisumu. The agreement set out the way in which the laboratory services were to be rendered, billed and paid for during the subsistence of the contract. 5.A dispute then arose between the parties, prompting the Respondent to issue some demand letters and finally instituted the suit in the lower court, claiming breach of the agreement. The manner of breach was alleged to be that the Appellant was referring its patients to another separate entity for similar laboratory tests and services, within the Appellant’s hospital premises, other than the Respondent’s contrary to the agreement. 6.It was the Respondent’s case that because of the said breach and irregular remittances, the Appellant owed it a total sum of Kshs.3,817,589/=. The Respondent produced in court a document (Page 36, Volume 3) which showed that the amount outstanding between the parties was Kshs.3,817,589/-.The statement of the witness one Priscilla Mercy Aywa was also adopted as evidence and indicates the amounts in dispute. The contract between the parties was also produced in court. 7.The Defendant/Appellant denied the claim through its Amended Statement of Defence stating that all verified accounts had been settled, and that there was no breach of contract allegedly relating to it running a parallel laboratory facility within its said hospital premises. The Appellant, Dr. Dedan Ongong’a testified in court. He adopted his witness statement, and produced the documents contained in the List of Documents dated 1.3.2022 as Exhibits and maintained that all verified accounts relating to all invoices raised by the Respondent, which were availed to him for settlement, were duly paid. He also maintained that there was no breach of contract. He stated that the clause in the contract did not bar referral to other laboratories and that the clause allowed doctors to refer patients who visited the hospital and insisted on their preferred laboratory to use the facility of such third-party laboratory. 8.The witness produced in court exhibits being copies of all the invoices which he confirmed to have been supplied to him by the Respondent for settlement and which he verified by way of reconciliation with the Respondent’s laboratory Staff and the Appellant’s Account’s department for the entire period and schedule of Cheques subsequently drawn by the Appellant in settlement of the same, along with the corresponding bank statements of the Appellant for the entire period confirming that the cheques drawn in favour of the Respondent towards settlement thereof, were fully paid. 9.The Court having entered Judgement for the Plaintiff as against the Defendant, the Defendant/Appellant filed a Memorandum of Appeal with six [6] grounds of appeal, as follows;a.The learned trial Magistrate erred in law and in fact, in failing to appreciate that from the nature of the pleadings by both parties, as presented before the court, the Respondent as the Plaintiff, having claimed for payment of alleged outstanding dues, in respect of laboratory services alleged to have been provided by it to the Appellant, and the Appellant having filed a Statement of Defense specifically denying the claim, the Respondent was under an obligation to specifically prove its case on the same.b.The learned trial Magistrate erred in law and in fact in failing to appreciate that the nature of the pleadings and testimony of the Appellant in response to the Respondent’s claim having specifically stated that all accounts had been settled and that the only ones that were not settled are the ones that were disputed, the Respondent was therefore under an obligation to avail a reconciliation of accounts, either by way of specific requisitions for the services alleged to have been rendered, and supporting invoices raised by the Respondent in relation thereof, against payments made, and balance due as claimed, or any other way, if at all.c.Though the learned trial Magistrate properly appreciated that the nature of the Respondent’s claim in the subordinate court for Kshs.3,817,579/= was one in the nature of special damages which is required by law to be specifically pleaded and proved, however, in his analysis, the trial Magistrate erred in law and in fact, by failing to appreciate that the evidence on record did not constitute a specific pleading as required by law, and did not constitute a specific proof in the nature of supporting requisitions and invoices.d.The learned trial Magistrate erred in law and in fact in failing to appreciate that the statement of accounts produced by the Respondent, and accepted by the court, as proof of its claim for outstanding payment allegedly due from the Appellant, did not, in fact, constitute any proof of its claim for unpaid dues, where it was clear that the said Statement of account was self- prepared by the Respondent, who when challenged in cross examination as to the sources of the entries thereon, did not avail any primary evidence of any services requested for by the Appellant to it, and supporting invoices raised in support of such requisitioned services, or any other proof of any basis in law or fact, from where the said entries of alleged charges for whatever alleged services in the alleged Statement of Accounts arose from.e.The learned trial Magistrate erred in law and in fact in failing to appreciate that the nature of the pleadings by both the Plaintiff and the Defendant in this matter, did not constitute proof as contemplated by law and also by failing to appreciate that a statement of accounts by its very nature and in the circumstances of this case was to have arisen from various invoices accumulated over time, whose entries were then made in the statement of accounts as secondary evidence that would not constitute proof unless the real evidence in the form of requisitions and invoices were produced.f.The learned trial Magistrate erred in law and in fact, when he misapprehended the fact of the Appellant’s admission to have replaced its dishonoured cheque, in favour of the Respondent in the sum of Kshs.177,254/- as an action which constituted an admission of the entire debt claimed by the Respondent in the sum of Kshs.3,817,579/= yet the circumstances of that payment and replacement of the dishonoured cheque, did not support or otherwise justify that finding, at all. Analysis and Determination 10.This Court sitting as the first appellate court, is obligated to reconsider and re-evaluate the entire evidence on record and draw its own conclusions, as if it was a court of first instance, bearing in mind that it did not have the advantage of seeing or hearing the witnesses testify. 11.This jurisdiction on appeal has been succinctly stated by the Court of Appeal in Selle & Another vs Associated Motor Boat Co. Ltd [1968] EA 123, where the Court held that an appellate court is obligated to reconsider the evidence, evaluate it afresh, and draw its own conclusions, taking into consideration the fact that it did not see or hear the witnesses. The court held as follows, “This court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect.” 12.The Court of Appeal echoed the same principles in Peters v Sunday Post Ltd [1958] EA 424, stating that: “An appellate court is not bound to follow the trial court’s findings of fact if it appears that the court failed to take into account particular circumstances or probabilities, or if the decision is plainly wrong.” 13.I will therefore proceed and re-examine the pleadings, the contract herein, the evidence adduced at trial and the decision of the learned Magistrate to determine whether the Respondent discharged the burden of proof so as to be entitled to the orders that were sought. 14.I have considered the entirety of the evidence and the exhibits produced in court by the parties. It is important to note that the Statement of Accounts relied upon by the Respondent, and produced as Exhibit P 8, (page 36 of Volume 1 of the Record of Appeal) is the sole evidence of the Respondent. As correctly submitted by the Appellant, this is a document created by the Respondent, indicating the figures and discounts and then balancing off the amounts. This is the document that was produced in court in support of the Special damages of Ksh.3,817,589/=. 15.I have considered this document together with the Agreement that governed the relationship between the parties. Clause 4.2 of the agreement provided for payment upon invoicing. The clause states as follows;“Oasis Plaza shall within 45 days but not later than 60 days from the date of invoicing pay to the Company through Account payee cheque for all the outstanding bills on Laboratory tests and procedures done by the Company on Oasis staff, Outpatient and Oasis Plaza in-patients.” 16.Clearly, the agreement made a provision on invoicing, mode of payment and reconciliation of all the amounts that fell due between the parties, so that the only way the Respondent would have established that there were amounts owing would have been by way of reconciled Accounts, probably by an accountant or auditor or through a joint reconciliation done by the parties. 17.This kind of evidence or reconciled accounts was never produced in court. The failure by the Respondent to provide proof of the contested invoices totaling to the claim of Ksh.3,817,589/= or a reconciliation of the accounts undertaken by both the parties, and proper particulars of such invoices deals a fatal blow to the Respondent’s case. 18.On the other hand, the Appellant had tendered evidence in court with clear particulars. The Appellant testified that payments were made strictly against invoices that had been verified in accordance with the agreement. The Appellant produced some billing summaries to demonstrate the way invoices were verified, disputed entries flagged, and only confirmed amounts settled. 19.I have had an occasion to evaluate the said billing summaries and they are consistent with the provisions of the Agreement and the Appellant’s testimony in court on how reconciliation was supposed to be done. This is the kind of evidence that Court would have expected from the Respondent to establish the amount that has been claimed. 20.Be that as it may, my finding is that the evidence of the Appellant was not controverted. In the absence of any invoices or reconciliation, the Respondent may not have been able to prove a claim for special damages. The document at page 36 of Volume 1, cannot be authenticated because it is not backed up by invoices and a reconciliation. In B. Braun Pharmaceuticals EPZ Limited v Aquamist Limited [2019] eKLR, the High Court addressed a claim founded on a statement of account without invoices and held:“To prove the indebtedness the respondent adduced the statement of account. In my view such statement alone cannot be used as sufficient evidence to prove and confer liability on the appellant. Section 37 of the Evidence Act states: “Entries in books of account regularly kept in the course of business are admissible whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.” I find that by treating the statement of account as sufficient proof of the claim, the trial court misdirected itself on the law. 21.The trial Magistrate in his Judgment also stated that the Appellant had admitted that that he issued a cheque which bounced. The learned magistrate interpreted the issuance of the cheques as an admission of the entire debt claimed by the Respondent in the sum of Kshs.3,817,579/=. He took the view that the Respondent was entitled to the Judgment because there was no evidence that the Appellant had made good the dishonoured cheque. The cheque was for Kshs.177, 254/= and the fact that the Appellant was paying this amount would not be an admission of the entire debt. This was a special damage claim that needed to be proved specifically. I find that the learned trial Magistrate erred in law and in fact in making this finding. 22.In the circumstance this court is convinced the Respondent had not proved its case on a balance of probability in the trial court and that the learned trial Magistrate erred in entering Judgement for the Respondent as against the Appellant herein. 23.In making this finding I am alive to the incidences where interference with a trial courts discretion is permitted. In Govani v shah & Another, Jaff (Third Party) Civil Appeal 185 of 2019, the learned Judges of Appeal reiterated the finding in Mbogo vShah (1968)EA the court stated follows:“I think it is well settled that this court will not interfere with the exercise of discretion of the inferior court unless it is satisfied that its discretion is clearly wrong because it has misdirected itself or because it has acted on matters of which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so it arrived at a wrong conclusion. It would be wrong for this court to interfere with the exercise of trial Judges decision merely because this court’s decision would have been different”. 24.And with that in mind my finding is that the Appellant have proved that the Respondent was not entitled to the orders they got in the trial court. I will therefore set aside the Judgment of the trial Court delivered on 29th November, 2023 and allow the appeal in its entirety. The suit in the lower court is therefore dismissed. 25.The Appellant is awarded the costs of the proceedings in the lower court and on this Appeal. Orders accordingly. JUDGMENT DELIVERED, DATED AND SIGNED VIRTUALLY AT NAIROBI THIS 29TH DAY OF MAY, 2026.…………………………..………………L.M. WACHIRAJUDGEIn the Presence of:Kevin – court assistant…………………………………………… -for the Appellant……………………………………………. -for the Respondent