https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9099

 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COUNTY COURT NAME: MILIMANI HIGH COURT CASE NUMBER: HCCSCA/E357/2025 JAMES GITAU SINGH VS ITALBUILD IMPORTS LIMITED AND SCALA ENTERPRISES LIMITED JUDGMENT # JUDGEMENT 1. **Introduction** 2. The Respondent filed its Statement of Claim dated 9th June 2023 against the Appellant before the Small Claims court and stated that on diverse dates between June 2017 and February 2019, contracted the Respondent to undertake roofing works with Tegola Canadese Shingles at the Appellant’s house in Karen. 3. There was a balance of Kshs. 368,888.00/= outstanding and payable in respect of the works which the Appellant failed and or ignores to settle despite several requests and promises. 4. The evidence before the Trial Court was to the effect that the Respondent invoiced Bagate Limited for the works but after the first payment, the Appellant made all the other payments with personal cheques. The Respondent produced htre cheques before the Trial Court. 5. On 20th June 2018, the Respondent sent a further quotation of Kshs. 152,883.00/= for additional works which was immediately approved by the Appellant vide an email sent on 22nd June 2018 and this raised to total amount for the works to Kshs. 2,668,888.70/= which was the entire amount to be paid by the Appellant to the Respondent. 6. The balance of Kshs. 368,888.00/= is what brought the parties to the Small Claims Court as fees outstanding that was unpaid for the works done by the Respondent. Both parties do not dispute that there indeed was a contract for the works done and substantial amounts had been paid towards settlement of the consideration of the contract. 1. What is in dispute is whether the amount outstanding was to be paid by the Appellant or Bagate Limited, the company initially invoiced and paid the first installment. 2. At the hearing of the said suit the parties proceeded by way of documentation under Section 30 of the Small Claims Act and filed their respective submissions in support of their case. 3. The trial Magistrate in her considered judgment, 4. The Appeal 5. This appeal emanates from the judgement and decree of Hon. F. Ng’etich Resident Magistrate/Adjudicator delivered on 28th November, 2023 in Milimani SCCCOMM No. E4236 of 2023, Scala Enterprises Limited vs. James Gitau Singh. 6. The grounds of appeal presented by the Appellant vide the Memorandum of Appeal dated 19th December, 2023 upon which the seeks to upset the judgement and decree of the lower court are as follows: 7. That the trial court erred in law by failing to properly consider and evaluate the evidence before it. 8. That the Trial Court erred in law by finding that the Respondent discharged its evidentiary and legal burden of proof. 9. That the Trial Court erred in law by misapplying the laws of Contract and the supply of Goods. 10. That the Trial Coyrt erred in law by ignoring the principle that a limited liability company is a distinct legal entity from its directors/shareholders. 11. That the Trail Court erred in law by finding that the Respondent proved all the essential elements of a valid contract. 12. That the Trial Court erred in law by misapplying the doctrine of Privity of Contract. 13. That the Trial Court erred in law by misapplying the doctrine of Estoppel and the waiver of rights. 14. That the Trial Court erred by failing to consider the evidence on record, the Trial Court and the Respondent’s written submissions. 15. That the Trial Court erred by failing to consider the pleadings 16. The Trail Court erred in law by granting an amount based on an unsigned quotation that is actually for a lesser amount then what the Adjudicator awarded. 17. The Trial Court erred in law by failing to uphold the terms of the purported contract. Issues for determination 18. This Court, after analysing the Grounds of Appeal enumerated in the Appellant’s Memorandum of Appeal, considers that there is only one issue for determination which is; Whether there existed a legally binding contract between the Appellant and the Respondent. 1. In considering any appeal arising from the Small Claims Court, this Court is bound by the provisions of Section 38 of the Small Claims Court Act which states as follows; 38. Appeals (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. Analysis and determination 1. This being a first appeal from the Small Claims Court, the jurisdiction of this Court is circumscribed by Section 38 of the Small Claims Court Act which limits appeals to matters of law. Accordingly, this Court is not at liberty to interfere with findings of fact unless it is demonstrated that the Trial Court acted on no evidence, misapprehended the evidence, applied wrong principles of law, or arrived at conclusions that no reasonable Court properly directing itself would have reached. 2. The Appellant's challenge is principally founded on the doctrine of privity of contract. His contention is that the Respondent invoiced Bagate Limited and that any liability arising from the transaction rests exclusively upon that company. The Respondent, on the other hand, maintains that notwithstanding the initial invoice, the conduct of the parties established a direct contractual relationship between the Respondent and the Appellant. 3. The Court has carefully reviewed the documentary evidence placed before the Trial Court. It is common ground that the Respondent undertook roofing works at the Appellant's residential premises in Karen. It is equally undisputed that substantial payments were made towards the contract sum. The dispute relates only to the outstanding balance of Kshs. 368,888/=. 4. The evidence reveals that although the initial payment emanated from Bagate Limited, all subsequent dealings concerning the performance of the contract were undertaken directly between the Appellant and the Respondent. The Appellant personally negotiated variations to the works, approved additional quotations, corresponded directly with the Respondent and made subsequent payments through personal cheques. These facts were not substantially disputed before the Trial Court. 5. Of particular significance is the email dated 22nd June 2018 through which the Appellant personally approved additional works valued at Kshs. 152,883/=. That approval resulted in an increase of the contract sum. Such conduct is wholly inconsistent with the position of a stranger to the contract. A person who authorises variations to contractual works, supervises performance, and makes payments towards the contract price cannot subsequently disclaim responsibility for the contractual obligations arising therefrom. 6. The Court of Appeal in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another (Civil Appeal No. 95 of 1999)[2001] KECA 362 (KLR) held that Courts do not rewrite contracts for parties and that parties are bound by the obligations they voluntarily assume. Similarly, in Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd, the Court reaffirmed that contractual obligations freely undertaken must be honoured and enforced according to their terms. 7. The Appellant's argument on separate corporate personality is legally sound as a general proposition. A limited liability company is indeed a distinct legal person separate from its shareholders, directors and officers. However, that principle does not assist the Appellant in the peculiar circumstances of this case. The Respondent's claim is not founded upon any attempt to pierce the corporate veil of Bagate Limited or to impose liability upon an officer of the company. Rather, the Respondent's case is that the Appellant himself became a contracting party through his own conduct and dealings. 8. The Court further notes that no evidence was tendered demonstrating that the Appellant acted as an authorised agent of Bagate Limited. There was no board resolution, letter of authority, agency agreement, or any communication notifying the Respondent that the Appellant was acting solely on behalf of the company. More importantly, there was no evidence that the Respondent agreed to look exclusively to Bagate Limited for payment of the contract sum. 9. Agency is not presumed. A person seeking to rely on agency bears the burden of demonstrating that he acted on behalf of a disclosed principal. In the present case, the Appellant failed to demonstrate that he disclosed to the Respondent that he was acting solely as an agent of Bagate Limited. To the contrary, the evidence demonstrates that he consistently conducted himself as the person responsible for the project and for payment of the contract price. 10. The doctrine of privity of contract cannot be invoked in isolation from the facts giving rise to the contractual relationship. While it is true that only parties to a contract may sue or be sued upon it, the question before the Court is whether the Appellant was in fact a party to the contract. That question must be answered by examining the entirety of the dealings between the parties. 11. Upon reviewing the evidence, this Court is satisfied that the Appellant actively participated in the formation, variation, execution and performance of the contract. The totality of the evidence demonstrates that the contractual relationship was not merely between the Respondent and Bagate Limited. Rather, the Appellant personally assumed obligations under the agreement and conducted himself throughout as the party responsible for payment. 12. The Court is equally persuaded that the Appellant is estopped from denying liability. Having personally negotiated with the Respondent, approved additional works, made payments through personal cheques, accepted the benefit of the completed works and allowed the Respondent to proceed on the understanding that he would honour the contractual obligations, the Appellant cannot now be permitted to assert that another entity is solely liable for the outstanding balance. 1. The law does not permit a party to approbate and reprobate. A party cannot accept the benefits arising from a transaction while simultaneously repudiating the burdens attendant thereto. Such conduct would undermine commercial certainty and offend the principles of equity and good conscience. Determination 1. I therefore find that the learned Adjudicator correctly appreciated both the facts and the applicable law. The finding that the Appellant was liable for the outstanding balance was firmly grounded upon the evidence and was consistent with established principles of contract law, agency and estoppel. 2. Consequently, I find no error of law capable of warranting interference by this Court. 3. The appeal is devoid of merit and is hereby dismissed with costs to the Respondent. Judgement delivered virtually on 25th June 2025 In the presence of; Ned Chemoiya for the Appellant. Ms. Kibii for the Respondent C/A Irene Chelangat SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. LADY JUSTICE CHELANGAT MUTAI** Milimani High Court High Court Civil Appellate Division Date: 2026-06-25 12:58:46