Kasamani v Were (Commercial Case E788656 of 2025) [2026] SCC 54 (KLR) (26 June 2026) (Judgment)

Kasamani v Were (Commercial Case E788656 of 2025) [2026] SCC 54 (KLR) (26 June 2026) (Judgment) Neutral citation: [2026] SCC 54 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E788656 of 2025 GW Kiamah, RM June 26, 2026 Between Charles Lutta Kasamani Claimant and James Oyugi Were Respondent Judgment 1.The claimant instituted this suit via the statement of claim dated 2/5/2025 seeking judgment against the claimant for Kshs. 200,000.00/= on the basis that he loaned the respondent that amount in three different instalments and the same was to be repaid by 17/4/2025. However, the same remained unpaid. 2.The respondent filed a response dated 16/9/2025 and denied that the disbursement was a loan. He pleaded that the parties had agreed that the claimant would loan him Kshs. 3 million for his business in DRC, Rwanda and UAE and he deposited his title deed for land parcel South of Takaungu (Kuruwitu) MN/111/10276, valued at approximately Kshs. 7,500,000/=, as security for the anticipated Kshs. 3,000,000/= facility and not for any debt of Kshs. 200,000/=. He admitted that the claimant sent an advance of Kshs. 200,000/= which he utilized to register the company being Handel Capitol Limited wherein the claimant was also a director thus the same was a business contribution and not a loan. 3.The respondent further pleaded that though the claimant sort to rely on the loan agreement, the same was executed under intimidation and threats relating to the retention and possible disposal of his title deed, and that the claimant failed to disburse the agreed Kshs. 3 million and also failed to release the title deed and as a result, the respondent filed a complaint with the DCI. It was thus pleaded that the claimant failed to disclose the full nature of the agreement and the respondent pleaded that the suit be dismissed with costs. 4.The matter proceeded under Section 30 of the Small Claims Act and the claimant filed submissions dated 29/1/2026 whereas the respondents were dated 18/3/2026. 5.I have seen and considered the pleadings, testimonies, evidence and submissions before court. The main issue for determination is whether the claimed amount of Kshs. 200,000/= was advanced as a loan, or business contribution. 6.The standard of proof in civil claims is on a balance of probabilities. See the Court of Appeal in Mumbi M'Nabea v David M. Wachira [2016] eKLR. 7.Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. 8.It was not denied that the claimant sent the respondent Kshs. 200,000/= in three different instalments. The same was also proven via documentary evidence. The claimant also produced the debt settlement agreement wherein the respondent acknowledged the debt of Kshs. 200,000/= and committed to settle the same on 17/4/2025 failure to which the claimant was at liberty to file a suit and recover the amount. It is trite that an acknowledgment of debt constitutes strong prima facie evidence of indebtedness unless successfully impeached. It then follows that once such documentary evidence was produced, the evidential burden shifted to the respondent to demonstrate why the agreement should not be enforced. 9.The respondent pleaded that he executed the agreement under threat and intimidation on the basis that his title deed would be disposed of. Allegations of duress, coercion or undue influence are serious allegations which must be proved by evidence noting that mere assertions in pleadings are not evidence. 10.There was no proof that the respondent was coerced to execute the agreement. Contrary to his allegations, this Court noted that the agreement itself indicated that the title had been released to the respondent. Further, the OB copy on record related to a complaint made on 17/3/2025, before the debt settlement agreement was executed. As such, the same did not corroborate the alleged coercion surrounding the signing of the agreement. There was nothing to show that the claimant continued to retain possession of the title after execution of the loan agreement. 11.The respondent also asserted that the Kshs. 200,000/= was sent to him as a contribution towards incorporation of Handel Capitol Limited, and not a personal loan. While the CR12 and company documents demonstrated that both parties were directors of the company, such documents merely established a corporate relationship and did not prove that the disputed funds were a capital contribution. 12.Further, though the respondent pleaded that the parties had an agreement for a business loan facility of Kshs. 3 million, the agreement produced by the respondent was not executed by either party thus the terms therein were not binding on the claimant. Further, the certificate of incorporation showed that the company was incorporated on 8/1/2026, whereas the funds were sent on 6th, 8th and 10th January. This indicates that the process of incorporation begun way before the sums were sent to the respondent. 13.In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court held that a signed agreement freely entered into by parties is binding and courts will not rewrite contracts for parties absent proof of fraud, coercion, misrepresentation or other vitiating factors. 14.Having found that there was nothing on record to support the allegation that the parties were engaged as business partners or that the respondent executed the loan agreement under threat or undue influence, I do find that the Kshs. 200,000/= was a loan rather than business contribution, and the loan settlement agreement is enforceable. 15.In the end, I do find that the claimant sufficiently proved the claim as against the respondent. To that end, I hereby order as follows: -1.Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 200,000.00/=2.The claimant is awarded costs Kshs. 20,000/= 16.The respondent is awarded 30 days stay of execution.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 26TH DAY OF JUNE 2026HON. GLADYS W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR