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Otanga v Mukhono t/a Bros Young Construction Company (Civil Appeal E480 of 2022) [2026] KEHC 9040 (KLR) (Civ) (25 June 2026) (Judgment) Neutral citation: [2026] KEHC 9040 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E480 of 2022 BW Murunga, J June 25, 2026 Between Magellan Otanga Appellant and Vincent Mukhono t/a Bros Young Construction Company Respondent (Being an Appeal from the Judgment and Decree of the Hon. C.A Okumu delivered on 6th June 2022 in the Small Claims Court at Nairobi in SCCCOMM E381 OF 2022) Judgment 1.The appellate corridor from the Small Claims Court to the High Court is deliberately narrow and exclusively reserved for matters of law. The present appeal tests the integrity of these boundaries. Before this Court is an appeal challenging the Judgment and Decree of the Small Claims Court delivered by Hon. C.A. Okumu on 6th June 2022, which dismissed the Appellant's claim in its entirety. Factual Background 2.The genesis of this dispute traces back to a construction business partnership agreement dated 25th November 2017. The Appellant approached the trial court claiming that pursuant to the said agreement, he advanced the sum of Kshs. 290,000/= and a further Kshs. 10,000/= to cover incidental costs in cash as seed capital to the Respondent. 3.According to the Appellant, the funds were advanced on the strict condition that they would be refunded within one month from the date of execution of the said agreement, attracting an interest of 20% per month. However, the Appellant averred that the Respondent completely failed, refused and/or neglected to refund the principal amount and the accrued interest. 4.Consequently, the Appellant filed a claim vide a Statement of Claim dated 25th July 2019 seeking the principal sum of Kshs. 300,000/= and capped the interest at Kshs. 700,000/=, thereby waiving any amounts in excess of the Kshs. 1,000,000/= pecuniary jurisdiction of the Small Claims Court. 5.In his defense, the Respondent vehemently denied the claim. He asserted that the agreement was a tripartite one, involving a third party and that he signed the agreement purely in his capacity as a Director of M/s Bros Young Construction Company, a distinct limited liability company and not in his personal capacity. Crucially, the Respondent maintained that the agreement stipulated the funds were to be deposited into a joint bank account. He denied ever receiving any cash or bank deposits from the Appellant. 6.After hearing the oral testimonies and reviewing the documentary evidence, the learned Adjudicator framed the core issue as whether there was a breach of contract by the Respondent. 7.The trial court noted that while the Appellant claimed to have advanced the monies in cash, the agreement expressly provided for the funds to be deposited into a bank account. The Appellant failed to produce any deposit slips or documentary evidence to prove that the funds actually changed hands. 8.Relying on Section 107 of the Evidence Act, the Adjudicator held that the Appellant had failed to fully discharge the burden of proof. Consequently, finding that it was unclear whether the Kshs. 300,000/= was ever advanced, the trial court dismissed the claim with costs to the respective parties. The Appeal 9.Aggrieved by the decision, the Appellant lodged the Memorandum of Appeal dated 1st July 2022, formulating three primary grounds:i.The Learned Adjudicator erred in law in dismissing the claim owing to and in observance of the strict rules of evidence particularly Section 107 of the Evidence Act; hence failing to observe the strict provisions of Section 32 (1) of the Small Claims Court Act No. 2 of 2016 as read together with Rule 31 of the Small Claims Court Rules 2019.ii.That the Learned Adjudicator erred in law in failing to consider the documentary evidence presented by the Appellant herein during the hearing of the Claim contrary to the provisions under Section 17 of the Small Claims Court Act No. 2 of 2016 and Rule 23 (1) of the Small Claims Court Rules 2019iii.That the Learned Adjudicator erred in law in acting partially and with bias in the conduct and hearing of the matter by failing to take into account all the oral and documentary evidence placed before the court, thus breaching Rule 6 of the Small Claims Court Code of Conduct for Adjudicators 2019; and most importantly Articles 48 and 50 (1) of the Constitution of Kenya 2010. Appellant's Submissions 10.The Appellant submitted that the Small Claims Court is a creature of statute designed to provide accessible and informal justice. Relying on Section 32(1) of the Small Claims Court Act, the Appellant argued that the court is not bound by strict rules of evidence. Thus, by strictly invoking Section 107 of the Evidence Act, the Adjudicator misdirected himself. 11.It was further submitted that the trial court ignored material documentary evidence and the Respondent's own admissions. The Appellant urged this Court to re-evaluate the evidence, asserting that the failure to consider material submissions occasioned a miscarriage of justice and prayed that the judgment be set aside. Respondent's Submissions 12.The Respondent opposed the appeal, raising a preliminary issue regarding the competence of the appeal. He submitted that the Appellant failed to include the extracted Decree in the Record of Appeal, contrary to Order 42 Rule 13(4)(f) of the Civil Procedure Rules, arguing that this omission goes to the root and jurisdictional aspect of the Court. 13.On the merits, the Respondent submitted that an appeal from the Small Claims Court is strictly on points of law as per Section 38 of the Small Claims Court Act. He contended that the Adjudicator reached the correct decision as the Appellant failed to prove that the money was ever deposited into the agreed joint account. He argued that careless execution or failure to abide by the written terms of a contract cannot be cured by the relaxed rules of the Small Claims Court. Issues For Determination 14.The overarching issue that eclipses all others in this appeal is whether the Memorandum of Appeal raises genuine points of law to clothe this Court with the requisite appellate jurisdiction. Analysis And Determination 15.The Small Claims Court is a specialized forum, designed by the legislature to dispense justice with speed, simplicity and finality. To safeguard this objective and prevent endless litigation over minor claims, the legislature erected a strict statutory ring-fence around the appellate jurisdiction of the High Court. 16.Section 38 (1) of the Small Claims Court Act Cap 10A states with crystalline clarity:“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.” 17.It is a well-known legal adage that an appellate court must not usurp the role of the trial court. The trial court is the sole master of the facts, possessing the unparalleled advantage of hearing the evidence first-hand. 18.This Court, in the persuasive decision of Atancha v Mwakiwiwi [2023] KEHC 18217 (KLR) definitively settled this position. The Court held that where an appeal is concerned with the admission of witnesses, cross-examination, and the evaluation of evidence, it is fundamentally an appeal on issues of fact and evidence. Such grievances do not crystallize into points of law and thus fall outside the statutory perimeter of Section 38. 19.Furthermore, in Changa v Satari [2023] KEHC 19129 (KLR) it was emphatically underscored that appeals must genuinely engage matters of law. The Court stated that : "points of law cannot be on the basis of argumentative disagreements of facts." 20.This therefore means that an appellant cannot simply dress a factual disagreement in the distinguished robes of a "point of law" and expect it to pass through the gates of appellate jurisdiction. 21.Looking critically at the Appellant's Memorandum of Appeal, the grievances raised are firmly anchored in the realm of facts and the evaluation of evidence. The Appellant complains that the trial adjudicator failed to consider documentary evidence and strictly applied the burden of proof under Section 107 of the Evidence Act instead of the relaxed rules under Section 32 of the Small Claims Court Act. 22.This argument is fatally flawed. While it is true that Section 32 of the Small Claims Court Act relaxes the strict rules of evidence regarding admissibility to promote expeditious justice, it does not throw the requirement of proof to the wind. "He who alleges must prove" (not him who denies) remains the golden thread woven into the fabric of our civil justice system. A relaxed evidentiary standard does not negate the claimant’s responsibility to adduce sufficient proof neither does it absolve a claimant from the burden of proving their case on a balance of probabilities. 23.The Appellant alleged that he handed over hard cash to the Respondent. The written agreement, however, required the funds to be deposited into a specific bank account. The Appellant failed to furnish a single deposit slip or receipt. The trial Adjudicator evaluated the competing testimonies and found the Appellant's oral assertions insufficient to prove the actual transfer of funds. This was a purely factual evaluation. There is absolutely no perversity in a trial court demanding basic proof of payment in a claim for liquidated sums. To hold otherwise would be to turn the Small Claims Court into a court driven by rumors and hyperbole, stripping it of its character as a court of law. 24.Even if I were to assume, for a moment, that the funds were indeed advanced, the Appellant's case hits a fatal iceberg on the question of privity of contract and corporate personality. The record glaringly reveals that the Respondent, Vincent Mukhono, executed the agreement in his capacity as a Director of M/s Bros Young Construction Company. 25.It is a trite, elementary, and universally acknowledged principle of company law tracing its majestic roots back to the legendary House of Lords decision in Salomon v. A. Salomon & Co. Ltd [1897] AC 22 that a company is a distinct legal entity, separate and distinct from its directors and shareholders. The Appellant sued Vincent Mukhono in his personal capacity for a contract executed on behalf of a corporate entity. The Appellant sued the wrong party. One cannot extract corporate liability from a director's personal pockets without lifting the corporate veil; a remedy that was neither pleaded nor proved in the lower court. 26.The Small Claims Court is a court of relaxed procedure, not a court of relaxed justice. The Appellant still had the inescapable duty to furnish the court with credible and trustworthy material to demonstrate that the monies were indeed advanced. As the old proverb goes, "you cannot make bricks without straw." The trial adjudicator's finding that the Appellant failed to provide this requisite straw was a factual conclusion reached after evaluating the evidentiary material before him. 27.The Appellant's invitation for this Court to re-evaluate the documentary evidence and reach a different conclusion is an invitation to descend into the arena of facts, an exercise that is statutorily forbidden by Section 38 of the Small Claims Court Act. A point of law must transcend a mere disagreement with how the trial court weighed the evidence. Was the Trial Court's Decision Rational? 28.The Appellant accused the Adjudicator of bias and partiality, an allegation seemingly born out of the sting of defeat. Bias is a grave allegation that requires cogent proof, not mere speculation mounted upon the shaky foundations of an unfavorable ruling. 29.A review of the judgment reveals a logical and comprehensible sequence of reasoning. As guided by the decision in Republic v Deputy County Commissioner Lower Yatta Sub-County & another [2022] KEELC 2722 (KLR), the Court held that:'A decision is irrational in the strict sense of that term if it is unreasoned; if it is lacking ostensible logic or comprehensible justification.' 30.The Adjudicator clearly set out the issues, evaluated the testimonies of both the Claimant and the Respondent, identified the missing link in the Claimant's case which was the proof of payment, and applied the law correctly. The Adjudicator exercised his discretion reasonably by calling his attention to the matters he was bound to consider specifically, the lack of proof of the actual advancement of the funds 31.In the final analysis, this appeal is devoid of merit. As the revered equitable maxim dictates: Equity aids the vigilant, not the indolent. The Appellant failed to prove the disbursement of funds and quite fundamentally, directed his legal arsenal at the wrong target. The learned Adjudicator arrived at an impeccable, legally sound decision that this Court has absolutely no reason to disturb. Determination 32.The edifice of the Appellant's case rests on the shifting sands of factual disagreement rather than the solid rock of a point of law. To allow this appeal would be to open the floodgates for every dissatisfied litigant to re-litigate factual disputes under the guise of legal errors, thereby defeating the very raison d'être of the Small Claims Court. 33.The learned Adjudicator made no error of law. He properly construed the burden of proof and rightly concluded that the Appellant failed to discharge it. The procedural flexibility envisaged under the Small Claims Court Act is not a license to dispense with the substantive necessity of proving one's claim on a balance of probabilities. 34.I find that this appeal is incompetent as it offends the mandatory provisions of Section 38 of the Small Claims Court Act and constitutes a futile attempt to overturn a sound and well-reasoned judgment. 35.Consequently, I make the following final orders:a.The Appeal is hereby dismissed in its entirety.b.The Judgment and Decree of the Small Claims Court at Nairobi in SCCCOMM E381 of 2022 delivered on 6th June 2022 is upheld and affirmed.c.The costs of this appeal are awarded to the Respondent.IT IS SO ORDERED. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF JUNE, 2026.BENARD WAFULA MURUNGAJUDGEDelivered on virtual platform in the presence of:Shadrack Wambui for the Appellant (la)Odera Were for the RespondentKevin Babu - Court Assistant