https://new.kenyalaw.org/akn/ke/judgment/scc/2026/43

Makau v Muthama (Commercial Case E29921 of 2024) [2026] SCC 43 (KLR) (29 June 2026) (Judgment) Neutral citation: [2026] SCC 43 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E29921 of 2024 GW Kiamah, RM June 29, 2026 Between Henry Kioko Makau Claimant and Winfred Mumbe Muthama Respondent Judgment 1.The claimant instituted this suit via the amended statement of claim dated 13/8/2025 seeking judgment against the claimant for Kshs. 396,000.00/= on the basis that he gave the respondent a loan of Kshs. 200,000/= payable without interest to assist in his ailing father, and a further loan of Kshs 240,000/= to be repaid with 15% interest per month as the same was issued by the claimant’s sister. That the total loan was for Kshs. 530,000/= from which the respondent had paid Kshs. 134,000/= leaving a balance for Kshs. 396,000/= and interest of Kshs. 300,000/=. 2.The respondent filed a response dated 4/8/2025 and admitted to receiving the sums. It was however denied that the same was a loan as the parties were acquaintances and the sums were sent on informal and personal arrangments. That the respondent averred that the sums were refunded through cash and Mpesa transfers. That there was no agreement for interest and the claim for Kshs. 740,000/= was misconceived. 3.The matter proceeded under Section 30 of the Small Claims Act and the claimant filed submissions dated 5/11/2025 whereas the respondent’s were dated 6/11/2025. 4.I have seen and considered the pleadings, testimonies, evidence and submissions before court. The main issue for determination is whether the claimant has proven that the claim as against the respondent. 5.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. 6.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. 7.The first issue to address was whether there was a binding contract between the parties. While there was no written agreement, a contract may be inferred from the conduct of the parties. The repeated advances, coupled with the Respondent’s acceptance and partial repayments, are consistent with a debtor–creditor relationship rather than gratuitous or informal transfers. The respondent’s contention that the payments were informal and non-repayable is not supported by evidence. In particular, no credible proof was tendered to show that the sums were gifts or that full repayment was made. 8.As to whether the claimant had proved any pending debt, I do note that the respondent did not deny receiving the amounts. Indeed, the sum of Kshs. 530,000/= was proven by way of Mpesa statements. The claimant also admitted to receiving a part payment of Kshs. 134,000/=. Though the respondent pleaded that she had fully repaid the sums advanced to her, there was no sufficient evidence placed before court to prove repayment beyond Kshs. 134,000/=. 9.Accordingly, the Court finds that the claimant has proved, on a balance of probabilities, that the sums advanced constituted a loan repayable by the respondent. As such, I do find that the debt of Kshs. 396,000/= was due and owing and the same is awardable. 10.As regards the claim for interest, I do find that there was nothing to indicate that the parties had agreed on any interest terms. Further, the claimant charged interest at 15% per month which translates to approximately 180% per annum. The interest rate charged is highly inordinate and unconscionable. 11.This Court retains discretion to decline enforcement of terms that result in unjust, oppressive, or unconscionable outcomes. In the circumstances, the Court finds the claimed interest to be disproportionate and inequitable. The Court therefore declines to enforce such terms. 12.From the foregoing, I do find that the claim is partially successful. 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. 396,000/=2.The claimant is awarded costs Kshs. 30,000/= 13.The respondent is awarded 30 days stay of execution.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 29TH DAY OF JUNE 2026HON. GLADYS W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR