https://new.kenyalaw.org/akn/ke/judgment/scc/2026/75

Mkare v Musya (Commercial Case E135 of 2026) [2026] SCC 75 (KLR) (11 May 2026) (Judgment) Neutral citation: [2026] SCC 75 (KLR) Republic of Kenya In the Small Claims Court at Mombasa Commercial Case E135 of 2026 TN Mwangeka, RM May 11, 2026 Between Edward Kahindi Mkare Claimant and Irene Musya Respondent Judgment 1.Via Statement of Claim dated 14th February 2026, the Claimant seeks for the Respondent to pay the out-standing loan amount of Kshs. 77,300/- together with interest at 12% per annum and advocate fees. It is the Claimant’s case that the Respondent borrowed Kshs. 77,300/- from the Claimant promising to make monthly instalments of Kshs. 10,000/- and the same would accrue interest at court rates. However, the Respondent defaulted and only paid Kshs. 3,000/-, Kshs. 2,000/- and Kshs. 1,000/ on 28th June 2025, 5th July 2025 and 6th September 2025, respectively. The balance due and owing is Kshs, 77,300/-. 2.On the part of the Respondent, she states that parties herein entered into a land sale agreement sometime in 2022. The agreed purchase price was Kshs. 600,000/-. The Claimant paid a deposit of Kshs. 77,300. However later on he changed his mind and now want his deposit back. That the Claimant's failure to complete the transaction constitutes a breach on his part. As such, the Respondent is not legally obligated to refund the deposit as a debt. 3.The court has considered the pleadings, documents in support as well as the submissions by the parties and renders itself as hereunder; the Claimant has filed MPESA transaction statement that proves that Kshs. 28,270/- was sent to the Respondent on diverse dates between 1st June 2021 to 30th April 2023. However, the Respondent has admitted that the total amount she received was Kshs. 77,300/-. 4.Why this money was sent is the real contention. The Claimant alleges it was a loan while the Respondent alleges it was a deposit for a land transaction that fell through. From the evidence filed by the Claimant, the screenshot messages are between the Claimant and the Respondent. The Respondent’s contact is saved as “Irin Kiwanja”. It is not uncommon for one to save another’s contact with reference to their dealings and or circumstances surrounding their meeting. I therefore presume the existence of this fact based on the common course of human conduct in public and private business, in line with Section 119 of the Evidence Act and find that the parties were indeed transacting for land and the money was not a loan as alleged by the Claimant. 5.From the evidence on record, the agreement between the parties was oral in nature. Undeniably, verbal contracts can be enforceable, but only if they are provable in court, and the contract meets the requirements of contract formation. For oral contracts, the courts will first be concerned with whether an oral contract exists and then with ascertaining the terms as these are, by their very nature, not written down. Ascertaining the terms of an oral contract has been held to be a question of fact. This means that all evidence to assist that task is admissible, including evidence of the parties’ subjective intentions and subsequent conduct. I rely on the Court of Appeal decision in Civil Appeal No. 167 Of 2019 Pride Inn Limited Vs Thatchmaanz Limited Keca 2026. 6.Guided by the above holding and based on the evidence it is no doubt that the agreement between the parties herein is enforceable as one of money witheld. It has been pleaded that the Claimant’s inaction for over two years constitutes a breach of the agreement. In Ogutu v Anjichi [2025] KEHC 3875 (KLR) the court considered whether the failure of a buyer to complete the purchase price on time constituted a breach of contract and held in the affirmative. I note that in that case, the contract was a written land sale agreement with specified timeline within which the purchase price was to be paid. 7.As the deal failed to sail through, it is only natural that the parties should be taken back to the position they were before things fell apart. They should be restituted back. The Respondent has pleaded that she has over time made payments to the Claimant as refund of the said amount in good faith. She did not however provide any evidence of the same. The Claimant on the other hand has stated that the Respondent has only paid Kshs. 6,000/-. 8.As it is not contested that the Respondent received Kshs. 77,300/-, this court finds that 9.the Claimant has proved its case against the Respondent for the sum of Kshs. 77,300/-only. Further, having found that the parties were indeed transacting for land and the Kshs. 77,300/- was not a loan as alleged by the Claimant, the claim for Kshs. 28,871.37/- as interest at the rate of 12% per annum is thus rejected. The claim for advocate fees at Kshs. 7,130/- is equally rejected in the interest of justice in line with section 3(3)(a) of the Small Claims Court Act. 10.Final orders are as follows;a.Judgment is entered in favor of the Claimant against the Respondent for Kshs. 77,300/- less any amount already paid by the Respondent upon proof of the same by the date of this judgment.b.There shall be no interest on (a) above.c.Costs of the suit assessed at Kshs 5,000/-. DATED SIGNED AND READ VIRTUALLY AT THIKA THE……11TH…….DAY OF……MAY……2026HON. THERESA N. MWANGEKARESIDENT MAGISTRATE/ADJUDICATORIn the presence of;…Mr. Kahindi… for Claimant;……N/A…… for RespondentC/A Sabina