https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11211

 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MACHAKOS COUNTY COURT NAME: MACHAKOS HIGH COURT CASE NUMBER: HCCA/E315/2024 MOLDPLAST KENYA LIMITED VS SAMUEL KUNGU T/A BUILDMART HARDWARE JUDGMENT BACKGROUND The Appellant’s case in the trial court 1. The suit was commenced by a plaint dated 15th April 2024. The Plaintiff (now Appellant) pleaded an oral supply arrangement and sought Kshs. 5,446,825/= as special damages for goods sold and delivered, plus costs and interest. The Defence case in the trial court 1. By its statement of defence, the Defendant (now Respondent) admitted the relationship and that supplies were ordinarily accompanied by delivery notes executed by authorised staff, but contended that the sum invoiced for corresponding delivery notes had been paid, and some invoices forming the Plaintiff’s claim were alien for want of corresponding signed delivery notes. The oral evidence 1. The Appellant called PW1 (Paul Kariuki) and PW2 (Keziah Ngure). The Respondent testified as DW1 (Samuel Kungu) and called DW2 (Richard Masese Ochongo), an accountant. 2. From the proceedings, PW1 and PW2 relied heavily on the partner ledger and on invoices and delivery notes; however, upon cross-examination, PW1 conceded in substance that although he stated he had delivery notes for the disputed invoices, he did not have them in court at the time. PW2 similarly could not confirm that all the disputed invoices were in the ledger and did not have the delivery notes for the disputed invoices. 1. DW2’s evidence was that upon reconciliation, invoices totalling about Kshs. 3,023,800/= had no corresponding delivery notes in the documents filed, and that after subtracting those disputed invoices from what he termed the “difference” on the ledger, he arrived at a credit balance of Kshs. 507,249/= in favour of the Respondent. 2. The learned trial magistrate dismissed the suit, essentially on the finding that the court could not determine from the material placed before it which invoices remained unpaid; that the invoices and delivery notes did not tally with the partner ledger; and that therefore the claim was not proved. The Appellant’s case on Appeal 1. The Appellant challenges the whole judgment of the subordinate court dismissing its claim for Kshs. 5,446,825/= being the alleged unpaid price for Polyvinyl Chloride (PVC) pipes and related fittings supplied to the Respondent. 2. The Appellant’s case, fairly stated, is that the trial court had before it primary commercial documents namely invoices and delivery notes acknowledged by the Respondent’s personnel and that those documents, together with the course of dealing between the parties, were sufficient to prove delivery of goods and an unpaid balance. The Appellant further contends that once such prima facie proof was tendered, the evidential burden shifted to the Respondent to demonstrate payment or to disprove delivery, which the Respondent allegedly did not do by receipts, bank statements or other payment records. 3. The Appellant also argues that the trial court adopted an unduly rigid approach by treating the “partner ledger” as determinative, instead of interrogating the invoices and delivery notes on their own probative force. In the Appellant’s view, the court should have isolated at least the portion of the claim that was supported by matching invoices/delivery notes and, in any event, should have entered judgment for Kshs. 507,249/= which the Appellant characterizes as an admission in the Respondent’s witness statement. 4. The Memorandum of Appeal dated 3rd December 2024 faults the trial court, inter alia, for failing to consider the Appellant’s evidence; for allegedly shifting the burden of proof; for failing to notice invoices accompanying delivery notes; for failing to record evidence diligently; for treating the partner ledger as decisive; and for failing to enter judgment for the alleged admitted sum of Kshs. 507,249/=. 5. The Appellant prays that the judgment be set aside and the appeal allowed; and in the alternative, that the suit be heard de novo. The Appellant also seeks costs. The Respondent’s case on appeal 1. The Respondent opposes the appeal and supports the trial court’s reasoning that the Appellant failed to prove the claim and its quantum because the documents did not tally on the invoices and delivery notes vis-à-vis the partner ledger, and because the purported admission of Kshs. 507,249/= was not an admission of indebtedness but a claimed credit balance after reconciliation. The oral evidence 1. The Appellant called PW1 (Paul Kariuki) and PW2 (Keziah Ngure). The Respondent testified as DW1 (Samuel Kungu) and called DW2 (Richard Masese Ochongo), an accountant. 2. From the proceedings, PW1 and PW2 relied heavily on the partner ledger and on invoices and delivery notes; however, upon cross-examination, PW1 conceded in substance that although he stated he had delivery notes for the disputed invoices, he did not have them in court at the time. PW2 similarly could not confirm that all the disputed invoices were in the ledger and did not have the delivery notes for the disputed invoices. 3. DW2’s evidence was that upon reconciliation, invoices totalling about Kshs. 3,023,800/= had no corresponding delivery notes in the documents filed, and that after subtracting those disputed invoices from what he termed the “difference” on the ledger, he arrived at a credit balance of Kshs. 507,249/= in favour of the Respondent. 4. The learned trial magistrate dismissed the suit, essentially on the finding that the court could not determine from the material placed before it which invoices remained unpaid; that the invoices and delivery notes did not tally with the partner ledger; and that therefore the claim was not proved. ISSUES FOR DETERMINATION 1. Having considered the Memorandum of Appeal, the record, and submissions, the following issues arise for determination: 2. Whether the Appellant proved its claim on liability and quantum on a balance of probabilities. 3. Whether the trial court erred in failing to enter judgment for Kshs. 507,249/= on alleged admission. 4. Whether the impugned judgment discloses misapprehension of evidence and or wrong principle warranting appellate interference; and the appropriate orders on costs. Duty of this Court 1. This being a first appeal, this court is under a duty to re-evaluate the evidence on record and draw its own conclusions while bearing in mind that it did not see or hear the witnesses testify. (See,Charles Ogolla Obiero v Joseph Munyambu Karega [2017] KECA 623 (KLR). 2. However, the legal burden of proof lies on the party who asserts a fact. In civil proceedings, the burden rests on the party who would fail if no evidence were adduced by either side pursuant to Section 107 of the Evidence Act (Cap. 80). This was held by the Court of Appeal in Karugi & Another v Kabiya & 3 others [1983] KECA 38 (KLR) where it was stated that, “The burden was always on the Plaintiff to prove his case on a balance of probabilities even if the case was heard as formal proof”. Likewise, failure by a defendant to contest the case does not absolve a plaintiff of the duty to prove the case to the required standard hence in Gichinga Kibutha v Caroline Nduku [2018] KEELC 3981 (KLR) the Court held that, “It is not automatic that instances where the evidence is not controverted the Claimants shall have his way in Court. He must discharge the burden of proof. He must prove his case however much the opponent has not made a presence in the contest.” ANALYSIS 1. Whether the Appellant proved its claim on a balance of probabilities 2. It is not in dispute that the parties had a commercial relationship. The real controversy is proof of the particular unpaid balance and whether the Appellant’s documents demonstrated, invoice-by-invoice, the goods delivered, the price invoiced, payments credited, and the net outstanding sum. 3. Under Section 107 of the Evidence Act (Cap. 80) the legal burden lay on the Appellant to prove the debt and its quantum. A central feature of this dispute raised at the pleadings stage and maintained consistently through the defence evidence is that the Respondent did not merely issue a blanket denial. In paragraph 6 of the Statement of Defence, the Respondent specifically pleaded that “some of the invoices making up the Plaintiff’s claim are alien to the Defendant [and] there are no corresponding delivery notes signed by the Defendant as acknowledgment of receipt of the goods.” This was therefore a pleaded and particularized attack on the authenticity and probative value of part of the invoicing, not an afterthought. 4. The Respondent’s witness statement reinforces that pleaded position. At paragraph 6, DW1 stated that the sums invoiced for corresponding delivery notes had been paid, and at paragraph 7 he identified the invoices that, upon reconciliation, allegedly appeared in the partner ledger without corresponding delivery notes in the documents on record. Those invoices were expressly listed including INV/2022/0313, 0294, 0258, 0249, 0244, 0230, 0233, 0178, 0147, 0108, 0071 and 0049, and the Respondent’s case was that they could not be treated as delivered supplies for want of delivery-note proof. 5. That challenge was not left at the level of DW1’s assertion. DW2, a licensed accountant, testified that he was instructed to examine the partner ledger and delivery notes filed in court, and at paragraph 4.2 of his witness statement he stated that invoices totaling to Kshs. 3,023,800/= did not have corresponding delivery notes as part of the documents filed. The consequence of that evidence, whether one accepts DW2’s ultimate arithmetic or not, is that the court was confronted with an objectively defined evidential gap; a block of invoices said to comprise a significant portion of the pleaded debt was not backed by corresponding delivery notes within the record. 6. In a sale-of-goods debt claim of this kind, where the defendant pleads and testifies that certain invoices are “alien” for lack of delivery acknowledgments, the supplier cannot justify the debt by producing invoices in isolation. The supplier must demonstrate a coherent chain from invoice to corresponding delivery note acknowledged by the buyer (or other credible proof of receipt) to allocation of payments and computation of the net unpaid balance. On this record, once the audit query was raised and particularized, the evidential burden to answer it with matching delivery documents lay with the Appellant. 1. The trial court’s conclusion that it could not tell “which invoice has not been settled” and that the invoices and delivery notes did not tally with the partner ledger must be read against this pleaded and evidenced audit query. 2. The Appellant’s case was that invoices, delivery notes and dishonoured cheques constituted sufficient proof. In appropriate cases, invoices accompanied by acknowledged delivery notes can constitute strong prima facie evidence of supply and delivery (see, for example, the reasoning in Surgilinks Limited v Njimia Pharmaceuticals Limited [2025] KEHC 10056 (KLR). However, that principle presupposes that the documentary chain is internally coherent and enables the court to identify what is outstanding. The learned Judge expressed himself thus; Paragraph “12. As such, the Defendant submits that given that the Plaintiff witnesses testified that interest was calculated on invoices marred with discrepancies, it urges the court, in its judicial discretion, to recalculate the interest owed in accordance with Civil Procedure Rules. 13. From the evidence and submissions above, the Defendant does not dispute that it accepted the terms indicated in the Plaintiff’s invoice that ‘Monthly interest of 3% will be charged on all overdue accounts’ meaning that a valid contract existed between the parties in respect of the interest payable. In its evidence, the Plaintiff produced statements of the outstanding invoices and copies of various invoices which admittedly remained unpaid. Whereas the Defendant attempted to challenge the same through its submissions, I note that this challenge is of little or no consequence as the same could only be mounted through rebuttal evidence in pleadings. In any case, I find that the issues raised by the Defendant about the invoices were clarified by the Plaintiff’s witness during re-examination and the inconsistencies raised are not sufficient to dislodge the Plaintiff’s claim that interest is payable on the outstanding invoices.” 1. Here, the record shows the Respondent raised a specific audit query on invoices totalling to Kshs. 3,023,800/= allegedly lacked corresponding delivery notes in the filed documentation. Once that issue was squarely raised, the Appellant needed to answer it with clarity by placing the corresponding delivery notes and demonstrating how the outstanding sum was computed from the ledger and the invoice or delivery matrix. 2. The proceedings show that when pressed, the Appellant’s witnesses were unable to produce the corresponding delivery notes for the disputed invoices in court, and also could not clearly map the disputed invoices and the claimed outstanding figures in a way that could have allowed the trial court and this court to identify the precise unpaid instruments. In particular, PW1 conceded that although he claimed to have delivery notes for the disputed Kshs. 3,023,800/= invoices, he did not have them in court. PW2 could not confirm that all the disputed invoices were in the ledger and did not have the delivery notes. 1. The Appellant’s central reliance is the Dormakaba Limited v Arcitectural Supplies Kenya Limited [2021] KEHC 210 (KLR) approach where the plaintiff produces delivery notes acknowledged by the defendant and corresponding invoices, those documents may constitute prima facie proof of delivery and indebtedness, particularly where the defendant’s denials are unsupported. 2. The court agrees with the principle in Dormakaba (Supra) and similarly in Veteran Pharmaceuticals Limited v Ondeyo & another [2023] KEHC 18959 (KLR) that acknowledged commercial documents such as delivery notes, invoices and statements can discharge the plaintiff’s burden and shift the evidential burden to the defendant. This was seen where the appellate court found that the appellant had proved its case on a balance of probabilities. The evidence of supply and delivery of goods was supported by stamped invoices and statements of account, which the respondents did not dispute or rebut. The respondents failed to explain the stamped invoices or provide evidence that the cheques were honoured. The trial court erred by requiring the appellant to produce bank statements to prove dishonour of cheques when the burden had shifted to the respondents. The respondents' mere assertions in their defence, unsupported by evidence, could not displace the appellant's uncontroverted evidence. Accordingly, the lower court's judgment was set aside and judgment entered for the appellant as prayed in the plaint, with costs and interest. 3. However, Dormakaba Limited v Arcitectural Supplies Kenya Limited [2021] KEHC 210 (KLR) is distinguishable in that the documents corresponded in material particulars with the credit application, LPOs, delivery notes, invoices, and admissions in correspondence, therefore enabling the court to identify the delivered goods and the outstanding sum with precision. 4. In contrast, the present record contains a material evidentiary problem that the trial court identified and which this court cannot ignore. The inability to reconcile and pinpoint the specific unpaid invoices and or deliveries comprising the pleaded sum, especially after the Respondent raised a detailed audit query of invoices totalling to Kshs. 3,023,800/= allegedly lacking delivery notes in the documents filed. 5. The Plaintiff’s witnesses’ recorded evidence shows that when pressed on the queried invoices and delivery notes, the Plaintiff’s side did not produce the corresponding delivery notes in court. The trial court was therefore faced with 6. a pleaded global sum, 7. a ledger said to be the full transaction record, but 8. no clear mapping identifying which invoices remained unpaid, and 9. a live dispute that some invoices in the ledger lacked delivery notes in the court record. 10. This approach is consistent with High Court decisions emphasising that an invoice is primarily a demand for payment and, where delivery is disputed, delivery notes or other proof of receipt are necessary to establish liability; and that an appellate court will not interfere with a trial court’s dismissal where the claimant’s documentation does not allow the court to ascertain the outstanding balance with certainty. The Responded placed reliance on the case of Pramukh Cash and Carry Limited v Charles Ojwang Milamba t/a Milamba Stores [2024] KEHC 1340 (KLR) and E.P. Communications Limited v East Africa Courier Services Limited [2019] KEHC 1298 (KLR). 11. On this record, the trial court’s complaint was not that there were no delivery notes/invoices at all; it was that the court could not determine which invoices were unpaid and how the pleaded total was reached, given the non-tallying documentation and unresolved delivery note gaps for queried invoices. That finding aligns with the logic in E.P. Communications Ltd -Vs- E.A. Courier services Ltd [2019] eKLR where failure to link delivery notes to the claimed unpaid invoices/amount was fatal. Hon. Justice F. Gikonyo held in part; “The purpose of an invoice is that it is issued by a seller to request for payment for purchase. An LPO is sent by a purchaser to the seller to confirm, order and authorize the purchase. A delivery note is proof of delivery of good.” 12. In addition, the Hon. Justice F. Gikonyo, faced with a similar situation and quoting from Alfred Ndogi Mata -Vs- Hellen Siemeko Adede [2005] eKLR observed; “The evidence show that a business relationship existed between the parties herein. There is also evidence that, goods were supplied to the Respondent during the business relationship on credit. However, 2 issues abound. Were the goods alleged to have been supplied actually supplied and received? And for the goods supplied and delivered, were they paid for by the Respondent?The appellant produced invoices, LPOs and delivery notes. The purpose of an invoice is that it is issued by a seller to request for payment for purchase. An LPO is sent by Purchaser to the Seller to confirm, order and authorize the purchase. A delivery note is proof of delivery of goods……” I align myself absolutely with the above finding. In a contract of supply such as this, the appellant, being the supplier ought to have produced the relevant LPO’s (evidence of PW1) to confirm the order made by the Respondent. He ought to have also shown the delivery notes to show the actual goods delivered. He exhibited neither of these in evidence and also gave no explanation on the failure to do so. As the supplier and party to these contracts, these documents must have been retained by him for every supply and failure to produce or show them can only dent the claim of the appellant that the goods where delivered and received. And showing the invoices alone, which only are proof of demand for payment, cannot in any way fill the void left by failure to exhibit the relevant LPO’s and Delivery notes. 1. For that reason, I am not persuaded that the trial magistrate misdirected himself by insisting on a coherent linkage between the ledger and the supporting primary documents. It was a legitimate evidential demand in a liquidated commercial claim whose success depended on accurate documentary reconciliation. 2. The learned trial magistrate’s conclusion that the court was unable to determine if there is a sum owed because there were no invoices and delivery notes that tally with the Partner ledger is therefore a conclusion that is supported by the evidentiary gaps on record. This court is not persuaded that the trial court applied a wrong standard; it applied the balance of probabilities standard to a claim whose quantum depended on coherent accounting proof. 3. I therefore find that the Appellant has not demonstrated that the trial court’s dismissal was based on a wrong principle or a misapprehension of the evidence. The appeal on this ground fails. 4. The argument that the trial court improperly elevated the partner ledger is also not borne out by the judgment. The trial court did not hold that the ledger alone was decisive; it held that the court could not reconcile the Appellant’s own summary record (ledger) with the invoices/delivery notes placed before court, and that the Appellant did not lead clear evidence identifying which invoices remained unpaid. 5. In short, the Appellant did not discharge its burden to prove the pleaded debt of Kshs. 5,446,825/= to the required standard. 6. Whether the trial court erred in failing to enter judgment for Kshs. 507,249/= on admission 7. The Appellant argues that the Respondent admitted owing Kshs. 507,249/=. The Respondent’s position is that the figure was advanced as a credit balance in his favour after reconciliation, not an admission of debt due to the Appellant. 8. The relevant record (witness statements and DW2’s evidence) shows that the Kshs. 507,249/= figure was arrived at by subtracting the disputed invoices from a ledger-derived figure, and the Respondent’s case is that this computation showed overpayment. 9. That is not an unequivocal admission that the Respondent owes the Appellant Kshs. 507,249/=. It is, at best, a contested reconciliation outcome dependent on assumptions that the Appellant disputed. It cannot therefore meet the threshold for judgment on admission under Order 13, rule 2 of the Civil Procedure Rules. 10. The Appellant’s argument on “admission” must also be tested against the Respondent’s pleaded and sworn narrative. In the defence, the Respondent did not admit owing Kshs. 507,249/=. In DW1’s witness statement, the figure of Kshs. 507,249/= is presented as an inference drawn after excluding the disputed invoices which DW1 asserted lacked delivery notes in the court record from the ledger position, leading to a claimed credit balance in the Respondent’s favour. DW2’s statement takes the same position and frames the Kshs. 507,249/= as the Defendant’s credit balance after subtracting invoices totalling Kshs. 3,023,800/=. 1. While this Court affirms the trial magistrate’s finding that the Appellant failed to prove its global claim of Kshs. 5,446,825/= due to severe evidentiary mismatches between the partner ledger and the underlying delivery notes, the Court cannot ignore the clear, objective accounting reconciliation introduced by the Respondent's own expert witness, DW2. In civil litigation, the court is bound to evaluate the admissions and inferences arising from the parties' own evidence. DW2, a qualified accountant, testified under oath that after auditing the partner ledger and systematically subtracting the invoices totaling Kshs. 3,023,800/= that lacked corresponding delivery notes, he arrived at a definitive net credit balance of Kshs. 507,249/=. Although the Respondent attempted to frame this figure as a "credit balance" in his own favor to claim overpayment, the math derived from a ledger tracking the supplier's receivables inherently dictates that removing unsupported debits leaves a verified, contractually backed debt baseline. By isolating this specific sum through their own forensic audit, the Respondent effectively removed it from the realm of disputed, alien invoices, thereby creating prima facie proof of a settled historical minimum. It would be a miscarriage of justice to deny the Appellant recovery for a portion of the supplies that the Respondent's own technical analysis acknowledges as structurally reconciled within the commercial stream of dealing. 2. Whether the judgment discloses misdirection warranting interference 3. Appellate interference with findings of fact is not automatic. This court will interfere where the trial court acted on wrong principles, misapprehended the evidence, or reached a conclusion not supported by the evidence. 4. On this record, the trial court’s central finding was that the Appellant failed to prove, with the necessary clarity, the outstanding invoices and the quantum claimed. Given the concessions in cross-examination and the unresolved missing delivery notes dispute, that finding is not perverse and is supported by the record. 5. The complaint that the trial court failed to diligently record evidence does not, on the material placed before this court, demonstrate a concrete prejudice sufficient to vitiate the judgment, especially where the key evidential gaps are apparent even from the recorded proceedings. 6. The Appellant also prayed, in the alternative, that the matter be remitted for hearing de novo. I have considered that prayer against the record and the court’s powers under section 78 of the Civil Procedure Act. An order for retrial is an exceptional remedy, reserved for situations where the original trial was fundamentally defective for example, where material evidence was not considered, the record is materially deficient, or the procedure adopted rendered the trial unfair, and it is not made merely to afford a party an opportunity to fill gaps in its case. 7. In the present matter, the parties were heard, witnesses testified, documents were produced, and submissions were filed; the learned trial magistrate dismissed the claim on the basis that the Appellant had not proved, with sufficient clarity, the specific unpaid invoices and the quantum claimed. That finding is supported by the record and does not disclose a miscarriage of justice warranting a retrial. To order a hearing de novo in these circumstances would improperly allow the Appellant to re-litigate the case for the purpose of repairing evidential deficiencies, contrary to principle. (See, Kahindi v San Marco Savings & Credit Co-operative Society Limited [2023] KEHC 25975 (KLR). DISPOSITION 30. In the result: 1. The appeal partially succeeds. 2. The judgment and decree of the Chief Magistrate’s Court at Mavoko in CMCC No. E247 of 2024 is set aside 3. Judgment is hereby entered for the Appellant in the partial, liquidated sum of Kshs. 507,249/= plus interest at court rates from the date of the filing of the plaint until full payment. c) Costs of the appeal shall follow the event and are awarded to the Respondent. It is so ordered. DATED, SIGNED AND DELIVERED at KERUGOYA this 8TH JULY 2026 IN THE PRESENCE OF: NO PARTY PRESENT BEFORE HON J. M. GANDANI JUDGE SIGNED BY/FOR: **★ TH E JUDICIAR Y O F KENY A ★** **HON. LADY JUSTICE JOYCE MKAMBE GANDANI** Machakos High Court High Court Div Date: 2026-07-08 10:38:27