https://new.kenyalaw.org/akn/ke/judgment/scc/2026/27

Njihia v Gaciku (Commercial Case E98221 of 2025) [2026] SCC 27 (KLR) (22 May 2026) (Judgment) Neutral citation: [2026] SCC 27 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E98221 of 2025 GW Kiamah, RM May 22, 2026 Between Isaack Kinyanjui Njihia Claimant and Stephen Gaciku Respondent Judgment 1.The claimant instituted this suit via a statement of claim dated 31/7/2025 seeking judgment against the claimant for Kshs. 200,000/= plus interest at 10% per month on the basis that on 13/9/2024, he issued the respondent a loan of Kshs. 200,000/= payable in 60 days plus interest at 10%. 2.The respondents filed a response and witness statement dated 15/10/2025 and 15/11/2025 respectively and stated that the parties had an oral business arrangement wherein the claimant was to contribute Kshs. 1,500,000/= for supply of maize flour from Tanzania to Congo but he only sent Kshs. 200,000/= which was used to fuel the supply vehicle to Tanzania. That the claimant declined to top up the difference causing the respondent to foot all costs for the driver and vehicle during the one-month period in Tanzania. It was therefore denied that the money was a loan, and that in any event, there was no written agreement signifying the loan terms, the claimant was not licensed to advance loans on interest, and the interest rate of 10% was unconscionable. 3.The claim proceeded under Section 30 of The Act and the respondent filed 8-page submissions contrary to the court’s clear directions on page limit and format. Consequently, the same are expunged from court record. The claimant did not file any submissions. 4.I have seen and considered the pleadings and evidence before court. The main issue for determination is whether the claimant has proven its case as against the respondent. 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. 5.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. 6.I do note that the respondent did not deny receiving Kshs. 200,000/= from the claimant. What was in dispute was the is the nature and legal character of that payment. The claimant pleaded that the same was a loan payable within 60 days with an interest rate of 10%. However, the claimant did not file any documents to signify any such agreement more so on repayment period and interest rate. 7.The only evidence of the transfer is the respondent’s admission. However, such admission does not establish the legal characterization of the transfer as a loan.As it were, there is nothing to signify the same was a loan, including any communication between the parties to establish the nature of relation or dealings between the parties. 8.While receipt of funds is admitted, such admission alone does not establish the juridical basis of the transfer. The claimant was still required to demonstrate, by evidence, that the transfer created a loan obligation rather than another form of transaction. 9.The respondent also failed to proof that there was any business arrangement between him and the respondent. There was nothing filed including any correspondence to establish that the parties were engaged in any sort of business. As such, the defence lacked merit and could not succeed. Notwithstanding the failure of the defence, the burden remained upon the claimant to prove, on a balance of probabilities, the existence of a loan agreement and its terms. This burden did not shift. In the absence of evidence to support the pleaded loan, the claimant’s case remains unproven. 10.On a balance of probabilities, I am not convinced that the claimant loaned the respondent Kshs. 200,000/= payable within 60 days at a monthly interest rate of 10%. In any event, the claimed interest rate would have required strict proof and legal scrutiny. The claimant’s allegations were unsupported by evidence and the same remained mere allegations. 11.The claimant has failed to prove that the sum constituted a loan with agreed terms. However, given the respondent’s admission of receipt and failure to establish any lawful consideration, the court would in appropriate circumstances consider restitutionary relief. In this case, however, such relief was neither pleaded nor sufficiently crystallized for determination noting that the claim was specifically pleaded and prosecuted as a loan claim with defined terms. No alternative or ancillary claim for restitution was pleaded or sufficiently canvassed before the court. 12.The upshot is that the claim is found to lack merit and the same is dismissed. 13.Each party shall bear its own costs.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 22ND DAY OF MAY 2026HON. GLADYS .W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR