https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7570

Otieno v My Credit (Civil Appeal E153 of 2024) [2026] KEHC 7570 (KLR) (29 May 2026) (Ruling) Neutral citation: [2026] KEHC 7570 (KLR) Republic of Kenya In the High Court at Kisumu Civil Appeal E153 of 2024 LM Wachira, J May 29, 2026 Between Philip Otieno Appellant and My Credit Respondent (Being an Appeal from the Judgement and Decree of the Kisumu Small Claims Court in SCCOMM E402 of 2024 by Hon. GC Serem delivered on 25th July 2024.) Ruling 1.The Respondent herein has filed a Preliminary Objection challenging the jurisdiction of this court to entertain the Appeal. The Preliminary Objection states that the grounds set out in the Memorandum of Appeal do not meet the threshold of Section 38 of the Small Claims Act as enunciated in Amunga vs Muisu, CA E725 OF 2022. 2.A background to the Preliminary Objection is that the suit originates from the Small Claims Court. It involved a claim of breach of contract where the Appellant who was the Plaintiff claimed that he had acquired a facility from the Respondent and directed the Respondent to release the funds through Mpesa, but the Respondent instead disbursed the funds through an account held in Kenya Commercial Bank. The Appellant had claimed that he suffered loss of business as a result of the funds having been disbursed to KCB instead of Mpesa as instructed. 3.The learned Adjudicator heard the matter and found that damages for breach of contract must be specifically pleaded and proved. The Adjudicator found that although pleaded, there was no proof that the Appellant had suffered any damages and went ahead and dismissed the suit. The Appeal herein is as a result of the said dismissal. 4.The Memorandum of Appeal filed herein lists the Grounds of Appeal as follows:a.That the Honourable Learned Magistrate erred in Law and in fact in failing to consider the merits of the material issues placed before her by the Appellant which raised issues pivotal to the determination as to whether indeed the Appellant suffered loss due to the breach of contract occasioned by the Respondent.b.That the Learned Magistrate erred in law and fact by failing to consider the need for compensation for the appellant after the breach of contract finding as he suffered significant loss.c.That the Learned Magistrate erred in law and fact in failing to consider the oral testimony issued by the applicant's witness who-explained the special damages incurred by the applicant during hearing contrary to Section 62 of the Evidence Act Kenya.d.That the Learned Magistrate misdirected herself on the applicable law and principles, in the evaluation of evidence adduced and thereby arrived at a wrong decision in her judgment. 5.The objection is grounded on Section 38 of the SCCA, which provides that “ Any 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”. So that any Appeal filed on claims emanating from the small claims court can only be evaluated on matters of law only. 6.I have considered the Preliminary Objection filed in court and the submissions by the parties. From the onset, I wish to state that a Preliminary Objection can only be on a point of law. Any other matters that may require the court to look at the evidence by the parties cannot be raised by way of a Preliminary Objection. In the case of Mukisa Biscuit Manufacturing Company Ltd vs West End Distributors Ltd (1969) EA 696, a preliminary objection was said to be in the nature of a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if had to be ascertained or if what is sought is the exercise of judicial discretion. 7.The Preliminary Objection herein is straight to the point. That based on the provisions of Section 38 (1) of the Small Claims Act, any appeal against a decision in a small claims matter can only be on a point of law. The argument by the Respondent herein is that the grounds listed on the Memorandum of Appeal do not meet the threshold of Section 38 (1) of SCCA, meaning that they are not matters of law. 8.I have considered the said grounds. Ground 1 is that the Honourable Learned Magistrate erred in Law and in fact in failing to consider the merits of the material issues placed before her by the Appellant which raised issues pivotal to the determination as to whether indeed the Appellant suffered loss due to the breach of contract occasioned by the Respondent and ground Number 2 states that the Learned Magistrate erred in law and fact by failing to consider the need for compensation for the Appellant after the breach of contract finding as he suffered significant loss. I will consider these two grounds together because they deal with whether the Appellant suffered loss, and therefore needed compensation. 9.The question as to whether the Appellant suffered loss or not or needed to be compensated is a matter of evidence to be adduced in Court. Proof of loss requires evidence which is a matter of fact. As stated in David vs Nutrimatrix Enterprises Ltd (Civil Appeal E246 of 2024, the court stated ……… “the grounds as raised by the Appellant touch on matters of facts which will require this court to scrutinize and re-evaluate the evidence. Section 38 bars appeals from small claims court on matters of fact…” My finding is that the ground number 1 and 2 raised are on matters of fact and therefore cannot stand. 10.Similarly ground Number 3 states the Learned Magistrate erred in law and fact in failing to consider the oral testimony issued by the Applicant's witness who-explained the special damages incurred by the Applicant during hearing contrary to Section 62 of the Evidence Act Kenya. The alleged failure to consider evidence is also a matter of fact. It is not misapplication of the law. 11.And the final ground is that the Learned Magistrate misdirected herself on the applicable law and principles, in the evaluation of evidence adduced and thereby arrived at a wrong decision in her judgment. The question of misdirection on the law is a question of fact. In fact, there is no indication on the particular misdirection when evaluating the evidence. 12.I have had an opportunity of considering the entire Submissions by the parties. The Respondent appears to argue that this court can actually consider both questions of law and fact when an Appeal is filed in Small Claims Appeals. This would not be correct and would indeed be contrary to the provisions of Section 38 of the Small Claims Act. 13.My finding is that indeed the Grounds of Appeal as listed on the Memorandum of Appeal dated 9th August 2024 do not meet the threshold of Section 38 of the Small Claims Court Act. I will therefore uphold the Preliminary Objection dated the 7th February 2025 and dismiss the Appeal with Costs to the Respondent. RULING DELIVERED, DATED AND SIGNED VIRTUALLY AT NAIROBITHIS 29TH DAY OF MAY, 2026.…………………………..………………L.M. WACHIRAJUDGEIn the Presence of:Kevin – court assistant…………………………………………… -for the Appellant……………………………………………-for the Respondent