https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9576

Sang v Sang (Civil Appeal E077 of 2023) [2026] KEHC 9576 (KLR) (6 July 2026) (Ruling) Neutral citation: [2026] KEHC 9576 (KLR) Republic of Kenya In the High Court at Eldoret Civil Appeal E077 of 2023 RN Nyakundi, J July 6, 2026 Between Moses Sang Claimant and Peter Tanui Respondent Ruling 1.Before this Court is notice of motion dated 16th day of February 2026, expressed to be brought under Section 80 of the Civil Procedure Act, Order 45 Rule 1 and Order 51 Rule 1 of the Constitution and all other enabling provisions of the law. The applicant seeks the following orders:a.Spent.b.That pending hearing and determination of this Application inter partes, there be stay of execution of the judgment and decree issued in Eldoret SCCCOMM/E562/2022-Moses Sang v Peter Tanui.c.That pending hearing and determination of this Application, there be stay of execution of the judgment and decree issued in Eldoret SCCCOMM/E562/2022-Moses Sang v Peter Tanui.d.That this Honourable Court be pleased to review, vary and/or set aside the ruling delivered on 10th February 2026 dismissing the Applicant's application dated 5th February 2026.e.That this Honourable Court be pleased to reinstate the Applicant's application dated 5th February 2026 for hearing and determination on merit.f.That the costs of this application be provided for. 2.The application is based on the following grounds:a.That on 31st March, 2023, Judgment was delivered against the Applicant in Eldoret Small Claims Court No. 562 of 2022 -Moses Sang v Peter Tanui and the applicant has now been served with the Decree and execution is imminent.b.That aggrieved by the decision of the Adjudicator, the Applicant lodged an appeal against the said judgment, but unfortunately due to the inadvertence of the Counsel who was on record, the said appeal was dismissed for want of prosecution on 4th November 2025.c.That aggrieved by the said dismissal, the Applicant filed a certificate of urgency application dated 5th February, 2026, seeking, inter alia, orders to set aside the ruling delivered on 4th November, 2025 and for reinstatement of the appeal, but the said application was summarily dismissed on 10th February, 2026, without affording the Applicant an opportunity to be heard.d.That the ruling delivered on 10th February, 2026 contains an error apparent on the face of the record, as it dismissed the applicant's application on the mistaken assumption that no appeal existed, yet the application before the Court was expressly seeking the its’ reinstatemente.That unless the ruling of 10th February, 2026 is reviewed and set aside and the Applicant granted an opportunity to be heard on merits, the Applicant stands to suffer irreparable prejudice, including the imminent risk of execution of the judgment and decree, substantial financial loss, frustration of substantive rights, and denial of access to justice.f.That this Application raises serious and arguable issues, and unless stay of execution is granted, execution may proceed and the decretal sum may be recovered before the determination of the intended review, thereby exposing the Applicant to financial hardship and rendering any eventual success merely academic.g.That in the premises, it is necessary and just that the Application herein be certified urgent and the orders sought therein be granted in the best interests of justice in order to avert an injustice. 3.In support of the application is the annexed affidavit of Peter Tanui who deponed as follows:a.That I am an adult of sound mind and the Applicant hereinb.That I am aware that Judgment was delivered against me on 31st March 2023 in Eldoret SCCCOMM/E562/2022-Moses Sang v Peter Tanui.c.That I have now been served with the decree arising from the said judgment, and execution is imminent.d.That aggrieved by the said Judgement, I instructed an advocate to lodge an appeal against the said judgment, but unfortunately, due to the inadvertence on the part of my then Counsel on record, the said appeal was dismissed for want of prosecution on 4th November 2025.e.That upon learning of the dismissal, I promptly instructed my current advocates to move this Honourable Court, through an application dated 5th February 2026 seeking, inter alia, orders to set aside the ruling of 4th November, 2025 and reinstate the appeal.f.That the said application was, however, summarily dismissed vide a ruling delivered on 10th February 2026, without affording me an opportunity to be heard inter partesg.That I am advised by my Counsel on record the advice I verily believe to be true that the ruling delivered on 10th February 2026 contains an error apparent on the face of the record, as it proceeded to dismiss my application on the mistaken assumption that no appeal existed, yet the application before the Court was expressly seeking reinstatement of the appeal.h.That unless the ruling delivered on 10th February 2026 is reviewed and set aside, and I am granted an opportunity to be heard on merits, I stand to suffer irreparable prejudice, including the imminent risk of execution of the judgment and decree, substantial financial loss, frustration of my substantive rights, and denial of access to justice.i.That the present Application raises serious, arguable, and triable issues, and unless stay of execution is granted, the same shall be rendered nugatory, as execution may proceed and irreversibly alter the status quo before I am heard on merits.j.That I stand to suffer substantial loss and irreparable harm if execution proceeds, as the decretal sum may be recovered before the determination of the present Application, thereby exposing me to financial hardship and rendering any eventual success merely academic.k.That in the circumstances, it is just, equitable, and in the best interests of justice that the Application herein be allowed as prayed. 4.The Appellant to this appeal is aggrieved with the decision of the Court based on the following grounds:a.That the learned Honourable Magistrate erred both in law and in fact in failing to consider the evidence tendered through sworn affidavit dated 13th December, 2022,b.That the learned trial Magistrate erred both in law and in fact in finding that the Appellant owed the Respondent, without considering mentioning in her judgment the testimony and contents of the defense of the Appellantc.That the learned trial Magistrate erred in law and in fact by failing at all to mention in her judgement and consider the facts of the case. The Appellant set out in his affidavit dated 13th December, 2022, thereby arriving at the wrong decision.d.That the learned trial Magistrate erred in law and in fact in citing the testimony of weighbridge receipt, to arrive at her decision because it doesn't have a link with the payments made to the Respondent.e.That the learned trial Magistrate erred in law and in fact by failing to consider the evidence of payments made to the Respondent which was tendered though statements of payments in the list if documents 5.The Appellant legal Counsel filed submissions in support of the appeal and placed reliance in the following cases; Ephantus Mwangi and Another vs Duncan Mwangi CA No. 22 of 1982 [1982-1988] 1KAR 278, Kenya Ports Authority v Kustron K Ltd [1997] eKLR, Mabachi & Another vs Nurtun Bates Ltd CA 247 of 2005 [2013] KECA 204 eKLR, National Bank of Kenya Ltd v Pipeplastic Samkoli K Ltd & Another [2001] eKLR and Ephantus Nyaga v Ndwiga Stephano [2020] eKLR. It is from this perspective that the Appellant urged this Court to find that there was no proof of the existence of a contract between the Appellant and the Claimant. 6.The question is whether the learned trial Adjudicator erred in law and fact in finding that there is an oral agreement capable of being enforced as between the Appellant and the Claimant. The jurisdiction of this Court is now well settled as laid down on the following cases; Suluenta Kennedy Sita & Another v Jeremiah Ruto (suing as legal representative of the Estate of Joyce Jepkemboi) [2017] eKLR, the Court held:“A first appellate Court is enjoined to re-evaluate all the evidence adduced before the lower Court in order to reach its own independent conclusions but in doing so, it should give due allowance to the fact that it did not have the opportunity of seeing or hearing the witnesses." And Abok James Odera t/a A.J. Odera & Associates v John Patrick Machira [2013] eKLR, where the Court emphasized the obligation of a first appellate Court to subject the entire evidence to fresh scrutiny and held that: “This being a first appeal, we are reminded of our primary role as a first appellate Court namely, to re-evaluate, re-assess and reanalyze the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way" 7.In the substantive appeal, the learned Counsel submitted that the learned trial Magistrate erred in law and fact in not appreciating that there was no evidence to determine and establish existence of a fiduciary relationship of holding Peter Tanui personally liable for the performance of the contract which gave rise to an order for compensation for the money not paid due and owing to the Claimant. The second issue which was important to the learned Counsel on behalf of the Appellant was that the plaint had been filed under personal liability whereas the proper party should have been the company by the name Petko Limited. In this respect learned Counsel relied on the case of Mabachi & Another vs Nurtun Bates Ltd CA 247 of 2005 [2013] KECA 204 eKLRthe Court of appeal allowed the appeal challenging joinder of the director of the company and held that:“.....Mediacom, as a body corporate, is a persona jurisdica, with a separate independent identity in law, distinct from its shareholders, directors and agents unless there are factors warranting a lifting of the veil we therefore find and hold that the Appellants herein ought not to have been joined in the suit before the High Court and as such the appeal succeeds. This appeal is therefore, allowed and the suit as against the Appellants in the High Court is struck out with costs”. 8.According to learned Counsel the learned Adjudicator relied on irrelevant and unconnected evidence and in this regard the Court was invited to be guided by the principles of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court of Appeal in allowing appeal held that;“A Court of law is bound by the terms of the contract and must base its findings strictly on relevant and admissible evidence, and not on extraneous or unsupported material. Therefore, the ad hoc method in which the learned judge proceeded to take and settle accounts was not only unprocedural but erroneous and without jurisdiction” 9.It is in this respect the learned Counsel urged the Court to allow the appeal on the strength that the Respondent produced evidence confirming remittance of some amounts by the Appellant on behalf of Petko. According to learned Counsel, this is a case in which there was notice of payment annexed as well as Mpesa statements filed by the Appellant demonstrating that payments were consistently made with regard to the transaction in issue. 10.The Claimant in this appeal by way of written submissions dated 4th April 2026 detailing the aspect of dispute that the trial Court in which the Respondent had agreed to transport stones from Iten town to Prime Steel Mills Limited and Abyssinia Iron and Steel Limited at a cost of Kshs 47,000/= per trip. This contract agreement between the Claimant and the Respondent proceeded to be performed in amnesty and the Claimant paid some cost of transportation but the balance of Kshs 846,000 remained unpaid necessitating the suit to be filed for recovery of the same. According to learned Counsel the agreement for transportation of goods existed between the Claimant and the Respondent and the said goods involving construction stones were delivered to the respective destinations. However, the Respondent failed to perform part of the contract by failing to pay the claimed amount of Kshs 846,000/=. Decision 11.Thisis an appeal from the Small Claims Court, in which the Court has been invited to call for the record for the sole purpose of appreciating whether the trial Court arrived at a just, correct, fair and appropriate findings based on the evidence. To start with the jurisdiction of an appeal’s Court is well settled on the various case law. Thus:A Court of Appeal should not interfere with the exercise of the discretion of a Judge unless it is satisfied that the Judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the Judge has been clearly wrong in the exercise of his discretion and that as a result there has been misjustice. See Mbogo v Shah [1968] EA 93 at 96. 12.In the realm of "pure" fact, the advantage which the Judge derives from seeing and hearing the witness must always be respected by an Appellate Court. At the same time the importance played by those advantages in assisting the Judge to any particular conclusion of fact varies through a wide spectrum from, where credibility is crucial and the Appellate Court can hardly ever interfere, to, at the other end, an inference from undisputed primary facts, where the Appellate Court is in just as good a position as the trial Judge to make the decision. See Mwangi and Another v Wambugu [1982] LLR 76 (CAK), Marube v Nyamuro [1983] LLR (CAK). 13.In this legal system, all contracts are generally valid and enforceable provided they contain the essential elements of a valid contract. That is offer, acceptance, consideration, legal capacity and intention to create legal relation. The primarily governing legislation in Kenya, is the law of Contract Act. The guiding principles which have been developed over time by the Court of law include the following: Essential Elements Must Be Met: An oral contract must satisfy the core requirements of offer, acceptance, and consideration. In Morjaria v Patel (2025), the High Court reinforced that verbal agreements are legally binding if these elements are explicitly present and provable. Burden of Proof: Oral contracts are much harder to prove than written ones. As stated by the Court of Appeal in Attorney General v Kabuito Contractors Limited, the existence of an oral contract must be proved on a "balance of probabilities". The plaintiff must rely on evidence like correspondence (e.g., emails/texts), receipts, subsequent conduct, or witness testimony Performance of Contract: If the parties' conduct shows clear offer, acceptance, and consideration, the contract can be enforced. In a dispute regarding unpaid agent transport costs and sales commissions (2026), the High Court ruled that a long-standing verbal agreement was fully binding because the agent's actions (transporting and selling goods) were recognized by the Court as part-performance Statutory Exceptions (Must Be in Writing): Under Section 3(3) of the Law of Contract Act, oral agreements regarding the disposition of land or an interest in land are strictly unenforceable. They must be in writing, signed by all parties, and attested by a witness. The Parol Evidence Rule: Under Section 98 of the Evidence Act, once parties have formalized an agreement into a written document, oral evidence cannot be admitted to contradict, vary, add to, or subtract from the written terms, unless fraud, mistake, or misrepresentation is proven. See also Basta & Sons Ltd v Compact Freight Systems LTD (2025), Abdi Ali Dere v Firoz Hussein Tundal & 2 Others [2013] eKLR and Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR. 14.From the perspective of the record and the evidence before trial Court, there exists a valid contract between the Appellant and the Respondent. It is also clear from the evidence, that the oral agreement also involved an entity and company by the name Petko Limited presumably the Appellant is the Director of that company. This was a contract for the sourcing and transportation of lime stones as between the two parties. There was an agreed price of Kshs 47,000/- per trip, although the judgment of the Learned Trial Magistrate does not specifically address that issue as to how many trips were accomplished to meet the obligations as stated in the oral contract. In Kenya, the principle of pacta sunt servanda (agreements must be kept) dictates that parties are bound by the terms they voluntarily agree to. Trite law establishes that Courts cannot rewrite contracts for parties. Judges are restricted to interpreting and enforcing agreements as written, rather than altering or implying terms to rescue a party from a bad bargain. This is what the Courts have spoken on these issues as affirmed by the following authorities: Kikumu v Radar Limited (Civil Appeal E004 of 2024) [2026] KEHC 4353: In this recent case, the High Court reaffirmed that Courts cannot rewrite contracts for parties. The Appellant argued that the lower Court altered the monthly service charge. The High Court emphasized that parties are bound by their agreement unless coercion, fraud, or undue influence is explicitly proven. Morjaria v Patel (Civil Case 153 of 2018) [2025] KEHC: In this dispute involving a loan, the High Court declined to enforce retroactive interest rates and penalties that were not clearly documented at the time of contracting. The Court reinforced the principle that judges cannot infer or rewrite terms of a contract, as parties are strictly bound by the specific terms they agreed upon. Ogutu v Anjichi (Civil Appeal E010 of 2024) [2025] KEHC 3875: The High Court reiterated that parties cannot opt out of a signed agreement simply because the terms no longer suit their changed circumstances. In upholding the original terms, the Court stressed that it is trite law that a Court cannot rewrite contracts for parties. Otieno v Sukari Industries Limited (Civil Appeal E075 of 2024) [2026] KEHC 2418: The High Court emphasized that the business of the Court is not to rewrite contracts. Its only duties are to establish whether a contract existed between the parties and whether a breach occurred. National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] KECA 362 (KLR): While a Court of Appeal decision, this case serves as the foundational authority relied upon by the High Court in Kenya. The Court of Appeal stated clearly that a Court of law cannot re-write a contract between the parties, and the parties are bound by those terms absent fraud, coercion, or undue influence. 15.I have reviewed the evidence, there is no dispute that the Appellant and the Respondent entered into an oral contract for the delivery of stones from Iten to other destinations in Awasi. There was performance of this contract as agreed of delivering the lime stones being transported by the motor vehicle KDC 565D. But thereafter the Court finds no other delivery notes to show and demonstrate how many trips of stones were delivered within the period under review. There is also something else which was not captured by the trial Court with regard to transactional payments as detailed in the Mpesa statement from Safaricom a sum of Kshs 1,802,540 by Petko Ltd, a company associated with the Appellant Peter Tanui. The amount transferred by Petko to Moses Sang who is the Appellant in this appeal. As if that is not enough Petko Ltd upon instructions issued paid Kshs 423,000/= to Moses Sang through RTGS who has a Diamond Trust Account with Absa Bank Eldoret. The Court has further perused the statement of claim by Moses Sang dated 25th October 2022. That by filing this claim before Small Claims Court he has waived recovery all sums of excess of 1,000,000 excluding cost and interest. However, it is important to state that in the Mpesa statement of account of Peter Tanui show that he had paid Moses Sang a total of Kshs 1,802,540/= whereas through RTGS Kshs 423,000/=. Given the status of statement of account had paid a total sum of Kshs 2,225,540/=. Unfortunately, from the trial Court record there is no iota of evidence of any acknowledgment from Moses Sang that Peter Tanui paid him this colossal amount of money during the period when the oral contract was negotiated and performance of it took effect. The trial Court was being told that Moses Sang has forfeited over Kshs 100,0000 which he does not want to claim from Peter Tanui but it was just a mere statement of allegation without any independent supporting evidence. That besides the forfeiture he had already been paid Kshs 2,225,540 by Peter Tanui. What is not clear from both the statement of claim and the Respondent rejoinder is how many trips were agreed upon and what were the exact deliverables within the terms of the contract of the stones being transported from Iten to the destination of choice given by Moses Sang. It is also interesting that the claim made before the trial Court of 846,000/= cannot be proportionately substantiated as the balance due and owing from the initial amount already established from the documentary evidence of Kshs 2,225,540/- transferred on account of Moses Sang. There is no other additional documents to this Court to draw from in so far as the trial record is concerned save for the affidavit of the Claimant, the notice of payment instruction, the outstanding amount owed to Moses Sang without the acknowledgement of the amount received, registration instrument of Petko Ltd, the statement of Mpesa account of Peter Tanui which evidence is within the conference of the Evidence Act. 16.The Court has considered the history of the matter and the nature of the contract between the parties as presented before the Trial Court. Having perused the Judgment which forms the subject matter of the appeal, I am unable to agree with the Learned Trial Magistrate on how she arrived at the balance of Kshs 846,000/= which she ruled against Peter Tanui. There is no evidence of how many trips of lorries were to be delivered at the destination given by Moses Sang. Secondly, the number of trips paid for as supported by the RTGS to Diamond Trust Bank and Mpesa statement of account as associated to Peter Tanui so that the amount already paid is then discounted as a credit to the debt which Moses Sang was able to file a suit before the Small Claims Court. These are fundamental issues in this oral contract which now finds its way to the High Court on Appeal. The Court below should have taken the liberty to establish all the material evidence to the claim was properly included in the trial bundle and in its absence the oral testimony by the Claimant should have given the chronological evidence of the performance of the contract as agreed with Peter Tonui. 17.However, that is not the case here. What the Court is faced with there is evidence of a man who entered into a contract with another for delivery of limestones, he happened to be paid Kshs 2,225,540 and without compelling evidence he said he has forfeited Kshs 1,000,000 but ready to pursue a claim of 846,000. The Learned Trial Magistrate should have had the foregoing in her mind as she dealt with claim before her. The question which arises is whether the discretion arises on the basis of evidence and sound legal principles could have made one to arrive at a decretal sum as an amount due and owing to one Moses Sang by Peter Tonui totaling to Kshs 846,000. In my considered view the answer is in the negative. 18.In my considered view, typically, the trial Court record is fundamentally flawed in so far as the admission of evidence and analysis of it to assess the amount due and owing of Kshs 846,000/=. This is also a case one can say that the Claimant suffered prejudice and injustice if his statement of claim is anything to go by when he admitted that he is owed so much money over Kshs 1,000,000 but he wants to litigate a lesser amount in the Small Claims Court. 19.In the first instance the Court lacked pecuniary jurisdiction for the subject matter as per the statement of the claim that over Kshs 1,000,000 had been written off and the Claimant was only in pursuit of Kshs 846,000/=. The other most intriguing issue in these proceedings falls within the scope of monies already paid out by Petko Limited which was not properly addressed in the decision making of the Learned Trial Magistrate. 20.This country called Kenya is a constitutional democracy governed by the rule of law and the provisions of Article 48 on access to justice. It has no shortage of Courts with pecuniary jurisdiction to hear and determine the civil disputes with features of the one being processed by the Small Claims Court. Sometimes I feel like litigants file cases before the Small Claims Court to microwave justice which may be a threat to the provisions of Article 50 of the Constitution on fair trial rights. The target is more to accomplish case disposal within sixty (60) days come rain come sunshine. As a Court of law such compromises should not find their way to our Courts by rubber-stamping certain key material evidence under the guise to adjudicate issues to meet the ends of justice. The best the trial Court should have done was to remit the matter back to a Subordinate Court with jurisdiction to hear and determine the commercial dispute as between the Appellant and the Respondent which was way far beyond the Kshs 1,000,000 as admitted in the statement of claim by one Moses Sang. In exercising my jurisdiction and as an appeals Court, I have re-evaluated the evidence to answer the question if justice was served and I have come to the conclusion that the original record is fundamentally flawed and in terms of Order 42 Rule 26 of the CPR this is a fit case for retrial before another trial Court. 21.It follows that in, making the final orders it was an error for the Court to hold that the outstanding amount due and owing was Kshs 846,000/- whereas documentary evidence show that there was an initial payment of Kshs 2,225,540/- which was never correlated to form part of the record and even the witness statement of the Claimant, no disclosures were made as to the reasons why Peter Tanui and his company Petko transferred such a colossal amount of money to Moses Sang during the period of performance of the oral contract between the two parties. 22.It is now settled law that for an appellate Court to interfere with the exercise of judicial discretion of a trial Court all the material that was before that forum must be scrutinized, evaluated and examined before it comes into a conclusion that the trial Magistrate erred in principle and he/she was plainly wrong in the final decision. In the instant case there is a clear omission on the face of the record of any mention of the primary documents which showed some money transfers between Peter Tanui and Moses Sang. In the course of the trial those documents had been filed and placed before the record of the trial Court for consideration. Unfortunately, the statement of claim itself does not disclose the exact amount owed to Moses Sang by Peter Tanui arising out of those obligations agreed upon in the oral contract. In this case Moses Sang told the Court that he had written off a claim of over Kshs 1,000,000 and he was only pursuing a payment of Kshs 846,000 without laying a basis upon which he wrote off the debt and without acknowledging that Kshs 2,225,540 had already been transferred to his account. It is apparent as I said elsewhere that the proceedings were flawed rendering the decision fatally defective. 23.In the present appeal the story behind the literal confusion must not be left to go unattended and the entire contract ought to be re-litigated on the merits so that any of the parties who failed to perform his part of the bargain should be held liable and not on extension of mercy or compassionate grounds as the Claimant attempted to say so before the trial Court. 24.The upshot of this is that the appeal as filed be and is hereby allowed with a condition that an order for a retrial be complied with by the parties but not before the Small Claims Court as that is not the Forum of Conveniens for this dispute. The primary and essential object of the Small Claims Court is to deal with debts, and commercial transactions below Kshs 1,000,000/-. It is clear beyond argument that the statement of claim itself the Claimant admits that he is owed over Kshs 1,000,000 by the Defendant Peter Tanui. That was exactly the situation in which the Claimant opted to be heard and the trial Court would listen to him and give the Claimant his own judgment upon the evidence. In my considered view the trial Magistrate decided that she was going to construe the claim in the context of the disclosures made by the Claimant, while the documents already on record told a different story and none of which established that the dispute was within the jurisdiction of the Court. By his own admission the Claimant ousted the jurisdiction of the Court from hearing and entertaining the commercial dispute. It is also not lost in this Court that the Claimant filed the suit against Peter Tanui notwithstanding that the contract in question was entered with Petko Ltd. It is a requirement of Company Law that a motion needed to be filed to lift the corporate veil so that to personally file a suit or a claim against the director of a company. 25.For those reasons, the file shall be returned to the Chief Magistrate’s Court at Eldoret to allocate a suitable Magistrate to hear the matter afresh by dint of this order of a retrial made by this Court. The costs of this appeal shall abide the outcome of the retrial before the Court of law. DATED, DELIVERED AND PUBLISHED VIA CTS AT ELDORET THIS 6TH DAY OF JULY 2026.………………………….……….R. NYAKUNDIJUDGE