https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7174

Shah & another v Denko Properties Limited & another (Civil Appeal 100 of 2024) [2026] KEHC 7174 (KLR) (22 May 2026) (Judgment) Neutral citation: [2026] KEHC 7174 (KLR) Republic of Kenya In the High Court at Machakos Civil Appeal 100 of 2024 BM Musyoki, J May 22, 2026 Between Dharmesh Chandulal Shah 1st Appellant Archana Dharmesh Shah 2nd Appellant and Denko Properties Limited 1st Respondent Green Gro International Limited 2nd Respondent (Being an appeal from judgement and decree of Honourable Hon. B.A. Luova RM/Adjudicator dated 7-03-2024 in Machakos Small Claims Court claim no. E293 of 2022) Judgment 1.By an undated statement of claim filed in the Small Claims Court at Machakos in claim number E293 of 2022, the appellants prayed for;a.Judgment in the sum of Kshs 864,850.00 being the net return due in July 2019 for two greenhouses on plot number 138.b.Costs and interests.c.Any other or further relief as the Honourable Court may deem fit and just to grant. 2.The facts as pleaded were that on 1-10-2018, the appellants and the 1st respondent agreed that 1st respondent would construct two greenhouses on parcel number 138 at a cost of Kshs 625,000.00 which sum was paid. Vide another contract dated 1-10-2018 the appellants agreed with the 2nd respondent that, the latter would manage the aforesaid greenhouses for agricultural farming for renewable period of two seasons of 8.5 months each and the returns agreed at Kshs 432,425.00 would be payable to the appellants within 45 days from the end of each season. However, from the witness statements and documents produced in evidence, the date of the 2nd agreement turned to be 30-10-2018. It was averred that the respondents failed to pay returns for the period due from July 2019. The statement of claim said nothing about the 2nd season. 3.In their response to the claim, the respondent pleaded that the 1st respondent constructed all the greenhouses as agreed but was not involved in the farming. They added that the 2nd respondent planted capsicum plants in the greenhouses in 2019 but the appellant evicted it from the properties in December 2019 in the mid of the first season when the plants were almost mature thereby frustrating the 2nd respondent’s execution of the contract. The respondents claimed that the eviction restricted the 2nd respondent’s access to the crops which remained in the possession of the appellants who entered and destroyed the said crop. For this, the respondents counterclaimed breach of contract and asked for judgment against the appellants for the following;a.Payment of the sum of Kshs 847,650.00.b.Costs of the suit.c.Interest.d.Any other relief the Honourable court may deem fit to grant. 4.After hearing the parties, the trial court made a finding that both parties breached the contract; the respondents by failing to remit the returns of the 1st season and the appellants by evicting the respondents before the second season ended. She proceeded to award the appellants Kshs 432,425.00 being agreed returns for the first season and Kshs 185,325.00 to the 2nd respondent being its share of profits for the 2nd season since the appellants took over the project with capsicum in it. The trial court also set off Kshs 127,200.00 from the appellant’s award being for water bill which the appellants had undertaken to pay. The set off and counterclaim left a sum of Kshs 119,900.00 as amount due to the appellants for which the court entered judgment sparking off this appeal. 5.The memorandum of appeal pleads that; 1.That the learned Adjudicator erred in law and in fact by completely misinterpreting the provision of the contract as regards duties and responsibilities of the parties in particular the respondents. 2.That the learned Adjudicator erred in law in making finding that the appellant had breached the agreement in existence between the appellants and the respondents. 3.That the learned Adjudicator misdirected herself in law by failing to appreciate that the evidence presented by the respondents was not sufficient to sustain a finding in favour of the respondents with respect to the counterclaim. 4.That the learned Adjudicator erred in law by making a finding that the appellant frustrated the performance of the contract. 5.That the learned Adjudicator erred in law by applying an erroneous standard of proof and failed to appreciate that the respondents had failed to discharged the burden of proof placed upon them as a matter of law. 6.The short-abridged testimonies of the parties are as follows; The appellants 7.The 2nd appellant testified on behalf of himself and the 1st appellant by stating in addition to the facts stated in the 2nd paragraph of this judgment, that the date of 1st season commenced on 31st December 2018 which lapsed on or about September 2019 but the respondents failed to honour their part of the contract by failing to remit any amount to the appellants. He added that the default continued until 10th January 2020 when the appellants terminated the contract due to the respondent’s breach. He added that, he was notified of a crop failure after the end of the 1st season. 8.On the side of the respondents, one Dennis Mbaabu a director of the 2nd respondent told the court that, the 2nd respondent farmed capsicum plants in 2019 but the appellants evicted the 2nd respondent from the properties later in the year during an ongoing season which frustrated the respondent’s execution of the contract such that the 2nd respondent could not enter and harvest. He also claimed that the appellants owed them Kshs 310,050.00 for water used during the farming which they confirmed and 30 per cent of the sales of the capsicum crop. He added that the 1st respondent did not owe the appellant anything because it constructed the greenhouses and supplied water as agreed. He stated further that there was infection of tomatoes crop which they had initially planted and had to change to the herbs and that, they handed over the crops and greenhouse to the 2nd appellant. Analysis and determination 9.The appeal was disposed of by way of written submissions. The appellant filed submissions dated 10th August 2025 while the respondents filed their submissions dated 25th November 2025 which I have duly read and considered alongside the evidence of the parties inclusive of the exhibits. 10.I note from the submissions of the respondents that they have raised an issue of jurisdiction which I believe I should handle first. It has been said that jurisdiction is everything and where the court finds that it has no jurisdiction over a matter, it must down its tools there and then. The respondents argue that this court lacks jurisdiction over this appeal pursuant to Section 38(1) of the Small Claims Courts Act which provides that;‘A 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.’ 11.According to the respondents, the analysis and determination of how much was owed to who was a matter of calculation and arithmetic which is a factual exercise hence the lack of jurisdiction. I agree with the respondents that establishing who owed who and how much involved analysis of the truth of the pleaded facts and therefore an issue of facts. However, that is not the only issue in the appeal. I have noted that the appellants have claimed in their memorandum of appeal and submissions that the trial court erred in rewriting the contract for the parties. To be specific, the appellants claim that the respondents changed the crop which was to be planted without their consent and that the court held that the appellants had impliedly consented without which the court would not have had the basis of finding the appellants to have been in breach. In my view, this is a matter of law which this court has jurisdiction to determine. 12.The appellants have argued that the respondents breached the contract by farming capsicum crop in the second season instead of tomatoes and delaying or extending period of payment thus breaching recital clause ‘e’ and clause 12.4 of the agreement dated 30-10-2018 which was produced as the appellants’ exhibit 6. The trial court held on this issue that the appellants had impliedly consented to the change of the crop. This is the point where the appellant claims the court re-wrote the contract for the parties. 13.In interpreting contracts between the parties, the court must strive to identify the true intention of the parties. Where the language used in the contract is clear and in plain language, the court should not give a meaning which in any manner changes what the parties intended or import words into the written agreement which would change the natural and ordinary meaning of the agreement or any part thereof. Justice John M. Mativo (as he then was) held in Euromec International Limited v Shandong Taikai Power Engineering Company Limited [2021] KEHC 93 (KLR), that;‘Contractual interpretation is, in essence, simply ascertaining the meaning that a contractual document would convey to a reasonable person having all the background knowledge that would have been available to the parties. In Arnold v Britton, Lord Neuberger explained that the courts will focus on the meaning of the relevant words used by the parties ‘in their documentary, factual and commercial context,’ in the light of the following considerations: (i) the natural and ordinary meaning of the clause; (ii) any other relevant provisions of the contract; (iii) the overall purpose of the clause and the contract; (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed; and (v) commercial common sense; but (vi) disregarding subjective evidence of any party’s intentions.’ 14.In my interpretation of recital clause ‘e’, the party which was given mandate to decide which crop other than tomatoes was fit for farming was the service provider. In the description paragraphs, the service provider was the 2nd respondent. That clause does not have the word consent or any requirement for the service provider to obtain approval from the appellants. In my view, all that was required was information of the kind of crop would be planted but whatever crop the 2nd respondent planted, the appellants were entitled to Kshs 432,425.00 per season and that is why the appellants were claiming Kshs 864,850.00 for the two seasons irrespective of the fact that the 2nd respondent had planted capsicum instead of tomatoes. For the above reason, to fault the court for re-wring the contract neither do I see any breach by the respondents of cause 12.4 of the agreement which provided for how the agreement could be amended. 15.For purposes of clarity, the clause is reproduced below;The ‘Season’ refers to the period commencing from the effective date and shall cover planting, growing and harvesting produce which shall be eight and half (8.5) months for tomatoes or any other crop as crop deemed fit by the service provider in writing. 16.In any event, the statement of claim did not plead breach of contract on the issue of the type of crop but failure to pay for the two seasons. The issue of change of the crop came up during the hearing and in fact it was nowhere in the appellants’ written witness statement. It is trite that parties are bound by their pleadings and the court should not admit or allow any evidence that seeks to divert from the pleadings. It was held in Migore v South Nyanza Sugar Co. Ltd [2018] KEHC 5465 (KLR) that;‘It is by now well settled by precedent that parties are bound by their pleadings and that evidence which tends to be at variance with the pleadings is for rejection. Pleadings are the bedrock upon which all the proceedings derive from. It hence follows that any evidence adduced in a matter must be in consonance with the pleadings. Any evidence, however strong, that tends to be at variance with the pleadings must be disregarded.’ 17.The other issue is whether the appellants breached the contract. I have already held that, the respondent did not breach the contract by planting capsicum instead of tomatoes. Their breach which has not been challenged is their failure to pay the first season. It is common ground that the appellants terminated the contract by evicting the respondents vide notice dated 2-12-2019 before the second season ended. It is also clear that when the respondents were evicted from the plots, the crop was almost mature for harvesting and the appellants were left in control of the same. The appellants in my opinion had no right to evict the respondent before the end of the second season and most importantly before the crop had been harvested. I therefore do not see reason for disturbing the trial court’s finding on this issue. 18.I have stated earlier in this judgment that the issue of who owed who how much is an issue of fact over which this court has no jurisdiction. Consequently, and having found that the trial court did not re-write the contract for the parties as claimed by the appellants, this appeal is found to lack merits. It is hereby dismissed with costs to the respondents. DATED SIGNED AND DELIVERED AT NAIROBI THIS 22ND DAY OF MAY 2026.B.M. MUSYOKIJUDGE OF THE HIGH COURT.Judgment delivered in presence of Mr. Ochieng for the appellant and in absence of the respondent.