1.By an amended Memorandum of Appeal filed on 27th March 2023, the Appellant has moved this court seeking to overturn in part the decision of Hon Judith Omollo issued on 9th December 2022 in Nairobi SCC E2782 of 2022 on the following grounds:-
2.The Appellant urged the court to find in its favour and sought the following orders:-
3.The Appellant faults the judgment of the Small Claims Court in its failure to find that there was a contract established between Momentum Credit and the Respondent and in its failure to hold the Respondents responsible for the reimbursements of the funds claimed under the counterclaim. In doing so, the Appellant has invited the court to be guided by the definition of “privity of Contracts” as defined in Sweet & Maxwell “Chitty on Contract” textbook. The Appellant being cognizant on the limitations placed upon the High Court by dint of Section 38 of the Small Claims Act argues that the court failed to correctly interpret the law and that it erred in its finding that there was no contract established by the Factoring Agreement between the Respondent and Momentum Credit limited.
4.In its submissions during the hearing of the Appeal, the Respondent opposed the Appeal as filed. The Respondent urged the court to uphold the decision of the Small Claims Court in its judgment herein. The Respondent argued that the trial court was right in its finding that no contract was established by the factoring agreement to hold the Respondent as bound to make any payments or refunds to momentum Credit who was not even a party to the main suit. That to do so would have amounted to the court rewriting the terms of the contracts for the parties.
Analysis and Determination
5.I have considered carefully the Memorandum of Appeal and the Record of Appeal. Although this is a first Appeal, I am alive to the provisions of Section 38 of the Small Claims Court Act which has limited the jurisdiction of the High Court in respect of the Appeals from the Small Claims Courts to Appeals on points of law. The said Section 38 provides as follows;
6.I therefore note that despite the various grounds of Appeal set in the Memorandum of Appeal, the only issue that this court is expected to determine is
7.The Appellant urged the court to be guided by the definition by Sweet and Maxwell on “Chitty on Contracts” in determining whether there was Privity of Contract between the Respondent and Momentum Credit and if so, failure to make the payments set out in the factoring agreement amounted to breach of contract on the part of the Respondent. Black’s Law Dictionary describes privity of contract as follows:_
8.I note that the trial court dismissed, in its judgment, the counterclaim by the Appellant of its claim for reimbursement by the Respondent under the Factoring Agreement which the court found had the effect of vitiating the original agreement between the parties. The Court of Appeal in the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another  eKLR stated as follows;
9.Similarly, the Appellant in the present Appeal before this court is arguing that the court was wrong in finding that its claim in the counterclaim was not sustainable in the absence of an express contract between the Respondent and Momentum Credit, and that the said contract could only be enforced by either the Appellant or Momentum Credit who were parties thereto and not the Respondent. Having carefully considered the judgment of the small claims court, I am satisfied that the trial magistrate correctly interpreted the law on privity of contracts and that she did not commit any error of law. I therefore find, that the appeal herein has not been proved to the required standard to warrant interference of the Small Claims Court judgment by this court. I hold and find that the interpretation of the law and facts by the trial court was correct and find no good reason to disturb the courts findings.
10.The upshot of the above finding is that the judgment by the Small Claims Court is upheld and the Appeal herein dismissed as being devoid of merit. Costs of the Appeal are awarded to the Respondent.