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MagistrateAllowedNot stated in the judgment

New Titanic Jacaranda General Spares v Nasongo (Commercial Case E071 of 2025) [2026] KEMC 256 (KLR)

Small Claims Court
7 July 2026
2,243 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan Small Claims Court ordered a former accountant to repay Kshs. 488,411 for misappropriated funds, ruling the company could sue without a board resolution.

What this practically means

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Executive summary

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The Claimant sued its former Accountant/Internal Auditor for Kshs. 488,411/=, comprising Kshs. 275,701/= allegedly misappropriated between 1st November 2025 and 3rd February 2026, Kshs. 82,710/= being 30% interest under an undertaking dated 3rd February 2026, and Kshs. 130,000/= in external audit fees incurred to ascertain the loss. The Respondent denied misappropriation, denied owing any money, disputed bearing audit costs, denied the undertaking and challenged the court's jurisdiction, contending the dispute was purely a labour matter. The court framed three preliminary issues: board resolution, jurisdiction, and proof of the claim. On the first, following Arthi Highway Developers Limited v West End Butchery Limited, it held that absence of a board resolution at filing is not fatal where the company ratifies or demonstrates authority. On jurisdiction, following Maisha Mapya Kenya Foundation Limited v Shikuku, it held that a claim for special damages for money taken by a former employee belongs in a civil court, not the ELRC. On the merits, the Respondent admitted executing the undertaking but her allegations of forgery, duress and medical leave were unsupported by any documentary evidence; duress and forgery required particularised pleading under Order 2 rule 10(1) of the Civil Procedure Rules, guided by the duress principles in Mohamed Ahmed Abdun v Mini Bakeries. The undertaking was held valid and enforceable, and the audit fees, contractually provided for in the 'Final Zero-Tolerance Theft Warning and Undertaking', were held specifically pleaded and proved. Judgment was entered for the Claimant for Kshs. 488,411/= with interest from filing and costs assessed at Kshs. 35,000/=.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether want of a board resolution at the time of filing renders the claim incompetent
  2. 2.Whether the court has requisite jurisdiction or whether the matter falls within the Employment and Labour Relations Court
  3. 3.Whether the Claimant proved its claim and the extent of the Respondent's liability
  4. 4.Whether the undertaking dated 3rd February 2026 was validly executed or vitiated by duress, forgery or coercion
  5. 5.Whether the external audit fees of Kshs. 130,000/= were recoverable from the Respondent

Key legal issues

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01

Board resolution as a precondition to filing suit

Holding

Want of a board resolution does not render the claim incompetent; the objection fails.

Reasoning

The court noted the earlier rigid position in Bugerere Cofiee Growers Ltd v Sebaduka requiring a board resolution, but held that prevailing jurisprudence, guided by Arthi Highway Developers v West End Butchery, has shifted: the defect is curable by subsequent ratification or demonstrated authority to prosecute the claim.

p. 3
02

Jurisdiction - Small Claims Court vs Employment and Labour Relations Court

Holding

The court is seized of the requisite jurisdiction; a claim for special damages for misappropriated funds by a former employee is not a Section 12 ELRC matter.

Reasoning

Relying on Maisha Mapya Kenya Foundation Limited v Shikuku, where the ELRC held that a claim for special damages for money stolen by former employees no longer in an employment relationship belongs in a civil court, this court found jurisdiction to hear the recovery claim.

p. 3
03

Validity and enforceability of the undertaking dated 3rd February 2026

Holding

The undertaking for Kshs. 275,701/= plus 30% interest (Kshs. 82,710/=) is valid and enforceable.

Reasoning

The Respondent admitted executing the undertaking but her allegations of forgery, duress and non-involvement were unsupported by any documentary evidence (no police report, OB extract or medical records). Duress and forgery defences required particularised pleading under Order 2 rule 10(1), which was not done.

p. 5
04

Recoverability of external audit fees of Kshs. 130,000/=

Holding

The audit expense was specifically pleaded and proved by cheque and CW2's evidence, and the Respondent had agreed in writing to be liable for incidental costs including audit in the event of theft, fraud or dishonesty.

Reasoning

The Claimant produced a document titled 'Final Zero-Tolerance Theft Warning and Undertaking' providing that the Respondent shall be held liable for all incidental costs including audit in the event of theft, fraud and dishonesty. The expense was pleaded and proved by cheque supported by CW2's testimony.

p. 5

Legal principles established

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  • The absence of a board resolution at the time of filing suit is not fatal so long as the company subsequently ratifies the action or demonstrates authority to prosecute the claim.
  • A party relying on duress, coercion, undue influence or like defences must plead them with particularity under Order 2 rule 10(1) of the Civil Procedure Rules.
  • A written undertaking voluntarily executed cannot be displaced by mere allegations of forgery or duress unsupported by evidence.
  • The court cannot rewrite contracts or relieve a party from a bargain unless vitiating factors are specifically pleaded and strictly proven.

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for the sum of Kshs. 488,411/=
  2. 2.Interest on the judgment sum from the date of filing of suit until payment in full
  3. 3.Costs of the suit assessed at Kshs. 35,000/=

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Small Claims Court Act; court found it is seized of jurisdiction over a civil recovery claim notwithstanding the former employment relationship

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Accordingly, this court finds that want of a board resolution does not render the claim incompetent and the objection on that score fails.
p. 3Board resolution not mandatory for commencing suit
Accordingly, it is the finding of the court that it is seized with the requisite jurisdiction to hear and determine this matter.
p. 3Jurisdiction of Small Claims Court over recovery from former employee
Mere allegations, without proof cannot displace a written undertaking voluntarily executed.
p. 4Effect of a voluntary written undertaking
a. Judgment be and is hereby entered for the Claimant against the Respondent for the sum of Kshs. 488,411/= b. Interest on (a) from the date of filing of suit until payment in full; and c. Costs of the suit assessed at Kshs. 35,000/=.
p. 5Final orders

Issues in the judgment

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minor

The Statement of Response is described as containing a denial of jurisdiction, but the sentence is incomplete: 'The undertaking is denied and the jurisdiction of the court is also and it is averred that this is purely a labor court matter.'

minor

The total awarded (Kshs. 488,411/=) does not arithmetically reconcile on the face of the judgment with the pleaded components (Kshs. 275,701/= undertaking + Kshs. 82,710/= interest + Kshs. 130,000/= audit fees = Kshs. 488,411/=), which do in fact sum to the award; however, the prayer quoted at the outset also sought interest from 30th April 2026 while interest was awarded from the date of filing of suit.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "New Titanic Jacaranda General Spares v Nasongo (Commercial Case E071 of 2025) [2026] KEMC 256 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/256/eng@2026-07-07

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.