National Bank of Kenya Ltd v Mwaniki wa Ndegwa [2020] KECA 461 (KLR)

The statutory notice demanded only Kshs 21,332,434 together with interest thereon. Although the CBK Prudential Guidelines required suspension of interest on non-performing loans in the bank's books, the guidelines did not prevent the bank from notifying the chargor of the amount of suspended interest due. The bank offered no explanation for omitting the suspended interest from the notice, and the only statements capturing suspended interest were prepared for the suit. The chargor is entitled to know the full extent of his indebtedness from the notice, failing which the chargee cannot insist on more than was demanded.

Applying section 107(1) of the Evidence Act, he who asserts must prove. The bank's witness produced statements capturing suspended interest but admitted they were not in the usual format sent to customers; the respondent denied receiving them. The inconsistencies in the evidence indicated insufficient proof of service, so the finding of the trial court on this issue could not be disturbed.

Rule 75(3) of the Court of Appeal Rules requires a notice of appeal to specify the part of a decision appealed against. The requirement is mandatory and prevents a party from ambushing the other side at the hearing. Since the notice of appeal targeted only the finding that the bank was bound to recover only the amount in the statutory notice, the Court restricted itself to those issues.

The Court endorsed the settled position that the object of a statutory notice is to protect the mortgagor's equity of redemption and that for the statutory power of sale to accrue the notice must conform to the statutory requirements. An accurate and faithful statement of the debt is a crucial element of the notice; where suspended interest forms part of the mortgage money it must be included in the notice or it must be made clear that it shall be included at the point of sale or payment.