Kenya Commercial Bank v Isaac Ingati Abong’ & Another [2020] KECA 792 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that pension money already deposited into a deceased person's bank account belongs to their estate, not the pension scheme.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the pension money already deposited into the deceased's account formed part of the deceased's estate.
- 2.Whether the learned judge erred by issuing the orders against the administrator of the Scheme.
Key legal issues
#Whether money paid into the deceased's account before her death formed part of her estate
It did; Section 36A of the RBA covers only monies still accruing or payable to beneficiaries, not funds already disbursed.
The respondents were not claiming benefits from the Scheme but money already in the deceased's account at her death. The authorities relied on by the bank concerned funds still within the Scheme's control. The undisputed balance of Kshs. 2,111,447.35 stood in the deceased's account at her death, so the funds were her free property as defined in Section 3 of the LSA and her beneficiaries were entitled to them.
Whether the bank could debit the account on the ground that pension entitlement lapsed at death
No; neither the RBA nor the Trust Deed and Rules provide that death automatically lapses the payment, so the debit lacked legal basis.
The court identified a legal lacuna: no provision in the RBA or the Trust Deed and Rules states that the death of a pensioner automatically lapses the contract. Without such a provision the bank, on behalf of the Scheme, had no legal right to debit the deceased's account, and the funds could only be categorised as part of her estate.
Whether orders could properly issue against the administrator of the Scheme
Yes; the order was addressed to his office, not his personal capacity.
The administrator is an appointee of the trustees who run the Scheme for the benefit of the appellant. The order directed the office rather than the individual, so the objection that adverse orders were made against a person unheard or in a personal capacity did not succeed.
Legal principles established
#- Pension monies already disbursed into a deceased pensioner's account before death are no longer governed by the Scheme's rules or the Retirement Benefits Act but form part of the deceased's free estate distributable under the Law of Succession Act.
Court orders
#- 1.Appeal dismissed in entirety with costs
- 2.Money subject of the appeal to be credited back into the deceased's account and administered by the respondents in accordance with the Law of Succession Act, not the Trust Deed and Rules
- 3.Orders of the High Court altered to the extent that distribution shall be under the LSA rather than the Trust Deed and Rules
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Kakamega
- Succession Cause No. 151 of 2009
- Jurisdiction invoked
- First appeal from the High Court sitting in succession matters under the Law of Succession Act (Section 47 of the LSA invoked below); appeal to the Court of Appeal under the Court of Appeal Rules.
Relief refused
#Appellant's prayer to set aside the High Court ruling
The court found the money in the deceased's account formed part of her estate and the administrator was properly ordered in his official capacity
Costs
Appeal dismissed with costs (costs to the respondents).
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In the result, this appeal fails in entirety and I would dismiss it with costs.
As Asike Makhandia, JA agrees, it is so ordered.
Therefore the said funds were no longer bound by the rules and regulations of the Scheme or the RBA. The funds were the property of and formed part of the estate of the deceased
The same should not be distributed in accordance to the Trust Deed and Rules but must be deposited back into the account and the respondents will administer it in accordance to the LSA.
It would seem to me that, however, herein lies the legal lacuna since the RBA and the Trust Deed and Rules do not have a provision clearly stating that the death of a pensioner automatically lapses the contract.
Issues in the judgment
#Bench listed as three judges but the judgment states Odek JA died before signing it, so only two judges signed; the panel composition and unanimity are therefore not fully verifiable from the judgment itself.
Judgment uses first person singular ('I have considered the record') without a heading identifying the author, though Kiage JA's signature block and Makhandia JA's concurrence indicate authorship.
Respondent's name appears as 'Caroline Ayoti Ariedo' in the title but 'Carolyne Ayoti Oriedo' in the body of the judgment.
Deceased's name inconsistently rendered as 'Alice Oriedo Akeng'o' and 'ALICE ORIEDO AKONG'O' in the High Court orders.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Commercial Bank v Isaac Ingati Abong’ & Another [2020] KECA 792 (KLR)", Case Analysis (2020). Civil Appeal No. 56 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/792/eng@2020-04-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.