L.n Property Development Co Ltd & 1 other v Fidelity Commercial Bank Limited
The bottom line
#Kenya's Court of Appeal upheld a bank's property auction, ruling that borrowers who act on statutory notices cannot later claim the notices were defective.
What this practically means
#Executive summary
#Key legal issues
#Whether the requisite statutory notices were properly issued and served before the exercise of the statutory power of sale
The court held that service was duly effected. A 90-day statutory notice dated 7th June 2011 was issued to the address in the charge document, and copies of the 45-day auctioneer's notice were sent to the directors at the correct postal address despite one certificate of postage reflecting an incorrect number.
The court applied its own decision in Euro Bank, holding that the true question is whether the mortgagor was in fact given 90 days before sale, not whether each notice was formally impeccable. The appellants themselves pleaded receipt of the 1st December 2011 notification of sale and reacted with a settlement proposal, demonstrating that the notices prompted negotiation. The respondent accommodated the appellants for roughly six months while the treasury bill proceeds remained unremitted. Acting on the notice without complaining of invalidity cured any defect.
Whether the appellants were entitled to general damages for improper exercise of the statutory power of sale
No damages were payable. The appellants had sufficient opportunity to redeem and failed to do so; the failure to remit treasury bill proceeds was not the respondent's responsibility.
The court found the debt remained unsettled because the treasury bill proceeds were never remitted despite assurances, and the non-perfection had been brought to the appellants' attention by email dated 2nd May 2012, to which they responded that they would effect an RTGS transfer. To the extent the complaint concerned the auctioneers' conduct (e.g. the 21-day notice bearing an incorrect postal address), the remedy lay against the auctioneers, who were not parties to the suit.
The correct approach of a first appellate court to findings of fact made by the trial court
A first appellate court must reassess and re-evaluate the evidence and reach its own conclusions, but the jurisdiction to differ from findings of fact is exercised with caution.
Relying on Rule 31(1) of the Court of Appeal Rules, 2022, Gitobu Imanyara, Selle v Associated Motor Boat Co., and Peters v Sunday Post, the court restated that an appellate court has jurisdiction to review evidence to determine whether the original conclusion should stand, but must do so with caution since it neither saw nor heard the witnesses.
Legal principles established
#- Where a chargor is served with a statutory notice and a 45-day redemption notice and, acting on them, enters into negotiations for settlement but fails to pay the debt, the statutory power of sale has been properly exercised and the chargor cannot later complain of defective notice.
- The decisive question on redemption notice is whether the chargor was in fact afforded the requisite 90-day and 45-day periods before sale, not whether every notice was formally perfect; conduct acting on a notice cures alleged impropriety.
- Grievances concerning breaches of the Auctioneers Rules, such as defective service by auctioneers, ought properly to be directed against the auctioneers themselves, not the chargee.
Court orders
#- 1.The appeal is dismissed
- 2.Costs of the appeal awarded to the respondent
- On appeal from
- High Court of Kenya at Nairobi
- Civil Case No. 465 of 2012
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal Rules, 2022 (Rule 31(1)), reviewing the decision of the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "L.n Property Development Co Ltd & 1 other v Fidelity Commercial Bank Limited", Case Analysis (2026). Court of Appeal Appeal arising from Nairobi High Court Civil Case No. 465 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1108/eng@2026-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.