Jane Nduta Kimani (Suing as personal representative of Peter Kimani Nene (Deceased) v Kenya Commercial Bank Limited [2019] KEELC 697 (KLR)
The bottom line
#A Kenyan court stopped KCB from auctioning a Thika family's land because the bank could not prove it sent the legally required notices, though the debt itself still stands.
What this practically means
#Executive summary
#Key legal issues
#Whether a legal charge existed between the parties
The court found on the balance of probability that the deceased executed the charge deed and declined to accept the document examiner's report
The plaintiff disputed the signature on the charge deed, relying on a forensic document examiner's report concluding the signatures were by different authors. The court discounted the report because the examination was done years after execution and the known signature was taken from an Equity Bank slip rather than a KCB document contemporaneous with the charge. The court also noted the undisputed letter of offer and the fact that the chargor handed his title to the bank, concluding execution was more probable than not.
Whether the chargor performed his obligations
The chargor was in arrears and did not duly perform his obligations
The court relied on undisputed pre-suit letters dated 20th March 2013 and 16th April 2013 showing the chargor was in arrears. Two later letters marked 'without prejudice' were excluded from evidence, following authority on the protection of without-prejudice negotiations. The court therefore found non-performance proved by the earlier undisputed correspondence.
Whether the statutory power of sale was lawfully exercised
The statutory power of sale was not properly exercised because service of the statutory and redemption notices was not proved
Sections 90(1) and 96(2) of the Land Act require service of a notice and a notice to sell before sale. The defendant alleged service by registered post but produced no certificate of postage; the redemption notice was unsigned by the chargor and the auctioneer gave no evidence of service. Relying on authority placing the burden of proving service on the chargee, the court held the power of sale had not validly arisen.
Whether the computation of the amount owed was properly done
The court found the computation unclear and the plaintiff's allegation of exaggeration credible
The defendant claimed interest at the contractual rate of 20% per annum calculated daily, but called no evidence to demonstrate how the demanded figures were computed. The earlier interlocutory ruling had noted credence in the plaintiff's complaint of exaggeration, and the defendant did not rebut this at trial. The court therefore held the computation was not established.
Legal principles established
#- A chargee must prove service of the statutory notice before exercising the statutory power of sale; failure to attach a certificate of postage or proof of service renders the exercise irregular
- Where a chargor alleges non-receipt of the statutory notice, it is incumbent upon the chargee to prove posting
- Correspondence marked 'without prejudice' cannot be used as evidence against a party to the dispute
- Where a lender alleges a particular contractual interest rate was used in computing the debt, it bears the burden of calling evidence to prove the computation
Court orders
#- 1.Judgment entered for the Plaintiff against the Defendant in terms of prayers (a), (b), (c), (d) and (g) of the Amended Plaint dated 31st October 2018
- 2.Prayer (a): injunction restraining the Defendant, its agents and/or servants from selling, transferring, alienating, advertising or otherwise dealing with LR No. Thika Municipality Block 6/202
- 3.Prayer (b): declaration that the purported exercise of the Defendant's statutory power of sale was premature, null and void
- 4.Prayer (c): order directing the Defendant to deliver up to the Plaintiff full statement of accounts, the rate of interest charged and the charge instruments executed in respect of the guarantee recalled by Nation Newspapers Limited
- 5.Prayer (d): order for an independent and full forensic audit of the statement of accounts and the rate of interest charged
- 6.Prayer (g): costs of the suit to the Plaintiff
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the charged land parcel Thika Municipality Block 6/202 (no specific constitutional or statutory provision stated in the judgment as extracted)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jane Nduta Kimani (Suing as personal representative of Peter Kimani Nene (Deceased) v Kenya Commercial Bank Limited [2019] KEELC 697 (KLR)", Case Analysis (2019). Not stated in the judgment as extracted (Thika ELC suit; Amended Plaint dated 31st October 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/697/eng@2019-11-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.