Geoffrey Kinuthia Mungai & another v Progressive Credit Limited [2021] KEELC 3939 (KLR)

The court found irreconcilable discrepancies between the amounts in the letter of offer and the charge, with no evidence of reconciliation. The charge document was undated and the letter of offer unsigned and undated. The letter of offer also never stipulated that a legal charge would be created over the suit property. These defects rendered the charge unenforceable between the parties.

Applying sections 107 and 109 of the Evidence Act, the court held that it is not enough for plaintiffs to assert they are spouses and that the land is a matrimonial home; tangible evidence was required, and none of a matrimonial home on the suit land was adduced. The denial of signature on the spousal consent form was not supported by handwriting expert evidence.

The court found the defendant's statements of account riddled with items that could not be deciphered, including penalties and interest not adequately captured in the letter of offer or charge. The defendant never explained the figures to the borrower, never made demand for additional interest before levying it, and never established when default occurred.

DW 1 admitted the 90-day statutory notice was not issued and no valuation was conducted. The notices issued emanated from auctioneers, not the chargee, and the section 96 notice to sell must not be confused with the auctioneer's redemption notice under Rule 15 of the Auctioneers Act. Section 97(2) mandates a forced sale valuation before exercising the right of sale.

Although the rule protects borrowers from exploitation by lenders and interest had accumulated to over four times the principal advanced, the court held the rule unnecessary because the charge was invalid and the defendant's claim of Kshs.2,587,458 was unfounded. The statutory rule applies to regulated financial institutions, which the defendant was not shown to be.