Linda Waceru Matindi & another (as personal representatives of the Estate of Andrew Matindi Nyamu – Deceased) v K-Rep Bank Ltd
The bottom line
#Even if a bank's auction is legally conducted, you can still sue for damages if they fail to prove the exact debt owed at the time of the sale.
What this practically means
#Executive summary
#Key legal issues
#Extent of the deceased plaintiff's commitments to the defendant
The plaintiff did not commit to the Kshs.3,000,000/= letter of offer of 19/4/2004 or the Kshs.4,000,000/= overdraft offer of 21/1/2005 (not signed/initialled by him), but did sign the guarantee and indemnity of 27/4/2004 limited to Kshs.3,000,000/= plus charges, and the letter of set off of 22/4/2004, and charged his Karen property for the Kshs.1,500,000/= facility
The court examined each document: the 2004 letter of offer required initialling of pages and signatures which the plaintiff did not give; the guarantee and indemnity bore his name and signature in Part 1 of the schedule; the set-off letter bore an apparently matching signature not alleged to be a forgery; the 2005 overdraft offer was not signed by him. His total commitment was therefore Kshs.4,500,000/= plus charges.
Indebtedness of Mayford at the time of the 2010 auction
Not established; the late-filed Sidian Bank statement was inadmissible and the advocate's demand letter was not evidence
The statement was prepared by Sidian Bank, a non-party incorporated by change of name in 2016, long after the suit commenced in 2006 and the sale in 2010, and was supplied late despite earlier requests. The advocate's letter was merely a communication from a special agent who could not be called as a witness. The redemption of a co-guarantor's property with Kshs.5,000,000/= further reduced the debt.
Lawfulness of the auction sale
The sale was lawful; proper notice was given and a prior court order allowed the sale
The plaintiff was given proper notice, attempted to stop the sale through court process and failed, and the decision allowing the sale was never challenged, which closed that chapter of the dispute.
Value of the property and amount realized
Market value assessed at Kshs.18,000,000/= (the insurance valuation, a neutral figure); the amount realized at auction not established for want of auctioneer's account and testimony
The defendant's Crystal Valuers report was not admitted and no witness testified on it; the plaintiff produced a valuation with market value Kshs.28,000,000/= and insurance value Kshs.18,000,000/=. The court adopted the insurance value as a neutral reasonable figure. On the sale proceeds, no statement of account under the Auctioneers Act was tendered and the auctioneer was not called.
Legal principles established
#- A party seeking to prove a borrower's indebtedness must produce primary evidence such as statements of account; a lawyer's demand letter is not evidence of the debt
- A bank statement prepared by a non-party entity (Sidian Bank) after the events, filed late, is inadmissible as an ambush
- Evidence of the amount realized at an auction without a statement of account under the Auctioneers Act and Rules and without calling the auctioneer is inadmissible hearsay
- A valuation report restricted for use by a particular client (KCB) may still be relied on in court by a party to the dispute
Court orders
#- 1.Prayers (a), (b) and (e) disallowed and dismissed
- 2.An account to be taken of what is due as at 1st December 2010 by the plaintiff by virtue of the legal charge dated 21st March 2005 and the guarantee and indemnity dated 27th April 2004 for Kshs.1,500,000/= and Kshs.3,000,000/= between the plaintiff and the defendant
- 3.The account to be taken on the footing that interest and other charges are only payable by the plaintiff on the sums of Kshs.1,500,000/= and Kshs.3,000,000/= guaranteed by the plaintiff and not otherwise
- 4.Payment to the plaintiff by the defendant for loss of the suit property, being Kshs.18,000,000/= minus the amount payable by the plaintiff per orders (b) and (c), as at 1st December 2010, with interest at 13% per annum from 1st December 2010
- 5.Plaintiff awarded the costs of suit against the defendant
- Jurisdiction invoked
- Original civil jurisdiction of the High Court (mortgage/charge and contract dispute)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Linda Waceru Matindi & another (as personal representatives of the Estate of Andrew Matindi Nyamu – Deceased) v K-Rep Bank Ltd", Case Analysis (2020). . Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.