William Kimutai Kandie v Consolidated Bank of Kenya Limited & another [2020] eKLR Case Summary

Court
High Court of Kenya at Eldoret
Category
Civil
Judge(s)
Olga Sewe
Judgment Date
September 30, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the key points of the William Kimutai Kandie v Consolidated Bank of Kenya Limited & another [2020] eKLR case. Discover the legal implications and insights in this comprehensive case summary.

Case Brief: William Kimutai Kandie v Consolidated Bank of Kenya Limited & another [2020] eKLR

1. Case Information:
- Name of the Case: William Kimutai Kandie (suing through John Kamar) v. Consolidated Bank of Kenya Limited & Protus Wanga T/A Timeless Dolphin Auctioneers
- Case Number: Civil Suit No. 37 of 2019 (Formerly Eldoret ELC No. 9 of 2015)
- Court: High Court of Kenya at Eldoret
- Date Delivered: 30th September 2020
- Category of Law: Civil
- Judge(s): Olga Sewe
- Country: Kenya

2. Questions Presented:
The court was tasked with resolving several central legal issues:
- Whether the 1st defendant’s statutory right of sale had accrued and whether they acted prematurely in seeking to realize the securities before exhausting remedies against the principal borrower.
- Whether the plaintiff, as the chargor, was duly served with the requisite statutory notices.
- Whether the bank satisfied the legal requirement for the valuation of the charged property as per Section 97 of the Land Act.
- Whether the restructure of the loan on 7 November 2012 and the partial payment by the borrower extinguished the plaintiff’s liability under the Deed of Guarantee.

3. Facts of the Case:
William Kimutai Kandie, represented by John Kamar through a Power of Attorney, filed this suit against Consolidated Bank of Kenya Limited and Protus Wanga T/A Timeless Dolphin Auctioneers. Kandie claimed that the bank unlawfully instructed the auctioneer to sell his land (ELDORET MUNICIPALITY/BLOCK 14/255) without adhering to the terms of the Charge. The plaintiff sought declarations that the intended sale was a nullity, that he was discharged from the guarantee agreement, and requested costs for the suit. The defendants denied the claims, asserting that the plaintiff was indebted to the bank and had offered the property as security for a loan.

4. Procedural History:
The suit was initiated on 19 January 2015, with an interlocutory application for a temporary injunction granted in favor of the plaintiff on 22 January 2016. The defendants filed a joint Statement of Defence asserting the plaintiff's indebtedness. The hearing saw testimonies from both parties, with the plaintiff's agent stating he was unaware of the sale until it was published in the newspapers. The defendants maintained that the plaintiff was properly informed of the loan's default and the subsequent actions taken.

5. Analysis:
- Rules: The court considered the provisions of the Land Act, specifically Sections 90 and 96 regarding statutory notices and the rights of the chargee, as well as Section 97 concerning the valuation of charged property.
- Case Law: The court referenced various precedents, including *Fidelity Commercial Bank Limited vs. Kenya Grange Vehicle Industries Limited* regarding the obligations of a guarantor and *David Harris vs. Middle East Bank Kenya Limited* which discussed the necessity of a guarantor's consent for alterations in loan agreements.
- Application: The court found that the bank had not properly served the requisite statutory notices to the plaintiff, particularly the 40 days’ notice to sell, and that the restructuring of the loan without the plaintiff's involvement discharged him from his obligations under the guarantee.

6. Conclusion:
The court ruled in favor of the plaintiff, declaring the bank's intended exercise of statutory power of sale a nullity, and that Kandie was discharged from his obligations as a guarantor. The court ordered the discharge of the Charge over the property and issued a permanent injunction against the defendants regarding the property.

7. Dissent:
There was no dissenting opinion noted in the judgment.

8. Summary:
The High Court of Kenya ruled that the plaintiff, William Kimutai Kandie, was unlawfully subjected to a statutory sale process by the bank due to improper service of notices and actions taken without his consent. The decision emphasizes the importance of strict compliance with statutory requirements in the exercise of a chargee's rights and highlights the protections afforded to guarantors under Kenyan law. The ruling has significant implications for future cases involving the rights of guarantors and the responsibilities of financial institutions in Kenya.

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