https://new.kenyalaw.org/akn/ke/judgment/keca/2026/949

Kimeriah (Suing in her capacity as the administrator of the Estate of Harrison Charles Kimeriah - Deceased) v Housing Finance Company (K) Ltd (Civil Appeal (Application) E061 of 2024) [2026] KECA 949 (KLR) (15 May 2026) (Ruling) Neutral citation: [2026] KECA 949 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal (Application) E061 of 2024 P Nyamweya, LA Achode & AO Muchelule, JJA May 15, 2026 Between Faith Wanjiru Kimeriah (Suing in her capacity as the administrator of the Estate of Harrison Charles Kimeriah - Deceased) Applicant and Housing Finance Company (K) Ltd Respondent (An application for certification and grant of leave to appeal to the Supreme Court against the judgment of the Court of Appeal at Nairobi by (Hon. Mr. Justice D. K Musinga, Hon. Lady Justice Mumbi Ngugi, & Hon. Mr. Justice G.V Odunga JJ.A) delivered on 4th July 2025 in Civil Appeal No. E061 of 2024 Commercial Case 250 of 2008 ) Ruling 1.On 4th July 2025, the Court of Appeal (D. K Musinga, Mumbi Ngugi, & G.V Odunga JJ.A) delivered a judgement herein, that allowed an appeal lodged by Housing Finance Company Ltd (hereinafter “the appellant”), and set aside a judgment delivered on 30th November 2023 by the High Court at Nairobi (J.W.Mongare J.) in Civil Suit No. 250 of 2008. The effect thereof was that the suit that had been filed in the High Court was dismissed. The said suit had been instituted by the applicant herein, Faith Wanjiru Kimeriah, suing in her capacity as the administrator of the estate of Harrison Charles Kimeriah (deceased). 2.The applicant is aggrieved by the decision of the Court of Appeal and intends to appeal to the Supreme Court, and has lodged an application dated 28th July 2025 pursuant to the provisions of Article 163 (4) (a) and (b) of the Constitution, in which she seeks certification that the intended appeal to the Supreme Court involves constitutional issues and matters of public importance, and that leave be granted to appeal to the Supreme Court of Kenya against the said judgment of the Court of Appeal, which was delivered on 4th July 2025 in Nairobi Civil Appeal No. E061 of 2024. 3.By way of background, the applicant’s suit in the High Court arose from a loan of Kshs.500,000/= which was advanced to the deceased, who was the applicant’s husband, and secured by a charge over the property known as L.R. No. 7793/6, which was jointly owned by the applicant and deceased. In addition, the loan was to be insured and the premiums deducted monthly and charged to the deceased as part of his loan repayment; and in the event of death, the loan balance would be fully redeemed by the insurance and the charged property discharged. 4.There were a number of suits instituted by the deceased against the appellant regarding the loan facility during his lifetime, and after he died, the security was sold by the appellant for Kshs.10,000,000/= by private treaty in exercise of the statutory power of sale, after the deceased allegedly defaulted in repayment of the loan. The applicant faulted the sale, principally on the grounds that the appellant arbitrarily and without notice to the deceased, varied the rate of interest, hence increasing the monthly repayments despite the deceased having repaid the loan and interest; the sale of the said property was unlawful since she was not served with the requisite statutory notices before the sale, and that the current value of the suit property together with all the developments thereon was Kshs.150,000,000/=. 5.The applicant subsequently sought and was granted the following orders in her favour by the High Court by the judgment delivered on 30th November 2023:i.A declaration that the deceased had fully repaid the loan amount advanced by the appellant;ii.The appellant pays to the applicant the sum of Kshs.150,000,000/= being the current market value of the suit property together with developments thereon.iii.Costs of the suit;iv.Interest on (ii) & (iii) above from the date of the judgment till payment in full. 6.The appellant appealed this judgment and the Court of Appeal identified four issues for determination in that appeal in the judgment delivered on 4th July 2025 namely, whether the deceased defaulted in servicing the facility; whether the statutory power of sale had accrued; whether the sale of the suit property was lawful; whether the appellant breached the terms of the contract between it and the deceased by failing to insure the suit property; and, whether the award of Kshs.150,000,000/= to the respondent was justified. 7.The Court of Appeal held that the evidence on record demonstrated that the deceased had admitted that he was in default, that the appellant’s exercise of its statutory power of sale had thereby accrued, the applicant could not in the circumstances of the case, be heard to complain that the statutory notice was not served and her advocates acknowledged receipt of the statutory notice and only contested the amount claimed therein; the deceased had an obligation to ensure that there were sufficient funds in the account to cover both the periodic repayments and the insurance premiums and the trial Judge imposed an onerous burden on the appellant to ensure that the suit property was insured notwithstanding the deceased’s default. 8.Lastly, that no basis was laid by the trial Judge to justify the award of Kshs.150,000,000/=; the learned Judge failed to take into account a material fact which was the receipt of Kshs.40,000,000/= from the 2nd defendant in respect of the same cause of action; and the award was wrongly based on the alleged value of the suit property at the date of the trial, together with developments as opposed to its value at the time of the sale. 9.The above background was detailed by the applicant in the instant application for certification and leave to appeal, who set out the main questions intended for determination by the Supreme Court as follows:a.The Learned Judges erred in law by determining that service to a deceased/ Charge/ borrower and /or guarantor meets the threshold of property service of mandatory statutory notices in exercise of statutory power of sale.b.The Learned Judges erred in law by upholding fraudulent and illegal debits of insurance premiums in mortgage account for non-existing insurance policy.c.The Learned Judges erred in law in entertaining new matters and issues at an appellate stage raised without leave of Court.d.The Learned Judges erred in law in determining that admission of debt negates the requirement of service of mandatory statutory notice in exercise of statutory power of sale.e.The Learned Judges erred in law in upholding unconstitutional and illegal process of taking away fundamental rights to property. 10.The applicant contended that the impugned judgment exposes the general public to the risk of banks purporting to serve deceased persons with statutory notices and thereafter proceeding to sell charged properties, non-compliance with mandatory statutory requirements in the exercise of statutory power of sale on allegations of admissions, and exposes the public to unconstitutional and unlawful breaches of the right to property guaranteed under Article 40 of the Constitution. Further, that the decision exposes members of the public to fraudulent debits of insurance premiums that inflate mortgage accounts without corresponding insurance policies, as well as to non-intervention by insurers despite the existence of life and property insurance covers in mortgage transactions, and further permits the introduction and determination of new issues at the appellate stage. 11.The appellant filed a replying affidavit sworn on 3rd February 2026 by Hedaya Malesi, its Legal Manager, in opposition to the application. In particular, it was averred that the invocation of Article 163(4)(a) was legally untenable, and the applicant was impermissibly attempting to clothe a plain civil dispute with a constitutional character so as to manufacture jurisdiction where none existed, and in any event that appeals under Article 163(4)(a) lie as of right and therefore do not require certification. Furthermore, that the applicant had introduced a new set of facts in the application for determination by the Supreme Court, and that the impugned judgment contained no findings on the factual questions which the applicant now sought to elevate to the level of constitutional or public interest issues, nor were the issues raised relating to the right to property under Article 40 and the right to a fair hearing raised, canvassed, or determined by the Court of Appeal in its judgment. 12.Lastly, that the factual issues raised were case-specific, did not transcend the circumstances of the present matter, and failed to meet the constitutional threshold of matters involving “general public importance” as contemplated under Article 163(4)(b) of the Constitution. The appellant averred that the matters complained of were merely disputed allegations of fact requiring proof and evidentiary interrogation, were unsubstantiated and speculative, notwithstanding that the Supreme Court is neither a trial court nor a fact-finding forum, and the applicant had failed to demonstrate how what was essentially a private dispute between two parties affected the broader public interest. 13.We heard the application on 10th February 2026 through this Court’s virtual platform. Learned counsel Mr. Gichuki Kingara appeared together with learned counsel Mr. Mirie Peter for the applicant, while learned counsel Mr. Paul Kamara, appeared for the appellant. Counsel for both parties highlighted their respective submissions dated 6th February 2026 and 3rd February 2026. 14.Mr. Kingara submitted in this respect that the intended appeal raises an important matter of general importance and cited the decision in Mitu-Bell Welfare Society v Kenya Airports Authority & 2 Others [2018] KECA 759 (KLR) to argue that a matter affecting a general class, such as borrowers and chargors or taxpayers, may qualify as one of general public importance. Counsel submitted that service of a statutory notice is a mandatory requirement in the exercise of the statutory power of sale regardless of the existence or admission of debt and reference was made to the decision in Mbuthia vs Jimba Credit Finance Corporation Ltd [1988] KLR 1, where the Court of Appeal held that the right to statutory notice is a substantive right that cannot be taken away by implication. Therefore, that the appellant, being aware of the borrower’s death, purported to effect service upon him posthumously, and the Court of Appeal’s endorsement of such service exposes the general public to unlawful sale of securities. 15.In addition, the issue whether a lender may lawfully debit insurance premiums from a borrower’s mortgage account without proof of an existing insurance policy, and thereafter avoid liability when the insured risk occurs affects thousands of borrowers across the country and implicates consumer protection, transparency, and accountability in financial institutions. Reliance was placed on Francis Joseph Kamau Ichatha vs Housing Finance Company of Kenya Ltd [2014] KEHC 3619 (KLR), where the Court emphasised the duty of mortgagees to act in good faith and strictly comply with contractual and statutory obligations, and counsel contended that permitting lenders to debit insurance premiums without accountability undermines public confidence in financial institutions and raises systemic issues deserving the attention of the Supreme Court. 16.On introduction of new issues at the appellate stage, the counsel submitted that they intend to challenge the propriety of entertaining new issues on appeal without leave. He argued that the principle that parties are bound by their pleadings is fundamental, that the Court of Appeal has previously affirmed that a court cannot determine issues that were neither pleaded nor canvassed at trial, and that deviation from this settled principle undermines procedural fairness and the integrity of the appellate process, and thus raises an issue that transcends the instant dispute and affects the administration of justice generally. 17.On his part, Mr. Kamara reiterated that no constitutional issues were raised before the trial court or the Court of Appeal, as the proceedings were commenced through a plaint grounded purely on private commercial issues, being a civil dispute. Further, that no constitutional controversy was ever pleaded, argued, or determined. It was further submitted that the Application was fatally defective for simultaneously invoking Article 163(4)(a) while also seeking certification under Article 163(4)(b). 18.On the question whether the applicant had demonstrated the existence of a matter of general public importance under Article 163(4)(b), counsel submitted that the issues raised are purely factual in nature, were never canvassed before, and were not determined by the Court of Appeal in the manner now presented by the applicant. It was contended that the Supreme Court is neither a first appellate court nor a forum for fact-finding, and that certification cannot be used as a vehicle to introduce fresh factual issues which the applicant now seeks to elevate into constitutional or public interest questions. In any event, the issues are case-specific and confined to the private rights of the parties and do not transcend the circumstances of the dispute and therefore cannot amount to matters of general public importance within the meaning of Article 163(4)(b). 19.We have considered the submissions made by learned counsel in support of and in opposition of the instant application. It is notable that the application is brought pursuant to the provisions of Article 163(4) of the Constitution that appeals shall lie from the Court of Appeal to the Supreme Court as of right in any case involving the interpretation or application of the Constitution; and in any other case where the Supreme Court, or the Court of Appeal, certifies that a matter of general public importance is involved. However, despite making reference to Article 163(4)(a), the applicant’s counsel only submitted on meeting the threshold for certification under Article 163(4)(b) of the Constitution. His response to the objection that no constitutional issue was determined by the Court of Appeal in the impugned judgment was that there was no bar to relying on both Article 163(4)(a) and Article 163(4)(b). The counsel however did not contest that the applicant did not raise any constitutional issues in her suit, nor were any such issues canvassed at the Court of Appeal. 20.The issue for determination in this application therefore is whether the intended appeal to the Supreme Court raises a matter of general public importance. The Supreme Court identified the principles governing the determination of a matter as one of general public importance in the case of Hermanus Phillipus Steyn vs Giovanni Gnecchi-Ruscone (2013) eKLR as follows:i.“for a case to be certified as one involving a matter of general public importance, the intending appellant must satisfy the Court that the issue to be canvassed on appeal is on the determination of which transcends the circumstances of the particular case, and has a significant bearing on the public interest;ii.where the matter in respect of which certification is sought raises a point of law, the intending appellant must demonstrate that such a point is a substantial one, the determination of which will have a significant bearing on the public interest;iii.such question or questions of law must have arisen in the Court or Courts below, and must have been the subject of judicial determination;iv.where the application for certification has been occasioned by a state of uncertainty in the law, arising from contradictory precedents, the Supreme Court may either resolve the uncertainty, as it may determine, or refer the matter to the Court of Appeal for its determination;v.mere apprehension of miscarriage of justice, a matter most apt for resolution in the lower superior courts, is not a proper basis for granting certification for an appeal to the Supreme Court; the matter to be certified for a final appeal in the Supreme Court, must still fall within the terms of Article 163 (4)(b) of the Constitution;vi.the intending applicant has an obligation to identify and concisely set out the specific elements of “general public importance” which he or she attributes to the matter for which certification is sought;vii.determinations of fact in contests between parties are not, by themselves, a basis for granting certification for an appeal before the Supreme Court.” 21.These principles were reiterated by the Supreme Court in the case of Malcolm Bell vs Hon. Daniel Torotich arap Moi and Another, Supreme Court Application No. 1 of 2013, which also noted that for a case to be certified as one involving a matter of general public importance, the intending appellant must satisfy the Court that the issue to be canvassed on appeal is on the determination of which transcends the circumstances of the particular case, and has a significant bearing on the public interest. 22.Given the foregoing, we agree that the principles of law that apply in the exercise of the statutory power of sale in relation to a security for a loan facility are settled, and their application will be determined by the facts of each particular case as was indeed done by the Court of Appeal. We are, however, persuaded that the facts of the appeal and arguments made by the parties raised a novel incidental issue, as regards whether there are additional legal requirements and procedures that come to play in relation to the realisation of a security where the chargor is deceased at the time of sale. In this respect, it is notable that the Court of Appeal in its judgment specifically referred to the pleadings by the applicant that “ the sale of the suit property was unlawful since she was not served with the requisite statutory notices before the sale, as the one dated 26th January 2006 sent to the estate of the late Harrison Charles Kimeriah was not received by her”. 23.The Court of Appeal’s findings in this respect were as follows:“ 41.Nevertheless, this being a first appeal, as we have stated above, we have the duty to re-evaluate and analyse the evidence and arrive at our own conclusions. The respondent’s case, on the issue of service, was that despite furnishing the appellant with the new address for service, she was not served with a statutory notice, and that the address that the appellant used was not her correct address. As we stated above, a consent order was recorded between the appellant and the deceased in HCCC No. 693 of 1982. In that consent the parties arrived at a compromise in which the appellant undertook not to enforce the realisation of the suit property if the deceased complied with the terms of the consent. The appellant contended, which contention was not seriously challenged, that the deceased failed to fulfil his side of the bargain, thus paving way for the sale of the suit property. In those circumstances, it is our view that the sale of the suit property was undertaken pursuant to the failure by the deceased to comply with the consensual court order. The respondent cannot, in those circumstances, be heard to complain that the statutory notice was not served. 42.Secondly, by a letter dated 24th August 2007 addressed to the appellant by the respondent’s advocates, it was stated that: “We are fully aware of the litigation history between yourselves and the late Harrison Charles Kimeriah. We are also aware of your letter dated 26th January, 2006 addressed to our client, which letter purports to claim Kshs 50,607,209.65 as at 31st December, 2005. That letter is further expressed to be a Statutory Notice. Various attempts have been made since then to obtain a comprehensive statement of account (for the period 12.08.1980 to date) without success.It is our client’s contention that the amount claimed from the estate as reflected in your letter aforesaid is grossly exaggerated and contains unlawful charges, penalties and interest. It is therefore necessary for you to avail the detailed tabulation of all the entries made in the account since its inception to enable our client respond to this claim.’’ 42.It is clear, from the said letter, that receipt of the statutory notice was acknowledged by the respondent, who only contested the amount claimed therein. In our view, where the receipt of the statutory notice is acknowledged, the allegation of non-service of the same becomes a non-issue…..” 24.While the Court of Appeal indeed applied the settled principles to the facts of the appeal, our understanding of the question posed hereinabove by the applicant for determination by the Supreme Court is whether additional or different principles and requirements of law are imposed where there is an intervening death of a chargor, on which it appears there is uncertainty and the law is not settled. It is notable that this issue was live during the proceedings in the High Court and Court of Appeal. 25.A related question posed by the applicant arising from intervening death of the chargor, was that of the legal and evidentiary obligations and requirements of a chargee with respect to an insurance policy taken relation to the loan facility. After considering the parties submissions on the issue, the Court of Appeal found as follows:“ 45.As to whether the appellant breached the terms of the contract between it and the deceased by failing to insure the suit property, we have found that the deceased was not regular in servicing the facility and was admittedly in default. The respondent took the position that the obligation to insure the suit property was on the appellant, notwithstanding default…... 46.No clause was brought to our attention that imposed an obligation on the appellant to ensure that the suit property was insured notwithstanding default on the part of the deceased. It is clear from the evidence that the deceased’s account was in arrears long before the deceased passed away. The learned Judge’s finding that “there was no valid Life Insurance cover in place equivalent to the loan advanced to the deceased at the time of death of the Plaintiff’s husband, despite the Defendant having diligently collected the premium thereto” was clearly erroneous. The obligation to ensure that there were sufficient funds in the account to cover both the periodic repayments and the insurance premiums was on the respondent and the deceased. That was the position adopted by this Court in Housing Finance Company Limited v Mary Wambui Muturi (supra) where it was held that:“In our view, the insurance could not be extended to the arrears in future and how much arrears would accrue…the borrower had an equal responsibility to ensure that the premiums were paid, which he did not do. The appellant cannot therefore be burdened with the entire blame in this matter. On the contrary we hold that it would also have been prudent for the borrower to meet his obligations under the contract…as a default in servicing the mortgage had been proved, it cannot be rightly said that the respondent had no basis upon which to exercise its statutory power of sale under the charge…Upon re-considering and re-evaluation of the evidence on record we find that the High Court misdirected itself in assigning the burden to the appellant without putting into consideration the borrower’s conduct in the matter.” 46.This finding was based on an erroneous finding that the appellant “diligently collected the premiums”. Having started on the incorrect premise, we are of similar view that the learned Judge imposed an onerous burden on the appellant to ensure that the suit property was insured notwithstanding the default on the part of the deceased. In doing so, the learned Judge misdirected herself and was in error.” 26.While indeed these findings were informed by the facts of the appeal, the obligations and requirements on the part of a chargee in instances where an insurance policy is required to be taken over a loan facility, and legal incidents arising from the intervening death of a chargor remain unsettled. As indicated before, the Supreme Court’s guidance is that matters of general public importance are those that inter alia, raise a substantial point of law, or occasion a state of uncertainty in the law or arise from contradictory precedents, or will affect a considerable number of persons in general, or as litigants. 27.We however, in applying this test need to eschew getting into the merits of the intended appeal to the Supreme Court and in this respect are also alive to the holding by this Court in Mwambeja Ranching Company Ltd & another vs Kenya National Capital Corporation [2023] KECA 660 (KLR) that:“This Court has the duty to ensure that the case does not involve a mere question of law, but a substantial question of law. Hence, an applicant must satisfy this test to assume jurisdiction under Article 164 (4) of the Constitution. (See Supreme Court of India in Chunila v Mehta & Sons Ltd v Century SPG & Manufacturing Co Ltd 1962 AIR 1314, 1962 SCR Supl. (3) 549). 71.To qualify as a question of law arising from the case, there must have been a foundation laid in the pleadings, the question should emerge from the findings of facts arrived at by the court so as to make it necessary to determine that question of law and arrive at a just and proper decision. If the question is settled by the highest court, or if the general principles to be applied in determining the question are well settled, and there remains the question as to the application of those principles, or that the plea raised is palpably absurd, the question ought not to be viewed as a substantial question of law.” 28.In our view the two questions we have set out hereinabove that were posed by the applicant raise substantial issues of law that require to be determined by the Supreme Court for reasons that they not only arose from the facts of the appeal; but are likely to affect a substantial number of members of the public and in particular the representatives and dependants of deceased chargors whose securities are subsequently realised; and will also clarify the application of the law as regards the exercise of the statutory power of sale and the insurance implications in these circumstance. It is therefore our view that this application meets the test set out in Hermanus Phillipus Steyn vs Giovanni Gnecchi- Ruscone (supra) and warrants certification. 29.We accordingly find the application dated 28th July 2025 is merited to the extent that the applicant’s intended appeal is certified as raising matters of general public importance. We accordingly grant the applicant leave to appeal to the Supreme Court against the judgment of the Court of Appeal (D. K Musinga, Mumbi Ngugi, & G.V Odunga JJ.A) delivered on 4th July 2025 in Nairobi Civil Appeal No. E061 of 2024. Each party shall bear their respective costs of the application. 30.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 15TH DAY OF MAY, 2026P. NYAMWEYA……………..……………….JUDGE OF APPEALL. ACHODE……………………………JUDGE OF APPEALA. MUCHELULE…………………………….JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR