[2018] KEHC 672 (KLR)
The court found that the Defendants executed personal guarantees for the loan advanced to Sanitation Cares (K) Limited. The borrower defaulted, and the Plaintiff bank made proper demand on the Defendants, who failed to honor their obligations. The Plaintiff's evidence, including the guarantee documents, loan...
Source-derived case information.
- Citation
- [2018] KEHC 672 (KLR)
- Parties
- Plaintiff: Kenya Commercial Bank Limited; Defendant: Boaz Kipchumba Kaino; Defendant: Grace Chepkaitany Biwott
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 398 of 2018
- Procedural Posture
- Civil Case / Judgment
- Outcome
- judgment for the plaintiff
- Judges
- RB Ngetich
- Legal Topics
- Loan Guarantees, Personal Guarantee Liability, Default on Loan, Bank Recovery Actions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kenya Commercial Bank Limited
Plaintiff
Boaz Kipchumba Kaino
Defendant
Grace Chepkaitany Biwott
Defendant
Procedural Posture
Civil Case / Judgment
Legal Issues
- 1 Whether the Defendants are liable under the personal guarantees executed for the loan advanced to Sanitation Cares (K) Limited.
- 2 Whether the Plaintiff is entitled to recover the outstanding loan amount, interest, and costs from the Defendants.
- 3 Whether the Defendants were properly notified of the default and demand for payment.
Ratio Decidendi
The court found that the Defendants executed personal guarantees for the loan advanced to Sanitation Cares (K) Limited. The borrower defaulted, and the Plaintiff bank made proper demand on the Defendants, who failed to honor their obligations. The Plaintiff's evidence, including the guarantee documents, loan statements, and demand notices, was uncontroverted as the Defendants neither attended the hearing nor produced any evidence. The court held that the Defendants were jointly and severally liable to pay the outstanding loan amount, and the Plaintiff was entitled to judgment for the sum claimed, interest at court rates from the date of filing, and costs.
Court Disposition
judgment for the plaintiff
Orders
- Judgment entered for the Plaintiff against the Defendants jointly and severally for Kshs. 8,467,267.58.
- Costs awarded to the Plaintiff.
Full Case Text
Judgment text and source record
31 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT MILIMANI (NAIROBI)
COMMERCIAL AND ADMIRALTY DIVISION
CIVIL CASE NO.398 OF 2007
KENYA COMMERCIAL BANK LIMITED............PLAINTIFF
VERSUS
BOAZ KIPCHUMBA KAINO………………..1ST DEFENDANT
GRACE CHEPKAITANY BIWOTT…………2ND DEFENDANT
J U D G M E N T
INTRODUCTION
The Plaintiff herein filed this suit against the Defendants seeking Kshs. 8,467,267. 60 with interest of Kshs. 19% per month from 31st August 2004 till payment in full.
The Plaintiff bank advanced a loan of Kshs. 3,956,000. 00 to Sanitation Cares (K) Limited, which the Defendants individually and separately executed personal guarantee to pay with interest. At the time of filing this suit, the amount owing from Sanitation Cares (K) Limited to the Plaintiff, plus interested was Kshs. 8,467,267. 60.
The defence filed defence on 12th October 2007. In the defence filed the Defendants contend that they were not notified that there was a dispute between the Plaintiff and the borrower. In a rejoinder, the Plaintiff in reply to defence indicated that the Defendants were served with demand notices.
The Plaintiff filed an application dated 25th March 2009 seeking to strike out the Defendants defence. By ruling delivered Justice Lessit on 31st July 2009, the Court found that defence filed raises triable issues and declined to strike it out.
On 5th March 2018 when this matter came up for hearing, the Defendants failed to attend Court. Affidavit of Service was filed to confirm that the Defendants were served with the hearing notice. The case proceeded for hearing exparte.
EVIDENCE
The Plaintiff availed one witness Jane Nambaso Orumoi a recovery Manager for the Plaintiff bank. She adopted her witness statement dated 27th September 2017. She testified that the banked advance Kshs. 3,965,000 to guaranteed Sanitation Cares Company Limited and the amount was guaranteed by Defendants; that the nature of the guaranteed was for the Defendants to pay both principal, interest and other bank charges.
She testified that the debtor defaulted the the first 3 months from draw down date and did not pay up to March 1998 and later stopped paying completely in February 2000. She testified that in February 2004 the balance was Kshs. 9,083,798. 53; that is when the loan became non-performing. PW1 testified that the bank was not able to sell 2 properties because they were encumbered but one property the bank managed to sell, Kshs. 1. 9M was realized which reduced the balance to Kshs. 8,467,267. 58. Pw1 testified that the bank suspending interest from 2nd November 2004.
Defendants never adduced evidence to controvert evidence adduced by the Plaintiff. Plaintiff availed documents to confirm that the Defendants guaranteed loan advanced to Sanitation Cares Ltd. Documents produced confirm that the said borrower defaulted in repaying the loan. There is confirmation that the Defendants were notified of the default. There is no indication that the Defendants/Guarantors made any payments to honor their guarantee. Evidence also show that the bank stopped charging interest in November 2004.
From the foregoing, I find that the Defendants have failed to discharge their guarantee obligation.
FINAL ORDER
1. I hereby enter judgment for the Plaintiff against the Defendants jointly and severally for Kshs. 8,467,267. 58.
2. Costs to the Plaintiff.
3. Interest on 1 above at Courts rate from the date of filing this suit.
Judgment Delivered, DatedandSignedatNairobithis13thday ofDecember, 2018
RACHEL NGETICH
JUDGE
IN THE PRESENCE OF:
Naomi: COURT ASSISTANT
Mrs. Karani H/B for Ms. Weru:COUNSEL FOR THE PLAINTIFF
No appearance by DEFENDANTS8