Natome & another v Family Bank Kenya Limited & another (Civil Appeal E249 of 2025) [2026] KEHC 12723 (KLR) (30 July 2026) (Judgment)

 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KISUMU COUNTY COURT NAME: KISUMU HIGH COURT CASE NUMBER: HCCA/E249/2025 JOAN PRISCAH ARUM NATOME AND DESMA NATOME VS FAMILY BANK KENYA LIMITED AND KEYSIAN AUCTIONEERS JUDGMENT ***(Being an Appeal from the judgment and decree of the Hon. Robbert M. Oanda, Senior Principal Magistrate at Winam Court in Civil Suit No. E179 of 2024)*** # INTRODUCTION * 1. The Plaintiffs, vide a Plaint dated 23rd September 2024, instituted a suit against the Defendants seeking judgment against them jointly and severally for a declaration that the intended sale by public auction or any other way disposing of the interest of the Plaintiffs in the parcel of land known as KISUMU/BAR/2178 is untenable in law, unlawful and improper in as much as it is illegal; seeking a permanent injunction restraining the Defendants, by themselves, their servants, agents, or advocates or any of them or otherwise from offering for sale by public auction, or purporting to sell by public auction the piece or parcel of land known as KISUMU/BAR/2178, Kisumu County or otherwise howsoever dealing with or interfering in any way whatsoever with the Plaintiff’s proprietary interests thereof; a declaration that the Plaintiffs did not execute any loan agreements or charge documents over the parcel of land known as KISUMU/BAR/2178 as such the registration of a change in favor of the 1st Defendant is unlawful and improper in as much as it is illegal; an order that the trial court compels the 1st Defendant to sign all discharge of charge documents and provide all requisite documents to enable the deregistration of the charge over the land parcel number KISUMU/BAR/2178 and in default the trial court to execute the same on behalf of the Defendants; and cost of the suit. * 1. The Plaintiffs averred that at all material times, the land parcel number KISUMU/BAR/2178 was and remained the registered property of the 1st Plaintiff who had been shown a newspaper advert that showed that the suit property was set to be auctioned on the 24th September 2024 allegedly on a loan borrowed by the 2nd Plaintiff, a fact both the Plaintiffs were not aware since they did not borrow the said loan. 2. The Plaintiffs further averred that they conducted a search at the Kisumu District Land Registry which showed that the subject parcel land number KISUMU/BAR/2178 was charged to the 1st Defendant on or about the month of February 2013 by the 2nd Plaintiff. During this period, the Plaintiffs were not in the Republic of Kenya as they lived and stayed in Norway and therefore the Plaintiffs could not have executed any loan applications or charge documents in favor of the 1st Defendant. 3. The Plaintiffs further stated that the Defendants caused the suit property to be put up on sale on the 24th September 2024 by way of public auction without strict compliance with the provisions of Sections 90, 96, 97 and 98 of the Land Act 2012 and which action is therefore illegal, irregular, in bad faith and totally unlawful. 4. In response, the Defendants filed a defense denying the claim and averring that on 26th September 2012, Desnol Investment Limited where the 1st Plaintiff serves as a Director applied for and was granted a facility worth Kshs. 28 million. The facility was secured by the properties L.R. No Kisumu/Bar/2178 registered in the name of the 1st Plaintiff, L.R. No. Kisumu/Ojola 4116 and 3927 registered in the name of Desnol Investments Limited 5. They averred that the Plaintiffs, together with Noel Kagame Natome later sought financing in the amount of Kshs. 8 million. Subsequently, Desnol Investments Limited applied for and was granted several facilities which were later restructured resulting in an outstanding liability amounting to Kshs. 91,101,100/=. 6. The trial court delivered judgment on 27th October 2024 after determining two issues: whether the Plaintiffs had proved their case on a balance of probabilities, and whether they were entitled to the reliefs sought. 7. On whether the Plaintiffs had proved their case, the trial court rejected their contention that they did not execute the charge because they were allegedly out of the country at the time. The court held that a person residing abroad would ordinarily possess the requisite residence permits and travel documents. Since the Plaintiffs failed to produce any documents demonstrating that they had travelled to or resided in Norway, the allegation remained unsubstantiated. 8. The trial court further held that the Plaintiffs' allegation that they did not execute the charge amounted to a claim of fraud, which is a criminal offence attracting penal sanctions. The court observed that, had the allegations been genuine, the Plaintiffs ought to have reported the matter to the police to facilitate investigations. However, no such report was pleaded or shown to have been made. 9. The trial court also noted that the 2nd Plaintiff, who was the 1st Plaintiff's daughter, was not called to testify. It further relied on the holding in ***Nyanza Fish Processers Limited v. Barclays Bank of Kenya Limited*** ***(Civil suit 40 of 2025) [2023] KEHC 1641 (KLR*)**, where the court held that a party alleging that a charge was not intended must explain why the title documents were released to the bank, why the property remained charged for nearly ten years, why transactions with the bank continued throughout that period, and why no objection was raised until the bank sought to realize the security. * 1. On the issue of service of the statutory notices under sections 90 and 96 of the Land Act, the trial court acknowledged that, in an earlier ruling, it had found that the notices had not been properly served and had consequently granted interim injunctive orders. The court, however, proceeded to determine whether that omission justified the grant of a permanent injunction. Relying on ***Kenya Power & Lighting Co. Ltd v. Sheriff Molana Habi [2018] eKLR, John Karanja Njenga & Another v. Bank of Africa [2015] eKLR*** and ***Daniel Kamau Mugambi v. Housing Company of Kenya Limited***, the trial court held that a permanent injunction is only granted in appropriate circumstances and that a party seeking such relief must come to court with clean hands. It concluded that granting the injunction would prejudice the 1st Defendant's statutory right to realize its security and adversely affect the interests of third parties who were not parties to the proceedings. * 1. The learned magistrate, in conclusion, held as follows: ***“For the foregoing reasons, I find that the Plaintiffs have not proven their case as against the Defendants on a balance of probabilities. They are thus not deserving and/or entitled to the reliefs and/orders prayed for. The entire suit thus fails and the same is dismissed with costs to the 1st Defendant.*** 2. Being dissatisfied with the judgment of the trial court, the Plaintiffs lodged the present appeal vide a Memorandum of Appeal dated 25th November 2025, raising the following grounds:- 1. *That the learned magistrate erred in law and in fact by dismissing the Appellant’s suit thereby arriving at a grossly unfair decision and in all circumstances failed to do justice to the Appellants.* 2. *That the learned magistrate erred in law and fact by raising the standard of proof in this matter to a standard above the required balance of probabilities by finding that other than producing their Kenya Passports in court, the 1st Appellant needed to provide a Visa and Travel Documents to prove that she was away in Norway at the time the loan documents were purported to have been executed and registered.* 3. *That the learned magistrate erred in law and in fact by dismissing the Appellant suit and in effect allowing the Respondents to proceed with the sale of the land of the parcel number KISUMU/BAR/2178 to recover credit facilities that were not secured by the said parcel of land.* 4. *That the learned magistrate erred in law and in fact by dismissing the Appellants suit and in effect allowing the Respondents to proceed with the sale of the land parcel number KISUMU/BAR/2178 despite the 1st Appellant, the registered owner of the land parcel number KISUMU/BAR/2178 demonstrating that she did not owe the 1st Respondent any loan sums.* 5. *That the learned magistrate erred in law and fact by dismissing the Appellants suit and in effect allowing the Respondents to proceed with the sale of the land parcel number KISUMU/BAR/2178 despite agreeing with the Appellant that there was no strict compliance with the provisions of Sections 90, 96, 97, and 98 of the Land Act 2012.* 6. *That the learned magistrate erred in law and in fact by failing to appreciate that the 1st Appellant, the registered owner of the land parcel number KISUMU/BAR/ 2178 did not execute any documents allowing the 1st Respondent to use the said parcel of land to secure other loan facilities unknown to the 1st Appellant.* 7. *That the learned magistrate failed and/or neglected to cumulatively and/or exhaustively evaluate the entire evidence (both oral and documentary) on record and hence arrived at an erroneous and slanted conclusion, contrary to and in merit.* 8. *That the learned magistrate erred in law by finding that the Appellants suit lacked merit.* 3. The appeal was canvassed by way of written submissions. Before delving into the submissions of both parties, this court notes that, being the first appellate court, it is required under Section 78 of the Civil Procedure Act and as was held in ***Selle v. Associated Motor Boat Co. Ltd [1969] E.A 123***, to re-evaluate, re-assess and analyze the evidence adduced before the trial court and arrive at its own independent conclusions, while bearing in mind that it neither saw nor heard the witness when they testified # SUBMISSIONS BY PARTIES ## Appellant’s Submissions 1. The Appellants submitted themselves on three issues. They framed their first issue as whether the intended sale by public auction was lawful and whether the Respondents served upon all the Appellants with the statutory notices prior to the intended sale. The Appellants submitted that the intended sale by public auction was unlawful because the Respondents failed to serve the Appellants with the mandatory statutory notices before exercising its statutory power of sale. It was argued that, having found that the statutory notices had never been issued, the trial court ought to have ordered the Respondents to reissue the notices before proceeding with any sale, if the loan remained outstanding, rather than sanctioning the intended sale. 1. The Appellants relied on *Martha Khayanga Simiyu v Housing Finance Co. of Kenya & 2 Others, Nairobi HCCC No. 937 of 2001 [2001] 2 EA 540*, where the court held that service of valid statutory notices and a notification of sale are mandatory preconditions to the lawful exercise of the statutory power of sale. The Appellants contended that failure to comply renders the purported sale void and liable to be nullified at the chargor's instance, rather than being a mere irregularity remediable by damages. 2. The Appellants second issue was whether 1st Appellant used the land parcel number KISUMU/BAR/2178 as security to borrow a loan facility from the 1st Respondent and whether it was a continuing security. The Appellants submitted that it was undisputed that the 1st Appellant was the registered proprietor of **KISUMU/BAR/2178**. She testified that she presented her passport, which confirmed that she was in **JKIA on 9th January 2013**, departed for **Amsterdam on 10th January 2013**, and returned to Kenya on **6th December 2013**. They argued that it was therefore impossible for her to have executed the charge on **11th February 2013**, which was purportedly registered on **15th February 2013** in favour of the 1st Respondent to secure a loan of **Kshs. 2,000,000/=**. 1. The Appellants further submitted that the Respondent's witnesses admitted that the property was treated as a continuing security for subsequent loans advanced to other persons without the 1st Appellant’s consent. They contended that the 1st Appellant never signed the charge document and relied on *Vijay Morjaria v Nansingh Madhusingh Darbar & Another [2000] eKLR* to argue that fraud must be specifically pleaded and strictly proved and cannot be inferred. They also relied on *Kinyanjui Kamau v George Kamau [2015] eKLR*, submitting that the burden of proving fraud rested on the Respondents and reiterating that it was impossible for the 1st Appellant to have executed the charge while she was outside Kenya. 1. The Appellants further argued that even if the charge had been validly executed, it only secured the **Kshs. 2,000,000/=** loan advanced to **Desnol Investments Limited**, and no further charge was ever registered over the title. They maintained that the 1st Appellant only consented to guarantee that specific loan, and the Respondent's subsequent use of the property to secure borrowings by third parties was unlawful and rendered the intended sale illegal. They emphasized that the borrower was **Desnol Investments** **Limited**, while the 1st Appellant was merely a guarantor whose liability was limited to that loan. 1. The Appellants further submitted that the Respondent's own witness admitted that the 1st Appellant never consented to the property being used to secure other loan facilities and that no evidence was produced showing she had been informed of or agreed to such use. Relying on *Abraham K. Kiptanui v Delphis Bank Ltd & Another Nairobi (Milimani Commercial Courts) HCC No. 1864 of 1991*, as cited in *George Williams Omondi & Another v Co-operative Bank of Kenya Ltd & 2 Others [2016] eKLR*, they argued that varying the guaranteed transaction or extending security without the guarantor's consent discharged the guarantor from liability. 2. The Appellants further contended that the doctrine of continuing security was inapplicable because the 1st Appellant never consented to the property securing any other facilities. They pointed out that the redemption notices and subsequent newspaper advertisement related to a loan advanced to the **2nd Appellant, Desma Adhiambo Natome**, and there was no evidence that the suit property had been offered as security for that facility. 1. The Appellants also argued that the Respondent's own documents showed that the loan secured by **KISUMU/BAR/2178** had already been settled after the 1 st Respondent took over ownership of **KISUMU/OJOLA/3927** and **4116** from **Desnol Investments Limited**, thereby extinguishing the secured debt. 2. Further, the Appellants submitted that the trial magistrate erred in requiring them to prove that no debt existed. They argued that once they asserted that the loan secured by the suit property had been settled, the burden shifted to the 1st Respondent to prove that an outstanding debt remained. They maintained that the bank statement produced related to a separate loan obtained by the 2nd Appellant and not the facility secured by **KISUMU/BAR/2178**. Relying on *Almasi Bottlers Ltd v M'Mbijiwe & 3 Others* *(Civil Suit E012 of 2022),* they submitted that a party cannot be required to prove a negative, and the burden rested on the 1st Respondent to establish the existence of the alleged outstanding loan. 1. The Appellants third issue was whether the Respondents proved that there was a loan facility owing to the 1st Appellant to warrant it to exercise a statutory power of sale. The Appellants submitted that the Respondents failed to prove the existence of an outstanding loan facility owed by the 1st Appellant so as to justify the exercise of the statutory power of sale. They argued that although the Respondents produced documents alleging that the 1st Appellant had guaranteed a loan advanced to DESNOL Investments Limited, those documents only showed that the bank was pursuing recovery of a facility borrowed by DESMA Adhiambo Natome and not the 1st Appellant. Further, the bank statement produced by the 1st Respondent allegedly reflected a debt owed by DESMA Adhiambo Natome and not by the 1st Appellant. 2. The Appellants contended that DESNOL Investments Limited and DESMA Adhiambo Natome were separate borrowers and there was no evidence of legal charges showing that parcel number Kisumu/Bar/2178 had been charged to secure a loan advanced to DESMA. In their view, the bank could not therefore rely on that property as security or offer it for sale. 3. They further argued that if any loan advanced to DESNOL Investments Limited had existed, it had already been settled, as the loan account number was omitted from the statement of account. Consequently, they submitted that no loan balance remained outstanding, there was no basis for the continued charge over Kisumu/Bar/2178, and the property ought to have been discharged. ## Respondent’s Submissions 1. The 1st Respondent framed the first issue for determination as the duty of the Appellate court and submitted that the duty of a first appellate court is to re-evaluate, re-assess and re-analyze the entire record, independently consider the evidence, draw its own conclusions, and determine whether the trial court's findings should stand, while bearing in mind that it neither saw nor heard the witnesses. In support, reliance was placed *on Abok James Odera T/A A. J. Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates [2013] eKLR*, where the court, citing *Kenya Ports Authority v Kusthon (Kenya) Limited (2009) 2 EA 212*, held that a first appellate court must reconsider and re-evaluate the evidence on record and reach its own conclusions without introducing extraneous matters or interfering with the trial court's findings merely because it would have reached a different conclusion. 2. The 1st Respondent further submitted that the appellate court's review is confined to the Record of Appeal and the evidence presented before the trial court, and that the trial court's findings should only be disturbed where they are shown to be plainly erroneous. Accordingly, the Appellants cannot introduce matters outside the record or re-litigate the dispute as though it were being heard afresh. 3. The second issue was whether the learned magistrate erred in law and fact by applying a standard of proof higher than the balance of probabilities. The Respondents submitted that the learned magistrate applied a standard of proof higher than the civil standard of a balance of probabilities by requiring the 1st Appellant to produce visa and travel documents to prove that she was outside the country when the loan and security documents were executed and registered. Relying on ***Bingwa Sacco Society Limited v Ngatia (Civil Appeal E318 of 2023) [2024] KEHC 8748 (KLR)****,* the Respondents argued that civil cases are determined on a balance of probabilities and that in ***Re H and Others (Minors) [1996] AC 563***, the court stated that an event is proved on a balance of probabilities if its more likely than not to have occurred, with the strength of evidence depending on the seriousness of the allegation. 4. In addition, the 1st Respondent submitted that the 2ndAppellant and Noel Natome had applied for and were granted a banking facility of Kshs. 8 million pursuant to a duly executed letter of offer. The loan was subsequently disbursed and secured by a charge over the suit property in favour of Desnol Investments Limited for Kshs. 2 million. The 1st Respondent produced the executed letter of offer, loan statements and other facility documents, whose authenticity was neither challenged nor rebutted, thereby demonstrating that the facility had been duly applied for, approved and disbursed, establishing a borrower–lender relationship between the parties. 1. The 1st Respondent further submitted that the Appellants' contention that they were out of the country when the facility was advanced and therefore could not have executed the charge instrument was unsupported. Although the 1st Appellant had produced a passport extract allegedly showing travel abroad between January and December 2013, the trial court had correctly found that such a claim required supporting immigration documents, such as a visa or permit, which had not been produced. The lower court had therefore properly held that the allegation of continuous residence abroad had not been substantiated. It had further observed that, if the allegations were true, they would amount to fraud, yet no report of the alleged fraud had been made to the police. The 2nd Appellant had neither testified nor produced any documentary evidence to support her claim that she had been out of the country at the material time. Being a beneficiary of the loan facility, she ought to have testified but elected not to participate in the proceedings, thereby failing to discharge the evidential burden under section 108 of the Evidence Act. 2. The 1st Respondent further submitted that, in the absence of any rebuttal, the Appellants' assertions had remained unsubstantiated. Having produced all the documentation relating to the loan facility, the evidential burden had shifted to the Appellants to rebut the bank's case with cogent evidence, which they failed to do. 3. On the issue of the bank's exercise of its statutory power of sale, the 1st Respondent submitted that the loan statement showed the account had remained active and had been serviced, with the last instalment having been received on 7 May 2018, confirming both the existence of the facility and its repayment history. It was therefore submitted that the loan account had remained in default after the last repayment, thereby justifying the bank's recovery process. Consequently, the learned magistrate had correctly determined the matter on a balance of probabilities in favour of the 1st Respondent, whose evidence had effectively rebutted the allegations made against it. 1. **The third issue was whether the charge instrument was valid and whether the 1st appellant authorized the existing charge to secure the facility in dispute.** The 1st Respondent submitted that although the 1st Appellant denied executing or consenting to the existing charge being used to secure the disputed facility, the evidence demonstrated that a valid charge had been created over the suit property in favour of Desnol Investments Limited to secure Kshs. 2 million. The charge was duly registered, and since the 1st Appellant was a director of Desnol Investments Limited, she was aware of the liabilities secured by the charge. 2. It was further submitted that during cross-examination, the 1st Appellant admitted that she did not have custody of the title documents and acknowledged that the property had been charged. Although she claimed she had not executed the charge because she was outside the country, she failed to prove that allegation on a balance of probabilities. 3. The 1st Respondent argued that the Appellant's allegations challenged the validity of a registered security yet the bank's documentation demonstrated that all the legal requirements for creation of the charge including execution of the instrument, obtaining spousal consent where applicable, and registration of the bank's interest had been complied with and remained uncontroverted. Consequently, the evidential burden shifted to the 1st Appellant to disprove the validity of the charge and her involvement in the transaction, which she failed to do. Reliance was placed on *Equip Agencies Limited v I & M Bank Limited [2017] eKLR,* where the court held that failure to challenge a charge at the appropriate time renders subsequent allegations an afterthought. 4. The Respondents further submitted that the disputed facility was procured by the 2nd Appellant, the 1st Appellant's daughter, and the parties had agreed in the letter of offer that the existing securities in favour of Desnol Investments Limited would continue to secure the facility. The list of securities confirmed that the suit property remained a continuing security, and since there was no evidence that the existing charge had been discharged, limited or restricted, and no fresh charge was registered for the Kshs. 8 million facility, the existing charge continued to secure the facility in dispute. 1. Additionally, the Respondents argued that the 1st Appellant's conduct reinforced the existence of a continuing security arrangement. Reliance was placed on *Nyanza Fish Processors Limited v Barclays Bank of Kenya Limited [2023] KEHC 1641 (KLR*), where the court held that a chargor who had allowed property to remain charged for years without objection and only challenged the charge after realization of the security lacked candour. 2. The Respondents therefore maintained that the evidence established that the charge instrument was validly executed and that the suit property was lawfully offered as security for the disputed facility. The 1st Appellant's allegations were unsubstantiated and amounted to an afterthought. 3. The Respondent’s final issue for determination was whether the statutory notices were properly issued. The 1st Respondent submitted that the Appellants' contention that the statutory notices were improperly issued and ought to have been reissued was misconceived because no such relief had been sought before the trial court. Instead, the Appellants had sought to restrain the bank from exercising its statutory power of sale altogether. Relying on ***Kinyanjui v Njoki (Civil Appeal No. 298 of 2023) [2024] KEHC 9725 (KLR)***, the 1st Respondent argued that parties are bound by their pleadings and that a court cannot grant relief that has not been specifically pleaded. It was therefore submitted that the trial magistrate properly confined the determination to the issues raised in the pleadings, making the Appellants' complaint regarding reissuance of statutory notices misplaced. 4. The 1st Respondent further submitted that all the requisite statutory notices were duly issued and produced before the trial court together with proof of service. The notices were served upon the Appellants, the consenting spouse, and Desnol Investments Limited through the postal address provided at the time the charge was executed. It was argued that any challenge to the exercise of the statutory power of sale could not properly be determined without the participation of Desnol Investments Limited. 5. The 1st Respondent also contended that the Appellants' complaint regarding the absence of statements of account for Desnol Investments Limited was irrelevant, as the suit did not place the company's liabilities in issue. It was further submitted that the Appellants had taken contradictory positions by asserting that Desnol Investments Limited had settled its loan facility while simultaneously disputing the validity of the charge securing that indebtedness. 6. Accordingly, the 1st Respondent maintained that the evidence demonstrated full compliance with all statutory and contractual requirements governing the issuance and service of notices, thereby entitling the bank to lawfully exercise its statutory power of sale. 7. Conclusively, the 1st Respondent submitted that the Appellants had failed to demonstrate any error of fact or law warranting interference with the trial court's decision. It was argued that the evidence established that the loan facility had been properly disbursed and secured by valid and enforceable securities, while the Appellants failed to discharge the evidentiary burden in support of their allegations. Consequently, the Respondents urged the court to find that the appeal lacked merit, constituted an improper challenge to valid contractual and statutory processes, and should therefore be dismissed with costs. 8. In the circumstances, I have considered the submissions from both the Appellants and the Respondents and I therefore wish to have the following as issues for determination; # ISSUES FOR DETERMINATION 1. Whether the learned trial magistrate erred in finding that the Appellants failed to prove that the charge over land parcel KISUMU/BAR/2178 was invalid, fraudulent, or was not executed by the 1st Appellant. 2. Whether land parcel KISUMU/BAR/2178 lawfully secured the loan facilities in dispute and whether the 1st Respondent was entitled to exercise its statutory power of sale over the suit property. 1. Whether the 1st Respondent complied with the statutory requirements governing the exercise of its statutory power of sale, particularly the issuance and service of the statutory notices under Sections 90 and 96 of the Land Act, and if not, what was the legal effect of such non-compliance. 2. Who bears the costs? # ANALYSIS AND DETERMINATION ## Whether the learned trial magistrate erred in finding that the Appellants failed to prove that the charge over land parcel KISUMU/BAR/2178 was invalid, fraudulent, or was not executed by the 1st Appellant 1. The Appellants contend that the learned trial magistrate erred in law and fact by requiring them to prove their case beyond the requisite civil standard of a balance of probabilities. They argue that the 1st Appellant produced her Kenyan passport demonstrating that she departed Kenya on 10th January 2013 and only returned on 6th December 2013, making it impossible for her to have executed the charge instrument dated 11th February 2013. They further submit that the trial court wrongly insisted on the production of visas and other travel documents despite the passport bearing immigration stamps evidencing her departure and return. 2. The Respondents, on the other hand, maintains that the Appellants failed to discharge the burden of proving that the charge was invalid or fraudulently procured. It contends that the charge was duly executed and registered, the loan was disbursed, and the supporting banking documents remained unchallenged. According to the Respondents, the passport alone did not prove continuous residence abroad, while the allegations of fraud were never reported to the police nor supported by cogent evidence. 3. The law on the burden and standard of proof in civil proceedings is well settled. Sections 107, 108 and 109 of the Evidence Act place the legal burden upon the party who asserts a fact to prove its existence. In civil proceedings, the standard of proof is on a balance of probabilities. However, where allegations of fraud or forgery are made, the standard is higher than a mere balance of probabilities, though not as high as proof beyond reasonable doubt. In ***Ratilal Gordhanbhai Patel v Lalji* Makanji [1957] EA 314** the former Court of Appeal for Eastern Africa held that allegations of fraud must be strictly proved, although the standard is not beyond reasonable doubt. Likewise, in ***Koinange & 13 Others v Koinange [1986] KLR 23***, the High court held that fraud must not only be specifically pleaded but also strictly proved by credible evidence. 1. Equally, a first appellate court is obligated to reconsider and re-evaluate the entire evidence before arriving at its own independent conclusions while bearing in mind that it neither saw nor heard the witnesses testify. This duty was authoritatively stated in *Selle v Associated Motor Boat Co. Ltd* and has consistently guided appellate courts in determining first appeals. 2. I have carefully re-evaluated the evidence on record alongside the rival submissions. It is common ground that the 1st Appellant was the registered proprietor of land parcel KISUMU/BAR/2178. Her case before the trial court was that she never executed the charge instrument because she was outside Kenya when the charge was allegedly executed and registered. To support that assertion, she produced her Kenyan passport showing that she departed Kenya on 10th January 2013 and re-entered the country on 6th December 2013. 3. The trial court rejected that evidence on the basis that the Appellants ought to have produced visas or residence permits to demonstrate that they had indeed been residing in Norway. With respect, I am unable to agree with that reasoning. The question before the trial court was not whether the Appellants were lawful residents of Norway, but whether the 1st Appellant was physically present in Kenya on the date she allegedly executed the charge instrument. The passport containing official immigration entry and exit stamps constituted relevant documentary evidence capable of demonstrating her movements into and out of Kenya. Requiring additional immigration documents relating to her stay in Norway introduced an evidentiary burden that was unnecessary for determining the issue before the court. 4. Nevertheless, the mere production of a passport did not automatically establish that the charge instrument was fraudulent or invalid. The Appellants sought declarations that they never executed the charge documents and that the registration of the charge was unlawful. Those allegations were, in substance, allegations of fraud or forgery against the Respondents. The burden therefore remained upon the Appellants to adduce cogent evidence demonstrating that the signature appearing on the charge instrument was not that of the 1st Appellant or that the registration process was tainted by fraud. 1. Apart from the passport, no handwriting expert was called to dispute the authenticity of the signatures appearing on the charge documents. Equally, no evidence was tendered from the attesting advocate, the Land Registry, or any investigative agency to demonstrate that the execution or registration process had been falsified. While I do not agree with the trial court that failure to report the alleged fraud to the police was conclusive proof that no fraud existed, the absence of such investigations or any independent evidence inevitably weakened the Appellants' allegations. 2. The record further shows that the 2nd Appellant, who was alleged to have participated in the impugned transaction and who stood to shed light on the circumstances surrounding the facility, did not testify before the trial court. Although a litigant cannot be compelled to testify, the absence of material evidence from a party with direct knowledge of the transaction entitled the court to evaluate the Appellants' case on the evidence that was actually presented. 3. Having independently reviewed the entire record, I find that the learned trial magistrate misdirected himself in requiring the Appellants to produce visas and travel permits as proof that the 1st Appellant was outside Kenya. That requirement exceeded the evidentiary burden applicable in civil proceedings. However, that error alone did not discharge the Appellants from their legal obligation of proving that the charge instrument was invalid, forged, or fraudulently procured. The passport evidence established the Appellant's travel history but, standing on its own, did not conclusively impeach the validity of a duly registered charge in the absence of further evidence challenging its execution or registration. 4. Consequently, although I find that the trial court erred in its approach to the evaluation of the passport evidence, I am not persuaded that the Appellants proved, on the requisite standard, that the charge over land parcel KISUMU/BAR/2178 was invalid, fraudulent, or was not executed by the 1st Appellant. To that extent, this ground of appeal does not succeed. Whether the charge over land parcel KISUMU/BAR/2178 remained valid and enforceable so as to entitle the 1st Respondent to exercise its statutory power of sale 1. The Appellants contended that the charge over land parcel KISUMU/BAR/2178 was unenforceable because the 1st Appellant never executed the charge instrument and never consented to the property being used as security for subsequent facilities advanced by the 1st Respondent. They further argue that even if the charge was validly created, it only secured the initial facility advanced to Desnol Investments Limited, which had since been fully settled, and could not therefore be relied upon to recover subsequent facilities allegedly advanced to the 2ndAppellant. 2. 1st Respondent, on the other hand, maintains that the charge was lawfully created and duly registered and that the suit property constituted a continuing security for the facilities advanced by the bank. It submits that the Appellants failed to produce any evidence demonstrating that the charge had been discharged or that its operation had been limited to a single facility. Consequently, the bank contends that it was entitled to realize the security upon default. 3. A charge is both a statutory and contractual security. Its validity, extent and enforceability are determined principally from the terms of the charge instrument and the intention of the parties. Once a charge has been duly registered, it remains enforceable until the secured obligations are discharged or the charge is otherwise lawfully extinguished. Accordingly, the burden rests upon the party challenging the enforceability of the charge to demonstrate that the security has ceased to bind the property or that the chargee has acted outside the terms of the instrument. 4. Having reconsidered the evidence on record, I have already found under the preceding issue that the Appellants failed to establish that the charge instrument was invalid or fraudulently procured. It therefore follows that the charge remained a valid encumbrance over land parcel KISUMU/BAR/2178 unless it was shown to have been discharged or otherwise rendered unenforceable. 1. The Appellants asserted that the charge only secured the initial facility of Kshs. 2,000,000 advanced to Desnol Investments Limited and that the Respondents unlawfully extended the security to subsequent facilities without the consent of the 1st Appellant. They further contended that the original indebtedness had been fully settled after the bank realized the securities over Kisumu/Ojola/3927 and Kisumu/Ojola/4116. However, no discharge of charge, statement of account, or any documentary evidence was produced to demonstrate that the facility secured by KISUMU/BAR/2178 had in fact been fully redeemed or that the charge had ceased to exist. 2. On its part, the Respondents produced the charge documents, the letters of offer and statements of account showing that the facilities remained outstanding and that the suit property continued to stand as security. The documentary evidence further demonstrated that repayments continued until May 2018, thereby contradicting the Appellants' assertion that the indebtedness had been fully settled. Once the Respondents placed that evidence before the trial court, the evidential burden shifted to the Appellants to rebut it by credible evidence, which they failed to do. 3. The Appellants also argued that the 1st Appellant never consented to the suit property securing subsequent borrowing. While that contention raises an important question regarding the scope of the security created, the Appellants did not produce the charge instrument or any other documentary evidence demonstrating that the security was expressly restricted to the initial facility or that the Respondents acted outside the contractual terms governing the charge. In the absence of such evidence, this court cannot conclude that the Respondents unlawfully extended the security or that the charge had become unenforceable. 4. Consequently, I find that the Appellants failed to demonstrate that the charge over land parcel KISUMU/BAR/2178 had ceased to be valid or enforceable. The learned trial magistrate therefore did not err in finding that the Respondents remained entitled, in principle, to realize the security, subject only to compliance with the mandatory statutory requirements governing the exercise of the statutory power of sale. Whether the 1st Respondent complied with the statutory requirements governing the exercise of its statutory power of sale and, if not, what was the legal effect of such non-compliance 1. The Appellants submitted that the 1st Respondent failed to comply with the mandatory provisions of Sections 90 and 96 of the Land Act before commencing the realization of the charged property. They contended that the trial court, having already found that the statutory notices were not properly served, ought to have granted the permanent injunction sought instead of permitting the Respondents to proceed with the realization of the security. 2. The 1st Respondent submitted that it complied with all the statutory requirements preceding the exercise of its statutory power of sale and that the notices were duly issued and served. It further argued that the Appellants never sought an order directing the reissuance of statutory notices and that granting a permanent injunction would permanently defeat its contractual and statutory rights under the charge. 3. The exercise of a chargee's statutory power of sale is regulated by the Land Act. Compliance with the statutory notice requirements prescribed under Sections 90 and 96 is mandatory and constitutes a condition precedent to the lawful exercise of the power of sale. Where the prescribed notices have not been properly served, the intended realization cannot lawfully proceed until the statutory requirements have been satisfied. 4. The record shows that, during the interlocutory stage, the trial court found that the statutory notices had not been properly served upon the Appellants because they had been sent to an address that did not belong to them. On the strength of that finding, the court granted interim injunctive orders restraining the intended sale pending the hearing and determination of the suit. That finding was neither challenged nor displaced during the trial. 5. Upon determining the suit, however, the trial court declined to grant a permanent injunction, reasoning that such an order would permanently impede the 1st Respondent's statutory right to realize its security and would prejudice the interests of third parties who were not parties to the proceedings. In my view, that conclusion was legally sound. A permanent injunction would have the effect of forever restraining the Respondents from enforcing a valid security notwithstanding the existence of an outstanding indebtedness. Such an order would effectively extinguish the Respondent's statutory rights under the charge without any legal basis. 6. While the failure to properly serve the statutory notices rendered the intended realization premature, it did not invalidate the charge itself or permanently extinguish the Respondent's statutory power of sale. The defect lay in the procedure adopted in exercising that power and not in the existence of the power itself. Once the Respondents complies with the mandatory statutory requirements governing the issuance and service of notices, nothing in law prevents it from exercising its statutory remedies in accordance with the charge instrument and the Land Act. 7. I therefore find that the learned trial magistrate properly distinguished between the validity of the charge and the procedural requirements governing its enforcement. Although the statutory notices were found to have been improperly served, that omission did not entitle the Appellants to the permanent injunctive relief sought. The trial court correctly declined to issue orders that would permanently deprive the Respondents of its statutory right to realize the security. ## Who should bear the costs? 1. Costs are governed by Section 27 of the Civil Procedure Act, which provides that costs follow the event unless the court, for good reason, orders otherwise. 2. In the present appeal, the Appellants challenged the findings of the trial court on the validity and enforceability of the charge over land parcel KISUMU/BAR/2178, the exercise of the 1st Respondent's statutory power of sale, and the refusal to grant the reliefs sought. Upon independently re-evaluating the evidence on record and the applicable law, this court has found that, notwithstanding the trial court's misdirection in requiring the Appellants to produce visas and travel documents in addition to their passport, that error did not affect the ultimate determination of the dispute. The Appellants failed to prove that the charge was invalid, fraudulent or unenforceable, and the learned trial magistrate properly declined to grant a permanent injunction. 1. The 1st Respondent has successfully defended the judgment of the trial court, and I find no exceptional circumstances that would warrant a departure from the general rule that costs follow the event. 2. Consequently, the costs of this appeal shall be borne by the Appellants. The 1st Respondent shall be entitled to the costs of the appeal together with interest thereon at court rates from the date of taxation until payment in full. # DISPOSITION 1. Having carefully considered the pleadings, the record of appeal, the judgment of the trial court, the rival submissions by the parties, together with the applicable law and the authorities cited, this court now proceeds to render its determination on the issues arising for resolution in this appeal as follows: 1. The Appeal is hereby dismissed in its entirety. 2. The judgment and decree of the Senior Principal Magistrate's at Winam in Civil Suit No. E179 of 2024 delivered on 27th October 2025 are hereby upheld. 3. For the avoidance of doubt, the 1st Respondent shall be at liberty to exercise its statutory power of sale only upon strict compliance with the mandatory notice requirements under Sections 90 and 96 of the Land Act. 4. The 1st Respondent shall have the costs of the suit before the trial court and the costs of this Appeal. 5. Interest on the costs of the suit before the trial court and on the costs of this Appeal shall accrue at court rates from the date of taxation until payment in full. It is so ordered. **Dated and Delivered this 30th July 2026** SIGNED BY/FOR: **□ TH E JUDICIAR Y O F KENY A ★** **HON. JUSTICE ABDI M. HASSAN** Kisumu High Court High Court Civil Date: 2026-08-05 20:34:50