https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6607

Muli v Higher Education Loand Board (HELB) (Civil Appeal E478 of 2022) [2026] KEHC 6607 (KLR) (Civ) (14 May 2026) (Judgment) Neutral citation: [2026] KEHC 6607 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E478 of 2022 FR Olel, J May 14, 2026 Between Silvanus Musyoki Muli Appellant and Higher Education Loand Board (HELB) Respondent (BEING AN APPEAL FROM THE JUDGMENT/DECREE OF HON S..N MUCHUNGI (SENOR RESIDENT MAGISTRATE) DATED 3rd JUNE 2022 DELEIVERED IN MILLIMANI CMCC CASE NO E 3643 OF 2013) Judgment A. Introduction 1.This appeal challenges the judgment/degree of Honorable Seline.N. Muchungi (SRM) dated 3rd June 2022 delivered in Milimani Commercial Court CMCC No 3643 of 2013) where she dismissed the appellants claim to be awarded general damages for being wrongfully listed on as a loan defaulter by the 2nd defendant, a licensed credit reference Bureau. 2.The background to this dispute was that the Appellant instituted the primary suit vide his plaint dated 25th June 2013, wherein he stated that the respondent herein did send information to the 2nd defendant in the primary suit ( hereinafter referred to as the “ reference bureau”) to the effect that he owed them the sum of Kshs.92,731/= and the said bureau in turn without confirming if the said the said information was true proceeded to update its databased and unlawfully listed him as a loan defaulter to his loss and detriment. 3.In April 2013 he applied for a loan at Equity Bank (K) Ltd and was surprised to be informed that he had been listed as a defaulter based on the outstanding debt, purportedly owed to the respondent. He avered that his listing was actuated by malice and as the information complained about was untrue, libelous and put into context meant that he was a person who did not pay his debts and/or honour his obligations. The respondent’s action had therefore injuries his character and lowered his esteem in the minds of right thinking member of the society and he was therefore justified in claiming compensation for the same. 4.The Appellant therefore prayed for orders that his name be removed from the credit reference bureau database, he be issued with a loan clearance certificate and he be awarded general damages plus costs and interest of the suit. B The Response 5.The respondent filed their statement of defence dated 11th November 2015, where they admitted sending information to the credit reference bureau but denied informing Equity Bank (K) Ltd or any other bank of the outstanding loan owed by the appellant as a beneficiary of HELB loan during his university education. Be that as it may if there was any publication made regarding recovery of the said loan, it had been done in good faith and for the sole purpose of encouraging loan beneficiaries to repay the loan advanced as statutorily mandated in line with Regulation 14 of the Banking ( credit reference Bureau Regulations 2008 and 2013) and thus put the appellant to strict proof to the contrary. 6.The respondent further pointed out that the suit was prematurely filed by the appellant without first exhausting the remedy available to him under the credit reference bureau regulations and reiterated that their statutorily backed action did not defame the appellant and therefore prayed that the suit be dismissed. 7.The 2nd defendant too, did file their statement of defence dated 2nd November 2015, where they admitted that the respondent furnished them with information showing the credit worthiness of the appellant, which they stored in their database, but denied negligently publishing the same to unauthorized third parties. Be that as it may, it was true that they had provided Equity Bank (K) Ltd with the appellants’ credit history but could not be faulted for doing so as they were legally authorized credit information provider acting within their regulatory framework. 8.Further the 2nd defendant did aver that the information in question was published in good faith and was subject of qualified privilege under Regulation 14(1),28(3) and 28(6) of the Banking ( Credit Reference Bureau Regulations 2008 , Section 25(8) imported into credit reference bureau Regulations 2013, and put the appellant to strict proof on his allegations that there was malice in publishing the said information. The 2nd defendant emphasized that the appellant had not suffered and reputational injury and urged the court to dismiss the said suit. C. Facts at Trial 9.The parties consented that prayer (a) of the plaint be allowed and the only issue which remained for the court’s determination was whether the appellant was entitled to damages for the wrongful listing and who would bear the costs of the suit. Pursuant thereto the parties’ witness statement were admitted as their evidence and the documents filed in the trial bundles too were all admitted as Exhibits before the court. The parties then proceeded to file their respective submissions for the trial courts’ consideration. 10.Having analyzed the evidence on record, the learned magistrate held that whereas the appellant was wrongly listed as a loan defaulter, it was never out of malice or ill will, since the respondent had a statutory obligation to forward loan defaulters names to the credit reference bureau, who also had a corresponding duty to receive the said information and where relevant to share the same with relevant Banks as and when the need arose. 11.The appellant had also failed to prove that the information was published to third parties to the extent that his reputation was lowered in the estimation of right-thinking members of society. The upshot was that the appellant had failed to prove his case and thus was not entitled to general or aggravated damages as sought. The primary suit was thus dismissed with costs to the appellant payable by the respondent herein. C. The Appeal 12.Being aggrieved by the said judgment/ decree, the appellant filed his memorandum of appeal and raised the following grounds of Appeal namely that;a.The learned Magistrate’s erred in law and fact by failing to find that the Appellant had made his case for defamation.b.That the learned Magistrate’s decision is against the weight of the evidence adduced and tendered by the Appellant.c.That the learned Magistrate erred in law and fact in considering extraneous matters in arriving at the determination of the Appellants suit .d.That the learned Magistrate erred in law and in fact by being influenced by unknown issues.e.That the learned Magistrate erred in law and fact in failing to find that the Appellants evidence was uncontroverted by the respondent.f.That the learned Magistrate’s decision was based on the wrong principles.g.That the learned magistrate erred in law and fact in failing to find in favour of the Appellant.h.That the Magistrate erred in law and fact in basing his decision on irrelevant and extraneous circumstances. 13.The Appellant therefore urged this court to find that the Appel filed has merit and be pleased to allow the same and proceed to assess damages as prayed for in the plaint. D. The Parties Submissions. The Appellants submissions. 14.The appellant relied on his submissions dated 2nd June 2025 wherein he faulted the trial court for ignoring uncontested evidence, which established that he had fully repaid his HELB loan, yet the respondent had still gone ahead and wrongfully listed him as a defaulter, thus portraying him as a person who does not pay his debts and/or honour his obligations. This without doubt had lowered his estimation in the minds of right-thinking members of society and damaged his reputation. Reliance was placed in the case of Matiangi Vs Kisii Bottlers Limited & Another (2021) Eklr, Civil Appeal No 25 of 2020 and Joseph Njogu Kamunge Vs Charles Muriuki Gachari (2016), Ciivl Appeal No 42 of 2014; where it was held that the burden of proving the truth of an allegedly defamatory statements was placed on the defendant, rather that the plaintiff. 15.The trial magistrate had also failed to investigate and/or correct a known falsehood, when she ignored/failed to consider the fact that the respondent had no justifiable reason to continue branding the appellant as a defaulter, when it was within their knowledge that he had completely settled his HELB loan. Their inefficiency, inaction without doubt, portrayed ill-will and malice, which negated their representation which characterizing the listing as a “honest mistake”. Reliance was placed in the case of Phinehas Nyagah Vs Gitobu Imanyara (2013) KEHC 6662 (KLR), Civil suit No 697 of 2009, & DASANI Vs Ochieng ( Civil Case E005 of 2022),{2025} KEHC 3776 (KLR) to emphasize on this point. 16.Further by listing the Appellant when he did not have any outstanding debt to third parties (the credit reference bureau and any subscribing lender), ipso facto did establish that the defamatory words were published to a third party negating the need to have an independent witness testify to confirm the said publication. The appellant was an experienced auditor, businessman and public figure whose reputation had been besmirched when falsely branded as a bad debtor, which action had damaged his business character (a claim which was actionable per se ) and thus the court should have treated the said listing as defamatory without any additional proof of loss. 17.In addition, the appellant also faulted the trial magistrates finding that a standard CRB disclaimer insulated the respondent from liability and emphasized that to the contrary, it placed an obligation on the respondent not to breach the said regulations, especially Regulation 25(1) and 26(1) which directed them not to publish information if they believed that it was false and to also at all times protect the confidentiality of customer information. Reliance was placed on Metropolitan Credit reference bureau limited & Another Vs Mongare & 2 Others ( Civil Appeal E048 & E 049 of 2021 ) Consolidated (2023), KEHC 194080 (KLR) & Ndungu T/A Mwandunga commercial Agencies Vs KCB Bank Limited (Civil suit E001 of 2017) to emphasize on this point. 18.The appellant thus urged the court to hold that the respondent had deliberately violated the guiding regulations, which action constituted an actionable wrong in both negligence and defamation context. His career and business reputation had been put into jeopardy by the defaming publication and there was justification in his plea to be compensated for the loss suffered. He thus urged this court to set aside the judgment/decree of the trial court and be pleased to enter judgment in his favour in the sum of Kshs.7,000,000/= plus costs of both the primary suit and the Appeal. 19.The respondent did not file submissions to oppose this Appeal. E. Analysis And Determination 20.I have considered this appeal, submissions, and the impugned judgment. I have also considered the decisions relied on and perused the trial court’s record. This being a first appeal, it is by way of a retrial, and this court, as the first appellate court, must re-evaluate, re-analyze, and re-consider the evidence afresh and draw its conclusions on it. The court should, however, bear in mind that it did not see the witnesses as they testified and give due allowance for that. (see Selle v Associated Motor Boat Co Ltd & Others [1968] EA 123) & Peters Vs Sunday Post Limited (1968) EA 123. 21.A first appellate court is also the final court of fact, and litigants are entitled to full, fair, independent consideration of the evidence. The parties have a right to be heard both on issues of fact and issues of law, and the court must address itself to all issues raised and give reasons thereof. While considering the entire scope of section 78 of the Civil Procedure Act, a court of first appeal can appreciate the entire evidence and come to a different conclusion. See Kurian Chacko Vs Varkey Ouseph AIR 1969 Kerala 316. 22.The issues that arise in this Appeal is whether the trial court correctly appreciated the facts and the law to arrive at its decisions that the appellant and had not proved that he had been defamed by the respondents action to report him to credit reference bureau, and if this court is to hold other wise what appropriate measure of damages would be adequate to compensate him. 23.In Matumbi v Tanui (Civil Appeal 67 of 2020) [2026] KECA 253 (KLR) (13 February 2026) (Judgment) Neutral citation: [2026] KECA 253 (KLR) the court of appeal succulently summarized defamation jurisprudence as follows;In Kenya, the tort of defamation is now well settled, both as a matter of common law and as informed by the Constitution. In an action for defamation, a claimant must establish that the defendant published to a third party a statement of fact which referred to the claimant, was defamatory in nature in that it tended to lower the claimant’s reputation in the estimation of right-thinking members of society,was false,andwas published with the requisite degree of fault. Once liability is established, the court must assess damages with due regard to the nature and gravity of the defamation, the reach and mode of publication, the conduct of the defendant before and after publication, and the need to vindicate reputation while, at the same time, respecting the constitutional guarantee of freedom of expression under Article 33 of the ConstitutionFlowing from this formulation, a plaintiff in a defamation action must establish the following five elements.i.First, defamatory meaning. A statement is defamatory if it tends to lower the claimant in the estimation of right-thinking members of society generally, causes the claimant to be shunned oravoided, or exposes the claimant to hatred, contempt, or ridicule. This formulation, drawn from Gatley on Libel and Slander, has been repeatedly cited with approval by various courts. For example, in Musikari Kombo v Royal Media Services Ltd [2018] eKLR, this reaffrmed that the test is an objective one, to be applied from the standpoint of ordinary, reasonable members of society, and not from the subjective sensitivities of the claimant. Kenyan courts have further emphasized that the impugned words must be assessed as a whole, in their full context, and according to their natural and ordinary meaning as understood by reasonable readers or listeners, rather than through strained or technical interpretation. See also Miguna Miguna v Standard Group Ltd & 4 Others [2017] eKLR (HC).ii.Secondly, reference to the plaintiff. The claimant need not be expressly named in the publication. It suffices if reasonable persons acquainted with the claimant would understand the words complained of to refer to him or her. The governing consideration is identifiability, not universality of recognition. In SMW v ZWM [2015] eKLR, the High Court held that defamation is established where those who know the plaintiff can, on a reasonable reading of the publication, identify him or her as the person referred to. What matters is that the publication points, directly or by implication, to the claimant.iii.Thirdly, publication to a third party. To succeed in a defamation claim, the plaintiff must demonstrate that the defamatory words were published, in the sense that they were communicated to at least one person other than the plaintiff, since defamation is concerned with injury to reputation in the eyes of others and not with private insult or affront. In Nation Media Group Ltd v Alfred Mutua [2017] eKLR, this Court underscored that publication through mass media substantially aggravates defamation because of its reach, repetition, and permanence, particularly in the digital age. Kenyan courts have also recognised that each publication, including online republication, may constitute a distinct cause of action, subject to limitation principles. Closely related to publication is the question of actionability and proof of injury, and here Kenyan lawretainsthe classical common-lawdistinction between libeland slander.Libel, being defamation in permanent form — whether written, printed, broadcast, or digitally published — is actionable per se. In cases of libel, once the plaintiff establishes the other elements of defamation, injury to reputation is presumed, and the plaintiff is not required to prove actual damage in order to be entitled to general damages. This position has been affrmed in Kenyan jurisprudence, including in Selina Patani&Another vDhiranjiV. Patani[2019]eKLR (Court of Appeal) and Miguna Miguna v Standard Group Ltd & 4 Others [2017] eKLR (High Court). By contrast, slander — being defamation in transient form — is generally not actionable without proof of special damage, unless it falls within recognised exceptions, such as imputations of criminal conduct, professional incompetence, or unchastity. The rationale for this distinction lies in the presumed permanence and wider reach of libel, as opposed to the typically fleeting nature of slander. This presumption of injury in libel reflects the law’s recognition that reputational harm may be real yet diffcult to quantify, and must be balanced,at theremedial stage,against the constitutional imperative under Article 33 to avoid disproportionate restriction of freedom of expression.(iv)Fourthly, falsity and the burden of proof. To succeed in a defamation claim, the plaintiff must demonstratethat the defamatory statement was false, orat least not shown to besubstantially true, since truth constitutes a complete defence to defamation and the law does not protect reputation founded on falsehood. While the claimant bears the overall burden of proving defamation, oncethe defendant pleads justifcation,the burden shiftsto the defendantto prove the truth of the defamatory imputations. Truth is a complete defence, but it must be strictly proved. Phineas Nyagah v Gitobu Imanyara [2013] eKLR, this Court held that defamatory allegations must bejustied by cogentevidence, failing which liability attaches. Kenyan courts have consistently held thatallegations of criminal, corrupt, orimmoral conduct demand a high standard of proof;and that suspicion, opinion,rumor, or unverifed belief does not suffice. See George Mukuru Muchai v Standard Limited [2001] eKLR.(v)Finally, fault and malice. The law further requires proof of fault on the part of the defendant, in the sense that the defamatory statement must have been published with knowledge of its falsity, with reckless disregard for the truth, or without the exercise of reasonable care to verify its accuracy, depending on the circumstances of the publication and the availability of any recognised defences such as qualifed privilege or fair comment. Malice, while not an essential element of the tort of defamation, assumes legal signifcance where it may be inferred from the circumstances of publication and operates either to defeat defences such as qualifed privilege or fair comment or in the assessment of damages. Malice may be inferred from the circumstances of publication, including recklessness, failure to verify facts, knowledge offalsity, persistence in publication, or refusal to retract or apologise. In John Ward v Standard Ltd [2006] eKLR, the High Court held that malice may be inferred wherea defendantacts with indifference to the truth or publishes defamatory matter without reasonable inquiry. Where malice is established, it defeats qualifed privilege and operates as an aggravating factor in the award of damages. 24.The undisputed fact in this appeal is that the respondent did pass information to the credit reference bureau , which was to the effect that the appellant still owed them Kshs.92,731/= on account of unpaid student loan, and when Equity Bank (K) Ltd inquired about the appellants credit status, they were informed of the said outstanding liability. Upon being informed of this pending obligation, the appellant did raise objection to the said reference and the error was corrected. 25It was the appellants’ further evidence that the respondent’s action was actuated by malice in publishing the libelous information complained off and whose facts were untrue, malicious and ill motivated and portrayed him as a person who does not honour his obligations. 26.The respondent, in defence stated that their action was statutorily sanctioned and was made in good faith for the sole purpose encouraging the debtor to pay their obligation and was not in any way meant to defame the appellant. They further admitted that though the appellant had paid his student loan his former employer Kenya Anti-Corruption commission had not captured the appellant’s national identity card in the repayment schedule thereby making it impossible for them to verify which account to credit, and Upon the appellant bringing this issue to their attention the did reconcile his account against payment received from KACC and established that there had been an overpayment of Kshs.9,556.60/=, which was refunded to him and his status at the credit reference bureau updated accordingly. He was subsequently issued with clearance certificate No 58931 on 29th July 2013. 27.The respondent reiterated that their action was not malicious and that they did not publish any libelous information or defamatory information to the public as alleged or at all. Secondly the information supplied to the reference bureau was not intended to reflect upon the appellants’ solvency, financial standing or stability, honesty and also that their action did not imply that the appellant was unable to make payments or that he was not prepared to pay his debts and thus no ill will could be imputed on their part. 28.Finally, the respondent also pointed out that the appellant suit was premature as he had failed to utilize the alternative statutory mechanism under Regulation 35(5) of the credit reference bureau regulations, 2013 which clearly sets out the mechanism for addressing complainants. 29.As to whether the respondent maliciously published the information feed to the 2nd defendant in the primary suit. It was succinctly stated in Matumbi v Tanui ( supra) that to prove malice, the law requires proof of fault on the part of the defendant, in the sense that the defamatory statement must have been published with knowledge of its falsity, with reckless disregard for the truth, or without the exercise of reasonable care to verify its accuracy, depending on the circumstances of the publication and the availability of any recognised defences such as qualifed privilege or fair comment. 30.Looking at the respondents rebuttal, on this question, I do find that they did adequately explain what caused the wrongful referral to the reference bureau, which is the fact the appellants former employer (KACC) would send statutory deductions of various employee’s but had failed to indicate their national identity card in the said schedule sent. As a result, the appellants HELB account had not been updated, but immediately he raised an objection that this error was corrected and he was refunded Kshs.9,556.60/=, his status at the credit reference bureau updated accordingly and he was issued with clearance certificate No 58931 on 29th July 2013.No malice can therefore imputed from the respondents action and the trial magistrate was correct to so hold. ( Also see the court of Appeal decision on Raphael Lukale Vs Elizabeth Mayabi & Another (2018) Eklr.) 31.This court also notes the publication of the “Important notice” on the consumer credit report that states;“the information is not intended to reflect upon the solvency, financial standing or stability, honesty or motives of any person referred to and does not imply that any party is unable to make payment or that they are not prepared to pay their debts or that they are persons to whom credit should not be given.” 20.The effect of this notice, in my view, further negates any suggestion that there was malice in information published, such that even if it was inaccurate or incorrect and was read by a third party, in this case “Equity Bank (k) ltd “, it did not cast the Appellant in bad light. 32.The appellant alleged that as a result of the negative listing he suffered damages but failed to prove the same. His negative listing was withdrawn and therefore his facility would have been processed by Equity Bank (k) ltd in the normal manner. Further no detail of financial loss was provided, nor did he call any witness to support his contention that his reputation was lowered before his peers and other right-thinking members of society. 33.Further, the information passed to the bureau, and subsequently to the bank had the backing of statutory regulations underpinning and protecting the said process. Specifically, Regulation 19(1) of the Banking (credit reference bureau ) regulations 2013 provide that;“A suit cannot lie against the Central Bank, Bureau, an institution of chairpersons…… or any other person authorized under these regulations… for loss or damage caused or which is likely to be caused by anything, which is done or intended to be done in good faith in pursuance of these regulations or guidelines issued hereunder.” 34.This position was upheld in In the case of Alice Njeri Maina –vs- Kenya Commercial Bank [2018]eKLR the Court held:“In diverging confidential information of a customer, a bank may not be in itself defamatory, courtesy of the Credit Reference Bureau Regulations 2013 , under the Banking Act. Section 26 states that:(i)A Bureau shall protect the confidentiality of a customer information received in terms of these regulations and shall only report or release such customer information.1.to the customer concerned2.to the Central Bank3.to a requesting subscriber4.to a third party as authorised by the customer concerned, or5.As required by law. 35.Regulation 19(1) further states that:“A suit cannot lie against the Central Bank, Bureau, an institution of chairpersons --- or any other person authorised under these Regulations --- for loss or damage caused or which is likely to be caused by anything, which is done or intended to be done in good faith in pursuance of these regulations or guidelines issued hereunder.”The above provisions, in my considered view are applicable if the “thing” complained of was done in good faith. Where the institution is found to have been reckless and negligent and in breach of the institutions duty of care to the customer, then, a suit for negligence and sequential damage will lie. The onus lies on the plaintiff to prove that the bank or institution did not act honestly and was actuated by malice.I do not think that the published listing of the plaintiff to authorised institutions as stated in the Regulations cited above was defamatory to her character. No unauthorised persons got that information. The publication is authorised under Statute, the Banking Act. It can therefore not be defamatory unless the plaintiff publisized the same to unauthorised persons including “right thinking members of the society” and no proof was tendered .” (emphasis mine). 36.Finally looking at the statutory structure allowing the respondent to so act, it is clear that their action was protected by the defence of qualified privilege as their report was forwarded to the rightful entity, on a proper occasion and made without malice. ( See; Adam Vs Ward (1917) AC 309 .) C. Disposition 37.Derived from the above analysis of the facts and the law, I do find that this Appeal lacks merit and the same is dismissed with no orders as to costs. 38.It is so ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT MARSABIT THIS 14TH DAY OF MAY 2026.FRANCIS RAYOLA OLELJUDGEDELIVERED ON THE VIRTUAL PLATFORM, TEAM THIS 14TH DAY OF MAY, 2026.In the presence of: -N/A ……………………………………………………..AppellantN/A …………………………………………………. RespondentJarso ………………………………………………. Court Assistant