JUDGEMENT
1. This suit arises out of an alleged contract of lending between the Plaintiff and Defendants. The Plaintiff which is a Bank as well as the lending institution has obtained Judgement against the 1st and 4th Defendant. The suit against the 2nd Defendant, who is said to be deceased was withdrawn. This suit therefore proceeded against the 3rd Defendant only.
Background Facts
2. The Plaintiff filed the Plaint dated 17th September, 2015. It averred that on or about 5th June, 2012 the 1st Defendant requested for banking facilities from the Plaintiff. The 1st Defendant, as borrower, together with the 2nd, 3rd, and 4th Defendants as guarantors, accepted the Plaintiff’s letter of offer dated 5th June, 2012. This was for banking facilities comprising a Short-Term Loan of KES 10,000,000, an overdraft of KES 2,500,000, and a guarantee of KES 1,000,000. All these were repayable on demand and subject to specified floating interest rates above the Bank’s base rate.
3. The facilities were secured, inter alia, by personal guarantees and indemnities of the guarantors for KES 13,500,000. Subsequently, by a continuing guarantee and indemnity dated 31st August, 2012, the 2nd, 3rd, and 4th Defendants unconditionally undertook to pay on demand all monies owed. Further, they were to discharge the 1st Defendant’s obligations arising from the said facilities.
4. In accordance with the letter of offer, the Plaintiff disbursed the loan facilities to the 1st Defendant’s accounts. However, the 1st Defendant defaulted on repayment, prompting the Plaintiff to issue demand letters on 9th October, 29th October, and 20th November, 2014 to the 1st Defendant and copied the guarantors. Subsequently, by letters dated 27th February, 2015, the Plaintiff’s advocates demanded from each Defendant payment of Kshs. 26,442,711.00 as at 17th February 2015, together with accruing interest.
5. In the Plaint, the Plaintiff prayed for judgment jointly and severally against all the Defendants for;
a) Kshs.28, 854, 816.50 with interest at court rates from 31st July 2015 until payment in full.
b) Costs of the suit on an advocate-client basis and interest thereon until payment in full.
6. The 3rd Defendant filed the Statement of Defence dated 24th June, 2020. In its defence the 3rd Defendant denied any knowledge of the alleged borrowings, loans, or banking facilities. This is as well as the referenced Letter of Offer, guarantees, indemnities, and securities. She maintained that she never received or signed any such documents. She asserted that any documents purportedly bearing her signature are forgeries. Consequently, she denied having applied for or guaranteed the said facilities and puts the Plaintiff to strict proof of its claims.
7. She further contended that the Plaintiff’s claim is unsustainable and unenforceable against her. The alleged credit facilities, she argued, were procured through fraud and collusion involving the 4th Defendant and the Plaintiff’s employees. That in any event this was through the Plaintiff’s negligence in failing to conduct due diligence. She also asserted that any resolutions or documents authorizing the facilities are forged. Thus, rendering the entire lending arrangement illegal and void. She emphasized that she neither consented to nor had knowledge of these transactions.
8. Additionally, the 3rd Defendant denied any benefit from the alleged funds and disclaimed knowledge of the 1st Defendant’s indebtedness or default. She maintained that if any sums are owed, liability lies with the 4th Defendant, who allegedly orchestrated and concealed the fraudulent transactions. Upon discovering the alleged illegality, she reported the matter to the Criminal Investigation Department (DCI), where investigations are ongoing.
Issues for determination
9. The Court has carefully considered the Plaintiff’s case as well as the 3rd Defendant’s case, the testimonies of the witnesses, the evidence produced, the written submissions and the oral highlights by Counsel for the parties. The Court frames the following issues for determination:
a) Whether the Plaintiff’s case is merited.
b) Whether costs should be awarded.
Analysis
10. It was the Plaintiff’s case that the 3rd Defendant is a founding director of the 1st Defendant company. That she participated in securing banking facilities from the Plaintiff on or about 5th June 2012. This was alongside the 4th Defendant as guarantors. That she executed a letter of offer providing for a KES 10,000,000 short-term loan, KES 2,500,000 overdraft, and KES 1,000,000 guarantee, all repayable on demand and subject to specified floating interest rates. The facilities were secured by personal guarantees and indemnities. This is including a continuing guarantee dated 31st August 2012 allegedly signed by the 3rd Defendant. That she bound herself to settle all sums due upon demand. The Plaintiff disbursed the funds in accordance with the agreement. However, the 1st Defendant subsequently defaulted in repayment, prompting the issuance of demand letters in October and November, 2014.
11. In contrast, the 3rd Defendant maintained that she had no knowledge whatsoever of the banking facilities forming the subject of the suit. She denied any involvement in the lending arrangements between the Plaintiff and the 1st Defendant. In particular, she did not sign the Letter of Offer dated 5th June, 2012 or the Guarantee and Indemnity dated 31st August, 2012. She contended that her purported signatures on those documents were forged. That she did not attend or participate in any board meetings authorizing the alleged borrowing. That she neither knows nor has ever met the 2nd Defendant, who is alleged to have co-signed the said documents.
a) Whether the Plaintiff’s case is merited.
12. Section 108 of the Evidence Act states thus:
The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.
13. Further, Section 109 of the Evidence Act refers to the burden of proof of a particular fact. It states that:
The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
14. The Court notes that there was a continuing guarantee and indemnity in writing dated 31st August 2012 and signed by the 3rd Defendant as guarantor. This was in consideration of the Plaintiff making or continuing loans or advances to, otherwise giving credit or granting banking facilities. Essentially, the guarantors unconditionally guaranteed to pay the Plaintiff on demand in writing all monies and discharge the 1st Defendant's obligations without deduction, set-off, or counterclaim together with Interest thereon from the date of such demand and together also with costs and expenses.
15. Was the contract of lending fraudulent? The Defendant denied executing any documents that were used obtain financial facility from the Plaintiff. She further stated that she was kicked out of the business in the year 2010. Notably, the Defendant failed to provide proof of having been kicked out of the company.
16. Further to the above, the Defendant maintained that the facilities were procured through fraud in collusion with the Plaintiff’s officers.
17. It is trite that “he who asserts must prove.” This was well pointed out by the Court of Appeal in Jennifer Nyambura Kamau vs Humphrey Mbaka Nandi (2013) eKLR as follows;
“We have considered the rival submissions on this point and state that Section 107 and 109 of the Evidence Act places the evidential burden upon the appellant to prove that the signature on these forms belong to the respondent. Section 107 of the Evidence Act provides that “whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.” Section 109 stipulates that the burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence. If an expert witness was necessary, the evidential burden of proof was on the appellant to call the expert witness. The appellant did not discharge the burden and as Section 108 of the Evidence Act provides, the burden lies on that person who would fail if no evidence at all were given on either side.”
18. The burden of proof of allegation of fraud is higher than that required in civil cases. This being proof on a balance of probabilities. It is however lower than that required in criminal cases being proof beyond reasonable doubt. In Ndolo -V-Ndolo [2008] 1KLR (G &F) 742 the Court stated that:
“………Since the Respondent was making serious charge of forgery or fraud, the standard of proof required of him was obviously higher than that required in ordinary civil cases, namely proof upon a balance of probabilities; but the burden of proof on the Respondent was certainly not one beyond a reasonable doubt as in criminal cases…….”
19. Claims of fraud are grave allegations which must not only be expressly pleaded but also strictly proved by credible evidence. In this case, there was only the letter written to the DCI on the forgery of the signature. The 3rd Defendant did not produce evidence showing that the signature appearing on the disputed documents was forged or that it did not belong to her. Despite opportunities granted before the hearing took off, the 3rd Defendant did not pursue the matter with DCI. Even if DCI failed to investigate, there are now Private Document Examiners who offer their services and regularly give their expert opinions in this Court. This is on matters involving forgery of documents or contested Wills and other testamentary documents.
20. The Court does not purport to direct or offer advice on how a party is to prosecute their case or present evidence. The Court reminds itself that its duty is to listen to the evidence presented, weigh it and then arrive at a well-reasoned decision based on facts. The Court also has a cardinal duty to be impartial and fair at all times.
21. The Court has agonised over the facts of this case. The evidence presented tends to show that the 2nd Defendant was dead when this facility was given. It maybe that the 3rd Defendant chose to stand on that very evidence as proof of fraud. Fraud is a serious allegation. When it is raised, it has to prick the conscience of this Court. The Court becomes alert, its eyes wide, its ears alert, the fine hairs on its nape raised and its pen poised…. where is this fraud allegation leading us to. In that manner, the Court waited to some evidence that would be led to tie up this issue of fraud together. Perhaps the widow or children of the 2nd Defendant appearing in Court to shed some light on their father and his dealings with the 1st Defendant as well as the proof of his death. Perhaps independent evidence to show that the 3rd Defendant did not sign the documents. That the signatures were so different as to leave no other inference that they were a fraud. Had this been the scenario in this case, the verdict of this Court would have turned on such evidence. The Court would have found for the 3rd Defendant.
22. The 3rd Defendant had a link to the 1st Defendant. This link cannot be wished away and is not the creation of the Plaintiff. She was a director of the 1st Defendant. The Court has taken that into consideration too.
23. At the end of agonizing over the facts of this case, the Court has to make a determination one way or the other. In this case, the 3rd Defendant did not bring sufficient proof to discharge the burden of proof, when the pendulum swung in her direction.
24. The Court follows the decision of C.K.Yano J. in Kenindia Assurance Company Limited v Kipnyekwei t/a Nyekwei & Company Advocates [2026] KEELC 2694 (KLR). The Learned Judge stated as follows;
“23. And, in addition, Section 109 of the same Act provides that:-
109. Proof of particular fact.
The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
24. As matters stand, aside from mere allegations, the Respondent has tendered no evidence that he did not sign the lease agreement produced before the trial court. In the absence of such evidence, the court finds that the lease agreement produced before the trial court dated 27th December, 2018 and registered on 23rd August, 2019 is valid.”
25. On a balance of probabilities, the Plaintiff has proved its case that the Defendants signed unconditional guarantees to pay the Plaintiff in the event the 1st Defendant defaulted in repaying the loan amount.
b) Whether costs should be awarded.
26. Ordinarily costs follow the event and lie at the discretion of this Court. There is no reason why the Court should deny the successful Plaintiff the costs of this suit. Costs are awarded on a party-to-party basis as no justification has been shown for costs to be awarded at Advocate-Client basis.
27. The Judgement against the 1st and 4th Defendant is still in place as it was not set aside. The 3rd Defendant is there bound to satisfy the same judgement on a joint and several basis alongside the 1st and 4th Defendants.
Determination
28. The Court proceeds to find in favour of the Plaintiff and enters Judgement for the Plaintiff as against the 3rd Defendant which shall be joint and several as against the 1st and 4th Defendants as existing Judgement Debtors as follows;
a) Kshs.28, 854, 816.50 with interest at Court rates from 31st July, 2015 until payment in full.
b) Costs of the suit and interest thereon at Court rates from the date of Judgement until payment in full.
29. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 20TH DAY OF MAY, 2026.
NJOROGE BENJAMIN K.
JUDGE
In the presence of;
Mr. Kimani for the Plaintiff for the Plaintiff.
Miss Eunice Kibe for the 3rd Defendant.
Ms. Susan Nzioka - Court Assistant.
1. This suit arises out of an alleged contract of lending between the Plaintiff and Defendants. The Plaintiff which is a Bank as well as the lending institution has obtained Judgement against the 1st and 4th Defendant. The suit against the 2nd Defendant, who is said to be deceased was withdrawn. This suit therefore proceeded against the 3rd Defendant only.
Background Facts
2. The Plaintiff filed the Plaint dated 17th September, 2015. It averred that on or about 5th June, 2012 the 1st Defendant requested for banking facilities from the Plaintiff. The 1st Defendant, as borrower, together with the 2nd, 3rd, and 4th Defendants as guarantors, accepted the Plaintiff’s letter of offer dated 5th June, 2012. This was for banking facilities comprising a Short-Term Loan of KES 10,000,000, an overdraft of KES 2,500,000, and a guarantee of KES 1,000,000. All these were repayable on demand and subject to specified floating interest rates above the Bank’s base rate.
3. The facilities were secured, inter alia, by personal guarantees and indemnities of the guarantors for KES 13,500,000. Subsequently, by a continuing guarantee and indemnity dated 31st August, 2012, the 2nd, 3rd, and 4th Defendants unconditionally undertook to pay on demand all monies owed. Further, they were to discharge the 1st Defendant’s obligations arising from the said facilities.
4. In accordance with the letter of offer, the Plaintiff disbursed the loan facilities to the 1st Defendant’s accounts. However, the 1st Defendant defaulted on repayment, prompting the Plaintiff to issue demand letters on 9th October, 29th October, and 20th November, 2014 to the 1st Defendant and copied the guarantors. Subsequently, by letters dated 27th February, 2015, the Plaintiff’s advocates demanded from each Defendant payment of Kshs. 26,442,711.00 as at 17th February 2015, together with accruing interest.
5. In the Plaint, the Plaintiff prayed for judgment jointly and severally against all the Defendants for;
a) Kshs.28, 854, 816.50 with interest at court rates from 31st July 2015 until payment in full.
b) Costs of the suit on an advocate-client basis and interest thereon until payment in full.
6. The 3rd Defendant filed the Statement of Defence dated 24th June, 2020. In its defence the 3rd Defendant denied any knowledge of the alleged borrowings, loans, or banking facilities. This is as well as the referenced Letter of Offer, guarantees, indemnities, and securities. She maintained that she never received or signed any such documents. She asserted that any documents purportedly bearing her signature are forgeries. Consequently, she denied having applied for or guaranteed the said facilities and puts the Plaintiff to strict proof of its claims.
7. She further contended that the Plaintiff’s claim is unsustainable and unenforceable against her. The alleged credit facilities, she argued, were procured through fraud and collusion involving the 4th Defendant and the Plaintiff’s employees. That in any event this was through the Plaintiff’s negligence in failing to conduct due diligence. She also asserted that any resolutions or documents authorizing the facilities are forged. Thus, rendering the entire lending arrangement illegal and void. She emphasized that she neither consented to nor had knowledge of these transactions.
8. Additionally, the 3rd Defendant denied any benefit from the alleged funds and disclaimed knowledge of the 1st Defendant’s indebtedness or default. She maintained that if any sums are owed, liability lies with the 4th Defendant, who allegedly orchestrated and concealed the fraudulent transactions. Upon discovering the alleged illegality, she reported the matter to the Criminal Investigation Department (DCI), where investigations are ongoing.
Issues for determination
9. The Court has carefully considered the Plaintiff’s case as well as the 3rd Defendant’s case, the testimonies of the witnesses, the evidence produced, the written submissions and the oral highlights by Counsel for the parties. The Court frames the following issues for determination:
a) Whether the Plaintiff’s case is merited.
b) Whether costs should be awarded.
Analysis
10. It was the Plaintiff’s case that the 3rd Defendant is a founding director of the 1st Defendant company. That she participated in securing banking facilities from the Plaintiff on or about 5th June 2012. This was alongside the 4th Defendant as guarantors. That she executed a letter of offer providing for a KES 10,000,000 short-term loan, KES 2,500,000 overdraft, and KES 1,000,000 guarantee, all repayable on demand and subject to specified floating interest rates. The facilities were secured by personal guarantees and indemnities. This is including a continuing guarantee dated 31st August 2012 allegedly signed by the 3rd Defendant. That she bound herself to settle all sums due upon demand. The Plaintiff disbursed the funds in accordance with the agreement. However, the 1st Defendant subsequently defaulted in repayment, prompting the issuance of demand letters in October and November, 2014.
11. In contrast, the 3rd Defendant maintained that she had no knowledge whatsoever of the banking facilities forming the subject of the suit. She denied any involvement in the lending arrangements between the Plaintiff and the 1st Defendant. In particular, she did not sign the Letter of Offer dated 5th June, 2012 or the Guarantee and Indemnity dated 31st August, 2012. She contended that her purported signatures on those documents were forged. That she did not attend or participate in any board meetings authorizing the alleged borrowing. That she neither knows nor has ever met the 2nd Defendant, who is alleged to have co-signed the said documents.
a) Whether the Plaintiff’s case is merited.
12. Section 108 of the Evidence Act states thus:
The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.
13. Further, Section 109 of the Evidence Act refers to the burden of proof of a particular fact. It states that:
The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
14. The Court notes that there was a continuing guarantee and indemnity in writing dated 31st August 2012 and signed by the 3rd Defendant as guarantor. This was in consideration of the Plaintiff making or continuing loans or advances to, otherwise giving credit or granting banking facilities. Essentially, the guarantors unconditionally guaranteed to pay the Plaintiff on demand in writing all monies and discharge the 1st Defendant's obligations without deduction, set-off, or counterclaim together with Interest thereon from the date of such demand and together also with costs and expenses.
15. Was the contract of lending fraudulent? The Defendant denied executing any documents that were used obtain financial facility from the Plaintiff. She further stated that she was kicked out of the business in the year 2010. Notably, the Defendant failed to provide proof of having been kicked out of the company.
16. Further to the above, the Defendant maintained that the facilities were procured through fraud in collusion with the Plaintiff’s officers.
17. It is trite that “he who asserts must prove.” This was well pointed out by the Court of Appeal in Jennifer Nyambura Kamau vs Humphrey Mbaka Nandi (2013) eKLR as follows;
“We have considered the rival submissions on this point and state that Section 107 and 109 of the Evidence Act places the evidential burden upon the appellant to prove that the signature on these forms belong to the respondent. Section 107 of the Evidence Act provides that “whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.” Section 109 stipulates that the burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence. If an expert witness was necessary, the evidential burden of proof was on the appellant to call the expert witness. The appellant did not discharge the burden and as Section 108 of the Evidence Act provides, the burden lies on that person who would fail if no evidence at all were given on either side.”
18. The burden of proof of allegation of fraud is higher than that required in civil cases. This being proof on a balance of probabilities. It is however lower than that required in criminal cases being proof beyond reasonable doubt. In Ndolo -V-Ndolo [2008] 1KLR (G &F) 742 the Court stated that:
“………Since the Respondent was making serious charge of forgery or fraud, the standard of proof required of him was obviously higher than that required in ordinary civil cases, namely proof upon a balance of probabilities; but the burden of proof on the Respondent was certainly not one beyond a reasonable doubt as in criminal cases…….”
19. Claims of fraud are grave allegations which must not only be expressly pleaded but also strictly proved by credible evidence. In this case, there was only the letter written to the DCI on the forgery of the signature. The 3rd Defendant did not produce evidence showing that the signature appearing on the disputed documents was forged or that it did not belong to her. Despite opportunities granted before the hearing took off, the 3rd Defendant did not pursue the matter with DCI. Even if DCI failed to investigate, there are now Private Document Examiners who offer their services and regularly give their expert opinions in this Court. This is on matters involving forgery of documents or contested Wills and other testamentary documents.
20. The Court does not purport to direct or offer advice on how a party is to prosecute their case or present evidence. The Court reminds itself that its duty is to listen to the evidence presented, weigh it and then arrive at a well-reasoned decision based on facts. The Court also has a cardinal duty to be impartial and fair at all times.
21. The Court has agonised over the facts of this case. The evidence presented tends to show that the 2nd Defendant was dead when this facility was given. It maybe that the 3rd Defendant chose to stand on that very evidence as proof of fraud. Fraud is a serious allegation. When it is raised, it has to prick the conscience of this Court. The Court becomes alert, its eyes wide, its ears alert, the fine hairs on its nape raised and its pen poised…. where is this fraud allegation leading us to. In that manner, the Court waited to some evidence that would be led to tie up this issue of fraud together. Perhaps the widow or children of the 2nd Defendant appearing in Court to shed some light on their father and his dealings with the 1st Defendant as well as the proof of his death. Perhaps independent evidence to show that the 3rd Defendant did not sign the documents. That the signatures were so different as to leave no other inference that they were a fraud. Had this been the scenario in this case, the verdict of this Court would have turned on such evidence. The Court would have found for the 3rd Defendant.
22. The 3rd Defendant had a link to the 1st Defendant. This link cannot be wished away and is not the creation of the Plaintiff. She was a director of the 1st Defendant. The Court has taken that into consideration too.
23. At the end of agonizing over the facts of this case, the Court has to make a determination one way or the other. In this case, the 3rd Defendant did not bring sufficient proof to discharge the burden of proof, when the pendulum swung in her direction.
24. The Court follows the decision of C.K.Yano J. in Kenindia Assurance Company Limited v Kipnyekwei t/a Nyekwei & Company Advocates [2026] KEELC 2694 (KLR). The Learned Judge stated as follows;
“23. And, in addition, Section 109 of the same Act provides that:-
109. Proof of particular fact.
The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
24. As matters stand, aside from mere allegations, the Respondent has tendered no evidence that he did not sign the lease agreement produced before the trial court. In the absence of such evidence, the court finds that the lease agreement produced before the trial court dated 27th December, 2018 and registered on 23rd August, 2019 is valid.”
25. On a balance of probabilities, the Plaintiff has proved its case that the Defendants signed unconditional guarantees to pay the Plaintiff in the event the 1st Defendant defaulted in repaying the loan amount.
b) Whether costs should be awarded.
26. Ordinarily costs follow the event and lie at the discretion of this Court. There is no reason why the Court should deny the successful Plaintiff the costs of this suit. Costs are awarded on a party-to-party basis as no justification has been shown for costs to be awarded at Advocate-Client basis.
27. The Judgement against the 1st and 4th Defendant is still in place as it was not set aside. The 3rd Defendant is there bound to satisfy the same judgement on a joint and several basis alongside the 1st and 4th Defendants.
Determination
28. The Court proceeds to find in favour of the Plaintiff and enters Judgement for the Plaintiff as against the 3rd Defendant which shall be joint and several as against the 1st and 4th Defendants as existing Judgement Debtors as follows;
a) Kshs.28, 854, 816.50 with interest at Court rates from 31st July, 2015 until payment in full.
b) Costs of the suit and interest thereon at Court rates from the date of Judgement until payment in full.
29. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 20TH DAY OF MAY, 2026.
NJOROGE BENJAMIN K.
JUDGE
In the presence of;
Mr. Kimani for the Plaintiff for the Plaintiff.
Miss Eunice Kibe for the 3rd Defendant.
Ms. Susan Nzioka - Court Assistant.