Consolidated Bank of Kenya v Waso Trustland Project [2025] KEHC 10643 (KLR)

Consolidated Bank of Kenya v Waso Trustland Project (Civil Appeal E006 of 2024) [2025] KEHC 10643 (KLR) (Civ) (17 July 2025) (Judgment)

Neutral citation: [2025] KEHC 10643 (KLR)

Republic of Kenya

In the High Court at Isiolo

Civil

Civil Appeal E006 of 2024

SC Chirchir, J

July 17, 2025

Between

Consolidated Bank of Kenya

Appellant

and

Waso Trustland Project

Respondent

(Being an appeal from the Judgment of Hon. L.Mutai in Civil case number E12 of 2022 at the Chief Magistrates Court at Isiolo)

Judgment

1. The Respondent herein filed suit at the Chief Magistrates Court at Isiolo seeking orders as follows:a.An order directing the defendant to re-open the plaintiff ‘s Account No. 10111200xxxxxx at Consolidated Bank of Kenya, Isiolo Branch, to be operated by the plaintiff’s bona fide signatories namely Gira Huka Gambe ( Chairperson), Jillo Adan Abdi ( secretary/ CEO), Abdi Jillo Dadacha ( Treasurer) and Jaldesa Tuke ( Board Member).b.Interest on the account balance in the plaintiff’s account No. 10111200xxxxxx at Consolidated Bank of Kenya, Isiolo Branch at 14% per annum from 2/10/2020 when the said account was closed till the date of the judgment.c.General damages for breach of contractd.Special damages of Kshs.25,000/=e.Costs of the suitf.Interest on (b),(c), (d) and (c) above Court’s rate.g.Any other relief or remedy this honourable court may deem fit and just to grant.

2. At the conclusion of the hearing, the trial court delivered judgment in favor of the respondent, wherein the court entered judgment as follows:a.An order directing the defendant to re-open the plaintiff Account No. 10111200xxxxxx at Consolidated Bank of Kenya, Isiolo Branch to be operated by the plaintiff’s bona fide signatories namely Gira Huka Gambe ( Chairperson), Jillo Adan Abdi ( secretary/ CEO), Abdi Jillo Dadacha ( Treasurer) and Jaldesa Tuke ( Board Member).b.Interest on the account balance in the plaintiff’s account No. 10111200xxxxxx at Consolidated Bank of Kenya, Isiolo Branch at 14% per annum from 2/10/2020 when the said account was closed till payment in full.c.Each party to bear their own costs.

3. The appellant was aggrieved by the Judgment and proffered this Appeal. It has set out the following grounds:a.That the Honorable Magistrate erred in law and in fact by condemning the Appellant to pay interest at 14% on the account balance of the Respondent’s Account No. 10111200xxxxxx which is a non- interest earning account yet it was clear even in the impugned judgment that the account was frozen at the instance of conflict within the Respondent’s Board.b.The Honorable Magistrate erred in law and fact by departing from its initial Ruling dated 17th March, 2022 in which it dismissed the Respondent’s Application seeking to compel the Appellant to re-open account No. 10111200xxxxxx. The Appellant complied with the said Orders and now the Honorable Magistrate condemns the Appellant to pay 14% interest at the fault of the Respondent.c.The Honorable Court erred in law and in fact by failing to appreciate that issue prior to the closure of the Account on 2. 10. 2020 had been dealt with in Isiolo CMCC No. 24 of 2019 and therefore misdirected itself to hold that interest be charged from 2. 10. 2020 yet the suit was filed on 17. 02. 2022.

4. The appeal proceeded by way of written submissions.

The Appellant’s submissions 5. It is the Appellant’s submissions that the Respondent’s Account No. 10111200xxxxxx as stated in paragraph 3,11 and in reliefs in the Plaint dated 17/02/2022 is different from Account No. 01020048121701 that was referred to in Isiolo CM’s civil case No. 24 of 2019’s order of 14/4/2020; that the respondent further failed to amend pleadings so as to align with order in Isiolo CMCC No. 24 of 2019. It is therefore the Appellant submission that the respondent suit was scandalous, frivolous, vexatious and an abuse of court process. Reliance has been placed on the case of Grace Wairimu Sorora & Another v National Land Commission & 2 others (2021) eKLR.

6. It is also the Appellant’s submission that it was the Respondent leadership wrangles that led to the initial closure of the Respondent’s Account at the Appellant bank, which wrangles were resolved vide the consent adopted in court on 14/4/2020 in CMCC No. 24 of 2019 ,leading to the re-opening of the Account.

7. The Appellant further submits that the Appellant never received a resolution of the full board or Court Order for Account Number 01020048121701 in tandem with the Court Order of 14/04/2020 in Isiolo CMCC No.24 of 2019. Further, it avers that no new board members or signatories visited the Appellant’s Bank to request for alleged changes and to provide specimen signatures.

8. Further, the Appellant submits, that there was no formal closure of 10111200xxxxxx, and that indeed the Account statements as they appear on Pages 18 to 27 of Record of Appeal clearly show that there have been no activities on the account since 02/10/2020.

9. The Appellant filed further submissions dated 3rd April 2025, wherein it averred that the Respondent’s impugned account No. 10111200xxxxxx was a current account which generally does not earn interest; as evidenced by the Account statements produced.

10. The Appellant has therefore urged this Court to find that it has sufficiently demonstrated that the Respondent’s impugned Account No. 10111200xxxxxx is a current account attracting monthly maintenance fees only. Further the Appellant urges this court to find that it is not possible to pay interest on Respondent’s non-interest earning account . The respondent has relied on the case of Amwago v Eco bank Ltd (2025) KEHC 3477 (KLR) in this regard

Respondent’s Submissions 11. The Respondent submits that it is not contested that the Respondent leadership wrangles were duly solved by the NGO’s Coordination Board and that the resolution of the conflict were captured in the two letters both dated 16/12/2021 , that were produced in evidence. That it is not contested that the Appellant was served with a letter seeking the Appellant to grant the Respondent access to their funds, and it was upon the Appellant’s failure to comply that this suit was filed. It its further submitted that the denial of the respondent’s access to its Account was deliberate.

12. The Respondent further submits that the trial court took judicial notice of the fact that banks use their customer’s money to make profit and therefore the Respondent herein is entitled to interest at 14% as adjudged by the trial court for the period that the Appellant closed and/ froze the Respondents account.

Analysis and determination 13. The duty of this court ,as the first Appellate court, is to review the evidence , evaluate it and arrive at its own conclusion, while making allowance for the fact that the trial court had the additional benefit of hearing and seeing witnesses first – hand. ( see : Selle & Ano vs Associated Motor Boat Co. Ltd ( 1968) E.A 123)

14. I have considered the grounds of Appeal and the rival submissions. Even though one of the Appellant’s prayer is the setting aside of the trial court’s Judgment it is evident from its grounds of appeal and the submissions that gravamen of its Appeal is the issue of interest at 14% . Nevertheless the issue of interest can only be answered by addressing the question of whether the Appellant indeed unlawfully barred the respondent from accessing its Account.

15. It is evident that the Respondent had leadership wrangles which necessitated the Appellant to close or stopped the operation of the Account. In this regard , the Appellant has submitted that the Account went dormant , not closed. However the defence witness ( Dw1 )admitted receiving the demand letter from the Respondent Advocates, and the letter demanded for the re-opening of the Account. There was no response to the effect that the Account was never closed in the first place but was in dormancy. Further paragraphs 5, 8,10 and 11 suggest that the Appellant was reluctant to allow the operation of the Account due to the wrangles going on in the Respondent’s company. Further , again, and in any event , the Appellant’s ground 1 of the memorandum of Appeal states that the Account was frozen because of the wrangles that were going on in the Respondent’s organization. Consequently the Appellant cannot run around and submit that the Account went into dormancy for want of operation. I therefore find the Appellant’s argument that the Account went into dormancy for want of any transaction implausible.

The question of interest 16. The statements of the subject Account which were produced by both parties show that there was no interest earned between July 2018 and October 2020 when the account was frozen. It meant that the Account was not earning interest even at the time it was operational. Further save to make it one of the prayers , neither the Respondent’s pleading or evidence laid a basis for the award of 14% interest. A perusal of the trial court’s judgment also show that , the court did not lay a basis for the awarding interest at 14 %.

17. Accordingly, to award interest at 14 % is impose on the parties terms which they had not agreed to in the first place . It is trite law that courts have no business re- writing contracts of parties. In the case of Pius Kimaiyo Langat v Co-operative Bank of Kenya Limited [2017] KECA 152 (KLR) the court of Appeal had this to say: “We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties, They are bound by the terms of their contracts, unless coercion, fraud or undue influence are pleaded and proved.”

18. However there is evidence to show that in december 2021 , the NGO- Co-ordination Board advised the Appellant about the bonafide members of the Respondent’s Board. I take judicial Notice , of the fact that by Law , the NGO- Co-ordination Board is the Registering body of all Non- governmental organizations( NGOs) in Kenya. Thus if one wanted to know if an NGO is registered or its members of the Board , one would have to carry out a search at the NGO Board. There was no valid reason therefore as to why the Appellant did not use the advice from the NGO Co-ordination Board communicated through the letter dated 16/12/2021 to reopen the account with the signatories being the Board members stated therein.

19. Consequently the loss and inconvenience that the respondent suffered from December 2021 is due to the fault of the Appellant . For that reason, the respondent was entitled to interest albeit not at the unsupported rate of 14%.

20. In the end the Appeal partially succeeds and I hereby proceed to make orders as follows:a)The judgment of the Trial court is hereby varied to the extent that the order of interest at 14 % per annum is hereby aside.b)The sum of ksh.5,344,764. 60 will attract interest at court rates from the date of the judgment in the lower court until the Account is re- opened .c)Each party to meet its own costs

Dated, signed and delivered at Isiolo this 17th day of July 2025. S. ChirchirJudge.In the presence of :3