On April 2010, Consolata Wanjeri Kigotho entered into a loan agreement with Stanbic Bank for the purchase of a vehicle which she paid between June 10, 2010 and May 5, 2014.
The agreement required that she settles the amount by paying monthly instalments of Sh41,056 in the aforesaid period.
The bank was required to release her logbook after the payment, but this did not happen as Stanbic claimed she had not fully repaid the required amount.
It said this arose out of the revision of the interest rates, which Wanjeri knew nothing about.
Stanbic, however, said Wanjeri understood that it reserved the right to vary the interest rates, as it was stated in the offer letter in the agreement she signed.
After the revision, the outstanding amount was Sh270,089 which the complainant (Wanjeri) failed to pay rendering it a breach of the loan facility agreement according to the bank.
It proceeded to list her in the Credit Reference Bureau and send auctioneers to her business place.
In 2019, Wanjeri moved to court seeking to have her logbook and damages for being embarrassed before her customers and employees, after the auctioneers visited her place of business.
She also said she could no longer use the vehicle due to damage by humid air and could not sell it as the bank was in the custody of the logbook.
Humid air can lead to damage in the engine - reducing the burn rate and increasing the combustion duration- rubber seals and failing sensors.
Wanjeri said she had suffered a loss of Sh250,000 going after the logbook and asked that the court grant her special damages of Sh150,000.
The trial court found that the bank was entitled to review the interest rates, dismissing Wanjeri's case.
She moved to the High Court to challenge the decision and prayed that the court be found at fault for not finding that the bank was in breach of contract for holding the logbook.
Stanbic also appealed the decision of the trial court wanting the High Court to find that Wanjeri was in breach of contract for failing to settle the amount arising from the interest revision.
The High Court combined the appeals and after reviewing the case, it found that even though Stanbic and Wanderi were bound by the agreement signed in 2010, any changes by one party should be notified to the other.
This includes the review of interests.
"I find that there is no evidence that Wanjeri was notified of the change in the interest applicable," Judge Asenath Ongeri said.
She also found that the bank did not give a clear path on how the money it was claiming - Sh270,089 was arrived at.
"I, therefore, find that Wanjeri proved on a balance of probabilities that Stanbic Bank was in breach of contract," the judge added.
She also found that as there was no evidence of communication in the notification of change in the interest agreed on, the bank was not entitled to increase the same.
On the issue of damages sought, the court found that Wanjeri did not prove that she incurred the loss of Sh250,000 due to the bank's breach of contract.
"I also find that general damages and punitive damages are not payable in cases of breach of contract," she said.
Delivering her judgement on August 17, Judge Ongeri issued a declaration that Stanbic Bank was in breach of the aforesaid agreement by failing to discharge the logbook to Wanjeri.
The judge ordered that Wanjeri gets her logbook within a month.
"The respondent (Stanbic Bank) is hereby ordered to unconditionally discharge the book for the motor vehicle to the appellant (Wanjeri) within 30 days of this date," Judge Ongeri ordered.
Both parties are to bear own costs of the appeal.
