The High Court in Nairobi has given Stanbic Bank 30 days to unconditionally release a customer’s vehicle log book which they continue to hold despite the customer having cleared a loan. Conslata Kigotho sued Stanbic Bank claiming that the financial institution was in breach of a contract having failed to discharge the log book for her vehicle after full repayment of a loan facility. She sought an order compelling the bank to unconditionally discharge her logbook.
In a ruling of 17th August 2023 by Judge A.N Ongeri, the judgment reads “I allow the appeal in the following terms; A declaration be and is hereby issued that the respondent was in breach of the contract entered between the appellant and the respondent by failing to discharge the log book of the appellant’s motor vehicle registration no. KBL 436J.
Further, the respondent be and is hereby ordered to unconditionally discharge the book for the said motor vehicle to Consolata Kigotho within 30 days of this date”. According to the details of the case, Kigotho entered into an asset finance agreement with the bank in April 2010 for the purchase of the motor vehicle and she paid monthly instalments of Ksh.41, 056 from 10/6/2010 to 5/5/2014. However, upon completion of the payments she expected the bank to release the log book to her, instead, she incurred Ksh.250, 000 pursuing the said log book.
However, the bank filed a statement of defence and counter claim dated 24/2/2020 stating that she had failed to fully repay the facility and further that the bank was seeking an outstanding loan of of Ksh. 270,089 together with interest at commercial rates.
The judge noted “I find that the appellant’s evidence was that she fully repaid the loan and demanded her log book but the respondent refused to release the log book and demanded a balance of Ksh.270, 089 which accrued as a result of a change in the interest rate. I find that there is no evidence that the appellant was notified of the change in the interest applicable”.
On the issue of whether the respondent was entitled to increase the interest rate, the judge noted “I find that the respondent was required to write to the appellant to notify her of the increase in the interest rate. There is no evidence that a letter or any other form of communication was used to notify the appellant that the interest agreed on had been varied. I, therefore, find that the respondent was not entitled to increase the interest rate”.