KSh19 Million Absa Bank Overcharging Claim Struck Out Over Late Filing

A KSh31.1 million Absa bank home loan spawned a KSh19 million overcharging claim, but the High Court ended the case over a missed six-year deadline.

A High Court judge has struck out a KSh19 million claim against Absa Bank Kenya PLC.

The claim arose from a KSh31.1 million home loan taken by David Ananda Apollo Odera.

Odera accused the bank of unlawfully varying interest rates and imposing excessive charges.

But Justice Wananda John R. Anuro never reached the substance of those allegations.

Instead, he found that Odera filed the contractual claim outside Kenya’s six-year limitation period.

The ruling, delivered on September 18, 2026, ended the dispute before the alleged overcharging reached trial.

It also highlighted the importance of properly pleading fraud or mistake when challenging historic banking transactions.

The Loan

Absa advanced Odera KSh31.1 million under a Letter of Offer dated April 30, 2014.

The facility was secured against L.R. No. 7785/1117, situated in Runda, Kiambu County.

According to the plaint, the loan fell into arrears in 2017, triggering Absa’s recovery efforts.

The bank declared Odera a defaulter and began steps towards realising the charged property.

The planned auction did not proceed after Odera secured a private buyer for the property.

The sale proceeds settled Absa’s outstanding claim around March 5 or 6, 2020.

The bank subsequently discharged its charge, apparently bringing the lending relationship to a close.

The financial dispute, however, was only beginning.

Odera later engaged forensic auditors to examine the bank’s interest calculations and repayment records.

He alleged that their review uncovered excessive interest and unlawful penalty charges.

He claimed Absa had also varied interest rates without properly notifying him.

His lawsuit sought KSh19,001,485.22, which he described as excess interest charged.

He separately demanded KSh181,200 paid to experts who recalculated the loan.

The plaint accused Absa of breaching the loan agreement and relevant banking legislation.

The Deadline

Absa responded by challenging the lawsuit before the substantive allegations could reach trial.

The bank filed a Preliminary Objection arguing that the claim was already statute-barred.

Its argument centred on the undisputed loan settlement date of approximately March 6, 2020.

Under Section 4(1)(a) of the Limitation of Actions Act, contractual claims generally have six years.

Absa therefore argued that Odera’s deadline expired around March 6, 2026.

But Odera filed his plaint on March 19, 2026, roughly two weeks beyond that deadline.

Odera’s lawyers disputed that calculation and offered a different starting point.

They argued that limitation should begin when the alleged overcharge was discovered.

According to their submissions, the alleged overcharge required forensic analysis before it could reasonably be identified.

They placed the discovery date at April 20, 2020, after the loan had been settled.

They further argued that discovery raised factual questions unsuitable for determination through a Preliminary Objection.

That argument forced Justice Anuro to examine when a contractual cause of action actually begins.

The judge relied on the established Mukisa Biscuit principle governing preliminary objections.

A preliminary objection must generally raise a pure point of law without requiring disputed evidence.

Limitation can qualify where the relevant dates are clear and undisputed from the pleadings.

The judge found that condition sufficiently satisfied in Odera’s case.

Discovery Fails

Justice Anuro then turned to the central question of when the contractual claim accrued.

The judge cited authority holding that contractual causes of action generally accrue when the breach occurs.

That position differs from claims where limitation may depend upon when damage becomes apparent.

Applying the ordinary contractual rule, the judge found the lawsuit had arrived too late.

The six-year period had already expired before Odera filed his March 19, 2026 plaint.

But the court recognised an important statutory exception involving fraud or mistake.

Section 26 of the Limitation of Actions Act can postpone limitation in certain fraud or mistake cases.

Time may then run from discovery, or when reasonable diligence could have revealed the problem.

That provision appeared potentially relevant because Odera relied heavily on later discovery.

Yet the judge found a fundamental problem with that argument.

Odera had not expressly pleaded either fraud or mistake in his plaint.

His pleadings instead accused Absa of unlawful interest variations and excessive charges.

They also alleged failures to notify him about changes in applicable interest rates.

The judge found those allegations insufficient to invoke Section 26’s discovery mechanism.

The distinction was decisive because fraud and mistake must be specifically pleaded.

Justice Anuro cited Vijay Morjaria v Nansingh Madhusingh Darbar & Another on that requirement.

General accusations of wrongdoing cannot substitute for properly particularised fraud allegations.

The court therefore refused to read fraud or mistake into Odera’s contractual claim.

Bank Warning

The ruling also delivered a broader warning concerning borrowers and historic loan calculations.

Justice Anuro noted that borrowers ordinarily have access to bank statements and repayment schedules.

They can also obtain information showing interest rates and movements within their loan accounts.

That availability creates a substantial hurdle for borrowers seeking delayed discovery years later.

The judge said a prudent borrower should monitor accounts and identify potential overpayments through reasonable diligence.

The ruling therefore draws a sharp line between discovering an alleged problem and properly pleading its legal consequences.

A claimant cannot simply invoke later discovery after the ordinary contractual limitation period has expired.

Where fraud or mistake is relied upon, those grounds must appear expressly and specifically in the pleadings.

Justice Anuro ultimately allowed Absa’s Preliminary Objection dated June 10, 2026.

He struck out Odera’s suit and awarded costs to Absa under Section 4(1)(a).

The court did not determine whether Absa actually overcharged Odera by KSh19 million.

Nor did it determine whether the forensic calculations accurately reflected the loan account.

Those substantive questions never reached trial because limitation ended the proceedings first.

The ruling instead turned on timing, pleadings, and the legal consequences of failing to invoke fraud or mistake.

READ ALSO: Absa Blocked from Selling Nairobi Property as Borrower Secures Fresh Appeal Stay

For borrowers, its message is significant: later discovery does not automatically restart a contractual limitation clock.

For banks, meanwhile, the decision underscores the protective force of statutory limitation periods.

For Odera, the KSh19 million dispute ended before the court could examine the alleged overcharge itself.

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