Court Orders Executor’s Estate to Pay KSh73 Million Over Unaccounted Inheritance

The High Court finds that a deceased trustee failed to demonstrate how he invested KSh30.5 million belonging to a young beneficiary, awarding 11 years of interest.

The estate of a deceased executor must pay KSh73.05 million after failing to account for inheritance funds held for a beneficiary.

The High Court found that the executor exclusively controlled the money but failed to demonstrate its investment.

The award includes KSh42.53 million in interest accumulated over more than 11 years.

Justice Joe Omido ruled that Gerda Naisenya Stoffregen deserved compensation for being deprived of her inheritance.

He awarded simple interest at 12 per cent annually from March 2015. The court further imposed 14 per cent interest until the entire amount is paid.

A Father’s Will

The dispute traces back to October 8, 2007, when Paul Brindstrup Stoffregen executed his Will.

He appointed David Jonathan Grantham and Gary Farrant as executors of his estate.

Paul died on October 24, 2007, when Gerda was only two years old.

Under the Will, three children would share his Danish estate equally.

Meanwhile, his Kenyan estate’s residue would remain under a family trust. This included a property along Lower Kabete Road, registered as L.R. No. 11392/2.

The trustees would hold the property for Paul’s widow, Joyce Supeyo Stoffregen.

She would benefit during her lifetime or until remarriage, whichever occurred earlier.

Thereafter, Gerda would inherit the property upon attaining 18 years.

The High Court granted probate in December 2008 and confirmed the grant subsequently.

On July 23, 2010, the court appointed the executors as trustees. They also received authority to sell the Lower Kabete Road property.

The trustees eventually sold the property to Scotia Holdings for KSh37 million. The proceeds supported estate administration, including school fees and household expenses.

Legal fees were also deducted before the remaining money reached the estate account.

 Missing Millions

By March 17, 2015, Havelock, Nduati & Company Advocates held KSh31.42 million.

After deducting KSh902,539.88 in legal fees and VAT, they transferred KSh30,515,145.70.

The money entered the estate’s Giro Commercial Bank account on March 18, 2015.

Both parties acknowledged that the funds were intended for investment. The resulting income would support Joyce before subsequently benefiting Gerda.

However, the court found no evidence establishing that any investment occurred.

Gerda maintained that Grantham exclusively controlled the account and authorised its disbursements.

She accused him of failing to invest the money or provide comprehensive accounts.

Despite repeated demands, she claimed, the executor never satisfactorily explained its administration.

She calculated that the original amount should have earned compound interest annually.

Applying a 12 per cent rate, she claimed KSh94,775,410.60. Her argument rested on the expectation that properly invested funds would generate returns.

Grantham’s daughter, Stephanie, disputed the calculation but acknowledged her father’s control.

She relied on an affidavit dated September 6, 2022, confirming his exclusive access.

Nevertheless, she admitted to being unaware of whether her father actually invested the money.

Liability Admitted

Gerda subsequently sued Stephanie in her capacity as administrator of Grantham’s estate. Her May 21, 2025, plaint alleged breaches of fiduciary duties.

She sought restitution, interest, an accounting and exemplary damages.

The case took a decisive turn during proceedings on June 17, 2026.

Stephanie admitted that KSh30,515,145.70 represented the outstanding principal belonging to the estate.

Gerda’s lawyer applied orally for judgement on admission, which went unopposed.

Justice Omido entered judgement for the entire principal against Grantham’s estate.

That admission effectively settled the underlying claim to the inheritance funds. The remaining dispute concerned interest, its calculation, and legal costs.

Compound Interest Rejected

In determining interest, the judge examined the responsibilities imposed upon executors and trustees.

He emphasised that trustees cannot treat beneficiaries’ property as their own.

Their obligations include safeguarding assets, investing money, and accounting for estate dealings.

The court relied on Section 83 of the Law of Succession Act. The provision requires personal representatives to account for estate assets and administration.

It also addresses distribution and retention of assets under continuing trusts.

Justice Omido observed that missing investment records could not benefit Grantham’s estate.

Responsibility for custody and investment rested with the deceased executor.

The court therefore considered compensation appropriate for Gerda’s prolonged deprivation.

“The award of interest is fundamentally compensatory,” the judge stated.

He distinguished the dispute from ordinary commercial lending arrangements.

The plaintiff’s entitlement arose from fiduciary obligations, rather than contractual interest.

The judge also considered Kenya Knitting & Weaving Mills Ltd v Mohamed Madhani & Co Advocates [2024].

That decision recognised judicial discretion over interest involving funds held in fiduciary capacities. It addressed the commencement date, applicable rate, and calculation method.

Consequently, Justice Omido awarded interest from March 18, 2015. This was when the principal entered the estate account under Grantham’s control.

He found that the obligation to preserve and invest began then.

However, the judge rejected Gerda’s KSh94.77 million compound interest calculation.

She had not produced documentary evidence proving the bank’s alleged investment rates.

Neither had she demonstrated that the funds would generate compound returns.

Citing Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji, he reaffirmed judicial discretion.

Courts may award simple or compound interest, depending on the evidence. The judge consequently selected simple interest at 12 per cent annually.

Importantly, the rate represented compensation, not an established investment return.

The court expressly declined to find that Giro Commercial Bank guaranteed 12 per cent.

It considered that rate reasonable given the prolonged deprivation and circumstances.

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The judge separately ordered 14 per cent interest on the aggregate decretal amount.

That additional interest runs from October 26, 2026, until payment. He also awarded Gerda the costs of the entire proceedings.

Stephanie must therefore pay KSh73,052,422.77, comprising principal and accumulated interest.

Further interest at 14 per cent will continue until full settlement.

The judgement reinforces the accountability expected of executors and trustees. They must safeguard beneficiaries’ money and demonstrate proper administration.

Their estates can inherit financial liability arising from established breaches of fiduciary obligations.

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