Eastlands Theatres Limited & 2 others v Kenya National Capital Corporation Limited

Clause 1 of the guarantees made payment payable 'on your demand in writing'. A contextual reading of the 16th March 1982 letter shows it requested payment of a capital instalment only and was addressed to the 2nd appellant alone. The advocate's letters of 11th February 1983 demanded the guaranteed sums from each guarantor and thus constituted the formal demand triggering the cause of action and the limitation period.

The court found no statutory requirement that guarantees be contained in a single document. Clause 11 of the guarantee expressly contemplated separate execution, deeming each signatory liable as if each had signed separate instruments. Separate execution therefore created no additional liability beyond the guaranteed sum of Kshs.7,000,000 plus interest, and the guarantors could not escape liability on that basis.

The trial court had fixed the lawful rate at 13% per annum per the letter of offer, which allowed increase only up to 15%. There was no cross-appeal by the respondent. The respondent's own statement of account showed interest charged at rates up to 20%, well above the lawful rate. The correct amount was the advanced sum plus lawful charges and interest at no more than 15% per annum; computation of the exact figure was remitted to the High Court.

The appellants relied on subsequent charges registered over the property to infer a higher value, but no witness explained the circumstances in which those charges were created. The trial judge correctly noted that without a counterclaim for the difference between market value and the realised sum, and without appropriate pleadings and evidence, no finding of undervalue could be made.