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Court of AppealDismissedCivil Appeal No. 118 of 1997· [1998] KECA 68 (KLR)

ABDALLA ALI HUSSEIN MOHAMED vs CLEMENT A. OJIAMBO [1998] KECA 68 (KLR)

Court of Appeal of Kenya
24 July 1998
1,441 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that a last-minute vehicle transfer to dodge a court-ordered debt attachment was a sham, and the registered 'owner' lost.

What this practically means

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Executive summary

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This was an objector's appeal against the dismissal by Ang'awa, J of an application to raise an attachment of a motor vehicle (KAA 198K) carried out in execution of a decree of Shs. 319,000/= awarded to the first respondent for injuries sustained in a 1993 bicycle accident. The objector, to whom the judgment-debtor had transferred the vehicle shortly before attachment, moved the court by notice of motion under Order 21 rule 55 and section 3A of the Civil Procedure Act seeking raising of the attachment and damages of Shs. 2,000/= per day. The High Court dismissed the application, finding the transfer was made to evade execution, relying on the absence of a road licence, a shared Post Office box, undisclosed consideration, non-payment of proceeds to the creditor, and the timing of the transfer. The Court of Appeal agreed that those inferences were properly drawn and affirmed the decision below. It held that section 8 of the Traffic Act makes registration only prima facie evidence of ownership, rebuttable by proof that registration was effected to defeat execution. The appellant's reliance on an earlier rule 5(2)(b) ruling of the Court of Appeal, which had described the attachment as patently illegal, failed because such observations were obiter: a rule 5(2)(b) application concerns only arguability and nugatory effect. The appeal was dismissed with costs, with storage charges, if any, to be borne by the objector or assessed by the Deputy Registrar.

Key legal issues

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01

Genuineness of the transfer of the suit vehicle to the objector

Holding

The transfer was not genuine and was intended to avoid execution of the decree; the High Court's inferences to that effect were properly drawn.

Reasoning

The transfer occurred only when execution was imminent; the judgment-debtor's insurers had been wound up; the vehicle was operated without a road licence; the transferor and transferee shared the same Post Office box; no consideration was shown; and proceeds were not paid to the judgment creditor. These facts justified the inference that the transfer was a sham designed to defeat execution.

p. 2
02

Effect of registration under section 8 of the Traffic Act

Holding

Registration confers only prima facie ownership, rebuttable by evidence that registration was effected to avoid execution.

Reasoning

Section 8 deems the registered person the owner 'unless the contrary is proved'. The court held there was sufficient material before the learned judge to conclude the registration was effected to avoid execution of the decree, so the statutory presumption was displaced.

p. 3
03

Weight of the earlier rule 5(2)(b) ruling

Holding

The observations in the rule 5(2)(b) ruling that the attachment was patently illegal were obiter, as that application only required consideration of arguability and nugatory effect.

Reasoning

An application under rule 5(2)(b) is concerned with whether an intended appeal is arguable and whether success would render it nugatory; it is not a decision on the legality of the attachment. The court therefore declined to be influenced by those dicta when hearing the appeal itself.

p. 3

Legal principles established

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  • Registration of a motor vehicle under section 8 of the Traffic Act is only prima facie evidence of ownership, which can be rebutted by contrary facts showing the registration was effected to defeat execution.
  • A transfer of property by a judgment-debtor made shortly before attachment, without demonstrated consideration and without payment of proceeds to the creditor, may be inferred to be intended to avoid execution.
  • Observations in a rule 5(2)(b) ruling on the merits of an intended appeal are obiter and do not bind the court hearing the appeal itself.

Court orders

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  1. 1.Appeal dismissed with costs
  2. 2.Any storage charges payable to the court broker to be paid by the objector
  3. 3.If there is no agreement on storage charges, the charges may be assessed by the Deputy Registrar of the superior court

Authorities

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Legislation

  • Civil Procedure RulesOrder 21 rule 53
  • Civil Procedure RulesOrder 21 rule 54
  • Civil Procedure RulesOrder 21 rule 55
  • Civil Procedure Actsection 3A
  • Traffic Act (Cap 403, Laws of Kenya)section 8
  • Rules of this Court (Court of Appeal Rules)rule 5(2)(b)
On appeal from
High Court of Kenya at Mombasa
H.C.C.C No. 471 of 1993
Jurisdiction invoked
First appeal from the High Court under the Civil Procedure Act and Rules (Order 21 objection proceedings), with leave of the superior court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "ABDALLA ALI HUSSEIN MOHAMED vs CLEMENT A. OJIAMBO [1998] KECA 68 (KLR)", Case Analysis (1998). Civil Appeal No. 118 of 1997. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/68/eng@1998-07-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.