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Court of AppealPartially AllowedCivil Appeal 139 of 2010· [2015] KECA 1010 (KLR)

SNK v MSK & 5 others

Court of Appeal
24 April 2015
8,692 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The appellant husband appealed against a High Court judgment in divorce-related proceedings under section 17 of the Married Women's Property Act, 1882, in which the trial judge awarded the 1st respondent a Kshs 10,000,000 lump sum maintenance, the 3rd respondent (the daughter) Kshs 10,000,000 for schooling and upkeep, declared the 1st respondent entitled to 50% of three properties registered in the appellant's name, ordered transfer of a company-owned property to her, and awarded Kshs 80,000,000 for her shares in family companies. The Court of Appeal, in a unanimous judgment, allowed the appeal in part. Following Muthembwa v Muthembwa and Salomon v Salomon, it held that a court acting under section 17 MWPA may declare beneficial interests in shares but has no jurisdiction to transfer company property or pass proprietary interests; such orders lie only in proceedings under sections 211 or 222(2) of the Companies Act. Those orders were set aside, disposing of the 4th and 5th respondents' cross appeal. Applying Echaria v Echaria, the Court reduced the 1st respondent's beneficial share in the three properties from 50% to 25%, assessing her indirect financial contribution, since the Matrimonial Property Act, 2013 could not apply retrospectively. The lump sum maintenance awards were varied: the 1st respondent now receives Kshs 350,000 monthly during her lifetime or until remarriage, and the 3rd respondent's award was set aside as she had attained majority. Trial costs were limited to one advocate; each party bears their own costs of the appeal.

Key legal issues

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01

Jurisdiction of the family court under section 17 MWPA over company property and shares

Holding

The court may declare beneficial interests in shares held by one spouse, including trusts, but cannot order transfer of company property or compel purchase of shares; such relief lies only under sections 211 or 222(2) of the Companies Act.

Reasoning

Following Muthembwa v Muthembwa, the Court construed section 17 MWPA as extending to disputes over shares in companies owned by spouses, but not to distribution of company-registered property. The trial judge's orders transferring a company-owned property and awarding Kshs 80,000,000 for shares were made without jurisdiction, and the companies were condemned unheard as non-parties. Salomon v Salomon's separate legal personality principle was disregarded by the trial court.

p. 9
02

Entitlement to a share of properties registered in the husband's sole name

Holding

The 1st respondent's indirect financial contribution was assessed at 25%, not 50%; the trial court's declaration of 50% ownership was varied.

Reasoning

Applying Echaria v Echaria, only direct or indirect financial contribution counted under the law applicable at the time. The 1st respondent made no direct financial contribution but held 5% shareholding in the family business, worked in it, and contributed indirectly. Her contribution was assessed at 25%. The Matrimonial Property Act, 2013, recognising non-monetary contribution, could not apply retrospectively.

p. 13
03

Lump sum versus periodical maintenance for a divorced spouse and child

Holding

The lump sum of Kshs 10,000,000 for the 1st respondent was substituted with a monthly payment of Kshs 350,000 during her lifetime or until remarriage; the Kshs 10,000,000 award for the 3rd respondent was set aside as she had attained majority.

Reasoning

The trial judge gave no reasons for choosing lump sums. Citing Cretney and Kershaw v Kershaw, the Court held maintenance must be assessed against the husband's means and standard of living, and lump sums should not cripple a business. A periodical payment was appropriate and may be varied on application. The 3rd respondent, then about 26, no longer qualified for statutory maintenance.

p. 16
04

Costs for three advocates in the trial court

Holding

The trial court's award of costs for three advocates was varied to costs for one advocate only.

Reasoning

Although the trial judge had discretion on costs, the Court found no justification for awarding costs of the two suits for three advocates representing the 1st respondent, and limited the award to one advocate.

p. 16

Legal principles established

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  • A court acting under section 17 of the Married Women's Property Act, 1882 may ascertain and declare beneficial rights to shares in a company, including a declaration of trust, but cannot order transfer of legal title or pass proprietary interest from one spouse to another.
  • Orders affecting property or shares of a limited liability company can only be made by the High Court in proceedings under sections 211 or 222(2) of the Companies Act; a company is a separate legal person from its shareholders.
  • Where matrimonial property is registered in the name of one spouse, beneficial shares depend on proven respective proportions of financial contribution, direct or indirect; equality is equity only where contributions are substantial but unascertainable.
  • A lump sum maintenance payment should not be awarded where its effect would be to cripple a business or cause unnecessary hardship; the court must consider the husband's means.
  • The applicable law in an appeal is the law in force when the trial court made its decision; a statute enacted later cannot govern the appeal.

Court orders

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  1. 1.The order of lump sum payment of Kshs. 10,000,000/= to the 1st respondent substituted with an order of a monthly payment of Kshs. 350,000/= during her lifetime or until she remarries
  2. 2.The order for the payment of Kshs. 10,000,000/= to the 3rd respondent for maintenance set aside
  3. 3.Costs for the trial suit awarded to the 1st respondent for one advocate
  4. 4.Each party to bear their own costs of the appeal
On appeal from
High Court of Kenya at Nairobi
Divorce Cause No 6 of 1997 as consolidated with Miscellaneous Civil Application No 1606 of 1997 (OS)
Jurisdiction invoked
First appellate jurisdiction under the Court of Appeal's statutory appellate powers (appeal against High Court judgment in matrimonial cause under section 17 of the Married Women's Property Act, 1882, applicable via section 3(1)(c) of the Judicature Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "SNK v MSK & 5 others", Case Analysis (2015). Civil Appeal 139 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/1010/eng@2015-04-24

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