Michael Chege v Chatur Properties Ltd [2019] KECA 848 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a shared director or office address does not make two companies legally the same, so the creditor could not attach the objector's goods.
What this practically means
#Executive summary
#Key legal issues
#Separate legal personality of companies notwithstanding common directorship
Common directorship of two companies does not make them one and the same entity.
The appellant's case rested on the contention that the director of Chatur Properties Limited was the same person as the director of the objector, Sunrise Properties Limited. The Court accepted this might well be true, but held that as a matter of law a shared director is insufficient to fuse two distinct corporate personalities. The corporate veil between the two entities remained intact for purposes of objection proceedings in execution.
Effect of duplicate registration at the Company's Registry
Duplicate registration of the same company name did not render the objector non-existent or illegal.
The appellant relied on a Registrar of Companies letter indicating two registrations under the name Sunrise Properties Limited, arguing the objector company was fraudulent. Both the High Court and this Court held that the Registrar had not said the objector did not exist; the letter only disclosed an earlier company of the same name. Duplicate names arising by inadvertence do not invalidate the current registration.
Burden of proof on the attaching creditor in objection proceedings
The appellant bore, and failed to discharge, the onus of proving the attached goods belonged to the judgment debtor, Chatur Properties Ltd.
In objection proceedings, the party asserting that goods claimed by an objector in fact belong to the judgment debtor must prove that assertion. The appellant's reliance on shared offices and a shared director was insufficient. The Court agreed with the first appellate judge that the failure of proof was dispositive, and the appeal had no merit on any of the ten grounds.
Scope of a second appeal
The Court confined itself to matters of law, adopting the Kenya Breweries v Godfrey Odoyo formulation.
This being a second appeal, the Court reaffirmed that it must resist the temptation of delving into matters of fact, confining itself to questions of law unless the courts below considered matters they should not have, failed to consider matters they should have, or the decision is perverse. The appellant identified no such error.
Legal principles established
#- A second appeal in the Court of Appeal is confined to matters of law; the Court will not delve into matters of fact except where the courts below considered matters they should not have, failed to consider matters they should have, or the decision is perverse.
- The fact that one director appears in two companies is not legally sufficient to establish that the two companies are one and the same; each company is a separate legal entity.
- Sharing premises does not unify separate legal entities; each company carries its own burdens.
- The burden lies on the judgment creditor to prove that goods attached in execution, which are claimed by an objector, belong to the judgment debtor.
Court orders
#- 1.The appeal is dismissed
- 2.No order as to costs
- On appeal from
- High Court of Kenya at Nairobi (Milimani Commercial Courts)
- H.C.C.A No. 69 of 2008
- Jurisdiction invoked
- Second appeal to the Court of Appeal under the Civil Procedure Act and Rules (matters of law only)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Michael Chege v Chatur Properties Ltd [2019] KECA 848 (KLR)", Case Analysis (2019). Civil Appeal No. 300 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/848/eng@2019-03-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.