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Court of AppealDismissedCivil Appeal at Mombasa (Memorandum of Appeal dated 28th February 2022)

Alfarooq Hospital Limited v Masinde (Civil Appeal E029 of 2022) [2025] KECA 892 (KLR)

Court of Appeal of Kenya
7 March 2025
4,717 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled a hospital could not dodge an employee's award by claiming it was a different company without proof.

What this practically means

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Executive summary

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The respondent, Emily Catherine Masinde, was employed at Alfarooq Hospital, Mombasa from 1st October 2015 and retrenched effective 1st May 2018. In ELRC Cause No. 427 of 2018 she obtained an undefended judgment on 6th February 2020 awarding her compensation, house allowance, leave pay, a certificate of service and costs. When execution commenced, Alfarooq Hospital Limited moved the ELRC (L. Ndolo, J.) under Order 10 rule 11 to set aside the default judgment, asserting it was a separate entity from 'Alfarooq Hospital Management' under a 2015 Management Agreement (MoU) with Miftah Construction & Supplies Limited, and that it was never served with summons. The trial court dismissed the application on 15th April 2021, holding service proper and the separate-entity claim unproven. On appeal, the Court of Appeal framed two issues: the identity of the respondent's employer and the propriety of service. The Court held the appellant bore the burden of proving it was distinct from Alfarooq Hospital Management, but failed: it omitted the CR12 for Alfarooq Hospital Management Limited, adduced no evidence of execution of the MoU or payment of the agreed rent, and produced no hospital licences. On service, the process server's affidavit was unchallenged, and the summons was received by Dr. Mwaura, whom the appellant itself had appointed CEO after taking over the hospital. The appeal was dismissed and the ELRC ruling upheld, with costs to the respondent. The Court applied James Kanyiita Nderitu on regular versus irregular default judgments, Shah v Mbogo on the discretion to set aside ex parte judgments, and the Evidence Act burden-of-proof provisions.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the learned Judge erred in failing to find that the respondent was employed by an entity distinct and separate from the appellant (Alfarooq Hospital Management, not Alfarooq Hospital Limited)
  2. 2.Whether the learned Judge erred in finding that service of summons was properly effected upon the respondent's employer

Key legal issues

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01

Identity of the respondent's employer

Holding

The appellant failed to discharge its burden of proving that Alfarooq Hospital Management was a distinct entity that employed the respondent; the respondent was employed and retrenched by the appellant.

Reasoning

The appellant annexed certificates of incorporation but deliberately omitted the CR12 for Alfarooq Hospital Management Limited, produced no attesting advocate's evidence of execution of the MoU, no proof of payment of the monthly rent consideration, and no licences or permits identifying the party licensed to run the hospital. It therefore failed to demonstrate any change of ownership or control of the hospital, and the respondent's appointment letter and hospital policies pointed to Alfarooq Hospital as employer.

p. 8
02

Service of summons and validity of the default judgment

Holding

Service was properly effected; the default judgment was regular and the trial court did not err in refusing to set it aside.

Reasoning

A process server swore he served Dr. Mwaura, whom the appellant's own company resolution of 2nd July 2018 appointed CEO, at the hospital premises on 16th July 2018; the summons bore Alfarooq Hospital Management's receipt stamp. The appellant never challenged the affidavit of service nor sought the server's cross-examination. Having taken over the hospital's administration, the appellant's proper remedies were third-party or objection proceedings, not setting aside; its inaction suggested an intent to obstruct execution.

p. 8
03

Use of a separate-entity defence to escape a decree

Holding

The setting-aside discretion will not assist a litigant who deliberately seeks to obstruct or delay the course of justice.

Reasoning

Citing Shah v Mbogo, the Court found the sequence of events - inaction after service, failure to institute third-party or objection proceedings, and the contradictory setting-aside application - showed the appellant intended to use 'Alfarooq Hospital Management' to shield itself from liability and leave the respondent without remedy.

p. 9

Legal principles established

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  • A party invoking the law and asserting the affirmative of an issue bears the legal burden of proof; a party alleging it is a distinct entity from the one sued must prove it on a balance of probabilities.
  • A party who does not challenge an affidavit of service and does not seek cross-examination of the process server cannot later contend that it was never served; an irregular default judgment is set aside as of right, but a regular one is discretionary.

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent
  2. 2.The ruling and orders of the ELRC (L. Ndolo, J.) dated 15th April 2021 are upheld with costs to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
On appeal from
Employment and Labour Relations Court at Mombasa
ELRC Cause No. 427 of 2018 (ruling of 15th April 2021 on Notice of Motion dated 29th January 2021)
Jurisdiction invoked
First appeal to the Court of Appeal from the ELRC (ruling dismissing an application to set aside a default judgment), pursuant to the Court of Appeal's appellate jurisdiction

Relief refused

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Setting aside of the default judgment and decree of 6th February 2020

The appellant failed to prove it was a separate entity from the employer sued, and service was properly effected on Dr. Mwaura, its appointed CEO, whose account was never challenged

p. 9

Costs

Appeal dismissed with costs to the respondent; the ruling and orders of the ELRC dated 15th April 2021 upheld with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

we reach the inescapable conclusion that the appeal has no merit and is hereby dismissed with costs to the respondent. The ruling and orders of the ELRC (L. Ndolo, J.) dated 15th April 2021 are hereby upheld with costs to the respondent.
p. 9Final orders - appeal dismissed, ELRC ruling upheld
In an irregular default judgment, on the other hand, judgment will have been entered against a defendant who has not been served or properly served with summons to enter appearance. In such a situation, the default judgment is set aside ex debito justitiae, as a matter of right.
p. 6Regular versus irregular default judgments
The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.
p. 6Right to be heard
the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue
p. 7Legal burden of proof
This discretion is intended so to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but is not designed to assist a person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice.
p. 9Discretion to set aside ex parte judgment - Shah v Mbogo

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, "Alfarooq Hospital Limited v Masinde (Civil Appeal E029 of 2022) [2025] KECA 892 (KLR)", Case Analysis (2025). Civil Appeal at Mombasa (Memorandum of Appeal dated 28th February 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/892/eng@2025-03-07

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