Kenneth Karanja Kibathi t/a M/S Kibathi & Company Advocates v Equity Masters Limited [2018] KEELC 1772 (KLR)
The bottom line
#A Kenyan court protected an advocate's unpaid legal fees by barring the sale of a company's land, but refused to touch the directors' personal property without proof they were actually directors.
What this practically means
#Executive summary
#Key legal issues
#Whether the prayer for an official search was still live
The prayer was overtaken by events because the Land Registrar had, pursuant to the consent order, produced the official search confirming registration of the suit parcels in the Respondent's name
The District Land Registrar, Thika, filed a replying affidavit attaching green cards showing Certificates of Lease in favour of Equity Masters Ltd issued on 2nd May 2018. The Court held the consent-ordered search had been satisfied, mooting the prayer for a search. Notably, the search contradicted the Respondent's Grounds of Opposition that the parcels had been sold to third parties.
Whether a prohibiting order should issue over the suit parcels
Granted - the parcels, being the Respondent's only known assets, were prohibited from sale until the decretal sum of Kshs.424,687/60 was satisfied
The Court found a judgment for Kshs.424,687/60 was entered on 18th May 2015 and remains unsatisfied. The Respondent's claim that the properties were sold to third parties was disproved by the official search showing registration in the Respondent's name. As the parcels were the only known assets, prohibition was prudent to secure the decree.
Whether the Directors could be compelled to attend for oral examination and have their property attached
Refused for want of evidence of directorship; the corporate veil issue fell away
The Applicant relied on bare allegation that the three named persons were Directors. No Company Registry search was exhibited. Without proof of current directorship there was no basis for oral examination, and consequently no basis to lift the corporate veil or permit attachment of their personal property. Those prayers were dismissed.
Legal principles established
#- A party seeking to compel named individuals to be orally examined as to a judgment debtor company's assets must first prove, by evidence such as a Company Registry search, that those individuals are directors of the company
- The corporate veil cannot be lifted absent confirmation of the directorship of the persons sought to be made liable
Court orders
#- 1.A prohibiting order issued against the Respondent's land parcels Ruiru/Kiu Block 4/1689 and Ruiru/Kiu Block 4/1753, prohibiting their sale until the decretal sum is satisfied
- 2.Prayers Nos. 4 and 5 of the Notice of Motion dismissed entirely
- 3.Applicant awarded costs of the application
- Jurisdiction invoked
- Order 22 Rule 35 of the Civil Procedure Rules, Sections 1A, 1B, 3A, 63(a) of the Civil Procedure Act, Section 48(2) of the Advocates Act, Cap 16 and Rule 13A of the Advocates Remuneration Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenneth Karanja Kibathi t/a M/S Kibathi & Company Advocates v Equity Masters Limited [2018] KEELC 1772 (KLR)", Case Analysis (2018). Notice of Motion dated 24th February 2016 (Decree of 18th May 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1772/eng@2018-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.