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ELCDismissedNot stated in the excerpt provided· [2021] KEELC 1979 (KLR)

Samson Teela Akute v Kenneth J Kamau Ngigi & 2 others [2021] KEELC 1979 (KLR)

Environment and Land Court
16 September 2021
COChristine Ochieng
3,496 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Plaintiff, who claims ownership of suit property KAJIADO/DALALEKUTUK/1320 and holds a competing title to that of the 1st Defendant, moved the court by Notice of Motion dated 25th November, 2020 seeking: (i) an order that Twyford Ceramics Company Limited (2nd Defendant) and/or KEDA deposit Kshs. 500,000,000 in court as security before judgment; (ii) further monthly deposits of Kshs. 10,000,000; (iii) a temporary injunction halting operations on the suit property pending compliance; and (iv) leave to enjoin KEDA as a defendant without amending the Plaint. The Plaintiff argued that the 2nd Defendant's change of name to KEDA with new Chinese shareholding, alleged debentures and secret removal of machinery showed an intent to defeat any decree. The Defendants opposed: the 1st Defendant via Grounds of Opposition; the 2nd Defendant through a replying affidavit of its Managing Director Li Ruiqin explaining that the name change retained the same registration number, that it has invested Kshs. 6.6 billion, employs about 3,000 people, and holds the balance of the purchase price in its advocate's account; the 3rd Defendant also filed Grounds of Opposition. The court framed two issues: whether the 2nd Defendant should deposit security, and whether KEDA should be joined. Relying on Kuria Kanyoko and Bayusuf Grain Millers, it held that the burden of proving an intent to obstruct execution lies on the applicant, that no tangible evidence showed the 2nd Defendant was moving assets from the jurisdiction, and that no valuation supported the Kshs. 500,000,000 figure. The court also held joinder unnecessary since KEDA and the 2nd Defendant share one registration, and declined to revisit the injunction which had been determined on 18th July, 2017. The application was dismissed with costs.

Key legal issues

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01

Whether the 2nd Defendant should deposit Kshs. 500,000,000 in court as security before judgment

Holding

Dismissed; the Plaintiff failed to discharge the burden under Order 39 Rule 5 of showing an intent to obstruct or delay execution by disposing of or removing property.

Reasoning

Order 39 Rule 5 requires the court to be satisfied, by affidavit or otherwise, that the defendant intends to obstruct or delay execution by disposing of or removing property from the court's jurisdiction. Apart from the Plaintiff's own averments, no tangible evidence was tendered that the 2nd Defendant was moving assets out of the jurisdiction. The 2nd Defendant had invested heavily on the property and its registration remained unchanged despite the name change. No valuation report supported the Kshs. 500,000,000 figure. The ownership dispute itself remains for trial.

p. 4
02

Whether KEDA should be enjoined as a party

Holding

Refused; KEDA and the 2nd Defendant are the same entity sharing one registration number, so joinder is unnecessary.

Reasoning

The Plaintiff argued that the 2nd Defendant's change of name to KEDA with new Chinese shareholding made it a different, non-existent entity whose assets were being moved, warranting joinder. The court found that although the name changed and a Certificate of Change of Name was issued, the registration number was retained, making KEDA and Twyford the same corporate entity. Enjoining it separately would serve no purpose. The change of name was a commercial decision that does not alter the company's liabilities.

p. 4

Legal principles established

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  • The burden of justifying attachment before judgment lies on the applicant, who must show the defendant is about to dispose of or remove property to defeat a decree; conflicting averments must be tested by evidence in the conventional way
  • An order of attachment before judgment is draconian and can only issue in the clearest of cases where the court is satisfied the defendant intends to abscond or dispose of assets to defeat justice

Court orders

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  1. 1.The Plaintiff's Notice of Motion Application dated 25th November, 2020 is dismissed
  2. 2.Costs of the application awarded to the 1st and 2nd Defendants

Authorities

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Legislation

  • Civil Procedure ActSection 63
  • Civil Procedure ActSection 1A(1)
  • Civil Procedure Rules, 2010Order 39 Rule 5
  • Transfer of Property Act 1882Section 52

Cases cited (20)

  • Okiya Omtatah Okoiti v Communication Authority of Kenya & 8 Others
    (2018) eKLR
  • Bayusuf Grain Millers v Bread Kenya Limited
    (2005) eKLR
  • Paul Kiplagat Birgen & 25 Others v Interim Independent Electoral Commission & 2 Others
    (2011) eKLR / (2012) eKLR
  • Awo Shariff Mohamed t/a Asmi Services v Caltex Oil Kenya Ltd
    (2008) eKLR
  • Shiva Enterprises Limited v Jivaykumar Tulsidas Patel t/a Hytech Investment
    (2006) eKLR
  • John Kipkemboi Sum and Lavington Security Guards Limited
    (1998) eKLR
  • Tuffsteel Limited v Boleyn Magic Wall Panel Limited
    (2020) eKLR
  • John Kahaito Bari & 3 Others v New Kenya Co-operative Creameries Limited & Another
    (2017) eKLR
  • Giella v Cassman Brown & Co. Ltd
    (1973) EA 358
  • Kenya Commercial Finance Co. Ltd v Afraha Education Society
    (2001) 1 EA 86
  • Export Processing Zones Authority v Kapa Oil Refineries Limited & 6 Others
    (2014) eKLR
  • Mrao Limited v First American Bank of Kenya Limited & 2 Others
    (2003) KLR 125
  • Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 Others
    (2016) eKLR
  • Albert Mario Cordeiro & Another v Vishram Shamji
    (2015) eKLR
  • Kuria Kanyoko T/A Amigos Bar & Restaurant v Nderu & 2 Others
    (1988) 2 KAR 126
  • Godfrey Oduor Odhiambo v Ukwala Supermarket Kisumu Limited
    (2016) eKLR
  • Medina Corporation Co. Ltd v Medina Properties Ltd & Another
    (2014) eKLR
  • Alice Mumbi v BOL Ronald Gerdinus & Another
    (2020) eKLR
  • Mugo Muruachimab alias Mugo Nyage v Moffat Nyaga Kagau & 2 Others
    eKLR
  • Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 Others
    (2014) eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court; Civil Procedure Act and Civil Procedure Rules, 2010 (Order 39)

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, "Samson Teela Akute v Kenneth J Kamau Ngigi & 2 others [2021] KEELC 1979 (KLR)", Case Analysis (2021). Not stated in the excerpt provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1979/eng@2021-09-16

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