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ELRCStruck OutMotion dated 26 May 2014 (ELRC, Nakuru)· [2014] KEELRC 1443 (KLR)

Rosabel Wagicuyu Nyamu v Kieran Day & another [2014] KEELRC 1443 (KLR)

Employment and Labour Relations Court
28 November 2014
1,102 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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This is a ruling on a notice of preliminary objection in an employment claim in the Employment and Labour Relations Court at Nakuru. The claimant, a former Pack House Manager later promoted to General Manager of Karuturi Ltd while under receivership, sought leave to sue the company, injunctive relief against eviction from an employment-allocated house, and (by amendment) Kshs 2,625,000 in notice pay, salary arrears, redundancy and gratuity. However, only the two Receivers were named as joint Respondents; the company itself was not a party. The Receivers objected that, as agents of the company in receivership, they bore no personal liability and could not be sued in their own name for claims arising from the company's contracts. Citing the Court of Appeal's decision in Lochab Brothers v Kenya Furfural Co. Ltd and the judge's own earlier ruling in Joseph Ashioya v Kenya United Steel Co., the court held that receivers are mere agents with no vested property or personal liability, and claims must be brought against the company. The claimant's invocation of Article 159 of the Constitution failed: the court warned that Article 159 was becoming an 'unruly horse' and cannot cure unexplained procedural non-compliance. The preliminary objection was upheld and the Memorandum of Claim struck out with no order as to costs, the claimant being at liberty to file a fresh suit against the correct parties since her claim was not time barred.

Key legal issues

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01

Competence of a suit brought against receivers alone, without the company in receivership

Holding

The suit against the Receivers alone was incompetent and was struck out on preliminary objection

Reasoning

Relying on the Court of Appeal's decision in Lochab Brothers, the court restated that a receiver is the agent of the company, cannot sue in his own name, and by parity of reasoning (as applied by the same judge in Ashioya) cannot be sued personally for claims arising from the company's contracts, including employment contracts. Since only the two Receivers were named as Respondents and the company was not a party, the suit was incompetent. The claimant was left free to file a fresh suit against the correct parties.

p. 2
02

Whether Article 159(2)(d) of the Constitution overrides the rule on who may sue or be sued in receivership

Holding

No - Article 159 cannot be an elixir for failure to comply with procedure where no justification is given

Reasoning

The claimant argued that the court should overlook the misjoinder under Article 159's command not to pay undue regard to procedural technicalities. The court held that while the Constitution is sacrosanct and inconsistent statutory or common law must yield, the claimant did not demonstrate that the substantive receivership law failed any constitutional threshold. The judge warned of the danger of Article 159 becoming an 'unruly horse' through casual invocation by non-compliant litigants.

p. 2

Legal principles established

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  • Receivers are agents of the company in receivership, have no locus standi to sue in their own name, and conversely a claim arising from the company's contract (such as an employment claim) must be brought against the company, not the receivers in their personal capacity
  • Article 159 of the Constitution cannot be invoked to cure non-compliance with substantive and procedural law where no reason for the failure is offered

Court orders

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  1. 1.The preliminary objection is upheld
  2. 2.The Memorandum of Claim is struck out with no order as to costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 159

Cases cited (2)

  • Lochab Brothers v Kenya Furfural Co. Ltd
    (1983) KLR
  • Joseph Ashioya & 165 others v Kenya United Steel Co. (2006) Ltd & Anr
    (2013) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (employment relationship between Claimant and Respondent)

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, "Rosabel Wagicuyu Nyamu v Kieran Day & another [2014] KEELRC 1443 (KLR)", Case Analysis (2014). Motion dated 26 May 2014 (ELRC, Nakuru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1443/eng@2014-11-28

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