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ELRCDismissedNotice of Motion dated 11th May 2012 (in the Claimant's employment claim)· [2015] KEELRC 1212 (KLR)

Muchiri v Kiambu Club; Kiambu Club Registered Trustees (Objector) (Cause 1517 of 2010) [2015] KEELRC 1212 (KLR)

Industrial Court (Employment and Labour Relations Court)
13 January 2015
NMNzioki Wa Makau
904 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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The Objector/Applicant, represented by Fidelis Mui, moved the Industrial Court by Notice of Motion dated 11th May 2012 seeking the lifting of a proclamation of 8th May 2012 executed by Jumbo Airlink Auctioneers pursuant to a decree in the Claimant's employment suit, and the unconditional return of the attached goods. The Objector argued that the Judgment Debtor, Kiambu Club, was an unknown entity in law and that Kiambu Club Limited, a company limited by guarantee, was distinct, relying on authorities on separate legal personality including In Re Standard Ltd ex parte Tricom Paper International BV. The Claimant/Decree Holder opposed, deposing that the Objector and the Judgment Debtor were one and the same and that estoppel barred the objection. The court accepted the general distinction between a business name and a limited liability company but distinguished the cited cases. The Respondent had filed a defence admitting it employed the Claimant as club manager, never pursued its pleaded point that the claim be struck out, and named itself as employer under the business name in the employment contract of 5th September 2005, contrary to the Employment Act's requirements. The Chairman of the Objector instructed counsel to defend the suit. The court held that estoppel in pais arose from this conduct during employment, termination and execution, so the Objector could not now deny it was the correct party. The application was dismissed with costs to the Claimant/Decree Holder, and all costs previously ordered by Njagi Marete J. were to be paid forthwith.

Key legal issues

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01

Whether the distinct legal personality of a limited liability company shields the Objector from execution

Holding

No - estoppel in pais arising from the Objector's conduct during employment, termination and execution prevents it from denying it is the correct party

Reasoning

The court accepted the general distinction between a business name and a limited company per the cited authorities. However, the Respondent filed a defence admitting employment of the Claimant as club manager, never sought to strike out the claim for wrong entity, and gave itself the business name as employer in the employment contract. Its acquiescence and conduct created an estoppel in pais, so the entity objection failed in the employment context.

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02

Whether the Employment Act's definition of employer captures the Objector

Holding

Yes - the Objector, as the person who gave itself as employer under the business name in the contract of service, cannot resile from that

Reasoning

The Employment Act is a complete code defining an employer to include any person, firm, corporation or company employing an individual, and requires statutory particulars in the contract. The contract dated 5th September 2005 named the business name as employer; the Objector was therefore bound and could not avoid execution by claiming a different legal identity. There was also no denial that the Objector's Chairman instructed counsel to defend the suit.

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Legal principles established

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  • In company law there is a distinction between a business name and a limited liability company
  • A party that acquiesces in a suit while capable of objecting is estopped from later raising the issue of wrong legal entity
  • In employment claims the Employment Act's definition of employer and the employer's own conduct can establish estoppel in pais notwithstanding the separate legal entity doctrine

Court orders

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  1. 1.The Objector's Notice of Motion dated 11th May 2012 is dismissed
  2. 2.Costs of the application to the Claimant/Decree Holder
  3. 3.All the costs ordered by Njagi Marete J. to be paid forthwith

Authorities

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Legislation

  • Employment Actdefinition of employer; statutory particulars of contract of service

Cases cited (4)

  • In Re Standard Ltd Ex Parte Tricom Paper International BV
    [2002] KLR 644
  • Mohamed Adan Molly v Linksoft (K) Ltd & Another
    [2013] eKLR
  • K-Rep Bank v Basilio Pascal Kiseli & 2 Others
    [2012] eKLR
  • Equitorial Commercial Bank Ltd v Bubacon Agencies Ltd & 3 Others
    [2013] eKLR
Jurisdiction invoked
Original employment jurisdiction; objection to execution in a decree of this Court

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, "Muchiri v Kiambu Club; Kiambu Club Registered Trustees (Objector) (Cause 1517 of 2010) [2015] KEELRC 1212 (KLR)", Case Analysis (2015). Notice of Motion dated 11th May 2012 (in the Claimant's employment claim). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1212/eng@2015-01-13

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