Victor Amos Nandi Otipa v Malplast Industries Limited [2019] KEELRC 1605 (KLR)

Employment and Labour Relations Court (inferred from parties' roles and references; court not expressly named in the judgment)

24 May 2019

NMNzioki wa Makau

923 words in judgment

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The bottom line

A Kenyan court refused to let a judgment debtor pay in instalments because it had paid nothing since judgment, showing no good faith.

What this practically means

Executive summary

The Respondent/Applicant filed a notice of motion dated 15th March 2019 seeking leave to pay the decretal amount in instalments, citing financial distress arising from various suits at the High Court and the Employment & Labour Relations Court, and asserting that execution would greatly prejudice it. The Claimant opposed, setting out the chronology since judgment was entered in March 2018 and asserting that the Respondent had made no attempt at any payment, characterising the motion as a further attempt to delay enjoyment of the fruits of the judgment. The Respondent relied on three authorities: Freight Forwarders Ltd v Elsek & Elsek (K) Ltd (Mwongo J), Swila Resorts Limited v Universal Freight Logistics (K) (Nzioka J) and Medol Group Limited v Adrian Company Limited & Another (Mutava J). The court adopted the principles from the first two decisions: creditor's rights must be considered, each case turns on its own merits, mere inability to pay in full at once is insufficient, the debtor must show bona fides by prompt payment of a fair proportion, and the court considers the circumstances of the debt, the debtor's conduct, financial position and bona fides. Applying these, the court found that since judgment in March 2018 the Respondent had not paid a single shilling and that its conduct did not indicate good faith or any attempt to settle. The motion was dismissed with costs to the Claimant, and execution was permitted to proceed. Dated and delivered at Nyeri on 24th May 2019.

Key legal issues

Whether an applicant for leave to pay a decretal sum by instalments has demonstrated bona fides and good faith sufficient to justify the exercise of the court's discretion

Holding

The application was dismissed because the Respondent had not paid a single shilling since judgment and its conduct showed no good faith or attempt to settle the debt

Reasoning

The court adopted the principles in Freight Forwarders Ltd v Elsek & Elsek (K) Ltd as stated by Mwongo and Nzioka JJ: the creditor's rights must be considered, each case is decided on its own merits, mere inability to pay at once is insufficient, and the debtor must show bona fides by prompt payment of a fair proportion. Applying these, the court found that since judgment in March 2018 the Respondent had made no payment, and its claim of other debts did not demonstrate good faith. Indulgence without any effort to settle would prejudice the creditor.

p. 2

Legal principles established

The court will only exercise its discretion to allow payment by instalments in favour of a deserving applicant whose conduct indicates good faith and an attempt to settle the decretal sum
Mere inability of a debtor to pay in full at once is not a sufficient reason for the exercise of the discretion; the debtor must show bona fides by arranging prompt payment of a fair proportion

Court orders

1.The Respondent/Applicant's notice of motion dated 15th March 2019 is dismissed
2.Costs of the application to the Claimant
3.Execution may proceed

Authorities

Cases cited (3)

Freight Forwarders Ltd v Elsek & Elsek (K) Ltd
[2012] eKLR
Swila Resorts Limited v Universal Freight Logistics (K)
[2018] eKLR
Medol Group Limited v Adrian Company Limited & Another
[2012] eKLR

Jurisdiction invoked: Not stated in the judgment; the court exercises discretion over execution and payment of the decretal sum by instalments following entry of judgment in March 2018

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Victor Amos Nandi Otipa v Malplast Industries Limited [2019] KEELRC 1605 (KLR)", Case Analysis (2019). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1605/eng@2019-05-24

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