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ELRCPartially AllowedObjector's application dated 24.02.2020, filed 25.02.2020 (in the suit filed 09.12.2014)· [2020] KEELRC 330 (KLR)

Gordon Otieno Omatch v Ismael Elisha Eshikote t/a High Class Auctioneers; Westhouse Hotel & 5 others (Debtor) [2020] KEELRC 330 (KLR)

Employment and Labour Relations Court
23 October 2020
BOByram Ongaya
1,231 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 an objection proceeding in execution decided by the Employment and Labour Relations Court at Nairobi. The claimant obtained judgment on 17.03.2017 against Westhouse Hotel for Kshs. 75,000 plus taxed costs of Kshs. 137,315 in an unfair termination suit. In execution, the objectors (West Wood Hotel) filed an application dated 24.02.2020 seeking setting aside of a proclamation of attachment dated 19.02.2020 effected by High Class Auctioneers, a permanent injunction against further attachment or sale, and review of orders of 26.06.2019 authorising a warrant of attachment against them. They relied on certificates of registration of business names and evidence of purchase of the hotel property by private treaty around September 2015, contending they were separate legal persons from the judgment debtor. The claimant countered that the objectors had taken over the management, assets and liabilities of the respondent, that the respondent had rebranded, and that the objectors' belated objection amounted to laches. The Court held that the certificates of registration established the objectors and the judgment debtor as separate persons in law and that the claimant had failed to prove the alleged rebranding by relevant evidence. Applying rule 33 of the ELRC (Procedure) Rules 2016, the Court found manifest injustice would result if review were refused, and allowed the application. The proclamation was set aside, a permanent injunction was issued, the orders of 26.06.2019 were reviewed and vacated, and each party was ordered to bear its own costs, the objectors' failure to respond to the earlier application weighing against a costs award in their favour.

Key legal issues

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01

Whether the objectors are separate legal persons from the judgment debtor

Holding

The certificates of registration of business names established that the objectors and the judgment debtor are separate persons in law, and the claimant failed to prove the alleged rebranding

Reasoning

The objectors exhibited certificates of registration dated 01.09.2011 (Westhouse – A One Degree South Hotel by Kibe Muigai Holdings Limited) and 25.08.2015 (West Wood Hotel), plus evidence of purchase of the land by private treaty around September 2015. The claimant's assertion that the judgment debtor rebranded into the objectors was not supported by relevant evidence, so the objectors' claim succeeded on that footing.

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02

Whether the orders of 26.06.2019 should be reviewed and the execution against the objectors vacated

Holding

Review was allowed under rule 33 of the ELRC (Procedure) Rules 2016 because manifest injustice would result if the execution orders against persons different from the judgment debtor stood

Reasoning

The Court weighed the review grounds in rule 33. Finding the objectors to be different persons from the judgment debtor, executing the decree against them would cause manifest injustice. It followed that the review would be granted and the orders for execution against the objectors vacated as prayed for in the application.

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03

The conduct of the objectors in failing to respond to the application of 05.03.2019 and the resulting orders

Holding

The Court noted the objectors had not denied service and their failure to participate, and reflected this in the costs disposition

Reasoning

The objectors were served with the claimant's application of 05.03.2019 and the orders of 26.06.2019 but chose not to oppose or respond until execution proceedings issued. Although their substantive objection succeeded, the Court took account of this conduct by ordering that each party bear its own costs of the objection proceedings rather than awarding costs to the objectors.

p. 2

Legal principles established

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  • A party alleging that a judgment debtor has rebranded or transferred into another entity must establish that fact by relevant evidence; otherwise registered business names establish separate legal persons
  • Where persons against whom execution orders were made are different from the judgment debtor, manifest injustice warrants review and vacation of execution orders under rule 33

Court orders

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  1. 1.The proclamation of attachment dated 19.02.2020 and attachment of the whole of the properties attached by High Class Auctioneers belonging to the objector in execution of the decree against the judgment debtor is set aside or lifted
  2. 2.A permanent injunction issued restraining the decree holder, his agents, servants, employees, assigns, representatives or anyone claiming for or under him from proclaiming, attaching, carting or selling by way of public auction or other way the movable or immovable properties and goods listed in the proclamation in execution of the decree dated 16.03.2017
  3. 3.The Court reviewed and vacated its orders given on 26.06.2019 against the objector (West Wood Hotel) in respect of the warrant of attachment made pursuant to the notice of motion dated 05.03.2019
  4. 4.Each party to bear own costs of the application

Authorities

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Legislation

  • Civil Procedure Actsections 1A, 1B, 3A, 63(e)
  • Civil Procedure RulesOrder 22 rules 51(1), (2), (3), 52, 53
  • Employment and Labour Relations Court Actsections 3, 12(3)(viii)
  • Employment and Labour Relations Court (Procedure) Rules 2016rules 32, 33
Jurisdiction invoked
Sections 3 and 12(3)(viii) of the Employment and Labour Relations Court Act; rules 32 and 33 of the Employment and Labour Relations Court (Procedure) Rules 2016; Order 22 rules 51-53 of the Civil Procedure Rules

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, "Gordon Otieno Omatch v Ismael Elisha Eshikote t/a High Class Auctioneers; Westhouse Hotel & 5 others (Debtor) [2020] KEELRC 330 (KLR)", Case Analysis (2020). Objector's application dated 24.02.2020, filed 25.02.2020 (in the suit filed 09.12.2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/330/eng@2020-10-23

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