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ELRCPartially AllowedNotice of Motion dated 10th March 2021 (ELRC, Nairobi)· [2021] KEELRC 1465 (KLR)

Sylvester Oduor Oyile v Primefuels (Kenya) Limited [2021] KEELRC 1465 (KLR)

Employment and Labour Relations Court
16 April 2021
MMM. Mbaru
1,604 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan employer that pays a court award after deducting PAYE as required can treat the debt as fully settled, even if the decree-holder disagrees.

What this practically means

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Executive summary

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By a Notice of Motion dated 10th March 2021, the respondent in an employment suit (the judgment debtor) sought stay of execution of the judgment of Justice Byram Ongaya delivered on 13th March 2020, lifting of a proclamation against six of its motor vehicles, a declaration that the decree was fully settled, and that the claimant's advocates bear the auctioneers' costs of an attachment of 10th March 2021. The judgment had awarded the claimant Ksh. 1,013,076 less due PAYE plus costs, which were later taxed at Ksh. 406,992.17. After warrants of attachment for Ksh. 1,534,428 issued and the applicant's vehicles were proclaimed, the applicant drew cheques totalling Ksh. 1,238,121.85 and remitted PAYE of Ksh. 296,306.15 to KRA. The claimant opposed, contending the respondent had paid only Ksh. 1,238,121.85 of the decretal sum and that the warrants correctly reflected the court's figure. The court framed two issues: whether the decree had been fully paid and settled, and whether the applicant was entitled to the prayers sought. Recomputing the award less PAYE together with taxed costs and interest, the court found the claimant entitled to Ksh. 1,235,672, which the payment of Ksh. 1,238,121 exceeded. The warrant had been obtained on a mistaken belief that Ksh. 1,534,428 was owed, without accounting for statutory deductions directed by the judgment under section 49(2) of the Employment Act and section 37 of the Income Tax Act, which invalidated the decree relied on for execution. The application was allowed: the decree was declared fully settled, the proclamation lifted, the claimant ordered to bear the auctioneers' costs, and each party to bear its own costs of the application. Delivered at Nairobi on 16th April 2021 by M. Mbaru, Judge.

Key legal issues

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01

Whether the decree was fully settled by payment of Ksh. 1,238,121.85

Holding

Yes. Recomputing the award of Ksh. 1,013,076 less PAYE of Ksh. 296,306, plus assessed costs of Ksh. 406,992 and interest of Ksh. 111,910, gives Ksh. 1,235,672; the amount paid exceeds this figure.

Reasoning

The judgment awarded Ksh. 1,013,076 less due PAYE, so the tax deducted and remitted to KRA must be credited. Adding taxed costs and interest yields Ksh. 1,235,672. Since the applicant had paid Ksh. 1,238,121, the warrant of attachment for Ksh. 1,534,428 rested on a mistaken failure to account for statutory deductions as directed by the court.

p. 3
02

Whether the attachment and proclamation founded on the warrant of Ksh. 1,534,428 were valid

Holding

No. The warrant was obtained on a mistaken figure that did not deduct PAYE as directed by the judgment and required by statute, and was therefore erroneous.

Reasoning

The court held the warrant was procured before taking into account the statutory deductions directed in the judgment, read with section 49(2) of the Employment Act and section 37 of the Income Tax Act. Proceeding on that basis invalidated the very decree relied upon for execution, so the proclamation had to be lifted and the applicant's motor vehicles released.

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Legal principles established

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  • Where a judgment awards a sum less due PAYE, the decree-holder must credit statutory deductions, read with section 37 of the Income Tax Act and section 49(2) of the Employment Act, before executing; ignoring them invalidates the decree relied on for execution.

Court orders

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  1. 1.Declared that the respondent has fully settled the decree herein
  2. 2.Lifted the proclamation issued against the Applicant's Motor vehicles KCJ 976Y, KCJ 983Y, KCF 532L, KCF 056L, KBS 384Z and KCR 334P
  3. 3.Ordered that the claimant shall bear the costs of the auctioneers
  4. 4.Ordered that each party bear its own costs of the application
Jurisdiction invoked
Sections 3 and 20 of the Employment and Labour Relations Court Act; Rules 28(1)(a) and (g) of the ELRC (Procedure) Rules; Articles 10 and 50 of the Constitution; sections 1A, 1B, 3, 3A, 63E and 95 of the Civil Procedure Act; Order 22 Rule 22 and Order 50 Rule 6 of the Civil Procedure Rules; section 37 of the Income Tax Act; sections 19(1) and 49(2) of the Employment Act, 2007

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, "Sylvester Oduor Oyile v Primefuels (Kenya) Limited [2021] KEELRC 1465 (KLR)", Case Analysis (2021). Notice of Motion dated 10th March 2021 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1465/eng@2021-04-16

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