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ELRCDismissedNot stated in the extract· [2021] KEELRC 2227 (KLR)

James Gitau Kamau & 9 others v Habo Group of Companies Limited & HGC Habo Group Limited (Cause 279 of 2015) [2021] KEELRC 2227 (KLR)

Employment and Labour Relations Court
4 February 2021
LNLinnet Ndolo
814 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~3 min to read original · ~4 min brief

The bottom line

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The Employment Court dismissed a company's bid to stop attachment of its assets because it failed to prove it actually owned them, and execution against the judgment debtor will now proceed.

What this practically means

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Executive summary

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Following a judgment by Makau J on 9th September 2016 awarding the Claimants Kshs. 1,014,862 plus costs and interest, the Claimants moved to execute. High Class Auctioneers proclaimed various office assets attached on 15th October 2020, and HGC Habo Group Limited filed an objection under Order 22 Rule 51(1) of the Civil Procedure Rules, asserting it was the legal owner of the proclaimed items. The Objector, through an affidavit of its Legal Assistant/Acting Human Resource Officer, Omboke Sammy, deponed that the assets belonged to it and that it was a distinct legal entity unrelated to the Respondent. The Claimants, through a replying affidavit of the 10th Claimant, James Gitau, contended that the Objector had shown no legal or equitable interest and that the Objector and Respondent shared directors, the Respondent allegedly using a company's certificate of incorporation to defeat execution. The Court framed two issues: timeliness of the Notice of Intention to Proceed, and the Objector's interest in the property. On the first, invoking Article 159(2)(d) of the Constitution, the Court held procedural time limits cannot determine objection proceedings in limine. It declined to determine the relationship between Objector and Respondent absent an application to pierce the corporate veil. On the core burden, the Court held the Objector had to prove its interest; the rubber stamp of its CEO on the Proclamation Notice was unauthenticated and could not shift the burden to the Decree Holder. The objection was dismissed with costs to the Claimants and execution allowed to proceed.

Key legal issues

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01

Burden of proof in objection to attachment proceedings

Holding

The Objector failed to discharge the burden of demonstrating a legal or equitable interest in the attached property; the objection fails and execution proceeds

Reasoning

Under Order 22 Rule 51(1), any person claiming entitlement to attached property must give notice of objection, and the law places the burden of proving that interest on the Objector. The rubber stamp of the Objector's CEO on the Proclamation Notice did not lift this burden: it was unauthenticated, the CEO was not named, and the Notice could have been received by the Judgment Debtor or an agent. Without evidence of interest, the objection must fail.

p. 2
02

Timeliness of service of the Notice of Intention to Proceed with Execution

Holding

The procedural time objection fails; procedural rules cannot defeat objection proceedings in limine under Article 159(2)(d)

Reasoning

The Objector argued the Notice of Intention to Proceed with Execution was served out of time and without leave. The Court held, invoking Article 159(2)(d) on the overriding objective, that a procedural rule prescribing time limits for filing notices cannot be used to determine objection proceedings in limine.

p. 1
03

Alleged relationship between Objector and Judgment Debtor / corporate veil

Holding

The issue of the relationship between the Objector and the Respondent is not before the Court at this stage, as there is no application to pierce the corporate veil

Reasoning

The Claimants argued the Objector and Respondent share directors and that the Objector's certificate of incorporation was being used to defeat execution. The Court found that determining the parties' relationship would require an application for piercing the corporate veil, of which there was none; accordingly the issue was not properly before it.

p. 2

Legal principles established

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  • The Objector bears the legal and evidential burden of demonstrating a legal or equitable interest in attached property, and this burden cannot shift to the Decree Holder by a rubber stamp on a Proclamation Notice
  • A procedural time rule cannot be used to determine objection proceedings in limine, per Article 159(2)(d)

Court orders

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  1. 1.The Objector's objection to attachment is dismissed
  2. 2.Execution will proceed towards satisfaction of the decree
  3. 3.The Objector to meet the costs of the proceedings

Authorities

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Legislation

  • Civil Procedure RulesOrder 22 Rule 51(1)
  • Constitution of Kenya, 2010Article 159(2)(d)

Cases cited (2)

  • Akiba Bank Ltd v Jetha & Sons Ltd
    [2005] eKLR
  • Kennedy Njuguna Mwangi v Collins Kiprono Bett & others
    [2018] eKLR
Jurisdiction invoked
Order 22 Rule 51(1) of the Civil Procedure Rules - objection to attachment in execution of a decree

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, "James Gitau Kamau & 9 others v Habo Group of Companies Limited & HGC Habo Group Limited (Cause 279 of 2015) [2021] KEELRC 2227 (KLR)", Case Analysis (2021). Not stated in the extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2227/eng@2021-02-04

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