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ELRCPartially Allowednot stated in the judgment extract· [2022] KEELRC 790 (KLR)

John Wanjohi Wakahora v Linksoft Communications Systems Limited [2022] KEELRC 790 (KLR)

Employment and Labour Relations Court
15 February 2022
4,086 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan employment court allowed an employer to pay a judgment debt in monthly instalments, but raised the amount and warned that any missed payment triggers full execution.

What this practically means

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Executive summary

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This is a ruling on a notice of motion dated 29th July 2021 by the Respondent/Judgment Debtor in an employment dispute in which judgment was delivered on 31st January 2020, awarding the Claimant USD 45,000 in damages plus interest and costs, with costs taxed at Kshs.294,992 on 22nd June 2021. After warrants of attachment and sale were issued on 27th July 2021 and the judgment debtor's goods proclaimed by Bemac Auctioneers, the judgment debtor, citing cash-flow constraints, negative shareholders' equity, losses and the effects of Covid-19, sought a temporary stay of execution, leave to liquidate the decretal sum in monthly instalments of Kshs.400,000, and the unconditional lifting of the attachment. The Decree Holder opposed, asserting the applicant had shown no bona fides in over 17 months, had only paid after being compelled, faced imminent collapse, and that the wrong procedural route was invoked. The court, applying Order 21 Rule 12(2) of the Civil Procedure Rules, found that the judgment debtor had sought instalments as early as 24th February 2020, that its audited financial statements were unchallenged, and that it had demonstrated goodwill by paying the proposed instalments before the orders were granted. Balancing this against the decree holder's legitimate expectations, Maureen Onyango, J suspended the decree and warrants on condition that the debt be paid in instalments of Kshs.500,000 per month from 1st March 2022, with accrued instalments paid by that date, auctioneer's fees paid, and automatic lifting of the suspension upon any default. The judgment debtor was ordered to bear the costs of the application.

Key legal issues

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01

Whether sufficient cause was shown for payment of the decree by instalments under Order 21 Rule 12

Holding

Sufficient cause was shown: the applicant pleaded and evidenced cash-flow problems, had requested instalments as early as 24th February 2020, and had demonstrated bona fides by paying the proposed instalments before the orders were granted

Reasoning

The court found the decree holder was aware of the respondent's financial difficulties, which were documented in audited accounts for 2019 and draft audited accounts for 2020 that were not contested. The judgment debtor had started making payments even before orders were granted. The court balanced this goodwill against the legitimate expectations of the decree holder holding a valid decree, and granted instalments but at a higher rate than proposed.

p. 5
02

Whether the warrants of attachment and sale should be stayed and the attachment lifted

Holding

The warrants and decree were suspended on conditions: payment by monthly instalments of Kshs.500,000, payment of accrued instalments by 1st March 2022, and payment of auctioneer's fees; default would automatically lift the suspension

Reasoning

The court exercised its discretion under Order 21 Rule 12 to suspend execution so long as the judgment debtor honoured the instalment arrangement, protecting the decree holder's right to the fruits of judgment through a default clause permitting execution for the entire outstanding sum.

p. 5

Legal principles established

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  • A court may, under Order 21 Rule 12, on sufficient cause shown and even without the decree holder's consent, order payment of a money decree by instalments on such terms as it thinks fit.
  • A judgment debtor who demonstrates goodwill and bona fides by starting to pay the proposed instalments before orders are granted, and who shows genuine cash-flow constraints, has shown sufficient cause for payment by instalments.

Court orders

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  1. 1.The decree and warrants issued to Messrs BEMAC AUCTIONEERS for execution of the decretal sum are suspended
  2. 2.The Judgment Debtor to pay the decretal sum in instalments of Kshs.500,000/- per month with effect from 1st March 2022
  3. 3.All instalments due from 3rd August 2021 to be made on or before 1st March 2022
  4. 4.The Judgment Debtor to pay Auctioneer's fees for proclamation to be agreed or as taxed by the Taxing Master if not agreed
  5. 5.In default of any one instalment or condition, the suspension of the warrants shall be automatically lifted and the Decree Holder at liberty to execute for the entire decretal sum outstanding together with costs and interest
  6. 6.The Judgment Debtor to bear the costs of the application

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 31
  • Civil Procedure Rules 2010Order 21 Rule 12(3), Order 51 Rule 1, Order 21 Rule 12(2), Order 22 Rules 22, 25, 49, 50, 51-54, Order 21 Rule 1
  • Constitution of KenyaArticles 159(2)(d), 48

Cases cited (7)

  • Japheth Muita Githaiga v Presbyterian University of East Africa
    [2020] eKLR
  • Zlatko Rostocil v James Samuel Kinyanjui
    [2013] eKLR
  • Kenneth Mutiga v Ntima Farmers Co-operative Society Ltd & another
    [2011] eKLR
  • Intel corporation v Via Technologies Inc.
    2002 3 HKC 650
  • Republic v Kenyatta University; Losem Naomi Chepkemoi (Ex parte)
    [2021] eKLR
  • Keshavji Jethabhai & Brothers Ltd v Saleh Abdul
    [1959] EA
  • Bertha Awuor Kowido v Speed Capital Limited
    [2021] eKLR
Jurisdiction invoked
Sections 1A, 1B and 31 of the Civil Procedure Act and Order 21 Rule 12(3), Order 51 Rule 1 of the Civil Procedure Rules 2010

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, "John Wanjohi Wakahora v Linksoft Communications Systems Limited [2022] KEELRC 790 (KLR)", Case Analysis (2022). not stated in the judgment extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/790/eng@2022-02-15

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