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ELRCDismissedCause No 2440 of 2016· [2023] KEELRC 1383 (KLR)

Mbugua v Ridhika Capital Limited (Cause 2440 of 2016) [2023] KEELRC 1383 (KLR)

Employment and Labour Relations Court
31 May 2023
JRJames Rika
368 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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To pursue a company's directors for unpaid judgment debts in Kenya, you must first prove who the directors actually are with an official company search, not just allegations.

What this practically means

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Executive summary

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The claimant had obtained judgment against the respondent on July 23, 2021 for Kshs. 616,923 in compensation for unfair termination and terminal dues, and the Bill of Costs was taxed at Kshs. 157,525 by Deputy Registrar Daisy Mutai on August 4, 2022. The claimant then filed an application dated March 23, 2023 seeking orders that the respondent's named Directors - Ramadhan Mwayaya Mwinyi and Timothy Mungai Warindi - be cross-examined on the respondent's means, property and assets capable of satisfying the Decree and Certificate of Taxation; that they produce books of accounts and other documentary evidence of the respondent's means; and, in the alternative, that they satisfy the Decree and Certificate of Costs personally, jointly and severally. The application was supported by the claimant's affidavit asserting that the respondent was shutting down business and closing its known address of operation. Service was effected on the respondent's Advocate and on the two named Directors through WhatsApp, but nothing was said of service on a third named person, John Karanja Kihagi. James Rika, Judge, rejected the application. The supporting affidavit merely alleged directorship without a Registrar of Companies search, and the respondent's own witness statement identified Japheth Momanyi Monari - not among those named - as the Director who employed the claimant. The application was rejected with no order on costs.

Key legal issues

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01

Proof of directorship as a precondition to enforcement orders against Directors

Holding

The application was rejected because the claimant failed to prove that the persons named were Directors of the respondent, and omitted the Director identified in the record.

Reasoning

The claimant's affidavit only alleged that the named persons were Directors, without a Registrar of Companies search. The respondent's own witness statement identified Japheth Momanyi Monari as the Director who employed the claimant, yet Monari was not named in the application. Service on one named Director, John Karanja Kihagi, was also not shown. The court therefore found the application unsustainable.

p. 2

Legal principles established

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  • A party seeking orders against Directors of a judgment-debtor must adduce evidence of directorship, such as an official search from the Registrar of Companies; mere allegation is insufficient.

Court orders

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  1. 1.The Application dated March 23, 2023 filed by the claimant is rejected
  2. 2.No order on the costs

Authorities

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Legislation

  • Electronic Case Management Practice Directions, 2020Practice Direction No. 6[2]
Jurisdiction invoked
Enforcement jurisdiction following decree and certificate of taxation in an employment claim (Employment and Labour Relations Court)

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, "Mbugua v Ridhika Capital Limited (Cause 2440 of 2016) [2023] KEELRC 1383 (KLR)", Case Analysis (2023). Cause No 2440 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1383/eng@2023-05-31

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