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ELRCPartially AllowedNot stated in the ruling· [2023] KEELRC 2995 (KLR)

Obonyo v Great Lakes University of Kisumu (Cause 376 of 2017) [2023] KEELRC 2995 (KLR)

Employment and Labour Relations Court
23 November 2023
1,108 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court allowed an employer facing money problems to pay a judgment debt in monthly instalments and got its attached vehicle released.

What this practically means

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Executive summary

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This ruling by C. N. Baari, Judge of the Employment and Labour Relations Court at Kisumu, determined a notice of motion dated 12th October 2023 by the Respondent/Applicant, a learning institution that was the judgment debtor in a decree of Kshs. 1,286,357.70 plus interest awarded to the Claimant/Respondent. The Applicant sought leave to settle the decretal sum in monthly instalments of Kshs. 100,000.00 and the setting aside of warrants of attachment and sale issued on 5th June 2023, under which auctioneers had attached its motor vehicle KBJ 276W, a Toyota Hilux Double Cabin, for sale on 19th October 2023. The sale did not proceed due to an interim order. The Applicant asserted it had paid Kshs. 550,000 of the debt, faced financial difficulties worsened by the Covid-19 pandemic's effect on enrolment, and relied on an uncontroverted financial report showing it did not raise more than Kshs. 3,000,000 monthly. The Claimant/Respondent, despite service, neither opposed the application nor attended court. The court, applying Order 21 Rule 12 of the Civil Procedure Rules and the Rajabali Alidina criteria (circumstances of the debt, debtor's conduct, financial position and bona-fides), found the Applicant's conduct and financial position justified the orders. It allowed instalment payments from November 2023 with default execution, set aside the warrants, ordered unconditional release of the vehicle, made the Applicant bear auctioneers' fees, and made no order on costs.

Key legal issues

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01

Whether a judgment debtor facing financial difficulties should be permitted to settle a money decree by instalments

Holding

Yes - where the debtor's conduct and financial position justify it, and an uncontroverted financial report and part-payment of the debt are shown, instalment payment may be allowed and warrants of attachment set aside

Reasoning

The court invoked Order 21 Rule 12 of the Civil Procedure Rules, which permits postponement or instalment payment of a money decree for sufficient cause. Applying the Rajabali Alidina criteria, it found the Applicant's conduct satisfactory, its financial report uncontroverted, and that it had already paid half the decretal sum (Kshs. 550,000). As a learning institution reliant on the attached vehicle, execution would disrupt its operations. The discretion was therefore exercised in the Applicant's favour with a default clause protecting the decree holder.

p. 3
02

Whether warrants of attachment and sale should be set aside where instalment payments are granted

Holding

Yes - the warrants of attachment and sale issued on 5th June 2023 were set aside, with the auctioneer directed to release the attached motor vehicle unconditionally, but auctioneers' fees were borne by the Applicant and execution to issue upon default

Reasoning

Having allowed instalment settlement, continued attachment of the vehicle would be inconsistent with the arrangement. The court lifted the warrants and ordered unconditional release of the motor vehicle KBJ 276W. However, it balanced the decree holder's right to prompt payment by requiring auctioneers' fees to be borne by the Applicant and stipulating that execution would issue upon default in any instalment.

p. 3

Legal principles established

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  • The considerations in an application to settle a decretal sum by instalments are the circumstances under which the debt was contracted, the conduct of the debtor, his financial position, and his bona-fides in offering to pay a fair proportion of the debt at once
  • Allowing settlement of a decree by instalment is a discretionary power to be exercised judiciously, and the Applicant must demonstrate that the discretion deserves to be exercised in its favour

Court orders

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  1. 1.The Respondent/Applicant is allowed to settle the decretal sum of Kshs. 1,286,357.70 plus interest in monthly instalments of Kshs. 100,000.00 payable on or before the 30th day of every month from November 2023 until payment in full, and in default execution to issue
  2. 2.The warrants of attachment and sale issued on 5th June 2023 are set aside and/or lifted
  3. 3.Ms. Heath Auctioneers to unconditionally release motor vehicle registration number KBJ 276W Toyota Hilux Double Cabin to the Respondent/Applicant
  4. 4.The Auctioneers fees shall be borne by the Applicant/Respondent
  5. 5.No orders on costs

Authorities

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Legislation

  • Civil Procedure RulesOrder 21 Rule 12

Cases cited (4)

  • Rajabali Alidina v Remtulla Alidina & Another
    [1961] EA 565
  • Nicholas Gitonga Murongi v Susan Wairimu & 4 Others
    [2021] eKLR
  • KTK Advocates v Baringo County Government
    [2018] eKLR
  • Diamond Star General Trading LLC v Ambrose D O Rachier carrying on business as Rachier & Amollo Advocates
    [2018] eKLR
Jurisdiction invoked
Order 21 Rule 12 of the Civil Procedure Rules (discretion to permit settlement of a money decree by instalments)

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, "Obonyo v Great Lakes University of Kisumu (Cause 376 of 2017) [2023] KEELRC 2995 (KLR)", Case Analysis (2023). Not stated in the ruling. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2995/eng@2023-11-23

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