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ELRCPartially AllowedNot stated in the judgment (application dated 16th May 2024 in the consolidated suit decided by Ongaya J on 20th July 2018)· [2024] KEELRC 2582 (KLR)

Karanja & 12 others v Wells Fargo Limited (Cause 388, 379, 380, 381, 382, 383, 384, 385, 386, 387, 389, 390 & 535 of 2014 (Consolidated)) [2024] KEELRC 2582 (KLR)

Employment and Labour Relations Court
24 October 2024
2,590 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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The Employment Court shut down auctioneers who attached Wells Fargo's assets, ruling every step of the 2024 execution was unlawful, and made the judgment creditors pay the costs.

What this practically means

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Executive summary

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This ruling by Ndolo J of the Employment and Labour Relations Court at Nairobi, delivered virtually on 24th October 2024, resolved a post-judgment dispute in the consolidated matter in which 13 Claimants obtained judgment against Wells Fargo Ltd on 20th July 2018. Conditional stay of execution was granted on 11th October 2018 on terms that the Respondent deposit the decretal sum in a joint interest earning account in the names of the parties' Advocates. The account was never opened as directed; the Respondent instead opened a call deposit account under the control of Walker Kontos Advocates, blaming the Claimants' Advocates for failing to supply account-opening documentation. In May 2024, after some Claimants instructed Chador Auctioneers to execute, the Respondent moved the Court seeking restraint of attachment, release of impounded assets, setting aside of the Warrants of Attachment issued on 25th April 2024, and a declaration on costs. The Court held that a one-sided call deposit account could not pass for a joint interest earning account, but the Claimants could not benefit from their own lapse in withholding documentation. The Court found the execution unlawful on four grounds: no notice to show cause was issued for a decree more than a year old (the decree dating from the 2018 judgment); partial execution against 9 of 13 Claimants was undertaken without leave under Section 94 of the Civil Procedure Act; the Warrants included gross figures without statutory deductions contrary to Section 49(2) of the Employment Act; and no proclamation notice preceded attachment contrary to Rule 12 of the Auctioneers Rules. The Court restrained further attachment, ordered immediate release of the impounded assets, set aside the Warrants, and ordered the Claimants and the Auctioneers to bear all costs of the unlawful execution.

Key legal issues

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01

Compliance with conditions of stay of execution

Holding

The condition of depositing the decretal sum in a joint interest earning account in the names of the parties' Advocates was not strictly complied with, since the call deposit account opened was under the control of only one side; however, the Claimants' Advocates' failure to supply documentation meant the Claimants could not benefit from the lapse

Reasoning

The Court held that an account where all Advocates have equal control is what a stay order contemplates; a one-sided call deposit account does not qualify. Yet the Respondent's Advocates had sought documentation from the Claimants' Counsel which was never supplied, so the Claimants could not rely on their own lapse. Had due procedure been followed, the Claimants would have learnt the decretal sum had been secured.

p. 5
02

Notice to show cause before execution of a decree over one year old

Holding

The decree dated from 20th July 2018 (the date of judgment), so Order 22 Rule 18 required a notice to show cause before execution; none was issued

Reasoning

Order 22 Rule 18(1) of the Civil Procedure Rules mandatorily requires a notice to show cause where execution is sought more than a year after the decree. Order 21 Rule 8(1) provides that a decree bears the date of delivery of the judgment, so the decree was dated 20th July 2018, not 23rd February 2024 as the Claimants contended. The absence of the notice rendered the execution unlawful.

p. 5
03

Partial execution without leave

Holding

The execution against only 9 of the 13 Claimants, whose costs alone had been taxed, was a partial execution without leave of the Court contrary to Section 94 of the Civil Procedure Act

Reasoning

A consolidated trial results in one common decree. Only the Bill of Costs for the 9 Claimants represented by Waiganjo Wachira & Co Advocates had been taxed; the costs of the remaining 4 were untaxed. Executing for only 9 Claimants therefore amounted to a partial decree executed without leave, contrary to Section 94 of the Civil Procedure Act.

p. 6
04

Defective Warrants of Attachment - statutory deductions and proclamation

Holding

The Warrants set out gross figures without statutory deductions contrary to Section 49(2) of the Employment Act, and the Auctioneer failed to issue a proclamation notice before attachment contrary to Rule 12 of the Auctioneers Rules; the entire execution was unlawful

Reasoning

The decretal sum ought to have been net of statutory deductions; warrants based on an erroneous tabulation cannot stand. The Respondent's HR Director and drivers deponed, uncontradicted by any affidavit from the Auctioneer, that no proclamation preceded attachment. These defects, together with the absence of notice to show cause and lack of leave for partial execution, made the entire execution exercise unlawful.

p. 6

Legal principles established

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  • A call deposit account under the control of only one side cannot qualify as the joint interest earning account contemplated in a conditional stay order
  • A decree bears the date on which the judgment was delivered, and issuance of notice to show cause before executing a decree more than a year old is mandatory
  • A consolidated trial results in one common decree, and executing only part of it without leave of the Court is impermissible
  • Warrants of Attachment based on an erroneous tabulation cannot stand

Court orders

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  1. 1.The Claimants and Chador Auctioneers are restrained from attaching, removing, selling or otherwise interfering with the Respondent's assets, pursuant to the Warrants of Attachment issued on 25th April 2024
  2. 2.The Auctioneers are directed to forthwith release the Respondent's assets impounded pursuant to the Warrants of Attachment issued on 25th April 2024
  3. 3.The Warrants of Attachment issued on 25th April 2024 are hereby set aside
  4. 4.The Claimants and the Auctioneers will bear all costs arising from the unlawful execution

Authorities

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Legislation

  • Civil Procedure RulesOrder 22 Rule 18(1)
  • Civil Procedure RulesOrder 21 Rule 8(1)
  • Civil Procedure ActSection 94
  • Civil Procedure ActSection 44(1) (proviso)
  • Employment ActSection 49(2)
  • Auctioneers ActSection 12
  • Auctioneers RulesRule 12
  • Court of Appeal RulesRule 55(1)

Cases cited (5)

  • Mwaura Njoroge & another v County Council of Kiambu & another
    [2015] eKLR
  • Alfred Muyeyeli & another v Jamin Onyiri & another
    [2020] eKLR
  • Transmara Sugar Company v Charles O. Mbaka
    [2021] eKLR
  • Hilton Walter Nabongo Osinya & another v Savings & Loans (K) Limited & another
    HCCC No 274 of 1998
  • Karuri Stores Pharmaceuticals Ltd & another v Acacia Medical Centre Limited
    [2021] eKLR
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court over post-judgment execution processes arising from its decree; Civil Procedure Act and Rules and the Auctioneers Act and Rules

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, "Karanja & 12 others v Wells Fargo Limited (Cause 388, 379, 380, 381, 382, 383, 384, 385, 386, 387, 389, 390 & 535 of 2014 (Consolidated)) [2024] KEELRC 2582 (KLR)", Case Analysis (2024). Not stated in the judgment (application dated 16th May 2024 in the consolidated suit decided by Ongaya J on 20th July 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2582/eng@2024-10-24

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