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Case Brief · caselaw.co.ke
High CourtPartially AllowedChamber Summons dated 8th March 2019· [2020] KEHC 9621 (KLR)

Dalbit Petroleum Limited v Techno Asphalt Limited (Objector) & Another

High Court of Kenya
15 April 2020
MOMaureen A. Odero
991 words in judgment
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The bottom line

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Creditors cannot legally seize and auction property belonging to third parties, even if it is stored on premises leased by the debtor.

What this practically means

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Executive summary

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Dalbit Petroleum Limited obtained judgment on 2nd August 2018 against a Defendant for Kshs.5,826,200 plus interest and costs arising from a 2006 Petroleum Products Supply Agreement. On 20th February 2019, Vintage Auctioneers, on the decree-holder's instructions, proclaimed various motor vehicles, a Caterpillar roller, a Caterpillar shovel, office furniture and assorted construction equipment at premises known as Ndeiya/Ndeiya/921. Techno Asphalt Limited, the Objector, filed a Chamber Summons dated 8th March 2019 under Order 22 Rules 51 and 52, Order 40 and Section 3A of the Civil Procedure Act, seeking a declaration that the proclamation was unlawful and that the proclaimed items belonged to the Objector. The Objector contended it leased the premises from the judgment debtor in 2018 and used them as a yard for storing vehicles and equipment belonging to third parties, annexing a lease agreement and log books. The court found the objection properly before it under Order 22 Rule 51. It held that the lease agreement was prima facie evidence of the Objector's tenancy, so property on the premises could reasonably be presumed to belong to the Objector, and that the log books showed the vehicles registered to persons other than the judgment debtor. The court declared the proclamation unlawful and awarded costs in the cause. Judgment delivered in Nairobi on 15th April 2020 by Maureen A. Odero, J.

Key legal issues

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01

Whether an objection to attachment under Order 22 Rule 51 was properly before the Court

Holding

The objection was properly before the Court, having been filed in compliance with Order 22 Rule 51.

Reasoning

The court set out the text of Order 22 Rule 51(1) and (2), which permits any person claiming a legal or equitable interest in attached property to give notice of objection before payment out of proceeds of sale, and found the present objection compliant.

p. 2
02

Ownership of the proclaimed items

Holding

The proclaimed vehicles and equipment did not belong to the Judgment Debtor; the Objector was lessee of the premises and the vehicles were registered to third parties.

Reasoning

A lease agreement dated 15th February 2018 showed the Objector as lessee of Ndeiya/Ndeiya/921, so property found there was presumed to belong to the Objector. Log books showed the vehicles registered to persons other than the Judgment Debtor, supporting the claim that the premises were used to store third parties' property.

p. 2
03

Lawfulness of the proclamation

Holding

The proclamation dated 20th February 2019 by Vintage Auctioneers was declared unlawful.

Reasoning

Since execution can only lawfully proceed against property of the judgment debtor and the proclaimed items did not belong to the judgment debtor, the proclamation was unlawful.

p. 2

Legal principles established

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  • Execution in satisfaction of a decree may only lawfully proceed against property belonging to the judgment debtor, not property belonging to third parties.

Court orders

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  1. 1.Declaration that the proclamation dated 20th February 2019 by Vintage Auctioneers was unlawful
  2. 2.Costs in the cause

Authorities

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Legislation

  • Civil Procedure ActSection 3A
  • Civil Procedure RulesOrder 40
  • Civil Procedure RulesOrder 22 Rules 51 and 52
Jurisdiction invoked
Order 22 Rules 51 and 52, Order 40 and Section 3A of the Civil Procedure Act

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, "Dalbit Petroleum Limited v Techno Asphalt Limited (Objector) & Another", Case Analysis (2020). Chamber Summons dated 8th March 2019. Source:

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