Ngumbau Investments Ltd t/a Courtyard Hotel v Kitele Investments Ltd & another

d. That the honourable court be pleased to declare the properties listed in the proclamation of attachable movable properties dated 16th April 2026, towards the satisfaction of the decree against the plainti/judgment debtor herein, do belong to the objector. e. That this honourable court be pleased to lift the proclamation for attachment and sale of assets listed in the proclamation of attachment dated 16th April 2026. f. That this honourable court be pleased to grant any other relief as it may deem t and just to grant. g. That the costs of this application be provided for. 2. The motion is supported by the grounds on the face thereof and Alice Mueni Kingo'o’s supporting adavit, sworn on the instant date, and succinctly, she states that on 16 April 2026, Moran Auctioneers unlawfully attached and intended to sell properties belonging to the objector, which is not a party to the relevant lawsuit. She informs the court that the objector asserts legal ownership of the attached properties and argues that any orders or decrees from the instant suit cannot be enforced against the objector, as it is a separate legal entity from the plainti/judgment debtor. The objector also maintains that the plainti/judgment debtor has no claim over the said properties, making the attachment and planned sale improper. She attached some annexures to her adavit. 3. In challenging the motion, the decree holders through Daphine Mueni Musyoki [5th plainti in the counterclaim and henceforth referred to as “judgment creditors”], deposed a replying adavit on 4 May 2026. Concisely, she states that the plainti/judgment debtor owns 99% of the objector, while the remaining 1% is held by Alice Mueni Kingo'o Ngunga, who is the wife of the 3rd defendant in the counterclaim [also a judgment debtor], Anthony Kingoo Ngunga. The only asset traceable to the plainti/ judgment debtor is its shareholding in the objector. She accuses the judgment debtors of exploiting the legal separation of corporate entities to avoid paying a judgment debt, and states that the current application is an attempt to delay or defeat justice. 4. She argues that the court should pierce the corporate veil and maintains that the application is incompetent on the grounds that Alice Mueni Kingo'o, being a minority shareholder, lacks the authority to swear adavits on behalf of the objector. Additionally, she states that the objector has failed to provide evidence of ownership of the goods in question, which is a requirement in such objection proceedings. Lastly, it is averred that the 3rd defendant to the counterclaim, also a judgment debtor, is the registered owner of the Toyota Land Cruiser KCN 222E listed in the proclamation notice. Annexures were attached to the adavit. 5. In rejoinder, the objector via the supplementary adavit of Alice Mueni Kingo'o, sworn on 7 May 2026, reiterates the objector's earlier averments and additionally, briey asserts that the decree holders' request to “lift the corporate veil” is procedurally improper. It avers that such a remedy is exceptional and only granted in cases of clear fraud or abuse of the corporate structure, which has not been shown here. She states that the decree holders have not presented proof of fraud or improper incorporation, relying instead on unsubstantiated claims. Therefore, the requirements for piercing the corporate veil have not been met. 6. As directed by the court, the application was canvassed by written submissions, with the objector’s law rm on record, Ms. Andrew & Steve Advocates, ling a set dated 29 April 2026 and 8 May 2026, whereas the decree holders’ submissions, led by their law rm on record, Ms. Jibril Noor & Co. Advocates, are dated 5 May 2026. Therefore, having considered the motion, grounds, adavits, annexures and rival submissions, the succinct issue for determination is whether the motion is merited. However, as a preliminary issue, this court nds that the prayer for permanent injunctive https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5514/eng@2026-09-22 2

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relief is misplaced and inappropriate in these proceedings. We now proceed with the analysis and determination. 7 As evident from the face of the motion, the relevant law that authorises this court to entertain the motion is founded in Order 22 Rule 51 of the Civil Procedure Rules (CPR), and this provision of the law states as follows: “ (1) Any person claiming to be entitled to or to have a legal or equitable interest in the whole of or part of any property attached in execution of a decree may at any time prior to payment out of the proceeds of sale of such property give notice in writing to the court and to all the parties and to the decree-holder of his objection to the attachment of such property. (2) Such notice shall be accompanied by an application supported by adavit and shall set out in brief the nature of the claim which such objector or person makes to the whole or portion of the property attached. (3) Such notice of objection and application shall be served within seven days from the date of ling on all the parties.” 8. A reading of this legislation demonstrates that, while execution is a lawful process, it permits individuals who were not parties to the original proceedings to seek judicial intervention if their interests in properties subject to the execution of a decree are at risk of being auctioned. In other words, innocent third parties cannot be held liable for the acts of the judgment debtor. 9. Concerning the relevant jurisprudence that guides the court, the Court of Appeal in Southern Bell Limited v National Social Security Fund Board of Trustees & 4 others [2023] KECA 1170 (KLR), summarised the following non-exhaustive principles: “ For a person to properly bring himself within the ambit of order 22 rule 51(1) of the Civil Procedure Rules, he has to meet certain conditions. First, he must prove that he is not the person against whom the decree was issued and, therefore not liable in respect thereof. Secondly, he must prove that attachment of his property has been levied in execution of the said decree. Thirdly, he must prove that he is entitled to or has a legal or equitable interest in the whole or part of any property attached in execution of the decree.” 10. A similar position was taken in Precast Portal Structures v Kenya Pencil Company Ltd & 2 others [1993] KEHC 100 (KLR), which elucidated on these principles and also highlighted as to who bears the burden of proof in the following manner: “ The burden is on the objector to prove and establish his right to have the attached property released from the attachment. On the evidential material before the Court, a release from attachment may be made if the Court is satised. (1) that the property was not, when attached, held by the judgment-debtor for himself, or by some other person in trust for the judgment-debtor; or (2) that the objector holds that property on his own account. But where the Court is satised that the property was, at the time of attachment, held by the judgment – debtor as his own and not on account of any other person, or that it was held by some other person in trust for the judgment-debtor, or that ownership has changed whereby the judgment – debtor has been divested of the property in order to evade execution or the change is tainted with fraud, the Court shall dismiss the objection. The Court takes into account the grounds of objections raised, and the contentions of the respective parties to the https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5514/eng@2026-09-22 3

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objection proceedings. Any special features evident in the proceedings which throw light on the controversy must be regarded.” 11. In this case, the objector informed the court that it has a legal and equitable ownership and possessory interest in the movable properties listed in the proclamation of attachment dated the 16th of April 2026, as they are recorded in its asset register and inventory, and are used exclusively in the day-today operations of the objector. To substantiate these assertions, it merely presented a certicate of incorporation of the objector. In this court’s view, the certicate of incorporation alone was not sucient to prove ownership of these items. 12. Notwithstanding these allegations by the objector and armed with a certicate of incorporation, the judgment creditors, through documentary evidence obtained from government agencies, unearthed crucial information. One of them was a search certicate for motor vehicle KCN 222E, which indicates that the vehicle belongs to the 3rd defendant in the counterclaim/judgment debtor. With regard to this motor vehicle, there is no diculty in nding that the objector has failed to prove any interest in it whatsoever. Moreover, the court nds that the objector is guilty of material non-disclosure. 13. The judgment creditors also obtained a CR12 of the objector and established that the objector’s sole director is the 3rd defendant in the counterclaim/judgment debtor. Further, it demonstrated that the plainti/judgment debtor solely owns 99% of the shares in the objector, with Alice Mueni Kingo'o [wife of the 3rd defendant in the counterclaim/judgment debtor] owning 10%. 14. The judgment creditor further contended that, as a minority shareholder, Alice Mueni Kingo'o was purportedly disqualied from swearing an adavit; however, this assertion lacks any legal foundation. In agreement with her submissions, whether a person is authorised to swear an adavit on behalf of a company is a factual matter and does not hinge on the proportion of shares held. Where a deponent arms on oath that she is duly authorised, such a declaration suces unless challenged by contrary evidence. In this case, the decree holders did not dislodge Alice Mueni Kingo'o’s assertion that she was authorised to swear the adavit. See In Spire Bank Limited v Land Registrar & 2 others [2019] KECA 530 (KLR). 15. In reaction to these pieces of documentary evidence from the decree holders, the objector presented several receipts to prove that certain assets belonged to the objector, and a scrutiny of the receipts that the objector presented revealed that only two items that were attached belonged to it, namely the assorted kitchen cutlery and TV sets. 16. Pointedly, the objector also argued that it was a duly incorporated entity endowed with a distinct and independent legal personality, possessing separate assets, liabilities, and obligations from those of the judgment debtors. Additionally, it contended that the court may lift the corporate veil only upon a formal application by the decree holder, rather than on the basis of adavit evidence. The decree holder failed to address this limb of a separate formal application; instead, it advocated piercing the corporate veil and presented several compelling grounds in support thereof. 17. After considering these competing arguments, and solely with regard to the two items that the objector proved belonged to it as of right, this court nds that the only manner in which it can determine the issue of lifting the corporate veil is through the ling of a formal application by the decree holders as envisaged by Order 22 Rule 35 of the Civil Procedure Rules, and not by any other means and this law states thus: “ Where a decree is for the payment of money, the decree- holder may apply to the court for an order that— https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5514/eng@2026-09-22 4

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(a) the judgment-debtor; (b) in the case of a corporation, any ocer thereof; or (c) any other person, be orally examined as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgmentdebtor or ocer, or other person, and for the production of any books or documents.” 18. Ultimately, for the above reasons and ndings, this court nds that the notice of motion dated 17 April 2026 only succeeds to the extent that it will lift the proclamation for attachment and sale of the 40 TV sets and assorted kitchen cutlery. Each party shall bear their respective costs of the motion. It hereby issues the following nal orders: a. The proclamation for attachment and sale of assets on the 40 TV sets and assorted kitchen cutlery listed in the proclamation of attachment dated 16 April 2026, is lifted. b. There is a temporary stay of execution proceedings for 7 days for the judgment debtors to pay the judgment debt or to enter an arrangement on how to pay, and failing the two options, the execution may proceed as already commenced, with the exception of the 40 TV sets and assorted kitchen cutlery listed in the proclamation of attachment dated 16 April 2026. c. There shall be no orders as to costs. Orders accordingly. DELIVERED AND DATED AT MACHAKOS THIS 22ND DAY OF SEPTEMBER, 2026. HON. A. Y. KOROSS JUDGE 22.09.2026 Ruling delivered virtually through Microsoft Teams Video Conferencing Platform; In the presence of; Ms. Kanja Court Assistant. Miss Kabura for Mr. Kimathi for the plainti/judgment debtor. Mr. Noor for decree holder. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5514/eng@2026-09-22 5

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