kehc-2026-00651

218,271.02, despite the closing balance being Kshs. 290,412.50. On 10th April 2025, the trial Court issued a Garnishee Order Absolute against the Appellant for the entire outstanding decretal sum of Kshs. 723,641.62. The learned Adjudicator rejected the Appellant’s objection that liability should be limited to funds held. It was that decision that prompted the instant appeal. The Appeal: 3. The Appellant filed a Memorandum of Appeal and an application by way of Notice of Motion, both dated 17th April 2025. The latter, which sought a stay of execution, was subsumed in this appeal. 4. The Appellant set forth the following grounds of appeal: a. The learned Magistrate erred in law by fundamentally misapplying the principles governing Garnishee proceedings, by ordering the Appellant to satisfy the entire decretal sum from its own funds, contrary to established legal precedent which confines the liability of a Garnishee solely to the funds held by it on behalf of the Judgment Debtor at the time of service of the Garnishee Order Nisi until it is discharged. b. The learned Magistrate erred in law and in fact by unjustly condemning the Appellant through the issuance of a Garnishee Order Absolute for the full decretal sum of Kshs. 742,107.92 (less Kshs. 19,461.30 paid by the 1st Garnishee), despite having full knowledge that the Appellant only held Kshs. 290,412.50 on behalf of the Judgment Debtor. This amounted to an arbitrary and excessive imposition of liability far beyond the Appellant’s legal obligation. c. The learned Magistrate erred in law and fact by failing to recognize that the Appellant’s liability, if any, was limited to the funds held on behalf of the Judgment Debtor as at the date of the Garnishee Order Absolute, being 10th April 2025, and not beyond. d. The learned Magistrate erred in law by imposing an unreasonable, disproportionate and unjust financial burden upon the Appellant by directing it to satisfy the full decretal sum despite there being clear evidence that the Judgment Debtor did not maintain sufficient funds in their account at the time the Garnishee Order Nisi was made Absolute. e. The learned Magistrate erred in law and in fact by failing to acknowledge that the Appellant’s liability was strictly confined to the actual funds held on behalf of the Judgment Debtor, plus debits effected during the subsistence of the Order Nisi, as at the date the Garnishee Order Nisi was made absolute. f. The learned Magistrate erred in law by failing to acknowledge and give due consideration to the fact that the Appellant had sufficiently shown cause as to why it ought not to be compelled to pay the decretal sum to the 1st and 2nd Respondents, having clearly demonstrated, through sworn affidavits and documentary evidence, that it did not hold sufficient funds belonging to the Judgment Debtor to satisfy the decree in full. The Submissions 5. In its written submission dated 13th June 2025, the Appellant claimed that the appeal hinged on whether the trial Court erred in ordering payment of funds exceeding those held in the account. The Appellant argued that garnishee liability is limited. It claimed that a Garnishee can only be compelled to pay funds it actually holds on behalf of a Judgment Debtor. It was its case that the Learned Adjudicator erred in law by misapplying the foregoing principle. To that end, it referred to the case of Lesinko Njoroge & Gathogo Advocates -vs- Invesco Assurance Co; Co-operative Bank of Kenya (Garnishee) [2020] KEHC 8931 (KLR) quoted in Mwangi -vs- President Football Kenya Federation; KCB Bank https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/651/eng@2026-01-29 2

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Kenya Limited (Garnishee) (Cause 299 of 2016) KEELRC 1095 (KLR), to fortify the legal position that burden shifts to the Garnishee to provide robust, clear and persuasive evidence that the funds or debt are not owed or payable. The Appellant argued it fulfilled this burden by producing evidence showing the insufficiency of funds. 6. The Appellant further submitted that equity does not punish and that the trial Court’s order was draconian and punitive by making the Bank liable for the full debt of the Judgment Debtor. It asserted that it demonstrated compliance, disclosing a balance of Kshs. 290,412.50, and therefore sufficiently showed cause why it ought not to be compelled to pay the entire decretal sum. While relying on the decision in Barclays Bank of Kenya Ltd -vs- Kepha Nyabara & 191 Others, the Appellant submitted that a Garnishee’s own property cannot be subject to adverse action to realize a debt due to a Judgment Debtor. 7. The Appellant prayed that the appeal be allowed accordingly. The Respondents’ case: 8. The Respondents challenged the appeal through written submissions dated 22nd July 2025. They argued that the trial Court was justified in condemning the Appellant to pay the outstanding decretal sum because of its deliberate disobedience and attempt to ridicule the Court. They referred this Court to the case of Refrigerator & Kitchen Utensils Ltd -v- Gulabchand Popatlal Shah & Others, Civil Application No Nairobi 39 of 1990 (UR), where it was observed that upholding the authority and dignity of the Court is essential for the rule of law, and Courts must deal firmly with proved contemnors. 9. The Respondents submitted that under Section 1(3)(A) of the Civil Procedure Act, the Appellant had a statutory duty to assist the Court and comply with orders. They pointed out that in the case of Refrigerator & Kitchen Utensils Ltd -vs- Gulabchand Popatlal Shah & Others, it was observed that as a matter of law, the Court must maintain its dignity and cannot condone disobedience. They submitted that the trial Court was legally correct to punish the Appellant for the breach. 10. Further to the foregoing, it was their case that under Order 23 Rule 3 of the Civil Procedure Rules, a decree nisi legally binds the Garnishee, and the breach of this rule justifies the absolute order. Analysis: 11. 12. Having carefully traced the genesis of the dispute, the grounds of appeal as well as the parties’ rival submissions, the issues that emerge for determination are: i. Whether the grounds raised in the appeal constitute matters of law appealable under Section 38 of the Small Claims Court Act. ii. Depending on (i) above, the Legal Scope of Garnishee Orders and the propriety of imposing liability for the full decretal sum on the Garnishee. The Court will now consider the above issues. (a) Whether the grounds raised in the appeal constitute matters of law appealable under Section 38 of the Small Claims Court Act: 13. Section 38 of the Small Claims Court Act [‘the Act’] delimits the jurisdiction of the High Court as follows; 38. Appeals https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/651/eng@2026-01-29 3

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14. (1) A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law. (2) An appeal from any decision or order referred to in subsection (1) shall be final. An exposition as to what constitutes matters of law was set out in the case of M’riungu and Others vs- R [1982-88] 1 KAR 360 by Lordship, Chesoni, Ag. JA, in the following manner; … We would agree with the views expressed in the English case of Martin v Glyneed Distributors Ltd (t/a MBS Fastenings) [1983] 1 CR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court(s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decision of the trial of first appellate court unless it is apparent that; on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad law. 15. The High Court cannot, therefore, reconsider matter of fact or the weight of factual evidence unless the impugned decision is so perverse that no reasonable tribunal could have arrived at such a decision. 16. Coming back to the issue at hand, the Appellant does not contest the factual findings. They admitted that they held Kshs. 290,412.50/- and allowed withdrawals. What they contested was the legal consequence applied to those facts. Principally, it argued that the Adjudicator applied the wrong legal test for Garnishee liability. 17. Order 23 Rules 3 and 4 of the Civil Procedure Rules is relevant to this suit. It provides as follows; 3. Effect of garnishee order [Order 23, rule 3] Service of an order that debts due to a judgment-debtor liable under a decree shall be attached, or notice thereof to the garnishee in such manner, as the court may direct, shall bind such debts in his hands. 4. Execution against garnishee [Order 23, rule 4] If the garnishee does not dispute the debt due or claimed to be due from him to the judgmentdebtor, or, if he does not appear upon the day of hearing named in an order nisi, then the court may order execution against the person and goods of the garnishee to levy the amount due from him, or so much thereof as may be sufficient to satisfy the decree, together with the costs of the garnishee proceedings 18. The appeal before this Court resulted from the consequence of the application of the foregoing legal provisions. Interpretation of statues is question of law. To be more acute, this Court has jurisdiction to determine if the Learned Adjudicator acted outside the legal scope of Order 23 Civil Procedure Rules. 19. This issue is therefore answered in the affirmative, and as such, it paves way to the second issue. (b) The legal scope of Garnishee Orders and the propriety of imposing liability for the full decretal sum on the Garnishee: 20. At the heart of the appeal is whether the Adjudicator erred by requiring the Appellant to satisfy the debt from its own resources, rather than limiting the order to the Judgment Debtor’s funds. Order 23 https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/651/eng@2026-01-29 4

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Rule 1 of the Civil Procedure Rules empowers a court to make an order for the attachment of debts in the following terms; Order for the attachment of debts [Order 23, rule 1] (1) A Court may, upon the ex parte application of a decree-holder, and either before or after an oral examination of the judgment-debtor, and upon affidavit by the decree-holder or his advocate, stating that a decree has been issued and that it is still unsatisfied and to what amount, and that another person is indebted to the judgment-debtor and is within the jurisdiction, order that all debts (other than the salary or allowance coming within the provisions of Order 22, rule 42 owing from such third person (hereinafter called the “garnishee”) to the judgment-debtor shall be attached to answer the decree together with the costs of the garnishee proceedings; and by the same or any subsequent order it may be ordered that the garnishee shall appear before the court to show cause why he should not pay to the decree- holder the debt due from him to the judgment-debtor or so much thereof as may be sufficient to satisfy the decree together with the costs aforesaid. 21. It is discernible from the above that attachment of debts owing from third party to the judgment debtor does not create a new debt; it attaches an existing one. Differently put, a Garnishee’s own property cannot be subjected to adverse action to realize a debt due by the judgment debtor. Garnishee proceedings aim solely to enable the decree holder to reach a debt due to the judgment debtor. 22. In Ngigi t/a Ngaywa Ngigi & Kibet Advocates v Xplico Insurance Company Limited; National Bank of Kenya Limited (Garnishee) (Miscellaneous Civil Application 42 of 2019) [2024] KEHC 5412 (KLR) the Court found persuasion in the case of Lesinko Njoroge & Gathogo Advocates -vs- Invesco Assurance Co; Co-operative Bank of Kenya (Garnishee) [2020] eKLR where Court stated as follows: … Garnishee proceedings are in their very nature proceedings whereby the garnishee is required to prove whether or not the garnishee is indebted to the judgment-debtor. Ordinarily, the judgment creditor only makes allegations of the garnishee’s indebtedness based on sound evidence whereby the burden of proof shifts to the garnishee to prove otherwise. In this regard, to discharge that burden, the garnishee has to produce strong, sufficient, and convincing evidence that the funds in its hands or the debt is not due or payable. 23. The record confirms that the Appellant breached the order nisi by allowing withdrawals after service to the tune of Kshs. 218,271.02/-. Essentially, the Appellant was bound by law not to release any sums from the account unless such amount exceeded the amount stated in the Order. However, by ordering the Bank to pay the entire sum of Kshs. 723,641.62/-, which sum exceeded what was irregularly withdrawn and the amount that remained in the account, the Adjudicator effectively fined the Bank Kshs. 215,000/- being the difference between the decree and the funds that ever existed. Essentially, it imposed penal fines for contempt in this manner without a specific contempt application. In this Court’s assessment, and respectfully so, the Learned Adjudicator committed an error of law [ See Mwangi -vs- President Football Kenya Federation; KCB Bank Kenya Limited (Garnishee) (Cause 299 of 2016) [2025] KEELRC 1095 (KLR) (4 April 2025). 24. Drawing from the foregoing, and for clarity’s sake, in garnishee proceedings even where a Garnishee breaches the order nisi by improperly releasing funds, their liability is quantified based on the actual funds released or the funds that ought to have been preserved, up to the limit of the decretal sum but https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/651/eng@2026-01-29 5

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not beyond. In other words, a Garnishee who wilfully allows withdrawal of funds after service of the decree nissi order is culpable to the extent of such withdrawals in the event whatever remains in the account is incapable of satisfying the decree. Further, the Garnishee may be liable for contempt once the Court is properly moved. 25. In the end, this Court finds, respectfully so, that the learned Adjudicator committed an error of law by misapplying the principles of Garnishee’s liability, thereby extending the Appellant’s obligation beyond the scope legally permissible under execution law. Disposition: 26. As I come to the end of this decision, I wish to sincerely apologize for the late delivery of this decision. The delay was largely caused by my engagement at the Judicial Service Commission where I sit as a Commissioner. 27. In the premises, the following final orders hereby issue: (a) The Appeal is hereby allowed. (b) The Garnishee Order Absolute issued by the trial Court against the Appellant for the payment of Kshs. 723,641.62, is hereby set aside and is substituted with a Garnishee Order Absolute to the tune of Kshs. 508,683/02 being the actual funds disclosed and held on behalf of the 3rd Respondent [Kshs. 290,412.50] and Kshs. 218,271.02/- being funds debited despite service of the decree order nissi. (c) Given the conduct of the Appellant, each party shall bear its costs. Orders accordingly. DELIVERED, DATED AND SIGNED AT NAIROBI THIS 29TH DAY OF JANUARY,2026. A. C. MRIMA JUDGE Judgment virtually delivered in the presence of: No appearance for parties. Michael/Amina – Court Assistants. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/651/eng@2026-01-29 6

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