Stancom Sacco Society Limited v Alliance One Tobacco Limited

6. On 7th December 2023, the Deputy Registrar pursuant to Order 49 Rule 5 directed the matter to be placed before this court following the objection to the Notice to Show Cause raised by Graham Kagali. 7. The objection to Notice to Show Cause was canvassed by way of written submissions. 8. The Judgment Debtors submissions are dated 21st August, 2025. The Judgment Debtor identified issues for determination as follows: 1. Whether the Objection has merit. 2. Who should bear the Costs of these proceedings? 9. The Judgment Debtor submitted that it is a Sacco Society which otherwise is a body corporate which has its own life under the law that creates it and a circle of leadership depending on its internal regulation. It has its own legal existence and personality separate from its directors and shareholders. It does not hold properties on behalf of its directors nor do the directors have powers to dispose of its property for their own benefit. (See Kenya National Capital Corporation Limited -vs- Hans Jurgen Langer (2016) е KLR) where Justice Fred Ochieng captured vividly the legal position of limited liability companies as separate and distinct legal entities from their directors and shareholders. 10. Any person who leads a body corporate does so under the rules set as possibly for a limited term. The Applicant submitted that it is no longer holds any position of responsibility at the Saccо. Consequently, it is submitted that the Decree Holder cannot (without proof) insist that the Applicant who is now a citizen with other obligations elsewhere should be one to answer the questions that the Sacco should answer. 11. The Applicant has informed the Court that the Sacco in question is non-existent. It is therefore the mandate of the Decree Holder to bring to Court evidence proving otherwise. The Judgment Debtor submitted that the Applicant's Objection has merit and ought to be allowed with Costs. 12. The Decree Holders submissions are dated 7th October 2025. The Decree Holder submitted that the objection seeks to frustrate execution and is without merit, misconceived in law and fact and intended to delay the realization of a valid judgment debt owed by the Plaintiff/Judgment Debtor to the Decree Holder, 13. The issues identified for determination by the J/Creditor are: i. Whether the Applicant has any legal or factual basis to object to the execution. ii. Whether the Judgment Debtor (Stancom Sacco Society Limited) is non-existent. iii. Who should bear the costs of this application. 14. On whether the Applicant has any legal or factual basis to object to the execution, the Decree Holder submitted that the Applicant’s assertion that he is no longer associated with the Plaintiff/ Judgment Debtor is unsupported by any documentary proof such as a resignation letter, CR12 or minutes evidencing cessation of directorship or official capacity. 15. It was also submitted that the Applicant has provided documents indicating that he is a Member of County Assembly (MCA) in South Kanyamkago County Ward Assembly and he has not provided any documents indicating that he is no longer affiliated to the judgement debtor. 16. It was also submitted that the fact that the Applicant is an MCA does not directly disqualify him from being affiliated to the Judgement Debtor but goes to show that he is involved in another income generating activity in addition to the Sacco. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8353/eng@2026-03-13 2

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17. The Decree Holder cited the holding in Multiple Hauliers EA Ltd v Yazad [2025] KEMC 30 (KLR) where it was stated that a party making an allegation of unauthorized office or non-existence must support it with evidence and a bare assertion will not suffice, The Applicant has not strictly demonstrated any legal grounds to prove that he is not liable to the decree dated 15th October 2015. 18. It was furthermore submitted that under Order 22 Rule 31 of the Civil Procedure Rules, the court may summon "any officer of the corporation" to show cause why execution should not issue against the company, The burden lies on the Applicant to prove he is not such an officer not on the Decree Holder to prove otherwise. 19. It was further submitted that Applicant's bare statement that "the Sacco is non-existent" and the documents proving that he is an MCA does not meet the evidentiary threshold required in civil proceedings as stated in Section 107-109 of the Evidence Act (Cap 80), which places the burden of proof on the party alleging a fact, 20. On whether the Applicant has any legal or factual basis to object to execution, it was submitted that the Applicant had not proved that the Sacco was defunct and that the same is registered under the Cooperative Societies Act and continues to hold assets traceable to the decretal sum 21. The D/H further submitted that in Re Queensway Investments Ltd [2006] eKLR the High Court declined to allow striking-off to be used as a cloak to defeat a creditor's decree, and ordered restoration of the company so that execution would not be frustrated. 22. Additionally, it was submitted that Section 121 of the Co-operative Societies Act provides that a society remains a body corporate until formally dissolved through gazettement by the Commissioner for Cooperative Development, That, no such gazette notice has been presented before this Court, 23. It was therefore submitted that the claim that the Sacco "no longer exists" is speculative and cannot defeat execution of a valid decree since the Applicant has not discharged the burden of proof placed upon him under Sections 107 to 109 of the Evidence Act (Cap 80). He has neither tendered any documentary evidence of the Saccois deregistration, dissolution nor any Gazette Notice to that effect, It was submitted that in the absence of such proof, this Honourable Court must presume that the Sacco remains a legal person capable of being sued, executing judgments, and satisfying decrees lawfully issued against it. 24. On who should bear the costs of the application it was submitted that the objection by the Applicant lacks merit and has only served to delay the enjoyment of the fruits of judgment by the Decree Holder, As such, the Applicant should bear the costs of this proceeding in accordance with Section 27 of the Civil Procedure Act, which grants the Court discretion to determine by whom and to what extent such costs shall be paid 25. In conclusion it was submitted that it is evident that the Applicant has failed to demonstrate any legal or factual basis to warrant the setting aside or suspension of the Notice to Show Cause, That the Applicant's allegations are unsupported by evidence and amount to a mere attempt to obstruct the lawful execution of a valid decree. 26. It was also submitted that the Decree Holder has established that the Judgment Debtor, Stancom Sacco Society Limited, remains a body corporate under the Co-operative Societies Act and is therefore capable of satisfying the decree issued by this Honourable Court, that the Applicant's claims of non-existence are speculative, unsubstantiated, and contrary to the evidentiary burden placed upon him by law. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8353/eng@2026-03-13 3

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27. It was therefore submitted that the objection filed by the Applicant is devoid of merit, frivolous, and an abuse of the court process and the same be dismissed with costs to the Decree Holder, Analysis And Determination 28. Based on the objection and rival submissions, the court was urged to dismiss the objection with costs. 29. Having considered the objection, the affidavits on record and the submissions of the parties, the court is of the view that the following issues arise for determination: 1. Whether the Applicant has established a lawful basis to object to the Notice to Show Cause. 2. Whether it has been demonstrated that Stancom Sacco Society Limited is non-existent. 3. Who should bear the costs of the objection. 30. On whether the Applicant has established a lawful basis to object to the Notice to Show Cause, the Notice to Show Cause in issue was issued pursuant to execution proceedings following a valid decree of the court. 31. Under Order 22 Rule 31 of the Civil Procedure Rules, where a decree is passed against a corporation, the court may summon any officer of the corporation to show cause why execution should not issue against the corporation. The purpose of such summons is not to impose personal liability upon the officer concerned, but rather to facilitate execution by enabling the court to obtain information regarding the corporation’s assets and means. 32. The Applicant objects to the Notice to Show Cause on the basis that he is no longer associated with the Sacco. However, the law on the burden of proof is clear. Under Sections 107, 108 and 109 of the Evidence Act, the burden of proving a fact lies upon the party who asserts it. 33. In the present case, the Applicant has not produced documentary evidence demonstrating cessation of his role within the Sacco. No resignation letter, minutes of the Sacco, or official records evidencing termination of his position have been placed before the court. 34. A bare assertion that one is no longer associated with a corporate entity cannot, without more, discharge the evidentiary burden imposed by law. 35. In the circumstances, the court is not persuaded that the Applicant has established a sufficient legal basis to challenge the Notice to Show Cause. 36. On whether the Sacco has been shown to be non-existent, the Applicant contended that the Sacco is non-existent. The only evidence presented in support of that contention is a letter from the Sacco Societies Regulatory Authority indicating that the Sacco is not licensed by the Authority and that the Authority is not privy to its registration status. That evidence does not establish that the Sacco has ceased to exist. Under Section 121 of the Co-operative Societies Act, a cooperative society remains a body corporate until it is formally dissolved through gazettement by the Commissioner for Co-operative Development. No Gazette Notice of dissolution has been produced before this court. In the absence of such proof, the court cannot presume the dissolution of the Sacco. On the contrary, the law requires the court to presume that the cooperative society continues to exist until its dissolution is formally gazetted. 37. As was observed in Re Queensway Investments Ltd [2006] eKLR, corporate dissolution cannot be invoked as a mechanism to defeat the lawful rights of judgment creditors. In Queensway Investments Limited the company was struck off the register and dissolved and in Malindi Air Services Limited a https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8353/eng@2026-03-13 4

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creditor with unsatisfied judgment debt the company was restored to enable enforcement of the debt. The contention that the Sacco is non-existent is therefore unsubstantiated. 38. On who should pay costs, Section 27 of the Civil Procedure Act provides that costs follow the event unless the court for good reason orders otherwise. 39. The objection raised by the Applicant has not demonstrated any legal or procedural impropriety in the issuance of the Notice to Show Cause. The Decree Holder is therefore entitled to the costs of the objection proceedings. 40. Accordingly, the court makes the following orders: 1. The objection to the Notice to Show Cause dated 18th May 2023 is hereby dismissed. 2. The Notice to Show Cause shall proceed in accordance with the law. 3. The costs of the objection proceedings are awarded to the Decree Holder. It is so ordered. DATED, SIGNED AND DELIVERED AT MIGORI THIS 13TH DAY OF MARCH, 2026 ……………………………………. HON. ANNE ADWERA- ONG’INJO JUDGE In the Presence of: Victor – Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8353/eng@2026-03-13 5

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