[2019] KEELRC 1216 (KLR)
The court found that, despite the relationship between the Objector and the Respondent, they are distinct legal entities under company law. There was no clear evidence that the properties proclaimed and attached belonged to the Respondent or that the Respondent was still operating from the premises where the...
Source-derived case information.
- Citation
- [2019] KEELRC 1216 (KLR)
- Parties
- Claimant: Emilio Kirimi Njeru; Respondent: New Bakers Limited; Objector: New Bakor Muthaiga Bakers Ltd
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause 1235 of 2015
- Procedural Posture
- Objection Application / Ruling on Objection to Execution
- Outcome
- Objection allowed; execution set aside.
- Judges
- MSA Makhandia
- Legal Topics
- Execution of Judgment, Company Separate Personality, Attachment of Property
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Emilio Kirimi Njeru
Claimant
New Bakers Limited
Respondent
New Bakor Muthaiga Bakers Ltd
Objector
Procedural Posture
Objection Application / Ruling on Objection to Execution
Legal Issues
- 1 Whether execution against the Objector's property was lawful given its separate legal personality from the Respondent.
- 2 Whether the proclaimed properties belonged to the Respondent or the Objector.
Ratio Decidendi
The court found that, despite the relationship between the Objector and the Respondent, they are distinct legal entities under company law. There was no clear evidence that the properties proclaimed and attached belonged to the Respondent or that the Respondent was still operating from the premises where the attachment occurred. Therefore, the execution against the Objector's property was irregular and could not be sustained. The court set aside the execution and related warrants, emphasizing the necessity of respecting the separate legal personalities of companies unless there is compelling evidence to pierce the corporate veil.
Court Disposition
Objection allowed; execution set aside.
Orders
- The proclamation and attachment including the warrants issued on 23 May 2019 are hereby set aside.
- Each party to bear own costs of the objection proceedings.
Full Case Text
Judgment text and source record
30 paragraphs
REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI
CAUSE NO. 1235 OF 2015
EMILIO KIRIMI NJERU.........................................................CLAIMANT
v
NEW BAKERS LIMITED...................................................RESPONDENT
AND
NEW BAKOR MUTHAIGA BAKERS LTD..........................OBJECTOR
RULING
1. New Bakor Muthaiga Bakers Ltd (Objector) moved the Court on 3 June 2019 to challenge the warrants, proclamation and attachment of its properties in execution of a judgment/decree issued on or around 23 May 2019.
2. On the same day, the Court granted interim stay of execution pending inter partes hearing on 10 June 2019.
3. The Claimant filed a replying affidavit in opposition to the objection application on 10 June 2019, and because the Objector sought for time to file a further affidavit, the inter partes hearing was rescheduled to 26 June 2019.
4. The Objector filed a further affidavit on 12 June 2019 and the Court heard submissions on the scheduled date.
5. It is not disputed that the Objector and the Respondent are related companies, sharing shareholders/directors.
6. It is also not disputed that the Claimant moved to execute from premises leased out to the Objector. The Respondent initially operated its business from the same premises before a surrender of lease was effected.
7. Although the Objector and the Respondent share directors, in company law, they have distinct and separate juristic personalities.
8. Without clear evidence that the proclaimed properties were owned by the Respondent and/or that the Respondent was still operating from the premises where the proclamation was carried out, it is the view of the Court that the execution against the Objector was irregular.
9. The Court will therefore issue an order setting aside the execution.
10. The Court notes that the Claimant and Respondent reached a consent on settlement of the decretal amount and payment of auctioneer’s charges and that a consent was filed in Court on 26 June 2019.
11. The Court orders
(a) The proclamation and attachment including the warrants issued on 23 May 2019 are hereby set aside.
12. Each party to bear own costs of the objection proceedings.
Delivered, dated and signed in Nairobi on this 15th day of July 2019.
Radido Stephen
Judge
Appearances
For Claimant Mr. Nyabena instructed by Nyabena Nyakundi & Co. Advocates
For Respondent Githinji Mwangi & Associates Advocates
For Objector Mr. Siagi instructed by Moses N. Siagi & Co. Advocates
Court Assistant Lindsey