[2010] KEHC 3090 (KLR)
The court dismissed the application because the request for substitution of the defendant was made too late, as the relevant changes in the defendant's status occurred before the main suit was heard and decided. The court found that the applicant should have sought substitution at the latest during the hearing of...
Source-derived case information.
- Citation
- [2010] KEHC 3090 (KLR)
- Parties
- Applicant: Geomaps; Defendant: Mapsurveys Limited; Respondent: Mapsurveys (K) Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 800 of 1989
- Procedural Posture
- Civil Case / Ruling on Notice of Motion for Substitution and Lifting of Corporate Veil
- Outcome
- application dismissed with costs to the proposed defendant
- Judges
- JM Khamoni
- Legal Topics
- Lifting Corporate Veil, Substitution of Parties, Enforcement of Judgments, Company Dissolution
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Geomaps
Applicant
Mapsurveys Limited
Defendant
Mapsurveys (K) Limited
Respondent
Procedural Posture
Civil Case / Ruling on Notice of Motion for Substitution and Lifting of Corporate Veil
Legal Issues
- 1 Whether the court should lift the corporate veil of Map Surveys (K) Ltd. and substitute it as the defendant in place of Map Surveys Limited.
- 2 Whether the decree should be satisfied by the substituted defendant and/or its directors personally.
- 3 Whether the application for substitution was made within the appropriate time frame.
Ratio Decidendi
The court dismissed the application because the request for substitution of the defendant was made too late, as the relevant changes in the defendant's status occurred before the main suit was heard and decided. The court found that the applicant should have sought substitution at the latest during the hearing of the suit, not after judgment had been delivered. Additionally, the applicant failed to specify the person against whom the veil of incorporation was to be lifted, rendering the prayer vague and incapable of being granted. The court concluded that there was no legal basis to grant the orders sought and dismissed the application with costs to the proposed defendant.
Court Disposition
application dismissed with costs to the proposed defendant
Orders
- The Notice of Motion dated 4th November 2009 is dismissed.
- Costs of the application awarded to the proposed defendant.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)
Civil Case 800 of 1989
GEOMAPS……………………………………………………….…………………PLAINTIFF/APPLICANT
versus
MAPSURVEYS LIMITED…………..………...…………..……………………………………DEFENDANT
MAPSURVEYS (K) LIMITED…...........…PROPOSED SUBSTITUTED DEFENDANT/RESPONDENT
RULING
The Plaintiff has filed this Notice of Motion dated 4th November 2009 praying for orders
“(i)THAT the court do be pleased to order that the veil of incorporation of the entity known as Map Surveys (K) Ltd., as a limited liability Company, be lifted and that entity, Map Surveys (K) Ltd., be substituted as the Defendant herein in place of the Original Defendant, Map Surveys Limited.
(ii)THAT pursuant to No. 1 above the court do be pleased to order and direct that the decree herein be satisfied by the substituted Defendant, Map Surveys (K) Ltd., and/or by its Directors or those of them as the court shall deem to have knowingly operated the Original Defendant’s affairs fraudulently, personally.”
Further, the Applicant prays for costs of the application.
The Notice of Motion is brought under Order L Rule Civil Procedure Rules, Section 3 A Civil Procedure Act and Section 323 of the Companies Act.It is based on grounds seen on the face of the Notice of Motion and supported by the affidavit of Lenny Kivuti deponed on 5th November 2009.
The Notice of Motion is opposed by the proposed substituted Defendant who filed a replying affidavit.
Having carefully considered what was brought to my attention during the hearing of the Notice of Motion, I do hereby dismiss it with costs to the proposed Defendant for the following reasons:
First, since the evidence shows changes in the Defendant took place before the main suit herein was heard and decided, the application for substitution should have been made, latest, at the time the suit was being heard.It is too late now if such substitution must be done.Deregistration of the Defendant in Kenya was done on 30th August 1995 and the proposed Defendant registered on 4th May 1995. The judgment of the court the Applicant intends to execute is dated 8th November 2005 against the Defendant said to have been dissolved on 21st October 1994 in the United Kingdom, a dissolution which subsequently led to that Defendant’s deregistration in Kenya.
Secondly, the Applicant is not specifying in prayer (i) the person to lift the veil of incorporationof Map Survey (K) Ltd.
Those are the orders of this court.
Dated this 19th day of March 2010.
J.M. KHAMONI
JUDGE
Present:
Meenye & Kirima, Advocates for the Applicant
David Mutinda, Advocates for the Respondent