[2019] KEHC 11969 (KLR)
The court found that the applicant had established that Greenstar Systems Limited was indebted to him pursuant to a valid court order and decree, and that previous garnishee proceedings to recover the debt were unsuccessful. The respondent did not oppose the application or appear at the hearing despite being served....
Source-derived case information.
- Citation
- [2019] KEHC 11969 (KLR)
- Parties
- Applicant: Halake Rambo Muthoga; Respondent: Greenstar Systems Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Civil Application 519 of 2016
- Procedural Posture
- Miscellaneous Application / Ruling on Ex Parte Application to Lift Corporate Veil and Enforce Judgment
- Outcome
- Application allowed as prayed. Costs to the applicant.
- Judges
- BT Jaden
- Legal Topics
- Lifting Corporate Veil, Judgment Enforcement, Garnishee Proceedings, Director Liability
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Halake Rambo Muthoga
Applicant
Greenstar Systems Limited
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Ex Parte Application to Lift Corporate Veil and Enforce Judgment
Legal Issues
- 1 Whether the court should grant leave to lift the corporate veil of Greenstar Systems Limited.
- 2 Whether the directors of Greenstar Systems Limited should be held personally liable for the judgment debt owed to the applicant.
- 3 Whether the applicant is entitled to costs of the application.
Ratio Decidendi
The court found that the applicant had established that Greenstar Systems Limited was indebted to him pursuant to a valid court order and decree, and that previous garnishee proceedings to recover the debt were unsuccessful. The respondent did not oppose the application or appear at the hearing despite being served. In these circumstances, the court exercised its discretion to lift the corporate veil of the respondent company and shift liability for the judgment debt to its directors, in order to prevent the abuse of the corporate structure and ensure the applicant is not denied the fruits of his judgment. The court granted the orders as prayed, including costs to the applicant.
Court Disposition
Application allowed as prayed. Costs to the applicant.
Orders
- Leave granted to lift the corporate veil of Greenstar Systems Limited.
- Corporate powers of Greenstar Systems Limited as a legal personality shifted to its directors.
Full Case Text
Judgment text and source record
20 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL DIVISION
HIGH COURT CIVIL MISC. APPL NO. 519 OF 2016
HALAKE RAMBO MUTHOGA........................APPLICANT/ADVOCATE
& MUIRURI ADVOCATES
VERSUS
GREENSTAR SYSTEMS LIMITED..................RESPONDENT/CLIENT
RULING
1. The Application dated 12th March, 2019 seeks the following orders:
(a) That the Honourable Court be pleased to grant leave for the Applicants application to lift the corporate veil of Greenstar Systems Limited, the Respondent herein.
(b) That this Honourable Court be pleased to shift the corporate powers of Greenstar systems Limited as a legal personality to its Directors.
(c) That this Honourable Court be pleased to direct the Directors of Greenstar Systems Limited to pay the judgment debt of Ksh.2,493,521. 75(principal sun plus 23 months’ interest) along with costs and interest from the date of the issuance of the orders herein until payment in full.
(d) That the costs of this application be provided for.
2. It is stated in the affidavit in support that the Respondent is indebted to the Applicant in the sum of Ksh.2,493,521. 75 pursuant to an order and Decree of this court dated 31st May, 2019. That the Garnishee proceedings commenced herein did not bear any fruits, hence, the application at hand.
3. The application was not opposed. No papers were filed in reply to the same. Though served, the Respondent did not turn up on the day the application proceeded to hearing. The application proceeded exparte.
4. I have considered the application and I allow the same as prayed. Costs to the Applicant.
Dated, signed and delivered at Nairobi this 17th day of Oct., 2019
B. THURANIRA JADEN
JUDGE