[2014] KEHC 5256 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CIVIL APPEAL NO. 144 OF 2013

(Being an appeal from the Ruling of Hon. S. Gacheru – PM in Mombasa RMCC No. 175 of 2011 between Tropical Pharmaceuticals Ltd –Vs- Munawar Pharmaceuticals Ltd and Hussein Juma Hussein delivered on the 11th day of October, 2013)

HUSSEIN JUMA HUSSEIN ……………..….…..………….. APPELLANT

V E R SU S

TROPICAL PHARMACEUTICALS LTD ……….……… 1ST RESPONDENT

AND

MUNAWAR PHARMACEUTICALS LTD ……………. 2ND RESPONDENT

RULING

An appeal has been filed in this matter against the Ruling of Hon. S. Gacheru – PM in Mombasa RMCCC No. 175 of 2011 delivered on 11th October 2013.

Pending the hearing of this appeal Appellant filed a Notice of Motion dated 11th December 2013. By that application Appellant seeks to stay proceedings in RMCCC No. 175 of 2011. The Respondent was served through the firm of Godfrey Mutubia & Co. Advocates but on 13th March 2014 when the application came before Court for hearing the Respondents were not represented.

Since there were no counter arguments presented before me I shall proceed to set out the findings that I have made.

The 1st Respondent is the Plaintiff while the 2nd Respondent is the Defendant in RMCCC NO. 175 of 2011. 1st Respondent obtained judgment against 2nd Respondent. When that judgment amount remained unsatisfied 1st Respondent filed in the lower Court Notice of Motion dated 21st November 2012 brought under Order 22 rule 35(b) of the Civil Procedure Rules. By that application 1st Respondent sought to have Appellant, Hussein Juma Hussein summoned as a Director of 2nd Respondent to be examined on whether 2nd Respondent has property which could satisfy the judgment.

Appellant filed a Preliminary Objection to that application stating that the Court had no jurisdiction to lift the corporate veil of a limited liability company. The lower Court delivered its Ruling on 11th October 2013 dismissing the Preliminary Objection which Ruling is the subject of this appeal. A copy of that Ruling was not provided to this Court.

Appellant by his present application seeks to stay proceedings in RMCCC NO. 175 of 2011. Is there a basis for seeking that stay? In my view the answer is in the negative. 1st Respondent’s application sought to have Appellant, who is alleged to be Director of the 2nd Respondent to be examined on the property, if any, the 2nd Respondent owns, which property can satisfy judgment obtained by 1st Respondent. Appellant failed to halt the hearing of that application by his Preliminary Objection. That application for examination of Appellant was brought under Order 22 Rule 35 of the Civil Procedure Rules. That Rule provides that an Officer of Corporation may be examined on whether the Corporation has property that can satisfy judgment. The Rule is in the following terms-

“Where a decree is for the payment of money, the decree-holder may apply to the Court for an order that-

the judgment-debtor;

in the case of a corporation, any officer thereof; or

any other person,be orally examined as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgment-debtor or officer, or other person, and for the production of any books or documents.”

Without wishing in any way to pre-empt the pending appeal, there is nothing in that Rule that permits the lifting of a Corporation’s veil. It does, on prima facie basis, seem as though the application seemed to simply have Appellant examined as an Officer of 2nd Respondent. There is, therefore, no basis that I can see why the proceedings of the lower Court should be stayed pending the present appeal. Even if there was a basis to stay, the only thing that could be stayed is the application for examination of the Appellant as an officer of 2nd Respondent, but not the stay of the whole suit in the lower Court.

In view of the above the Notice of Motion dated 11th December 2013 is dismissed with no orders as to costs.

DATED and DELIVERED at MOMBASA this 15TH day of MAY, 2014.

MARY KASANGO

JUDGE