[2012] KEHC 807 (KLR)
The court found that the Official Receiver, acting as Provisional Liquidator, had realized sufficient income to pay the pension dues owed to fifty-six former employees. Under Section 241(1)(d) of the Companies Act, the liquidator is required to pay creditors in full when the company is able. The court held that the...
Source-derived case information.
- Citation
- [2012] KEHC 807 (KLR)
- Parties
- Applicant: Official Receiver & Liquidator of Continental Credit Finance Limited (In Liquidation)
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Winding Up Cause 29 & 30 of 1986
- Procedural Posture
- Winding Up Cause / Ruling on Ex Parte Application for Leave to Pay Pension Dues
- Outcome
- application granted
- Judges
- CM Njagi, GV Odunga
- Legal Topics
- Company Liquidation, Creditor Priority, Employee Pension Rights, Distribution of Assets
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Official Receiver & Liquidator of Continental Credit Finance Limited (In Liquidation)
Applicant
Procedural Posture
Winding Up Cause / Ruling on Ex Parte Application for Leave to Pay Pension Dues
Legal Issues
- 1 Whether the Official Receiver as Provisional Liquidator may pay pension dues to former employees out of the company's income and revenue during liquidation.
- 2 Whether former employees' pension dues rank pari passu with other unsecured creditors in the distribution of assets.
Ratio Decidendi
The court found that the Official Receiver, acting as Provisional Liquidator, had realized sufficient income to pay the pension dues owed to fifty-six former employees. Under Section 241(1)(d) of the Companies Act, the liquidator is required to pay creditors in full when the company is able. The court held that the former employees' pension dues, as unsecured debts, should be paid in the same manner as other unsecured creditors. Since the company was in a financial position to make the payment, the court granted leave for the payment to be made out of the company's income and revenue. The application was allowed as prayed, with costs in the cause.
Court Disposition
application granted
Orders
- Leave is granted to the Official Receiver and Provisional Liquidator to pay Kshs. 5,549,945.60 to fifty-six former employees as pension dues out of the company's income and revenue.
- Costs in the cause.
Full Case Text
Judgment text and source record
25 paragraphs
REPUBLIC OF KENYA
High Court at Nairobi (Nairobi Law Courts)
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IN THE MATTER OF CONTINENTAL CREDIT FINANCE LIMITED IN LIQUIDATION
AND
IN THE MATTER OF THE COMPANIES ACT
(CAP 486 OF THE LAWS OF KENYA)
AND
IN THE MATTER OF AN APPLICATION BY
THE OFFICIAL RECEIVER & LIQUIDATOR OF CONTINENTAL CREDIT FINANCE LIMITED (IN LIQUIDATION)………..APPLICANT
RULING
By this ex parte application, the Official Receiver and Provisional Liquidator, Continental Credit Finance Limited, prays for leave to pay out of its income and revenue monies owed to fifty six (56) former employees as pension totalling Kshs. 5,549,945. 60 only. The application is brought by Notice of Motion dated 18th May, 2011 and taken out under Order 41(1) (1) (d) and Order 51 Rule 1 of the Civil Procedure Rules, and Section 241(1) (d) of the Companies Act.
On 7th August, 1986, this court appointed the Official Receiver as the Provisional Liquidator of Continental Credit Finance Limited (In Liquidation). Under Section 241 (1) (d) of the Companies Act, the Official Receiver is under a duty to pay out in full to creditors the money owed to them when the company is in a position to do so.
In this matter, the company has realized sufficient income to pay the fifty six (56) former employees pension dues owed to them amounting to Kshs. 5,549,945. 60. Therefore, it is fair and proper that these moneys be paid since the said former employees rank in pari passu with the other unsecured creditors of the company.
By reason of the foregoing prayer 1 of the Notice of Motion dated 18th May, 2011 is hereby granted as prayed.
Costs in the cause.
L. NJAGI
JUDGE
DATEDand DELIVERED at NAIROBI this 7th day of November, 2012.
ODUNGA
JUDGE