[2007] KEHC 3130 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI (MILIMANI COMMERCIAL COURTS)

Misc Civ Appli 552 of 2005

MIEMA ENTERPRISES LTD…………………..........………………APPLICANT

VERSUS

NJOKA TANNERS LTD……………….…………..........………..RESPONDENT

IN THE MATTER OF THE FOREIGN JUDGEMENTS (RECIPROCAL ENFORCEMENT) ACT CAP. 43 LAWS OF KENYA

AND

IN THE MATTER OF THE REGISTRATION OF JUDGEMENT & DECREE IN COMMERCIAL CASE NO.60 OF 2000, HIGH COURT OF TANZANIA, DAR ES SALAAM (COMMERCIAL DIVISION)

BETWEEN

MIEMA ENTERPRISES LIMITED ……………....….........…………..PLAINTIFF

VERSUS

NJOKA TANNERS LIMITED …………………...…….......………DEFENDANT

AND

EVANGELINE WANJIRA NJOKA ………………...........……..1ST OBJECTOR

ZINGO INVESTMENTS LTD. ………..……………..........……2ND OBJECTOR

RULING

This Chamber Summons is brought under Order 21 Rule 56 and 57 of the Civil Procedure Act. It prays that this Honourable court be pleased to order the lifting of the attachment of the objector’s moveable properties made by Ostrich Lion Auctioneers on 24th February, 2006. The application is supported by the affidavit of Robert Njoka Muthara who is the Managing Director of Zingo Investments Ltd, the 2nd Objector herein. He claims that he is the husband of Evangeline Wanjira Njoka, the 1st Objector herein.

He states that on 24th February, 2006 an Auctioneer by the names Ostrich Lion Limitedwent to the 2nd Objector’s factory situate in L. R. No.209/8628 along Lunga Lunga road, Nairobi and proclaimed various assets within the factory. He also avers that some of the goods indicated in the proclamation namely motor vehicles KAL 645V, KAL 644Vwere not within the premises of the 2nd Objector and do not belong to it. It is further contended by Mr. Muthara that the other assets in the proclamation belongs to the 2nd Objector, Zingo Investments and are within the premises owned by the 2nd Objector. And that the 2nd Objector is a limited liability company and is distinct from the Defendant herein.

In a further affidavit Mr. Muthara avers that it is not true that he closed the Defendant Company in Embu or did remove its assets and thereafter set up a dummy Company in Nairobi to escape its liabilities as alleged by the Plaintiff herein. He also claims that the assets of the 2nd Objector belong to it exclusively and are not the ones belonging to the Defendant. He further discounts that the Directors and Shareholders of Njoka Tanners Ltd are the same as of Zingo Investments Limited.

Mr. Muriithifor the Objectors submitted that the 2nd Objector is a limited liability company, which is a distinct legal entity from the Defendant and its directors. And the machinery planted on the premises, where Zingo Investment Limited carries on business belongs to the 2nd Objector. And that the 2nd Objector was not a party to the proceedings between the Plaintiff and Defendant.

Mr. Meenye Advocate for the Plaintiff submitted that there is a decree of a designate court, Tanzania High Court sitting in Dar es Salaam. On the instructions of the Plaintiff, this court registered the decree on 13th October, 2005 and then an execution process commenced against the assets of the Defendant. According to Mr. Meenye Advocate the same Directors and shareholders of the Defendant are the directors of the 2nd Objector. The letter dated 13th June, 2005 confirms that position. He also contended that according to the Memorandum of Association and Articles of Association, the two Companies have the same objectives and the same Directors. He submitted that the machinery of the Defendant was removed and planted at the premises of the 2nd Objector with the sole intention of defrauding the Plaintiff. It is the case of the Plaintiff that the 2nd Objector is nothing but an instrument to commit fraud. And the company is a cover up to defeat the case of the Plaintiff. And in view of the various discrepancies shown in the documents exhibited by the 2nd Objector Mr. MenyeAdvocate urged me to find that the equipment attached belonged to the Defendant and that the attachment is lawful and valid.

There is no dispute that Zingo Investments Limitedwas through a certificate of incorporation No. C 105410 registered on 1st September 2003. It is also clear that the Defendant herein was registered and/or incorporated way back in 1995. According to Mr. Muthara, the shareholders of Njoka Tanners Limited are Industrial & Commercial Development Corporation, Robert Njoka Muthara and Evangeline Wanjira and its directors are 4 in number.

The goods attached by the Auctioneer were found at the premises where the 2nd Objector carries on business. The 2nd Objector exhibited various documents to show it purchased the goods by itself from its funds. However I am afraid to say the documents exhibited does not show that the 2nd Objector made any payments to the Companies indicated in the various letters. The 2nd Objector exhibited various pro- forma invoices to show it purchased the machinery from various companies. Ideally a proforma is not a proof of payment of goods purchased. In my understanding a proforma invoice is usually sent to a customer/client who made an inquiry into the price of a particular product. In this case there is no evidence to show that the 2nd Objector sent monies for the purchase of the alleged machineries. Equally there is no evidence of the goods ever supplied to the 2nd Objector.

It is the case of the Plaintiff that the machinery are the ones supplied to the Defendant but which were removed in anticipation to defeat the claim of the Plaintiff. In the instant case, most of the proforma invoices are dated before the registration and incorporation of the 2nd Objector. It is important to note that proforma invoices Nos. 76, 81, 84 and 96 are dated before the 2nd Objector came into operation as a legal entity. There is also the quotation dated 3rd September, 2003, from Astron Computers Limited to a company called Singo Investment Limited situate in Limuru. That company is not in my view the same as the 2nd Objector.

It is the contention of the Plaintiff that it has carried out a search at Company’s registry to know the status of the 2nd Objector. According to the particulars of directors at the company’s registry, the directors of Zingo Investments Limited are;

(1) Robert Njoka Mutharaand

(2) Evangeline Wanjira Njoka.

The search was conducted on 13th June, 2005 and in my view it is an authentic and legitimate representation of the status of the 2nd Objector. The vein that runs through the two companies is that Mr. Muthara and his wife Njokaare directors and shareholders in both Companies. There is an assertion that the Defendant has 4 directors and 3 shareholders. But the 2nd Objector does not disclose the current status of the Defendant Company in particular whether Industrial & Commercial Development Corporation is still a shareholder of this shell company.

Having heard the submissions of both Advocates and having read the various material presented, I am satisfied that the objection has no legal basis. I hold that there is no evidence to show that the 2nd Objector owns the machinery that were attached by the Plaintiff. I am satisfied beyond doubt that the goods attached are the property of the Defendant disguised in a manner to defeat the claim of the Plaintiff. It is my decision that the objection is based on distortion, deceit and deception with view to obstruct the cause of justice. This court has the eyes, mind and ears to see through that deceit and deception. Indeed the assets of the Defendant company is held by this dummy company called Zingo Investments Limited in order to defeat or derail the liabilities that had accrued to the Company.

The way Mr. Muthara and his wife are changing and setting up companies is a clear reflection or manifestation of persons engaged in unlawful activities. I am in agreement with Mr. Meenye Advocate that the whole drama is purely to hide under the guise of incorporation of a new company and to commit and perpetuate fraud against the creditors of the Defendant. It is my firm decision that the 2nd Objector is using the Company’s Act as an Instrument to commit fraud and more so to run away from its obligation towards creditors. I think it is right to say that the Directors of the Defendant Company and the 2nd Objector are one and the same. They are using the legal protection given to them under the statute to defraud creditors by engaging in multiple companies. In the premises the objection of the 2nd objector is dismissed with costs.

There are two vehicles i.e. KAL 644V and KAL 645 V which were proclaimed by the Auctioneer. The two Objectors have not shown any evidence to show the ownership of the two vehicles. As things stand there is no valid objection against that proclamation done by the Auctioneer. It means there is no proper and valid objection raised by the Objectors. On the same breadth, I hold the attachment of the two vehicles is valid hence the Plaintiff is at liberty to proceed as it deems fit.

Order: the objection of the 2nd Objector is dismissed with costs, while the objection against motor vehicle KAM 804E is lifted.

Dated and delivered at Nairobi this 22nd day of March, 2007.

M. A. WARSAME

JUDGE