[2024] KEELRC 611 (KLR)

Wambua & 15 others v W. E Tilley (Muthaiga) Limited (Cause 441 of 2016) [2024] KEELRC 611 (KLR) (19 March 2024) (Ruling)

Neutral citation: [2024] KEELRC 611 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause 441 of 2016

JK Gakeri, J

March 19, 2024

Between

Benard Kithuku Wambua

1st Claimant

Harrison Kikuvi

2nd Claimant

Peter Njoroge Kimani

3rd Claimant

Penus Lenkal Patel

4th Claimant

Bernard Chege Kihigi

5th Claimant

Samuel Kipyegon Kokoo

6th Claimant

Samuel Mwangi Gachigua

7th Claimant

Simon Kagwi Githiri

8th Claimant

Charles Gathungu Njiriri

9th Claimant

Fredrick Kisuko Mwango

10th Claimant

Jones Musyoka

11th Claimant

John Njuguna Kamenju

12th Claimant

James Kariuki Gichu

13th Claimant

Ziphora Makumi

14th Claimant

Onesmus Mbithi Kikuvi

15th Claimant

Peter Ndiba Thariki

16th Claimant

and

W. E Tilley (Muthaiga) Limited

Respondent

Ruling

1. Before the Court for determination is the Applicant’s Notice of Motion dated 6th November, 2023 filed under Certificate of Urgency seeking orders that;1. Spent.2. Spent.3. Spent.4. This Court be pleased to grant an injunction restraining the Claimants herein, its servants and agents including Moonstar Enterprises Auctioneers from selling either by way of auction or in any way purporting to exercise their power of sale in so far as it relates to the Respondent’s movable and immovable property.5. Spent.6. This Court be pleased to stay, set aside and or revoke the warrant of attachment issued on 16th October, 2023 to Moonstar Enterprises Auctioneers and any consequential attachment and proclamation declared illegal.

2. The Notice of Motion is expressed under Article 159 of the Constitution of Kenya, Order 10 Rule 11, Order 22 Rule 51 (1) and (2), Order 51 Rule 1 of the Civil Procedure Rules, 2010 and Section 1A, 1B, 3A and 63(e) of the Civil Procedure Act, 2010 and the Notice of Motion is based on the grounds set out on its face and the Supporting Affidavit of Zulfika Haideralli Jessa sworn on 6th November, 2023 who depones that after the judgment herein was delivered on 19th July, 2022, the Respondent filed a Notice of Appeal and sought typed copies of the proceedings vide letter dated 22nd July, 2022 and 21st July, 2022 respectively, and the same were supplied 16th May, 2023 by which time the prescribed duration of filing the record of appeal had lapsed and lodged an application to file the appeal out of time dated 20th July, 2023.

3. That the Application was heard on 30th October, 2023 but the ruling is yet to be delivered.

4. The affiant deposes that he was served with warrants on 3rd November, 2023 and a Proclamation Notice dated 19th October 2023 by Moonstar Enterprises Auctioneers in execution of the judgment.

5. It is the affiant’s case that in November 2015, an order issued in HCC 522 of 2015 froze all the bank accounts and assets of the Respondent.

6. The affiant states that the auctioneer did not visit the Respondent’s premises but issued a blanket attachment without identification of the premises.

7. That the Respondent’s assets listed in the Proclamation Notice are affected by the Order in HCC of 2015 and attempt to attach and auction the assets will be in breach of the Court Order in HCC 522 of 2015.

8. That without a stay of execution or lifting of Warrants of Attachment, the Claimants are at liberty to attach and sell the applicant’s assets by public auction.

9. That the application for leave to appeal is arguable with chances of success and execution will render the intended appeal nurgatory and the applicant will suffer irreparable financial loss and the financial status of the Claimants is unknown in the event the intended appeal succeeds.

Response 10. In her Replying Affidavit sworn on 17th November, 2023, Ziphora Makumi, the 14th Claimant deposes that she had been authorized by the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13th, 15th and 16th Claimants to swear the affidavit.

11. The deponent admits the contents of paragraphs 1, 2, 3, 4 and 5 of the Supporting Affidavit.

12. The affiant states that the application for extension of time to file an appeal out of time was heard inter partes on 30th October, 2023 and was dismissed and as such no appeal is pending determination in this matter and the execution process commenced by the Decree-holders is legal.

13. The affiant states that the Order in HCC No. 522 of 2015 froze the disposal, mortgaging, charging, assigning, transferring, alienating, operating, interfering and/or dealing with any of the applicants assets within the jurisdiction of the court and the orders were vacated upon and completion of the inter parties hearing.

14. That no evidence had been adduced to show that the orders granted on 27th October, 2015 were extended.

15. The affiant disposes that the applicant is not entitled to a stay of execution as there was no pending appeal or orders barring execution and the financial status of the Claimants is inconsequential as no refund will ensue, and the Respondents stand to suffer prejudice if the application is allowed.

Applicant’s submissions 16. Counsel submitted on whether the court can permit an illegality (Proclamation, attachment and sale) contrary to a freezing order and whether the court should issue a stay pending appeal.

17. On the 1st issue, counsel submitted that the order granted in November 2015 (copy of which was not availed) and which was extended pending the hearing and determination of the main suit was still subsisting and the court ought to allow the application to set aside/revoke the Warrants of Attachment Proclamation and any intended sale as doing otherwise would be aiding an illegality.

18. Reliance was made on the decisions in Regional Institute of Management V Ondong Civil Appeal No. 420 of 2019 and Heptulla Noor Mohamed Nairobi, Civil Appeal No. 62 of 1983 as were the sentiments of the court in Burchell V Burchell Case No. 364 of 2005, Trusted Society of Human Rights Alliance V Cabinet Secretary for Devolution and Planning & 3 others (2017) eKLR among others on the effect of court orders and the essence of their observance.

19. That the Respondents conduct amount to contempt of court and ought not to be aided by the court.

20. According to counsel, the Claimants ought to apply to be joined in HCC No. 522 of 2015 Imperial Bank (In Receivership) V W. E Tilley (Muthaiga) Ltd & others to seek the setting aside of the freezing orders.

21. Reliance was also made on Section 63 of the Civil Procedure Act on the court’s jurisdiction to grant orders necessary to meet the ends of Justice, to urge that the warrants of attachment, proclamation notice attachment and intended sale be set aside.

22. On the issue of stay pending appeal, counsel submitted that there was an application before the Court of Appeal for leave to file an appeal out of time and cites Order 42 Rule 6 of the Civil Procedure Rules, 2010 on the elements to submit that the applicant had met the threshold for the grant of an Order of stay.

23. Counsel submitted that the applicant stood to suffer substantial loss as the sum of Kshs.2,737,141. 5, the decretal sum was colossal and the financial status of the Claimants was unknown citing Stanley Karanja Wainaina & another V Ridon Anyangu Mutubwa (2016) eKLR on the burden of proof of financial wherewithal of the Respondents.

24. On delay, counsel submitted that because the applicant was aware of the freezing orders, it did not file the application for stay upon delivery of judgment and the auctioneer served its documentation on 3rd November, 2023 and the application was filed without undue delay.

Respondent’s submissions 25. On 17th December, 2023, parties were accorded 14 days a piece to file and exchange submissions.

26. On 13th February, 2024, the applicants counsel informed the Court that they had filed submissions but counsel for the Decree-holders had not and promised to do so by close of business and prayed for a ruling date which the court gave as 19th March, 2024.

27. By 21st February, 2024 when the court retired to prepare this ruling, the Respondent’s submissions were still outstanding and were subsequently filed on 6th March, 2024. Regrettably, the court deemed them too late for consideration.

Determination 28. The singular issue for determination is whether the Applicant’s Notice of Motion dated 6th November 2023 is merited.

29. The applicant’s Notice of Motion is grounded on two pillars namely; the High Court Order in HCC No. 522 of 2015 and the pending application to file an appeal out of time.

30. On regards, auctioneer’s Warrants of Attachment, Proclamation attachment and proposed sale of the applicant’s assets to satisfy the decretal sum, the applicant argues that the process is a failure ab initio as the Court Order granted in HCC No. 522 of 2015 Imperial Bank Ltd (In Receivership) V W.E. Tilley Muthaiga & 20 others which froze all the applicant’s bank accounts and assets was still in force.

31. Puzzlingly, the applicant did not file or annex the extensions of the order and could not tell when the original order was made.

32. The extensions were material to this application as the order relied upon by the applicant was temporary, made pending the hearing and determination of the application before the High Court is dated 15th October, 2015.

33. Equally, the applicant made no attempt to enlighten the court on the status of HCC No. 522 of 2015.

34. Surprisingly, in their submissions, counsel for the applicant submitted that the orders made by the HCC No. 522 of 2015 on a date counsel did not identify were extended pending the hearing and determination of the suit on a date counsel did not indicate.

35. In their Replying Affidavit sworn by Ziphora Makumi, the Claimant/Respondents averred that the Orders made by the High Court in HCC No. 522 of 2015 were conditional upon the inter partes hearing and were vacated upon the occurrence and completion of the inter partes hearing.

36. Analogous to the applicant’s argument on the issue, the Respondent’s averment lacked corroborative evidence to substantiate the allegations.

37. To their credit, however, the Respondent filed 4 pages of the activities that had taken place in HCC No. 522 of 2015 from 21st January, 2016 to 23rd November, 2023 and a ruling was delivered by D.S. Majanja J. on 19th October, 2023.

38. From the record, it is evident that the main suit is yet to be heard and determined as the court has been handling applications.

39. Regrettably, the record is silent on subsisting or interim orders the court may have made. Though the effort is creditable, it does not demonstrate that the orders cited by the applicant lapsed or were not extended.

40. Thus, none of the parties bothered to confirm the current position of HCC No. 522 of 2015 and both are urging the court to accept its version.

41. Guided by the mantra that he who alleges must prove encapsulated in the provisions of Section 107, 108 and 109 of the Evidence Act, the burden of proof in this case fall on the applicant to demonstrate the orders in question was still in force.

42. The second pillar is the contention that the applicant has a pending appeal before the Court of Appeal exemplified by the Notice of Appeal dated 22nd July, 2022 and a request for typed copies of proceedings dated 21st July, 2022.

43. More significantly, the applicant contends that its application dated 20th July, 2023 for leave to lodge an appeal out of time is pending ruling by the Court of Appeal though hearing was concluded on 30th October, 2023.

44. Intriguingly, the applicant placed no material before the court to demonstrate the current status of the application which the court heard on 30th October, 2023 more than three months earlier.

45. The intrigue is compounded by the fact that the Respondent has produced documents from the Judiciary e-filing portal showing that Case No. COACAPPL/E340/2023 W.E. Tilley (Muthaiga) Ltd V Bernard Kithuku Wambua & others was filed on 20th July, 2023 and was not certified urgent on 24th July, 2023, was heard on 30th October, 2023 and dismissed by the Hon. Lady Justice Abida Ali-Aroni and the matter closed. The applicant was seeking extension of time.

46. The applicant did not respond to this evidence or controvert it in its submissions.

47. Undoubtedly, the substratum of the applicant’s notice of motion is highly contested by the Respondents who have provided copies of documents which tend to bring into question the credibility and reliability of the applicant’s assertions and submissions.

48. According to the Respondents, there is neither a court order under HCC No. 522 of 2015 nor a pending ruling before the Court of Appeal.

49. In the course of drafting this ruling on 21st February, 2024, it occurred to the court that certain material information was necessary to enable the court render its ruling from a point of information, in particular on the true state of affairs as regards the purported ruling that has been pending since October 2015 and the status of HCC No. 522 of 2015.

50. The court suo motu caused a mention scheduled for 6th March, 2024 and notice was given to counsels for the parties and whereas the Claimants/Decree holders were represented, the Applicant/Respondent was not.

51. The court directed that;1. The Respondent/Applicant shall avail a copy of the court order in HCC No. 522 of 2015 on the current status of the suit within 10 days.2. Ruling shall be on 19th March, 2024. 3.Counsel for the Claimant/Decree holders to serve notice and court’s directions on the Respondent/Applicant.

52. Pursuant to the directions on 14th March, 2024, the Respondent/Applicant’s counsel filed a copy of the order in HCC No. 522 in Imperial Bank Ltd (under statutory Receivership of the Receiver Manager V W.E. Tilley (Muthaiga) Ltd & 19 others duly signed by the Deputy Registrar of the High Court of Kenya at Nairobi.

53. In addition to the order of the court, counsel filed a copy of the order as previously availed to court with no authentication of the Deputy Registrar.

54. Further, counsel filed an Affidavit sworn on 13th March, 2024 affirming that the copy of the Court Order provided was a copy of the order issued by Justice Fred Ochieng and published in the Newspaper Edition of Wednesday 27th October, 2015.

55. Counsel deposes that the orders have been extended from time to time and confirmed by the Hon. Justice Mary Kasango to be in place until the hearing and determination of the main suit.

56. Finally, counsel deposes that HCC No. 522 of 2015 Imperial Bank Ltd V W.E. Tilley & 19 others comes up for mention before the Hon. Justice Mabeya on 21st March, 2024 for parties to be granted hearing dates.

57. The affidavit is silent on the ruling pending before the Court of Appeal.

58. Significantly, the information availed lays it bare that HCC No. 522 of 2015 is still active before the High Court at Nairobi and the Orders granted by Fred Ochieng J. in 2015 are still in force.

59. It is also important to underline the fact that the Respondent/Applicant was placed under the Receivership of the Kenya Deposit Insurance Corporation (KIDC) on 13th October, 2015 initially for a period of 12 months which the court has routinely extended.

60. Thus KIDC assumed the management and control of all the assets, liabilities and affairs of the Respondent Bank.

61. Although counsel for the Claimants/Decree holder argued vociferously that the properties mentioned in the warrants of attachment are not covered by the orders made in 2015, a careful examination of the Orders reveal that their scope is extensive as they encompass the fixed assets, monies in bank accounts of the applicant and any other asset in Kenya.

62. Order No. 3 states as follows;“That pending the hearing and determination of this suit, this honourable court do and hereby do issue an injunction barring the Defendant/Respondents, their agents and/or agents or otherwise, howsoever from removing from this jurisdiction disposing of, mortgaging (and or further mortgaging, charging (and/or further charging, assigning, diminishing, transferring, disposing, alienating, operating and or otherwise interfering and/or dealing with any of the assets within this jurisdiction, which said assets include but are not limited to;a.All Bank Accounts in the names of the Defendants in Kenya.b.The following Real estate and/or land, buildings and the development thereon: . . .”

63. The Claimant/Decree-holders agent, Moonstar Enterprises Auctioneers identified the following items as movable property for purposes of attachment and execution;1. One motor vehicle Reg. No. KAV 646F – old Kshs.120,000/=.2. 3 Trailers with containers – old Kshs.1,500,000/=.3. KBP 910V – old Kshs.650,000. 00. 4.10 pieces of fibre coolers – no value.5. Assorted metal scraps – no value.6. And any other attachable assets belonging to the Judgement debtor enough to cater for the principal amount plus costs.Proclamation done in the presence of the watchman who declined to sign.”

64. Although the foregoing list lacks essential particulars for purposes of execution, it identifies assets owned or belonging to the Respondent/Applicant the subject matter of the order in HCC No. 522 of 2015.

65. More significantly, however, in the court’s view, the orders made in HCC No. 522 of 2015 in 2015 envisaged that no property or assets of the Respondent, be it movable or immovable would be dealt with, disposed of, assigned, transferred or interfered with pending the hearing and determination of the suit.

66. In the court’s view, allowing the execution herein to proceed as insisted upon by the Decree-holders would be tantamount to rendering the orders of Fred Ochieng J. ineffectual in so far as certain movable assets of the Respondents are concerned while the suit is still on-going yet its outcome will impact on all the assets of the Respondents in Kenya.

67. Having been appraised of the current status of the suit before the High Court, the court is not persuaded that this is the opportune time for the proposed execution to be actualized.

68. The foregoing is fortified by the fact that the process of receivership of the 1st Respondent is on-going and the suit is pending before the High Court.

69. Allowing execution at this stage would render proceedings against the Respondents assets disorderly if not chaotic, which the orders issued in 2015 were intended to safeguard against.

70. In sum, the court’s hands are tied by the orders of the High Court in HCC No. 522 of 2015.

71. Consequently, the warrants of attachment issued on 16th October, 2023 to Moonstar Enterprises Auctioneers and any consequential attachment and proclamation are stayed pending the hearing and determination of HCC No. 522 of 2015 or directions of the court.

72. In the meantime, counsel for the Decree-holders shall serve a copy of the judgment and decree of the court on the Official Receiver of the Respondent.

73. Parties shall bear their own costs.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI ON THIS 19TH DAY OF MARCH 2024DR. JACOB GAKERIJUDGEORDERIn view of the declaration of measures restricting court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open court. In permitting this course, this court has been guided by Article 159(2)(d) of the Constitution which requires the court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this court the duty of the court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.DR. JACOB GAKERIJUDGE