Ktk Advocates v Nyambene Coffee Estates Limited & 2 others; Njeru Industries Limited (Objector) [2022] KEHC 3029 (KLR)

Ktk Advocates v Nyambene Coffee Estates Limited & 2 others; Njeru Industries Limited (Objector) (Miscellaneous Application 298 of 2015) [2022] KEHC 3029 (KLR) (Commercial and Tax) (13 May 2022) (Ruling)

Neutral citation: [2022] KEHC 3029 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Miscellaneous Application 298 of 2015

DAS Majanja, J

May 13, 2022

Between

Ktk Advocates

Applicant

and

Nyambene Coffee Estates Limited

1st Respondent

Nyambene Coffee Mills Limited

2nd Respondent

Lawrence C. Njeru

3rd Respondent

and

Njeru Industries Limited

Objector

Ruling

1. The Objector herein has objected to the Applicant’s attachment of its motor vehicles registration numbers KDC 081J, KDC 023J, KDC 087J and KCV 036V (‘’the subject motor vehicles’’) by its application dated 6th April 2022 made under Order 22 Rule 51 of the Civil Procedure Rules. The application is supported by the affidavit of its director, Henry Paul Ireri Njeru, sworn on the same date. It is opposed by the Applicant through the affidavit of its advocate, Donald B. Kipkorir, sworn on 4th May 2022.

2. The main issue for determination is whether attachment should be set aside on the ground that the subject motor vehicles belong to the Objector. In order to succeed under Order 22 Rule 51 of the Rules, the Objector must establish that it has a legal or equitable interest in the whole of or part of any property attached in execution of a decree.

3. The Objector contends that the subject motor vehicles do not belong to the Judgment-Debtors but to it as evidenced by copies of the registration certificates as follows: KDC 023J, KDC 081J and KDC 087J in the name of the Objector and Family Bank Limited and KCV 036V in the name of the Objector and NIC Bank Kenya PLC.

4. The position taken by the Applicant is that the Objector is part of the group of companies including the 1st and 2nd Judgment-Debtors owned and controlled by Lawrence C. Njeru and his sons Protasio Njeru, Sigismond K. Njeru and Henry Paul Ireri Njeru. The Applicant points out that the companies and their directors all operate from the same building on NTIMA/IGOKI/2043 within Meru Town and share the same postal address. He states that the objection proceedings are a ploy by the Judgment-Debtors to avoid paying the debt. The Applicant urges the court to lift the corporate veil and to find the Objector liable as was held in Gikera and Vadgama Advocates v Esconite Mining Company Limited and othersMSA CA Civil Appeal No. 5 of 2017 [2018] eKLR.

5. The central question is whether the Objector has established a legal or equitable interest in the subject motor vehicles. The fact that they are registered in the names of the Objector and its financiers is not controverted. Section 8 of the Traffic Act (Chapter 403 of the Laws of Kenya) provides that, “The person in whose name a vehicle is registered shall, unless the contrary is proved be deemed to be the owner of the vehicle” hence the Objector and its financiers are the owners of the motor vehicles. The Applicant, in these circumstances, must dislodge the statutory presumption in the Objector’s favour by showing otherwise (see Thuranira Karauri v Agnes Ncheche NYR CA Civil Appeal No. 192 of 1996 [1997] eKLR and Joel Muga Opija v East African Sea Food LimitedKSM CA Civil Appeal No. 309 of 2010 [2013] eKLR). In the absence of any such evidence, I find and hold that the Objector has established its legal interest in part of the subject motor vehicles. In my view, it does not matter that Family Bank Limited and NIC Bank Limited also have an interest which they have not asserted as the Objector only need establish that its legal in part of the subject property.

6. The Applicant has urged the court to lift the corporate veil on the Objector as the parties are controlled by the same persons and carry on business in the same premises. While this proposition seems attractive, I must reject it. The application before the court is an objection to attachment and the Objector has met the threshold for setting aside the attachment. In order to lift the corporate veil, the Applicant must file an application in the regard against the Judgment-Debtors for adjudication by the court.

7. For the reasons I have set out above, I allow the Objector’s Notice of Motion dated 6th April 2022 to the extent that the attachment of motor vehicles KDC 081J, KDC 023J, KDC 087J and KCV 036V is raised and warrants of attachment and sale set aside in that regard.

8. The Applicant shall meet the costs of the application.

DATED ANDDELIVERED ATNAIROBI THIS 13THDAY OF MAY 2022. D. S. MAJANJAJUDGECourt of Assistant: Mr M. OnyangoMr Kipkorir instructed by KTK and Company Advocates for the Applicant/Decree-Holder.Mr Mwambi instructed by Senaji and Shani Advocates for the Objector.