Introduction
1. This ruling determines objection to execution/attachment proceedings initiated by the objector herein COOPERATIVE BANK OF KENYA LTD vide Notice of Motion dated 31.1.2024 in which the objector seeks the following orders:
a) Spent
b) Spent
c) That the execution by way of attachment and intended sale of the said motor vehicle registration no. KCZ 468X by M/s. Bridgelake Auctioneers Services be set aside and an order be issued prohibiting any such subsequent mode of execution in enforcement of the decree by way of attachment of the said motor vehicle.
d) That the decree-holder be ordered to bear the costs of this application and the auctioneers be ordered to bear their own costs.
2. The application is supported by an affidavit sworn by JACKSON OIRE and was premised on the grounds that motor vehicles registration No. KCZ 468X, which had been proclaimed vide a proclamation notice dated 15th November 2023 with the intention of having it sold through a public auction whereas the said motor vehicle was jointly registered in the name of the objector and the judgement debtor, the appellant herein.
3. The objector averred that it had a legal interest in the suit motor vehicle as one of it’s proprietors as it had been registered as one of the proprietors of the said vehicle as a security for the repayment of an Asset Finance Facility granted by the Objector to facilitate purchase of the suit vehicle.
4. It was further averred that as a result in the circumstances of the registration of the suit vehicle as security, the judgement debtor/appellant had no proprietary interest capable of being transferred subsequent to a public auction as the objector retained an absolute right over the suit vehicle by virtue of its being registered as a Notice pursuant to section 15 of the Movable Property Security Rights Act, No. 13 of 2017, the said registration qualifying as a security against third parties within the provisions of the aforesaid law.
5. The Objector and 2nd respondent both filed written submissions to canvass the application dated 31.1.2024.
Objector’s Submissions
6. It was submitted that the objector was not named as a party from whom the decretal sums can be recovered and that had the 2nd respondent/decree holder and the auctioneers conducted due diligence as required by law to properly establish the status of the suit vehicle, then the instant objection proceedings would not have been necessary.
7. The objector submitted that it had discharged the evidentiary burden of proof to the required standard and had clearly proved its exclusive legal right and interest over the suit vehicle as it had produced a letter of approval for hire purchase finance facility dated 28th May 2020, Asset Finance Hire Purchase Agreement dated 25.9.2020, a Logbook for the suit vehicle proving joint registration, a Notice registered pursuant to Section 15 of the Movable Property Security Rights Act that speaks to the acknowledged legal interest and a loan statement for the period of 10.6.2023 to 29.1.2024 indicating that other than ranking first in priority, the loan facility is still in arrears pending settlement by the appellant/judgement debtor.
8. The Objector relied on the cases of Odhiambo Owiti & Company Advocates v Dominion Farms Limited; Sukari Industries Limited (Objector) 2021] eKLR and CMC Motor Group v Garex Kenya Ltd & Anor [2001] eKLR.
9. It was submitted that having demonstrated it’,s indisputable legal rights and interest, the 2nd respondent/decree holder did not have any justification for attaching the suit vehicle as collateral. The objector thus prayed for the objection to be allowed as prayed and the 2nd respondent be directed to unconditionally release the suit vehicle.
2nd Respondent’s Submissions
10. It was submitted that the objector’s application was fatally defective and ought to be struck out with costs for reasons that it had been wrongly placed before this court rather than before the trial court which issued the warrants of attachment.
11. It was submitted that the objector failed to issue a notice in writing to the court and all parties of her intention to object to attachment of property and thus the decree holder herein did not have the basis to file a Notice of Intention to Proceed thus it could be deemed that the objector had not initiated the objection proceedings and the decree holder was at liberty to proceed with execution.
12. The 2nd respondent further submitted that the objector had not established ownership of the said goods and particularly the suit vehicle by producing a copy of search to that effect as was held in the case of Patrick King’ori Waruguongo v James Nderitu & Another [2014] eKLR.
13. It was further submitted that the instant application was incompetent as the objector had failed to set out the nature of claim and as to whether such claim was directed to the whole or portion of the property attached as indicated in Order 22 Rule 51 (2) of the CPR 2010 and as held in the case of Chai Trading Co. Limited v Muli Mwanzia & 2 Others [2019] eKLR.
14. It was thus submitted that the instant application was premature and fatally defective and ought to be dismissed with costs to the 2nd respondent.
Analysis & Determination
15. I have carefully considered the pleadings, evidence and written submissions by the respective parties to this application. The Objector’s application is brought under Order 22 Rules 51 and 52 of the Civil Procedure Rules which provide as follows:
51. (1) Any person claiming to be entitled to or to have a legal or equitable interest in the whole of or part of any property attached in execution of a decree may at any time prior to payment out of the proceeds of sale of such property give notice in writing to the court and to all the parties and to the decree-holder of his objection to the attachment of such property.
(2) Such notice shall be accompanied by an application supported by affidavit and shall set out in brief the nature of the claim which such objector or person makes to the whole or portion of the property attached.
(3) Such notice of objection and application shall be served within seven days from the date of filing on all the parties.
52. Upon receipt of a valid notice and application as provided under rule 51, the court may order a stay of the execution for not more than fourteen days and shall call upon the attaching creditor by notice in writing to intimate to the court and to all the parties in writing within seven days whether he proposes to proceed with the attachment and execution thereunder wholly or in part.”
16. The law is clear that the onus lies on the Objector to establish its legal or equitable interest in the properties which are subject matter of the proclamation and attachment objected to, and not for the decree holder to prove that the goods belong to the Defendant. This position was affirmed in the case of Simba Colt Motors Ltd v Lustman & Co. (1990), HCCC No. 729 of 2002 that:
“The purpose of Rule 57 is to provide the objector with an opportunity to establish his claim to the attached moveable property. The rule casts the onus of proof on the objector to prove that the property belonged to him and not, as submitted before me, for the Decree-holder to prove that the property belonged to the Judgement-Debtor.”
17. Further in the case of Chotabhai M. Patel v Chaprabhi Patel [1958] EA 743, it was stated that:
a) Where an objection is made to the attachment of any property attached in execution of a decree on the ground that such property is not liable to attachment, the court shall proceed to investigate the objection with the like power as regards examination of the Objector, and in all other respects as if he was party to the suit.
b) The Objector shall adduce evidence to show that at the date of attachment he had some interest in the property attached.
c) The question to be decided is, whether on the date of attachment, the Judgment Debtor or the Objector was in possession, or where the court is satisfied that the property was in the possession of the Objector, it must be found whether he held it on his own account or in trust for the Judgment Debtor. The sole question to be investigated is, thus, one of possession of, and some interest in the property.
d) Questions of legal right and title are not relevant except so far as they may affect the decision as to whether the possession is on account of or in trust for the Judgment Debtor or some other person. To that extent the title may be part of the inquiry.”
18. In the case of Akiba Bank Ltd v Jetha & Sons Ltd (2005) eKLR, Waweru J. held that for an objector to succeed in his objection, he must exhibit evidence of his legal or equitable interest in the whole or part of any property attached in execution of a decree.
19. The issue for determination by this Court therefore is whether the Objector has shown a legal or equitable interest in the proclaimed and attached properties to be entitled to the orders it seeks.
20. The objector herein has annexed logbook showing that th suit vehicle is jointly registered between itself and the appellant/judgement debtor. The objector’s reason for this joint registration was that the said vehicle was bought on loan from the bank.
21. Odunga J (as he then was) in Dubai Bank (K) Ltd v Come-Cons Africa Ltd and Impak Holdings Co Ltd. Stated as follows:
“Although the law is that in the objection proceedings, the court does not and cannot make a finding as to the ownership of the property the subject of the objection proceedings but simply decide whether or not the objector has interest legal or equitable in the attached property, it is equally true that the onus of proof in objection proceedings is on the objector to establish ownership see CHATABHAI M. PATEL & ANOTHER HCCC NO. 544 OF 1957 (Lewis) on 8/12/58 HCU (1958) 743.” emphasis added
22. The question is whether the objector in this case has established on a balance of probability it’s interest in the attached good. Derivative from the documentary evidence of copy of log books and of the attached motor vehicle tendered before this Court, it is clear that the objector has established it’s legal interest in the attached suit motor vehicle.
23. Further, from the log book of the attached motor vehicle exhibited, it is not in doubt that the Objector herein was not a party to these proceedings and no order has been made against it in these proceedings. According to Section 8 of the Traffic Act;
“The person in whose name a vehicle is registered shall, unless the contrary is proved, be deemed to be the owner of the vehicle”.
24. In the instant case the Objector having produced the logbook which disclose it as the registered owner of the vehicles in question and the legal presumption being in it’s favour, the onus shifts onto the applicant decree holder to prove the contrary as stated in Section 8 of the Traffic Act. In those circumstances, the legal burden still remains on the Objector but the evidential burden shifts to the applicant decree holder to show that despite the prima facie registration of the vehicles in the name of the Objector, the Objector does not have any interest, legal or equitable in the same. This is what Odunga J (as he then was) aptly stated in Boleyn Magic Wall Panel Ltd v Nesco Services Limited; Boleyn International (K) Limited (Objector) [2021] eKLR.
25. As was correctly stated by Odunga J in the above Boleyn Magic Wall Panel Ltd case, in these kind of proceedings, the Court does not and cannot make findings as to ownership of the property the subject of the objection proceedings but simply decides whether or not the objector has interest, legal or equitable, in the attached property.
26. Therefore, on the material placed before this court by the objector, I am satisfied that the Objector’s prima facie legal interest in motor vehicle registration No KCZ 468X has been established and it has not been displaced by any evidence from the applicant decree holder herein. Premised upon that reason, I find the Notice of Motion dated 31.1.2024 is well merited and I allow it and I make the following orders;
i) The execution by way of attachment and the intended sale of motor vehicle registration No KCZ 468X by Ms Bridgelake Auctioneers Services is hereby set aside.
ii) The decree holder applicant, his servants and/or agents are hereby prohibited from undertaking any such subsequent mode of execution in enforcement of the decree by way of attachment of motor vehicle registration No KCZ 468X.
iii) The applicant /decree holder shall bear the costs of this application.
Delivered, signed and dated at Kisumu this 27th day of August 2024
1. This ruling determines objection to execution/attachment proceedings initiated by the objector herein COOPERATIVE BANK OF KENYA LTD vide Notice of Motion dated 31.1.2024 in which the objector seeks the following orders:
a) Spent
b) Spent
c) That the execution by way of attachment and intended sale of the said motor vehicle registration no. KCZ 468X by M/s. Bridgelake Auctioneers Services be set aside and an order be issued prohibiting any such subsequent mode of execution in enforcement of the decree by way of attachment of the said motor vehicle.
d) That the decree-holder be ordered to bear the costs of this application and the auctioneers be ordered to bear their own costs.
2. The application is supported by an affidavit sworn by JACKSON OIRE and was premised on the grounds that motor vehicles registration No. KCZ 468X, which had been proclaimed vide a proclamation notice dated 15th November 2023 with the intention of having it sold through a public auction whereas the said motor vehicle was jointly registered in the name of the objector and the judgement debtor, the appellant herein.
3. The objector averred that it had a legal interest in the suit motor vehicle as one of it’s proprietors as it had been registered as one of the proprietors of the said vehicle as a security for the repayment of an Asset Finance Facility granted by the Objector to facilitate purchase of the suit vehicle.
4. It was further averred that as a result in the circumstances of the registration of the suit vehicle as security, the judgement debtor/appellant had no proprietary interest capable of being transferred subsequent to a public auction as the objector retained an absolute right over the suit vehicle by virtue of its being registered as a Notice pursuant to section 15 of the Movable Property Security Rights Act, No. 13 of 2017, the said registration qualifying as a security against third parties within the provisions of the aforesaid law.
5. The Objector and 2nd respondent both filed written submissions to canvass the application dated 31.1.2024.
Objector’s Submissions
6. It was submitted that the objector was not named as a party from whom the decretal sums can be recovered and that had the 2nd respondent/decree holder and the auctioneers conducted due diligence as required by law to properly establish the status of the suit vehicle, then the instant objection proceedings would not have been necessary.
7. The objector submitted that it had discharged the evidentiary burden of proof to the required standard and had clearly proved its exclusive legal right and interest over the suit vehicle as it had produced a letter of approval for hire purchase finance facility dated 28th May 2020, Asset Finance Hire Purchase Agreement dated 25.9.2020, a Logbook for the suit vehicle proving joint registration, a Notice registered pursuant to Section 15 of the Movable Property Security Rights Act that speaks to the acknowledged legal interest and a loan statement for the period of 10.6.2023 to 29.1.2024 indicating that other than ranking first in priority, the loan facility is still in arrears pending settlement by the appellant/judgement debtor.
8. The Objector relied on the cases of Odhiambo Owiti & Company Advocates v Dominion Farms Limited; Sukari Industries Limited (Objector) 2021] eKLR and CMC Motor Group v Garex Kenya Ltd & Anor [2001] eKLR.
9. It was submitted that having demonstrated it’,s indisputable legal rights and interest, the 2nd respondent/decree holder did not have any justification for attaching the suit vehicle as collateral. The objector thus prayed for the objection to be allowed as prayed and the 2nd respondent be directed to unconditionally release the suit vehicle.
2nd Respondent’s Submissions
10. It was submitted that the objector’s application was fatally defective and ought to be struck out with costs for reasons that it had been wrongly placed before this court rather than before the trial court which issued the warrants of attachment.
11. It was submitted that the objector failed to issue a notice in writing to the court and all parties of her intention to object to attachment of property and thus the decree holder herein did not have the basis to file a Notice of Intention to Proceed thus it could be deemed that the objector had not initiated the objection proceedings and the decree holder was at liberty to proceed with execution.
12. The 2nd respondent further submitted that the objector had not established ownership of the said goods and particularly the suit vehicle by producing a copy of search to that effect as was held in the case of Patrick King’ori Waruguongo v James Nderitu & Another [2014] eKLR.
13. It was further submitted that the instant application was incompetent as the objector had failed to set out the nature of claim and as to whether such claim was directed to the whole or portion of the property attached as indicated in Order 22 Rule 51 (2) of the CPR 2010 and as held in the case of Chai Trading Co. Limited v Muli Mwanzia & 2 Others [2019] eKLR.
14. It was thus submitted that the instant application was premature and fatally defective and ought to be dismissed with costs to the 2nd respondent.
Analysis & Determination
15. I have carefully considered the pleadings, evidence and written submissions by the respective parties to this application. The Objector’s application is brought under Order 22 Rules 51 and 52 of the Civil Procedure Rules which provide as follows:
51. (1) Any person claiming to be entitled to or to have a legal or equitable interest in the whole of or part of any property attached in execution of a decree may at any time prior to payment out of the proceeds of sale of such property give notice in writing to the court and to all the parties and to the decree-holder of his objection to the attachment of such property.
(2) Such notice shall be accompanied by an application supported by affidavit and shall set out in brief the nature of the claim which such objector or person makes to the whole or portion of the property attached.
(3) Such notice of objection and application shall be served within seven days from the date of filing on all the parties.
52. Upon receipt of a valid notice and application as provided under rule 51, the court may order a stay of the execution for not more than fourteen days and shall call upon the attaching creditor by notice in writing to intimate to the court and to all the parties in writing within seven days whether he proposes to proceed with the attachment and execution thereunder wholly or in part.”
16. The law is clear that the onus lies on the Objector to establish its legal or equitable interest in the properties which are subject matter of the proclamation and attachment objected to, and not for the decree holder to prove that the goods belong to the Defendant. This position was affirmed in the case of Simba Colt Motors Ltd v Lustman & Co. (1990), HCCC No. 729 of 2002 that:
“The purpose of Rule 57 is to provide the objector with an opportunity to establish his claim to the attached moveable property. The rule casts the onus of proof on the objector to prove that the property belonged to him and not, as submitted before me, for the Decree-holder to prove that the property belonged to the Judgement-Debtor.”
17. Further in the case of Chotabhai M. Patel v Chaprabhi Patel [1958] EA 743, it was stated that:
a) Where an objection is made to the attachment of any property attached in execution of a decree on the ground that such property is not liable to attachment, the court shall proceed to investigate the objection with the like power as regards examination of the Objector, and in all other respects as if he was party to the suit.
b) The Objector shall adduce evidence to show that at the date of attachment he had some interest in the property attached.
c) The question to be decided is, whether on the date of attachment, the Judgment Debtor or the Objector was in possession, or where the court is satisfied that the property was in the possession of the Objector, it must be found whether he held it on his own account or in trust for the Judgment Debtor. The sole question to be investigated is, thus, one of possession of, and some interest in the property.
d) Questions of legal right and title are not relevant except so far as they may affect the decision as to whether the possession is on account of or in trust for the Judgment Debtor or some other person. To that extent the title may be part of the inquiry.”
18. In the case of Akiba Bank Ltd v Jetha & Sons Ltd (2005) eKLR, Waweru J. held that for an objector to succeed in his objection, he must exhibit evidence of his legal or equitable interest in the whole or part of any property attached in execution of a decree.
19. The issue for determination by this Court therefore is whether the Objector has shown a legal or equitable interest in the proclaimed and attached properties to be entitled to the orders it seeks.
20. The objector herein has annexed logbook showing that th suit vehicle is jointly registered between itself and the appellant/judgement debtor. The objector’s reason for this joint registration was that the said vehicle was bought on loan from the bank.
21. Odunga J (as he then was) in Dubai Bank (K) Ltd v Come-Cons Africa Ltd and Impak Holdings Co Ltd. Stated as follows:
“Although the law is that in the objection proceedings, the court does not and cannot make a finding as to the ownership of the property the subject of the objection proceedings but simply decide whether or not the objector has interest legal or equitable in the attached property, it is equally true that the onus of proof in objection proceedings is on the objector to establish ownership see CHATABHAI M. PATEL & ANOTHER HCCC NO. 544 OF 1957 (Lewis) on 8/12/58 HCU (1958) 743.” emphasis added
22. The question is whether the objector in this case has established on a balance of probability it’s interest in the attached good. Derivative from the documentary evidence of copy of log books and of the attached motor vehicle tendered before this Court, it is clear that the objector has established it’s legal interest in the attached suit motor vehicle.
23. Further, from the log book of the attached motor vehicle exhibited, it is not in doubt that the Objector herein was not a party to these proceedings and no order has been made against it in these proceedings. According to Section 8 of the Traffic Act;
“The person in whose name a vehicle is registered shall, unless the contrary is proved, be deemed to be the owner of the vehicle”.
24. In the instant case the Objector having produced the logbook which disclose it as the registered owner of the vehicles in question and the legal presumption being in it’s favour, the onus shifts onto the applicant decree holder to prove the contrary as stated in Section 8 of the Traffic Act. In those circumstances, the legal burden still remains on the Objector but the evidential burden shifts to the applicant decree holder to show that despite the prima facie registration of the vehicles in the name of the Objector, the Objector does not have any interest, legal or equitable in the same. This is what Odunga J (as he then was) aptly stated in Boleyn Magic Wall Panel Ltd v Nesco Services Limited; Boleyn International (K) Limited (Objector) [2021] eKLR.
25. As was correctly stated by Odunga J in the above Boleyn Magic Wall Panel Ltd case, in these kind of proceedings, the Court does not and cannot make findings as to ownership of the property the subject of the objection proceedings but simply decides whether or not the objector has interest, legal or equitable, in the attached property.
26. Therefore, on the material placed before this court by the objector, I am satisfied that the Objector’s prima facie legal interest in motor vehicle registration No KCZ 468X has been established and it has not been displaced by any evidence from the applicant decree holder herein. Premised upon that reason, I find the Notice of Motion dated 31.1.2024 is well merited and I allow it and I make the following orders;
i) The execution by way of attachment and the intended sale of motor vehicle registration No KCZ 468X by Ms Bridgelake Auctioneers Services is hereby set aside.
ii) The decree holder applicant, his servants and/or agents are hereby prohibited from undertaking any such subsequent mode of execution in enforcement of the decree by way of attachment of motor vehicle registration No KCZ 468X.
iii) The applicant /decree holder shall bear the costs of this application.
Delivered, signed and dated at Kisumu this 27th day of August 2024