RULING
1. The plaintiff filed the notice of motion dated 8.10.2024 under Order 22 Rule 35(b) of the Civil Procedure Rules and Section 3A of the Civil Procedure Act, seeking: -
(1) an order that the defendant's directors produce for inspection by the plaintiff and the court all the books and documents of accounts of the defendant company pertaining to the relevant period in issue.
(2) Upon production of the books of account, the plaintiff file within thirty (30) days a status report and the court do set a date for the oral examination of the directors namely, H.E. Hon. Rigathi Gachagua, John Mwai Mathenge and Peter Njoroge Regeru.
(3) Upon oral examination and upon there being found no reasonable grounds why the debt has remained unpaid by the company, the defendant's directors be held personally liable for the amount due under the decree together with interest accrued after the passing of the decree bringing the figure to Kshs 5,389,984.73 as at 30.1.2024 against the defendant and they should be ordered to pay the same forthwith.
2. The application is supported by the affidavits sworn by plaintiff’s finance manager, John Mburu Kamau on 8.10.2024 and its Chief Executive Officer, Junghae Wainaina on 25.3.2025.
3. The plaintiff also filed written submissions dated 4.3.2026.
4. The application is premised on the following grounds: -
(1) The plaintiff/applicant obtained judgment against the defendant on the 21.10.2022 and extracted a decree and a certificate of costs but has been unable to execute or satisfy the decree.
(2) The defendant company has either relocated to unknown place concealed its assets or is deliberately avoiding the satisfaction of the decree.
(3) The directors of the defendant company have connived and actively participated in obstructing execution against the defendant's assets.
(4) The said directors have abetted the hiding and transferring of the defendant's assets.
(5) The defendant's directors should be compelled to explain where the monies the subject matter of the decree herein were appropriated.
5. The plaintiff cited Ernie Cambell & Co. Ltd v Githunguri Dairy Plant Company Ltd [2008] KEHC 2667 (KLR) on the rationale for the provision for calling directors of a company to be examined and produce the company’s books of accounts. And, relied on Ganesh Engineering Works Limited & 3 others v Yamini Builders Limited [2021] eKLR on the circumstances for lifting the corporate veil.
6. The defendant/ respondent opposed the application through grounds of opposition dated 21.3.2025 and replying affidavits sworn by Mwai Mathenge, the executor of the Estate of the late James Nderitu Gachagua, on 13.12.2024, 3.2.2025, 3.6.2025 and 19.6.2025.
7. The defendant further filed initial and rejoinder written submissions dated 27.6.2025 and 9.7.2026.
8. The defendant urged the court to strike out the application with costs. Its core contentions are: -
(1) The directors hold these positions by virtue of being the Executors of the Estate of James Nderitu Gachagua to effectively administer the aforementioned estate.
(2) The applicant neither lodged a claim nor notified the Executors of the Estate of James Nderitu Gachagua of the debt owed by the company at the time of confirmation of grant and consequently, the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua.
(3) The application is defective to the extent that the applicant seeks an order for the directors to be held personally liable for the debt of the respondent, which contravenes the concept of corporate personality.
(4) The application is defective to the extent that the applicant did not join the directors as parties to the suit while seeking orders for them to be held personally liable for the amount due under the decree.
(5) The applicant's application is unmerited, made in bad faith and constitutes an abuse of court process.
9. The defendant relied on Set and Sit Contractors Limited v Odhiambo t/a Loi Enterprises [2023] KEHC 24731 (KLR0 and Victor Mabachi & Another v Nurturn Bates Limited [2013 KECA 204 (KLR) on the principle of corporate personality.
10. In urging the court to exercise caution when lifting the corporate veil, the defendant relied on Republic v Public Procurement Administrative Review Board and 2 others Ex Parte Transcend Media Group Limited
11. The defendant further relied on China Wu Yi Company Ltd v Ederman Property Ltd & 2 Others [2013] eKLR to submit that the veil of incorporation is not to be lifted merely because the company has no assets; in such a situation the law provides for remedies other than the director of the company being saddled with the debts of the company.
Analysis and Determination
Discovery of company assets
12. The court may order the examination of a director of a judgment-debtor company or any officer thereof in court to provide answers in respect to the company’s ability or means to satisfy the decree. Order 22 Rule 35(b) and (c) of the Civil Procedure Rules
13. “An application for examination is made as part of the enquiries to establish the assets and status of the judgement debtor. It is not in any manner meant to oppress the previous or current directors of a corporation. The examination or enquiry is an exercise to give direction to the judgement creditor as to whereabouts of the assets and status of a corporation.” Ernie Cambell & Co. Ltd v Githunguri Dairy Plant Company Ltd [supra]
Threshold
14. The threshold for the grant of orders for the discovery of company assets is: -
“as long as the Applicant has shown that the Respondent is in a position to provide information in the nature of discovery ...as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, the court should summon the person to attend and be examined in relation to the purpose stated in the rule.” Margaret Soares v Jane Otieno [2014] KEHC 6225 (KLR) and Post Bank Credit Limited (In Liquidation) v Nyamangu Holdings Limited [2015] KEHC 5964 (KLR)
15. The plaintiff annexed copies of the decree issued on 29.11.2022 for Kshs. 1,800,000/-, a certificate of taxation dated 19.9.2023 for Kshs. 579,545/-, warrants of attachment and sale given on 30.1.2024 and Company Search (Form CR12) dated 31.8.2023 from the Registrar of Companies.
16. The defendant’s director, Mwai Mathenge faulted the plaintiff for neither lodging a claim nor notifying the Executors of the Estate of James Nderitu Gachagua of the debt owed by the company at the time of confirmation of grant. He indicated that the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua. He, however, did not deny that the decretal sum is due. He also did not propose a plan to settle the decretal sum.
17. The defendant’s director further deposed that the defendant company ceased trading upon the deceased’s demise, its assets sold and proceeds applied to settle the liabilities of the deceased. He denied that the present directors are abetting the hiding of properties or assets belonging to the company.
18. The plaintiff’s CEO disputed the claim that the company ceased trading. He highlighted that the defendant company was listed in the deceased’s will as part of his Estate and directed how its shares would be distributed. He also indicated how the shares are to be distributed. He urged that the directors should be restrained from transferring the said shares before the liabilities of the company are settled.
19. The plaintiff’s CEO also asserted that upon being confirmed as Executors of the Will of the deceased, the Executors swore to settle the Estate by establishing the liabilities and assets of the company and paying off the creditors.
20. Several fundamental points worthy settlement emerge from the foregoing submissions.
21. The defendant’s director stated that the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua.
22. The law the way I understand it is that, liabilities of a company are not the personal debt of a deceased shareholder. The debt is owed by the company. except, where the shareholder signed a personal guarantee for the company’s debt or the corporate veil is lifted and the company debt is placed upon the shoulders of the shareholder.
23. I doubt the liabilities of the company could be liabilities of the estate of the deceased except in those instances permitted in law. Expecting it to be noted in the probate cause as the debt of the deceased is misconceived.
24. I do note however that, he did not deny that the decretal sum is due. He nonetheless, did not propose a plan to settle the decretal sum.
25. The defendant’s director also stated that the company ceased trading upon the deceased’s demise, its assets sold and proceeds applied to settle the liabilities of the deceased.
26. He intimated that the only potential assets of the company that the deceased disclosed in the will were anticipated proceeds of judgment in HCCC 276 of 2009 and an appeal from the judgment of the court in HCCC 186 of 2010 of which the former was dismissed and the latter is pending before the Court of Appeal.
27. These disclosures of sale of the company assets to settle liabilities of the deceased and of other assets of the company are significant and relevant in the application before the court. Making a case for them to be examined as requested.
28. I find that the plaintiff/ applicant has met the threshold for the grant of the discovery orders under prayers 1 and 2 of the application.
Lifting the corporate veil
29. The court may grant the orders for lifting of the corporate veil and orders to restrain the directors from selling company assets concurrently with the orders for examination.
30. The plaintiff urged that the directors should be restrained from transferring shares before the liabilities of the company are settled. However, it did not include such prayers in the application. But this will be considered during the examination. The directors are duly informed of the effect of such transfer in the circumstances of this case.
Disposal
31. In conclusion,
(1) The application dated 8.10.2024 is allowed in terms of prayers 1 and 2.
(2) Prayer 3 on lifting of the corporate veil and for the directors to be held personally liable for the decretal sum is deferred to be determined after the examination of the directors of the defendant company.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 30th day of July 2026
--------------
F. Gikonyo M
Judge
In the presence of: -
Ms. Nini for Applicant/Plaintiff
Ms. Joan for Kimathi for Respondent
CA- Ivan/Aggrey
1. The plaintiff filed the notice of motion dated 8.10.2024 under Order 22 Rule 35(b) of the Civil Procedure Rules and Section 3A of the Civil Procedure Act, seeking: -
(1) an order that the defendant's directors produce for inspection by the plaintiff and the court all the books and documents of accounts of the defendant company pertaining to the relevant period in issue.
(2) Upon production of the books of account, the plaintiff file within thirty (30) days a status report and the court do set a date for the oral examination of the directors namely, H.E. Hon. Rigathi Gachagua, John Mwai Mathenge and Peter Njoroge Regeru.
(3) Upon oral examination and upon there being found no reasonable grounds why the debt has remained unpaid by the company, the defendant's directors be held personally liable for the amount due under the decree together with interest accrued after the passing of the decree bringing the figure to Kshs 5,389,984.73 as at 30.1.2024 against the defendant and they should be ordered to pay the same forthwith.
2. The application is supported by the affidavits sworn by plaintiff’s finance manager, John Mburu Kamau on 8.10.2024 and its Chief Executive Officer, Junghae Wainaina on 25.3.2025.
3. The plaintiff also filed written submissions dated 4.3.2026.
4. The application is premised on the following grounds: -
(1) The plaintiff/applicant obtained judgment against the defendant on the 21.10.2022 and extracted a decree and a certificate of costs but has been unable to execute or satisfy the decree.
(2) The defendant company has either relocated to unknown place concealed its assets or is deliberately avoiding the satisfaction of the decree.
(3) The directors of the defendant company have connived and actively participated in obstructing execution against the defendant's assets.
(4) The said directors have abetted the hiding and transferring of the defendant's assets.
(5) The defendant's directors should be compelled to explain where the monies the subject matter of the decree herein were appropriated.
5. The plaintiff cited Ernie Cambell & Co. Ltd v Githunguri Dairy Plant Company Ltd [2008] KEHC 2667 (KLR) on the rationale for the provision for calling directors of a company to be examined and produce the company’s books of accounts. And, relied on Ganesh Engineering Works Limited & 3 others v Yamini Builders Limited [2021] eKLR on the circumstances for lifting the corporate veil.
6. The defendant/ respondent opposed the application through grounds of opposition dated 21.3.2025 and replying affidavits sworn by Mwai Mathenge, the executor of the Estate of the late James Nderitu Gachagua, on 13.12.2024, 3.2.2025, 3.6.2025 and 19.6.2025.
7. The defendant further filed initial and rejoinder written submissions dated 27.6.2025 and 9.7.2026.
8. The defendant urged the court to strike out the application with costs. Its core contentions are: -
(1) The directors hold these positions by virtue of being the Executors of the Estate of James Nderitu Gachagua to effectively administer the aforementioned estate.
(2) The applicant neither lodged a claim nor notified the Executors of the Estate of James Nderitu Gachagua of the debt owed by the company at the time of confirmation of grant and consequently, the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua.
(3) The application is defective to the extent that the applicant seeks an order for the directors to be held personally liable for the debt of the respondent, which contravenes the concept of corporate personality.
(4) The application is defective to the extent that the applicant did not join the directors as parties to the suit while seeking orders for them to be held personally liable for the amount due under the decree.
(5) The applicant's application is unmerited, made in bad faith and constitutes an abuse of court process.
9. The defendant relied on Set and Sit Contractors Limited v Odhiambo t/a Loi Enterprises [2023] KEHC 24731 (KLR0 and Victor Mabachi & Another v Nurturn Bates Limited [2013 KECA 204 (KLR) on the principle of corporate personality.
10. In urging the court to exercise caution when lifting the corporate veil, the defendant relied on Republic v Public Procurement Administrative Review Board and 2 others Ex Parte Transcend Media Group Limited
11. The defendant further relied on China Wu Yi Company Ltd v Ederman Property Ltd & 2 Others [2013] eKLR to submit that the veil of incorporation is not to be lifted merely because the company has no assets; in such a situation the law provides for remedies other than the director of the company being saddled with the debts of the company.
Analysis and Determination
Discovery of company assets
12. The court may order the examination of a director of a judgment-debtor company or any officer thereof in court to provide answers in respect to the company’s ability or means to satisfy the decree. Order 22 Rule 35(b) and (c) of the Civil Procedure Rules
13. “An application for examination is made as part of the enquiries to establish the assets and status of the judgement debtor. It is not in any manner meant to oppress the previous or current directors of a corporation. The examination or enquiry is an exercise to give direction to the judgement creditor as to whereabouts of the assets and status of a corporation.” Ernie Cambell & Co. Ltd v Githunguri Dairy Plant Company Ltd [supra]
Threshold
14. The threshold for the grant of orders for the discovery of company assets is: -
“as long as the Applicant has shown that the Respondent is in a position to provide information in the nature of discovery ...as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, the court should summon the person to attend and be examined in relation to the purpose stated in the rule.” Margaret Soares v Jane Otieno [2014] KEHC 6225 (KLR) and Post Bank Credit Limited (In Liquidation) v Nyamangu Holdings Limited [2015] KEHC 5964 (KLR)
15. The plaintiff annexed copies of the decree issued on 29.11.2022 for Kshs. 1,800,000/-, a certificate of taxation dated 19.9.2023 for Kshs. 579,545/-, warrants of attachment and sale given on 30.1.2024 and Company Search (Form CR12) dated 31.8.2023 from the Registrar of Companies.
16. The defendant’s director, Mwai Mathenge faulted the plaintiff for neither lodging a claim nor notifying the Executors of the Estate of James Nderitu Gachagua of the debt owed by the company at the time of confirmation of grant. He indicated that the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua. He, however, did not deny that the decretal sum is due. He also did not propose a plan to settle the decretal sum.
17. The defendant’s director further deposed that the defendant company ceased trading upon the deceased’s demise, its assets sold and proceeds applied to settle the liabilities of the deceased. He denied that the present directors are abetting the hiding of properties or assets belonging to the company.
18. The plaintiff’s CEO disputed the claim that the company ceased trading. He highlighted that the defendant company was listed in the deceased’s will as part of his Estate and directed how its shares would be distributed. He also indicated how the shares are to be distributed. He urged that the directors should be restrained from transferring the said shares before the liabilities of the company are settled.
19. The plaintiff’s CEO also asserted that upon being confirmed as Executors of the Will of the deceased, the Executors swore to settle the Estate by establishing the liabilities and assets of the company and paying off the creditors.
20. Several fundamental points worthy settlement emerge from the foregoing submissions.
21. The defendant’s director stated that the debt was not listed in the deceased's will as part of the liabilities owed by the Estate of the James Nderitu Gachagua.
22. The law the way I understand it is that, liabilities of a company are not the personal debt of a deceased shareholder. The debt is owed by the company. except, where the shareholder signed a personal guarantee for the company’s debt or the corporate veil is lifted and the company debt is placed upon the shoulders of the shareholder.
23. I doubt the liabilities of the company could be liabilities of the estate of the deceased except in those instances permitted in law. Expecting it to be noted in the probate cause as the debt of the deceased is misconceived.
24. I do note however that, he did not deny that the decretal sum is due. He nonetheless, did not propose a plan to settle the decretal sum.
25. The defendant’s director also stated that the company ceased trading upon the deceased’s demise, its assets sold and proceeds applied to settle the liabilities of the deceased.
26. He intimated that the only potential assets of the company that the deceased disclosed in the will were anticipated proceeds of judgment in HCCC 276 of 2009 and an appeal from the judgment of the court in HCCC 186 of 2010 of which the former was dismissed and the latter is pending before the Court of Appeal.
27. These disclosures of sale of the company assets to settle liabilities of the deceased and of other assets of the company are significant and relevant in the application before the court. Making a case for them to be examined as requested.
28. I find that the plaintiff/ applicant has met the threshold for the grant of the discovery orders under prayers 1 and 2 of the application.
Lifting the corporate veil
29. The court may grant the orders for lifting of the corporate veil and orders to restrain the directors from selling company assets concurrently with the orders for examination.
30. The plaintiff urged that the directors should be restrained from transferring shares before the liabilities of the company are settled. However, it did not include such prayers in the application. But this will be considered during the examination. The directors are duly informed of the effect of such transfer in the circumstances of this case.
Disposal
31. In conclusion,
(1) The application dated 8.10.2024 is allowed in terms of prayers 1 and 2.
(2) Prayer 3 on lifting of the corporate veil and for the directors to be held personally liable for the decretal sum is deferred to be determined after the examination of the directors of the defendant company.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 30th day of July 2026
--------------
F. Gikonyo M
Judge
In the presence of: -
Ms. Nini for Applicant/Plaintiff
Ms. Joan for Kimathi for Respondent
CA- Ivan/Aggrey