1. I have considered the Application dated 24th June, 2024 together with the affidavit in support and the submissions of the Applicant. The Application is not opposed. A return of service is available on the court record.
2. The Application seeks the tracing of assets of the judgment debtors who have refused to obey various court orders to settle the decretal amount.
3. The Applicant submitted that judgment debtors are in contempt of various court orders directing the payment of the decretal amount. The Supporting Affidavit sets out the history of the matter and the various court orders and rulings post judgment. The same forms part of the record. Examples include: on 25th June 2019, the Honourable Deputy Registrar ordered that the Judgement Debtors to pay the decretal sum as follows:
(a) The judgment debtors shall each make a lump sum down payment of Kshs. 5,000,000
within 30 days of the ruling.
(b) The balance of monthly instalments be agreed or set by court upon expiry of the 30 days.
(c) In default, the judgment debtors be committed to civil jail for a period of 6 months.
4. The 2nd Judgment Debtor was dissatisfied with this order and appealed to the High Court. Following the Order of 25th June 2019, the 2nd Judgment’s Application for stay of the said ruling was allowed on terms by Hon. Justice Tuiyot (as he then was) on condition that the 2nd judgment debtor pays a monthly sum of Kshs. 300,000 pending determination of the appeal. This order was not obeyed.
5. The Appeal was allowed on 9th June 2020 when Hon. Justice Tuiyot (as he then was), ordered the 2nd Judgment Debtor to:
(a) Pay a sum of Ksh.500,000 per month towards settlement of the decretal sum with effect
from 9th June 2020 for an initial period of 12 months with liberty to the decree holder to seek an upward review.
(b) In default of any one instalment then the 2nd judgment debtor be committed to civil jail for a period of 6 months.
(c) The order did not interfere with the order of the Deputy Registrar as against the 3rd judgment debtor.
6. After default in relation to the orders above, the 1st and 2nd Judgment debtors sought an order of taking accounts and review the order to pay the decretal amount by monthly repayments of Kshs. 500,000. On 8th December 2021, Hon. Justice Tuiyot (as he then was) dismissed the Application and found that:
(a) Interest on the decretal sum against the 1st judgment debtor would be limited to 6 years pursuant to Section 4(4) of the Limitation of Actions Act.
(b) The 2nd judgment debtor’s application was dismissed and the court held that he had made admissions of debt and that full interest was recoverable. Jurisdiction to grant orders
7. I note that the court has jurisdiction to grant the orders sought in the present Application are found pursuant to the inherent powers of the court and Section 38 of the Civil Procedure Act which states in the proviso as follows:
38.
Powers of court to enforce execution
Subject to such conditions and limitations as may be prescribed, the court may, on the application of the decree-holder, order execution of the decree—Provided that where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the court, for reasons to be recorded in writing, is satisfied—
(a)that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree—
(i)is likely to abscond or leave the local limits of the jurisdiction of the court; or
(ii) has after the institution of the suit in which the decree was passed, dishonestly transferred, concealed or removed any part of his property, or committed any other act of bad faith in relation to his property;
8. Further, Gikonyo, J. in the case of International Air Transport Association & another v Akarim Agencies Company Limited & 2 others [2014] KEHC 7523 (KLR) granted orders compelling the defendants to disclose their assets after he found that they did not discharge the evidential burden thereof. The court addressed the aspect of tracing of assets and held as follows:
“[27] Following and Tracing of assets are different and are utilized at different stages such that the former comes before the latter. Nonetheless, both are kind of ‘’investigative tools’’ and are always engaged in the same venture; locating assets. They may, also draw from the same factors. Following of assets refers to the initial steps where the movement of the assets from one person to the other or from one location to another is literally monitored or followed. ‘’Tracing’’ graduates ‘’Following’’ of assets and refers to the process of identifying the actual assets or other asset into which the original assets may have been converted. The conversion arises when the trust property is used to purchase or in exchange with another form of or substitute property; that is what is known in law as ‘’Related Property’’, and is in principle recoverable once traced. The traced property may also be in a pool of other property owned by the respondent alone or jointly with other persons or held by the respondent in trust for others. The conglomerate property in that status is referred to as co-mingled or mixed property. In co-mingled property there could be property which is innocently or legitimately owned by the respondent or other parties but which in some way, legally or physically, is connected to recoverable property say deposit of money in a joint or trust account. In that case, the property which is not the trust property or related property is called in law ‘’Associated Property’’, and it may not be recoverable especially if it belongs to innocent third parties. But if it belongs to the respondent, it will be subject to recovery for as long as the trust property remains unsatisfied.
[28]
In tracing of assets identification and or disentangling of the recoverable property are necessary and the onus of doing that lies on the applicant. But where the defendant intentionally mixes trust property with other properties, the law has created a burden on the defendant to identify the recoverable property lest the entire traced assets are deemed to be and shall become recoverable. Courts have taken this position as a way of damning any efforts by unscrupulous trustees to engage complicated designs to conceal misappropriated or stolen trust property. A further safeguard; where it is practically impossible to separate or identify the recoverable property from other property, court have taken the view that the entire property ‘represents’ recoverable property. Therefore, depending on the type of order being sought, two things must be present for an order for preservation or freezing of assets to issue, namely; 1) that the traced property has been identified or located to the defendant; and 2) prima facie evidence has been laid before the court showing that the property will be dissipated unless the order is issued. These two issues will also feature prominently in the decision I will make on the freezing order.”
9. Based on the law set out above, I am persuaded that principles set out in the Akarim case (supra) are applicable to the present matter. Further, I note that the Respondent and various agencies have been served with the Application and have not filed any response in opposition to the same. Accordingly, based on the reasons set out above, I find and hold that that Application is with merit.
10. The various entities listed from Prayers 3 to 6 of the Application are directed to provide the Applicant with the information and documentation sought in terms of prayers 3 to 6 of the Application with a view towards confirming what assets the judgment debtors may have concealed or transferred unlawfully.
11. As regards prayer 7, seeking warrants of arrest and commitment to civil jail; I direct the Deputy Registrar to issue Notice to Show Cause in respect of the same. The Applicant shall serve the Respondent with the present ruling and notice of the Hearing. Hearing is scheduled for 11 March, 2025 before the Deputy Registrar.