NGV v CNV also known as CHM (Matrimonial Cause 6 of 2021) [2022] KEHC 16645 (KLR) (6 December 2022) (Judgment)
Neutral citation:
[2022] KEHC 16645 (KLR)
Republic of Kenya
Matrimonial Cause 6 of 2021
JN Onyiego, J
December 6, 2022
Between
NGV
Applicant
and
CNV also known as CHM
Respondent
Judgment
1.The parties herein contracted their marriage under the Marriage Act sometime on April 21, 2007. Due to irreconcilable differences, their marriage hit a rock thus leading to its dissolution on April 26, 2021 vide Mombasa CMMC divorce cause number 34 of 2020. The couple was however not blessed with any child. By profession the applicant is a laboratory technologist while the respondent is a lawyer having been admitted to the bar in 1998.
2.By an originating summons dated May 5, 2021, the applicant moved to this court seeking orders as hereunder;a.A declaration that the money held in the various Bank Accounts in Mombasa and Nairobi in the Joint names of the parties herein and or in the name of [Particulars Withheld] Limited more particularly set out in Schedule A below which the parties herein lay claim to belongs to the Applicant and is not matrimonial property. The Respondent is not entitled to any portion thereof and her name should be removed from the said accounts.Schedule (A)- Accounts in Joint Parties Names/Company Name
b.An Order that the Respondent should pay to the Applicant interest on the amount of Kshs 640,000.00 lying in Account No XXXX in Credit Bank Limited, Westlands Branch, Nairobi from August, 2019 (when the same was frozen by the Respondent) at the rate of 12.5% per annum until payment in full.c.An Order that the Respondent should pay to the Applicant and [Particulars Withheld] Limited special damages to be assessed by the Court for the loss of business caused by the wrongful freezing of the money held in the parties’ joint names and in the name of [Particulars Withheld] Limited at Credit Bank Limited, Westlands Branch and Prime Bank Limited, Mombasa together with interest thereon from April, 2020 until payment in full.d.A Declaration that the amount of Kshs 2,000,000.00 gifted by the Respondent’s late father in 2009 is matrimonial property and the Respondent held the same in trust for the Applicant. The said trust be determined, and the Applicant be paid 50% share of the same together with interest thereon at the rate of 12.5% from the year 2018 until payment in full.e.A Declaration that the amount of GBP 4,500.00 (approximately Kshs 630,000.00) transferred by the Applicant to the Respondent’s Account Number XXX in HSBC Bank in the United Kingdom, which the parties herein lay claim to, belongs to the Applicant and it is not matrimonial property. The Respondent do pay the Applicant the said amount together with interest thereon at the rate of 12.5% from the year 2018 until payment in full.f.A Declaration that the money and assets held in the Respondent’s name and more particularly set out in Schedule B herein below is matrimonial property and it is held by the Respondent in trust for the Applicant. The said trust be determined, and the Applicant be paid 50% share of the same.Schedule (B) - Chetnadevi’s Accounts and Assets in Kenya
g.A Declaration that the money and assets held in the Respondent’s name jointly with her late father to which she is entitled, more particularly set out in Schedule C herein below is matrimonial property and it is held by the Respondent in trust for the Applicant. The said trust be determined, and the Applicant be paid 50% share of the same.Schedule (C)[particulars withheld] Accounts and Assets held Abroad
h.An Order That the Respondent do produce and file in this Court within a time to be specified, an affidavit with the particulars of the following:-i.All the bank Accounts held in her name and or held to her benefit in Kenya and elsewhere in the world from May, 2007, with Certified copies of the Statements of Account thereof.ii.All the Assets and properties held in her name and or held to her benefit in Kenya and elsewhere in the world from May, 2007, with Certified copies of the ownership documents thereof.iii.All the income received from legal practice/work in Kenya from the year 2008 to December, 2020.iv.To give effect to prayer 6 and 7 an Account of the amount and the value of the Assets held by the Respondent and or to her benefit be taken.i.A Declaration that the money held by the Respondent and or to her benefit in bank accounts in Kenya and elsewhere in the world, all the assets acquired by the Respondent (in various bank accounts), and all the money earned by the Respondent from her legal work during coverture are matrimonial properties held in trust by the Respondent for the Applicant. The said trust be determined, and the Applicant be paid 50% share of the same.j.An Order that in the event that the Respondent has disposed of or transferred or parted with possession of any of the assets or removed the money the subject matter of this suit from the jurisdiction of this Court, an order be issued for the Respondent to account for the same.k.That this Honourable Court do grant any further or other orders or directions as may be necessary.l.That the Respondent do pay the costs of this Summons.
| No | Bank Name and Branch | Account No | Account Names | Currency | Remarks |
| Credit Bank Limited, Westlands Branch, Nairobi | XXXXX(Customer:XXX) | Joint Names | Kshs | Fixed Deposit Account | |
| Credit Bank Limited, Westlands Branch, Nairobi | XXXXX | Joint Names | Kshs | Joint Personal Savings Account | |
| Prime Bank, Mombasa Branch | XXXXX | Joint Names | Kshs | Joint Personal Savings Account | |
| Prime Bank, Mombasa Branch | XXXXX | Joint Names | USD | Joint Personal Account | |
| Prime Bank, Mombasa Branch | XXXXX | Joint Names | GBP | Joint Personal Account | |
| Prime Bank, Mombasa Branch | XXXX | Joint Names | GBP | Fixed Deposit Account | |
| Prime Bank, Mombasa Branch | XXXXX | [Particulars Withheld] Limited | USD | Fixed Deposit Account | |
| I & M Bank, Mombasa Branch | XXXXX | Joint Names | Kshs | Joint Personal Account | |
| HDFC Bank- India | XXXXX | Joint Names | INR | Joint Personal Account |
| No | Bank Name and Branch | Account No | Account Names | Currency | Remarks |
| Prime Bank, Mombasa Branch | XXXX | [particulars withheld] | Not Known | Not Known | |
| Credit Bank, Westlands Branch | XXXXXXXXXXXXXXXX | [particulars withheld] | Kshs and others Not Known | Not Known | |
| CDS Accounts | 07-00-67XXX-1, Shares and Stocks in Mumias Sugar Company Limited, Safaricom Limited and other unknown accounts | [particulars withheld] | Not Known | Shares, Stocks and Dividends | |
| Treasury Bonds | Not Known | [particulars withheld] | Not Known | Treasury Bonds and Interest | |
| Prime Bank, Mombasa Branch | Not Known | [particulars withheld] | Not Known | Safe Deposit Box | |
| Credit Bank, Westlands Branch | Not Known | [particulars withheld] | Not Known | Safe Deposit Box |
| No | Bank Name and Branch | Account No | Account Names | Currency | Remarks |
| [particulars withheld] in the United Kingdom | XXXX, XXXX and other Various Unknown Accounts | [particulars withheld] | GPB | Personal | |
| [particulars withheld], United Kingdom | XXXX | [particulars withheld] | GBP | Personal | |
| [particulars withheld], United Kingdom | XXXXXXXX | [particulars withheld] | GPB | Personal | |
| [particulars withheld], Guernsey | 1.XXX-HRD2.XXX-CUR3.XXX-DEP4.XXXX- Fixed Deposit | [particulars withheld] | Not Known | Personal | |
| [particulars withheld], Jersey | XXX | [particulars withheld] | Not Known | Personal | |
| Union Bank of Switzerland Geneva, Switzerland | XXXEXXX.61K.KE &XXX.S1.KE | [particulars withheld] | Not Known | Personal | |
| Prudential Bonds, United Kingdom | Not Known | [particulars withheld] | Not Known | Personal | |
| UBS AG, Wealth Management International, Geneva, Switzerland | XXX | [particulars withheld] | GBP | Personal | |
| UBS AG, Wealth Management International, Geneva, Switzerland | XXX | [particulars withheld] | GPB | Personal | |
| Union Bank of Switzerland Geneva, Switzerland | Various Accounts (Not Known) | [particulars withheld] | GPB | Personal | |
| Barclays Bank, Harrow Road, Middlesex, United Kingdom | XXX,XXXXXX, XXX,Other Un known Accounts | [particulars withheld] | Not Known | Personal | |
| Barclays Bank, Harrow Road, Middlesex, United Kingdom | Not Known | [particulars withheld] | Not Known | Safe Deposit Box | |
| Barclays Bank, Guernsey | Not Known | [particulars withheld] | Not Known | Personal | |
| HSBC Bank, United Kingdom | Not Known | [particulars withheld] | Not Known | Safe Deposit Box |
3.The summons is supported by an affidavit sworn by the applicant on May 20, 2021 in which she averred that by the time he got married to the applicant he was employed as a laboratory technologist at Aga Khan Hospital Mombasa where he worked from 1991 to 2009 when he resigned and started his own business known as [particulars withheld] Co with the core mandate of rendering medical related services. That due to the requirement then that accompany had to have a minimum of two directors, he included the respondent’ name as co-director with each holding one share.
4.That as the initial capital to start up the company, he injected his salary savings, Sacco loans, loan from a friend and pension from his former employer. He averred that the respondent did not contribute anything towards the said company’s establishment. As proof of the sources of income, a bundle of bank statements for cash withdraws and deposits plus Sacco cash transactions were attached and marked as NV-5
5.He went further to state that he solely carried out and managed the day to day company business/activities which was purely medical and in relation to his medical training and profession without the respondent’s contribution. That he was being paid a monthly salary of about Kshs 100,000/= to Kshs 300,000/= depending on the income generated by the company. That despite the respondent being a lawyer, she stayed at home without engaging in any formal employment thus depending on him. He averred that the respondent did not engage in any formal work at the company save for occasional banking transactions for the business. He went further to state that he was the sole provider of all family business and needs. That the house hold needs were taken care of by his brother, sister in-law and two house maids he had employed.
6.It was further deposed that upon the company commencing business, they opened several bank accounts at prime bank Mombasa branch in the name of the company to which they were joint signatories. That they also opened a separate personal savings account for banking the surplus money from the business as well as his salary. It was his averment that although the respondent was not contributing anything towards the business, he nevertheless included her as a co-signatory for convenience sake in-case of anything.
7.He went further to state that after opening the said accounts with prime bank, he made arrangements with the directors to be converting accumulated savings into fixed deposit in foreign currency in their joint names or company name. That the year 2011 at the request of the respondent, he opened an account at credit bank. He went further to state that he made further arrangements for prime bank to be transferring surplus funds in their savings account to credit bank account and thereafter to fixed deposit account in their joint names. It was his contention that the source of all funds was from his business, personal savings, his salary and interest from fixed deposits.
8.According to him, the money invested in prime bank and credit bank belongs to the company and therefore intended for the future expansion of the company, reinvestment and replacement of the business equipment while his salary savings is meant for his retirement. He further averred that the amount of money in the aforementioned bank accounts under schedule B belong to the company and not matrimonial property hence the applicant is not entitled to a share.
9.He claimed that after the respondent left their matrimonial home sometime 2019, he discovered that she had secretly and without his knowledge tempered with bank opening forms thus giving herself alternate bank account signatory status hence froze their joint savings account at Credit Bank. That as a consequence, she withheld a deposit of Kshs 640,000/= meant for the fixed deposit account hence diverted some of the money meant for their account to her personal account which she had secretly opened. He blamed the respondent for paralysing his company business after writing letters seeking to freeze all their personal and company accounts. He averred that he was entitled to interest at 12.5% and damages for business loss during Covid pandemic.
10.The applicant further claimed that in November 2016, they travelled to London to visit the respondent’s family. That prior to that trip he deposited Kshs 630,000/= to the respondent’s personal account number xxxx in HSBC Bank in London. That it was agreed that the respondent was to add his name to the account but she failed. Further, he deposed that between the year 2014 and 2019 he transferred Kshs 2,832,495/= to their joint deposit fixed account in HDFC Bank in India to take care of their medical expenses but which money is still there.
11.He further stated that the year 2009, the respondent received Kshs 2 million from her late father which was deposited in their personal joint account at prime bank but which the respondent claimed was spent in enhancing company business. He further stated that the respondent had secretly transferred Kshs 1,435,965/= from their joint savings account to her father’s account at credit Bank Westlands branch which money he is demanding equal share (see NV-11). The applicant went further to claim that the respondent had invested in treasury bonds, shares in Mumias Company, Safaricom and others, safe deposit boxes and money in various personal savings accounts in prime bank and credit bank Mombasa.
12.He referred to assets under category B and C which refers to the respondent’s personal investments in Kenya(B) and a broad (C) as properties the respondent allegedly hid from his knowledge. In a nut shell, he claimed that all assets under category A were either company assets or personal savings hence not matrimonial property as the respondent did not contribute towards the acquisition of the same. That he single-handedly worked hard to acquire the property and that the respondent has her own properties. He attached LSK declaration forms filled by the respondent claiming that she always rendered probono services(NV-14). He asked the court to determine whether monies in the mentioned three categories are matrimonial properties for distribution.
13.In response, the respondent filed a replying affidavit sworn on June 29, 2021 stating that she was the brain behind the opening of the company business now the subject of these proceedings. That she was the one who incorporated the company using her legal expertise and funds advanced by her father. To prove that fact, she attached a bundle of documents (CHM-4) being copies of cheques amounting to 2 million. That she worked full time in the company managing human resource, accounts departments and general company management besides providing legal services.
14.She averred that monies in all bank accounts are matrimonial property by virtue of being joint bank signatories and equal share -holders. She went further to list four bank accounts omitted by the applicant namely; HDFC Bank of India-joint FD account No xxxx; Prime bank Mombasa Kshs joint FD account linked to joint personal account no xxxx and xxxx and Prime bank Mombasa Account for the company [particulars withheld] ltd-GPB account number xxxx. She denied freezing the accounts but rather restricted access so as to grow the accounts hence a safety measure as the applicant wanted to withdraw the whole amount. Regarding money in London account which was meant for their use, she averred that the same is still intact hence available for division as matrimonial property.
15.Concerning money transfers from their joint account amounting to Kshs 1,435,965/= she stated that the same was done with the consent of the applicant. She denied owning treasury bonds. As to shares, she attached CDS account (CHM-12) to show that they were of nominal value. On the assets listed under category C, she deposed that they belonged to her late father which were all closed. That account number 1 and 11 in category C of the assets were opened as student accounts by her and that they have nominal funds (CHM-14 being bank statements)
16.She categorically stated that all amounts under category A are matrimonial property. She claimed that the applicant had withheld her personal belongings and jewellery. Regarding the sum of 5 million paid for her medication, she claimed that it was for IVF as they had failed to get a baby.
17.In conclusion, she prayed for;a.An order directing[particulars withheld]Limited Company herein to pay the respondent a salary equivalent to that of the applicant for the period worked for over 10 years since September 2009 September - 2019 for the services rendered.b.An order directing that the applicant’s share of house No LR Mombasa Block XXI/190 is matrimonial property and so should be divided equally among the parties.c.An order directing that the asset in schedule A and B are matrimonial property and be divided equally amongst the parties.d.Am order directing the applicant to pay back to the respondent the sum of Kshs 2,700,000/= and any other amount found to have been withdrawn unlawfully since the parties’ separation in August 2019e.An order directing that the assets in schedule C belong to the respondent as they were acquired before her marriage to the applicant.f.An order directing the applicant to release to the respondent all personal items including but not limited to clothes, jewellery, academic and professional certificateg.Costs to be borne by the applicant.
18.In his rejoinder, the applicant filed a supplementary affidavit sworn on September 10, 2021 and filed on September 14, 2021 stating that the respondent had failed to disclose her secret earnings during the subsistence of their marriage. That even if the respondent earned good income, she did not make any contribution towards her and family needs nor the company business. He denied borrowing any money from the respondent’s father for purposes of starting his company business. He averred that upon commencement, the company was self- sustaining hence did not require any financial support from outside leave alone the respondent’s father whom they were not in good terms with. As proof of the company’s financial autonomy, he attached income tax statements, several bank statements plus his pay slips indicating that the company was a going concern (see annexture NV-3)
19.It was his contention that save for helping in the incorporation of the company, the respondent did not spend any money towards its operation nor render any legal services. He averred that the two million from the respondent’s father which was said to be a gift to the two was banked in their savings joint bank account at prime bank but Kshs 1,435,965/= was later secretly transferred by the respondent to her father’s account. To prove that assertion, the court was referred to annexture No.NV-11 in the supporting affidavit of the originating summons at page 73. He denied the claim by the respondent that she used to render accounting services to the company as she had no knowledge in accounting and that the company had an accounts clerk and seven other support staff. That he only included the respondent in the company for convenience purposes
20.He maintained the position that the money in the respondent’s UK account approximately Kshs 630,000/= is not matrimonial property hence his money deposited by himself for use while in UK but was never spent. Regarding the respondent’s claim that her father’s accounts and the student bank accounts she held were closed, he was of the view that there was no evidence on how the amount in those accounts were spent. Concerning the claim that he had withheld the respondent’s personal effects, he denied the same. He averred that at the request of the respondent he sent her all belongings through DHL sometime in July 2019. He attached DHL receipts as proof of dispatch of those goods to the respondent.
21.Regarding property LR Number XXI/190, he claimed that it is ancestral family house to which he owns ¼ share hence the respondent did not contribute anything towards its acquisition. That the respondent has a lot of money and assets hidden locally and outside Kenya but she has failed to disclose their particulars.
22.In reaction to the supplementary affidavit, the respondent sought leave to file and did file a further affidavit on February 7, 2022. She averred that she does not own secret accounts as alleged and in particular STD chartered bank which she claimed was opened in her maiden name in 1996 long before she got married and only changed to her marital name the year 2007 with the full knowledge of the applicant (see CHM-1). As to shares, she averred that the nominal shares in safaricom and Sasini were bought before she got married and that the applicant received cheques of 384/= and 950/= respectively in their joint account the year 2021. That Stanbic shares were bought for her by her late father before she got married.
23.When the matter came up for directions, parties by consent agreed to canvass the same by way of affidavit evidence and parties’ respective documents be adopted without calling for their makers. Parties filed 19 joint agreed issues for determination on November 3, 2021.
24.When the matter came up for hearing, the applicant adopted the content of the affidavit and supplementary affidavit in support plus the list of documents. He basically told the court that he incorporated Diagnostic plasma company solely for rendering medical services. That he started the business using 5.6 million he had saved from his salary from the previous employer, pension from jubilee insurance and loans. That he was the full time employee earning around Kshs 900,000/= per month while the respondent a lawyer by profession was doing nothing.
25.On cross examination, the applicant stated that he did not know any of the applicant’s sources of income. That the respondent was not entitled to any salary from the company.
26.On her part, the respondent adopted her replying and further affidavit in response to the summons. She claimed that she was the administrator of the company. That she contributed the initial capital to the tune of Kshs 2 million used to start the company business hence the company was a joint venture. She claimed that the applicant has refused to release her jewellery which they had kept in a joint locker.
27.Upon close of the case, counsel agreed to file written submissions
Applicant’s submissions
28.Through the firm of Wanja & Kibe advocates, the Applicant filed his submissions on April 28, 2022. Principally, the submissions filed herein is a summary of the content of the applicant’s affidavits in support of the summons. Counsel submitted that the company known as plasma diagnostic which is the centre of the dispute herein is the property of the applicant and that it was founded using initial capital solely raised by the applicant. She contended that the respondent has not proved that she contributed anything towards the formation of the company nor was she employed by the company to be entitled to any claim of salary from the company. To that end, counsel referred to the case of Pius Kimaiyio Langat vs Cooperative Bank of Kenya limited to(2017) e KLR to express the position that he who alleges bears the burden of proof.
29.Regarding the question whether the respondent had her own sources of income, counsel submitted that she was a lawyer who maintained her secret accounts besides personal savings accounts at STD chartered bank, prime bank and credit bank. That the respondent had admitted that the properties in category A and B were matrimonial property hence an admission that those properties does exist.
30.Regarding earnings from the respondent, counsel submitted that there was no proof on how much was earned. Counsel asserted that the applicant was entitled to 50% of the respondent’s assets listed in category B considering that he contributed towards her expensive lifestyle, advancement of her education, paid for her needs and providing for the family needs while the respondent was busy investing.
31.Counsel went further to submit that limited liability assets cannot be subject to division as matrimonial property. In that regard, the court was referred to the holding in the case of SNK vs MSK and 5 others (2015) eKLR. That the company which is a legal person cannot be liable in any way nor can its property be distributed as matrimonial property.
32.It was counsel’s further submission that for a party to be entitled to a share out of matrimonial property, he or she must prove contribution either direct or indirect. To buttress that position, reliance was placed in the case of ZAO VS RWD(2019) eKLR and PNN vs ZWN(2017) eKLR where both courts held that division of matrimonial property amongst spouses is based on their respective contribution towards acquisition.
33.Counsel submitted that the applicant’s salary is reflected in the joint fixed account held at prime bank which according to him is proved through documents attached yet the respondent has not established any of her contribution. Learned counsel submitted that it was impossible to know which assets of the respondent are in Kenya and outside as she has not disclosed the same. He urged the court that the respondent’s undisclosed assets both in Kenya and abroad do cancel with the applicant’s salary in credit bank deposit account.
34.According to M/s Kibe, the respondent who did not contribute anything to the company nor deposit any money to any account before and during marriage cannot certainly get out of marriage with wealth. To support that position, reference was made to the case of FGM vs MNG (2019)e KLR where the court held that no single party will enter into a marriage relationship with nothing and leave with more than he or she contributed during the subsistence of the marriage.
35.Concerning the prayer for a refund of Kshs 2,700,000 allegedly withdrawn by the applicant from the bank, it was counsel’s submission that it was company money to which she has no business. Regarding division of LR Mombasa block XXI/190, counsel opined that it is ancestral property hence family property to which he is entitled to ¼ share. That since no improvement has been done to the property pursuant to Section 9 of the Matrimonial Property Act, she cannot claim a share.
Respondent’s submissions
36.Through the firm of Kakad and Company Advocates, the respondent filed her submissions on July 12, 2022 thus submitting on three issues inter alia;a.Whether the assets as set out in schedule A,B, and C of the application dated May 20, 2021 constitute matrimonial propertyb.Whether the respondent is entitled to an equal share being 50% of the matrimonial propertyc.Who should bear the costs of the suit herein
37.Learned counsel basically reiterated the content contained in the respondent’s replying and further affidavit in response to the application. He contended that the assets listed in schedule A being property jointly owned by the parties is matrimonial property acquired during the subsistence of the marriage hence subject to equal distribution. In that regard, the court was referred to the case of AWM vs JKG(2021) eKLR where the court held that matrimonial property comprises of immovable and movable property acquired during the subsistence of the marriage.
38.Regarding assets listed under schedule B and C, counsel opined that they were acquired by the respondent before marriage hence not available for division as matrimonial property. To buttress that position, the court was referred to the holding in the case of AWM vs JKG (supra). That most of them are situate outside Kenya hence this court has no jurisdiction over them and that the applicant had admitted that he did not contribute anything towards their acquisition. Counsel submitted that the only foreign account opened during the subsistence of the marriage is account number HSBC Bank Harrow Branch in UK which was allegedly opened in the respondent’s name for personal use.
39.Concerning matrimonial property inherited by the applicant from his father in succession number 158 of 2008, it was the respondent’s position that the transmission having taken place during the subsistence of the marriage, the same was matrimonial property. In that regard, the court was referred to the case of DNK vs KM(2021) eKLR where Odunga J as he then was held that section 5 of the law of succession does not automatically exclude inherited property from being matrimonial property for purposes of division save where the inheritance was before marriage. On that basis, the respondent sought half of the applicant’s share in the matrimonial property in LR Mombasa block/XXI/190.
40.On the question whether the assets constituting matrimonial property should be shared out at the ratio of 50% to 50%, counsel submitted that the respondent was entitled to 50% share for the simple reason that she is a joint account holder and owner of all the matrimonial assets including what is owned by the company in question where she has equal share like the applicant. That the company was opened using funds from the respondent’s father hence matrimonial property.
41.It was submitted that, whereas the respondent never earned salary from the company since inception, and, whereas the applicant was earning a salary of between Kshs 100, 000/= and Kshs 300,000/=, the respondent is an equal share holder to the company hence any money realized from the company is deemed to be their property in equal share. That all joint savings and fixed deposits accounts were opened jointly with each party having a right to operate hence equal contribution to the funds contained therein. Counsel further submitted that the respondent did ensure smooth running of the family as a wife, bought groceries, maintained the home as well as house hold goods.
42.Learned counsel referred to Article 45 of the Constitution thus urging the court to find that parties to a marriage are entitled to equal rights at the marriage, during the marriage and at the dissolution of the marriage. In conclusion therefore, counsel urged the court to share equally the following assets; All funds contained in accounts listed in schedule A; Matrimonial home; Kshs 4 million secretly transferred from prime joint account between the time of separation and divorce; Assets in schedule B and C be declared to be the respondent’s property and not matrimonial property; the applicant be ordered to return to the respondent her personal effects and belongings.
Analysis and determination
43.I have considered the summons herein, response thereof, oral evidence by both parties and rival submissions by their respective counsel. Although parties filed 19 agreed issues for determination, the applicant condensed them to four while the respondent did break them to three. In my view, issues that are discernible are;a.Whether the properties the subject of these proceedings constitute matrimonial property.b.If the answer to (a) above is in the affirmative, what was each party’s contribution towards their acquisition.c.What is the individual party’s entitlement.d.Who bears the costs of the suit.
44.According to the originating summons, there are three categories of properties which have been classified as matrimonial property. The three categories listed as schedule A, B and C include immovable properties, shares, assets owned by [Particulars withheld] Ltd a company incorporated by the parties with each holding one share; various bank accounts both locally and outside Kenya either in their joint names or company name or individual name. However, the parties are not in agreement on which of those properties constitute matrimonial property for purposes of distribution and if any, at what share.
45.What is matrimonial property? Section 6 of the Matrimonial Property Act does define matrimonial property as;
46.In the case of TMW vs FMC (2018) e KLR the court adopted the definition under Section 6 of the aforesaid Act to hold that for property to qualify as matrimonial property, it must have been acquired during the subsistence of marriage unless agreed by both parties that such property will not form part of the matrimonial property. The burden of proof in law lies with the party alleging that such and such property indeed was acquired during the subsistence of the marriage and therefore constitutes matrimonial property.
47.However, the mere fact that property is acquired during coverture does not automatically entitle each spouse or party a share after dissolution of the marriage. One has to prove contribution whether direct or indirect. The onus of proof however is subject to a rebuttable presumption of law under Section 14 of 'Matrimonial Properties Act which provides;
48.In the case of Njoroge vs Ngari(1985) KLR the court held that if matrimonial property is held and registered in the name of one spouse but the other spouse made contribution towards its acquisition, each spouse or party is deemed have proprietary interest over that property. However, to determine how much share one is entitled will depend on the degree or extent of each party’s contribution. See PWK Vs JKG (2015) eKLR where the court held that’
49.In the instant case, various assets are in dispute. It is interesting that in this case the applicant approached this court seeking several properties to be declared as not being matrimonial property instead of the other way round. That notwithstanding, at the core of the dispute is what is the entitlement of each party out of the proceeds realized from the business carried out in the name of a company known as plasma diagnostic laboratory company limited which was incorporated the year 2009.
50.It is not in dispute that the applicant is a laboratory technologist and is the expert engaged in the day to day discharge of professional services in the said company. It is not in dispute that each party has one share of the company thus translating to equal share holding. The question then begging an answer is, can this court share out assets including funds held in the name of the company in various banks. It is trite law that a limited liability company is a legal entity capable of suing or being sued and that division or distribution of its own assets can only be done under the Companies Act. Since the shares are clearly identifiable which is not in dispute, this court has no business making a declaration that so and so holds any share in trust for the other.
51.While dealing with a similar scenario, the court in the case of SNK vs MSK (supra) had this to say;At paragraph [23] the court went further to state that orders against a company can only be brought against accompany under section 211 or 222(2) of the Companies Act. This position was restated in JWC vs PBW (2017) eKLR and Nancy Wambui Ndichu vs Steve Ndichu Mwaura Nairobi HCCC No 43 of 2009(OS) in which the court held that division of matrimonial property does not include shares nor properties owned by a company as a company is a separate legal entity and that the court with jurisdiction is the commercial division of the high court.
52.In view of the above case law, there is no doubt that the company in this case Plasma diagnostic ltd is a legal entity capable of suing or being sued. I agree with the applicant that any claim against the company herein including a claim of salary arrears by the respondent can only be ventilated before commercial division. Accordingly, all assets or accounts held in the name of the company are subject to the rules and regulations under the Memorandum of association and Articles of Association of the company or generally the law governing limited liability companies ( the Companies Act). To that extent, such company property or funds does not constitute matrimonial property to call upon division. For those reasons, this court has no business interrogating how much was contributed by who in starting the company. If there was any misuse or misappropriation of company funds, that is a company issue to institute criminal proceedings or ordinary suit for recovery of such funds.
53.Regarding matrimonial property in LR No Mombasa/block /XXI/190, both parties are in agreement that the ¼ share was inherited from the estate of the applicant’s father in succession case number 158 of 2008. Section 5 of the Matrimonial Property Act provides that the interest of any immovable property acquired or inherited before marriage shall not form part of the matrimonial property. Although the transmission process took place during the subsistence of marriage, the respondent does not have an automatic right over the inherited property unless proved that she contributed towards any improvement on the property.
54.It would be un affair if a spouse were to be married at the time when a co-spouse is getting his or her inheritance and immediately after acquiring the inheritance they divorce hence claims a share. Inherited property is meant for generational posterity and not for diversion to people outside that generation. In the absence of any contribution towards improvement of that property, the respondent has no right to claim a share. See M vs M civil appeal No 74 /2002(2008)1KAR 247 where the court of appeal held that;
55.In the circumstances of this case, no improvements were made on the inherited property. Accordingly, the matrimonial home herein is not available for distribution as it belongs to the applicant absolutely.
56.I will now turn to the assets listed under schedule A being;i.Credit bank limited west lands branch Nairobi acc Number XXXX (customer 2XXX) fixed deposit account in their joint names.ii.Credit bank LTD acc No XXXX Westlands branch joint person savings accountiii.Prime bank Mombasa branch joint person savings acc No xxxx in joint namesiv.Prime bank person savings USD currency account No xxxx in joint namesv.Prime bank Mombasa branch GBP currency joint person account No xxxx in joint namesvi.Prime bank Mombasa branch fixed deposit in joint names GBP currency Acc No xxxxvii.I&M Bank Mombasa branch joint person account no XXXXX in joint names.viii.HDFC-India IN INR currency account number XXXX in joint names.
57.According to the applicant, monies in these accounts were either from his salary or surplus(profit) from the company business to which he was the sole manager and service provider being the only expert and professional in the relevant medical field (laboratory technologist) which was the core mandate of the business. He argued that the respondent being a lawyer by profession did not have any role to play in the business. He gave a summary of salary earnings and investment in both savings and fixed deposit account at pages 120- 122 of his list of documents. The amount reflected as salary paid via cheque was Kshs 17,000,000/= while cash was Kshs 4,077,024/= making a total of Kshs 21,927,220/= That he included the respondent’s name only for convenience sake.
58.On the other hand, the respondent admitted that she never earned any salary from the Company. She only claimed that some of the money deposited in the subject accounts was from the joint business and some Kshs 2 million from her father which was used as initial capital to start the company. From the attached documentation, the source of the monies in the subject accounts is largely from the accumulated salary of the applicant. In my view, salary of a spouse can not constitute matrimonial property. Also, the 2 million given by the respondent’s father to assist start business although denied by the applicant is not in issue as I have already stated that this court has no jurisdiction to distribute company assets.
59.It is incumbent upon a party claiming contribution to prove either monetary or non-monetary contribution. Section 7 of the Matrimonial Property Act further provides that;
60.In the case of Agnes Nanjala William vs Jacob Patrius Nicholas Vander CA NO 127 of 2011 the court recognized both monetary and non-monetary contribution in the acquisition of matrimonial property. Similar position was held in Peter Mburu Echaria vs pricscilla Njeri Echaria (2007) eKLR
61.The respondent claimed that she made both monetary and non-monetary contribution. As stated above, there is no specific monetary contribution made by the respondent towards injecting savings in the subject accounts save for appearance as a co-signatory which in itself does not translate to monetary contribution. In the applicant’s words, the respondent was made a co-signatory out of love and convenience. Although section 14 of the matrimonial property presumes property jointly registered as having been acquired through equal contribution, the presumption is subject to rebuttal by either party. See MGNK vs AMG(2016) eKLR
62.In the case of Edward Nga’ng’a Kairu vs Mary Njoki Ndiba Nga’ng’a civil appeal number 559 of 2019 the court of appeal had this to say;The court however went ahead apportioned the property in the ratio of 90% to 10% in favour of the appellant.
63.The respondent did not make any direct contribution to the eight accounts. In fact, they seemed to have engaged in money trade by converting the applicant’s salary earnings and some business funds to create wealth. Unfortunately, the respondent did not disclose whether she ever generated any income from her legal practice. According to the applicant, the respondent kept all her investment a secret from him.
64.However, in the instant case, there is overwhelming evidence that the applicant was the main source of the funds in the eight accounts. Indeed, the respondent as a professional lawyer must have had her own sources of income but which are not reflected in any of the accounts. It will be unfair to share another professional’s sweat while the other professional’s earnings are intact in whatever account or investment. In view of the fact that the respondent did render some accounts management responsibilities and reinvesting money from one account to account and even negotiating for good interest rates, I will give an indirect contribution share of 25 % against the applicant’s share of 75%.
65.As regards assets listed in schedule B, the applicant is claiming a share but fell short of proving either direct or indirect contribution. He even doesn’t know how much is in those accounts. The respondent submitted that those accounts do not constitute matrimonial property as they were acquired before coverture. It is trite law that he who alleges must prove. The court cannot operate on mere speculation. For those reasons the assets listed under schedule B cannot be classified as matrimonial property.
66.Concerning assets in category C, equally, save for funds in account HSBC Bank Middlesex UK in the name of the respondent, the rest are all accounts held in the name of the respondent and her late father opened before she got married. Under Section 9 of the Matrimonial Property Act, they do not qualify to be matrimonial property. In any event, the applicant did not claim making any kind of contribution towards their acquisition. As for HSBC bank Middlesex United Kingdom XXXX both parties agreed that the money therein was meant for their joint use while in UK but was never spent. In the circumstances, I agree with the respondent that the money in that account should be shared out equally at 50% to 50% share.
67.As to the shares in Safaricom and Mumias sugar, the respondent attached evidence show that they were acquired before her marriage. She also attached evidence that their value is negligible ranging between Kshs 384 and Kshs 950. I do not find anything worth distributing. As to treasury bonds, the respondent denied knowledge of their existence. The applicant did not provide any evidence to establish their existence. Accordingly, those shares and treasury bonds do not constitute matrimonial property.
68.Regarding personal effects, the applicant claimed that he did send them vide DHL to the respondent and attached some receipts. It is difficult to tell as to who is telling the truth. I can no give an order in vain save to advise the applicant to release any personal effects belonging to the respondent if any for the sake of harmony.
69.Having held as above, the originating summons herein is allowed with orders that;a.All assets or properties held in the name of [particulars withheld] Ltd company are not matrimonial properties hence should be dealt with in accordance with the provisions of the Companies Act before the commercial division.b.The funds in bank accounts listed under paragraph 56 herein above and listed here below are hereby declared as matrimonial property to be shared out in the ratio of 75 % to 25% in favour of the applicant;i.Credit bank limited west lands branch Nairobi A/c Number XXXX (customer XXX) fixed deposit account in their joint names.ii.Credit bank LTD A/c No XXXX Westlands branch joint person savings accountiii.Prime bank Mombasa branch joint person savings A/c No XXXX in joint namesiv.Prime bank person savings USD currency A/c No XXXX in joint namesv.Prime bank Mombasa branch GBP currency joint person A/c No XXXX in joint namesvi.Prime bank Mombasa branch fixed deposit in joint names GBP currency A/c No XXXXvii.I&M Bank Mombasa branch joint person account no XXXX in joint names.viii.HDFC-India IN INR currency account number XXXX in joint names.c.Funds in account number XXX HSBC Middlesex UK in the name of the respondent is declared as matrimonial property to be shared equally between the applicant and respondentd.LR No Mombasa block XX/190 is hereby declared not to be matrimonial property hence the applicant’s property absolutely.
DATED SIGNED AND DELIVERED VIRTUALLY THIS 6TH DAY OF DECEMBER, 2022.………………J. N. ONYIEGOJUDGE