Alfarooq Hospital Limited v Mukua (Civil Appeal E030 of 2022) [2025] KECA 924 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a hospital claiming it was the 'wrong' legal entity had to prove it — and failed to.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned Judge erred in failing to find that the respondent was employed by an entity distinct and separate from the appellant (Alfarooq Hospital Management rather than Alfarooq Hospital Limited)
- 2.Whether the learned Judge erred in finding that service of summons was properly effected upon the respondent's employer
Key legal issues
#Identity of the respondent's employer
The respondent was employed and retrenched by the appellant itself; the appellant failed to discharge the burden of proving that Alfarooq Hospital Management was a separate entity that had employed her.
The appellant relied on an MoU, certificates of incorporation and CR12 searches but deliberately omitted the CR12 for Alfarooq Hospital Management Limited, produced no evidence corroborating execution of the MoU, no evidence of payment of the monthly rent consideration, and none of the licences or permits identifying who was licensed to run the hospital. No change of ownership or control was demonstrated. The respondent's appointment letter bore the Alfarooq Hospital logo, and her policies described her as staff of Alfarooq Hospital.
Whether service of summons was properly effected
Service was properly effected on the appellant through Dr. Mwaura, whom the appellant had appointed CEO after taking over the hospital's administration.
The affidavit of service sworn by the process server, Patrick Mwendwa, deponed to serving Dr. Mwaura at the hospital premises. The appellant never challenged or sought cross-examination of the process server. The summons bore Alfarooq Hospital Management's receipt stamp of 16th July 2018, and the appellant's own company resolution of 2nd July 2018 showed it had terminated the MoU, taken over management and appointed Dr. Mwaura as CEO. The appellant's indolence, failing to institute third-party or objection proceedings, suggested an intent to use the name shield to obstruct execution.
Principles for setting aside default judgments
The court adopted the regular/irregular default judgment dichotomy; since service was proper, the setting-aside application was governed by discretionary principles, which the appellant's obstructive conduct defeated.
Citing James Kanyiita Nderitu, a regular default judgment may be set aside under Order 10 rule 11 upon such terms as are just, the court weighing reasons for default, delay, triable issues and prejudice. Shah v Mbogo confirms the discretion is not designed to assist a party who deliberately obstructs or delays the course of justice. The appellant's contradictory posture and inaction placed it in that category.
Legal principles established
#- A party asserting that a judgment was entered against the wrong entity bears the legal and evidential burden of proving that separation, including proof of ownership, control and the essential elements of any contract relied upon.
- An irregular default judgment entered against a party not served is set aside as of right, whereas a regular default judgment is set aside only in the exercise of a judicial discretion.
- The discretion to set aside an ex parte judgment will not be exercised to assist a litigant who has deliberately sought to obstruct or delay the course of justice.
Court orders
#- 1.The appeal is dismissed with costs to the respondent
- 2.The ruling and orders of the ELRC (L. Ndolo, J.) dated 15th April 2021 are upheld, with costs to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- Employment and Labour Relations Court at Mombasa
- ELRC Cause No. 426 of 2018 (ruling on Notice of Motion dated 3rd February 2021)
- Jurisdiction invoked
- First appellate jurisdiction over the Employment and Labour Relations Court (Article 162(2)(a) jurisdiction); no specific provision invoked in the judgment
Relief refused
#Setting aside the ex parte judgment of 6th February 2020
Service was properly effected upon the appellant's appointed CEO; the appellant failed to prove it was a distinct entity from Alfarooq Hospital Management
Costs
The appeal is dismissed with costs to the respondent; the ruling and orders of the ELRC dated 15th April 2021 are upheld, with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Having carefully considered the record of appeal, the grounds on which it was anchored, the rival submissions of respective counsel, the cited authorities and the law, we reach the inescapable conclusion that the appeal has no merit and is hereby dismissed with costs to the respondent. The ruling and orders of the ELRC (L. Ndolo, J.) dated 15th April 2021 are hereby upheld, with costs to the respondent.
In view of the foregoing, we reach the conclusion that the respondent was employed and retrenched by none other than the appellant.
In an irregular default judgment, on the other hand, judgment will have been entered against a defendant who has not been served or properly served with summons to enter appearance. In such a situation, the default judgment is set aside ex debito justitiae, as a matter of right.
This discretion is intended so to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but is not designed to assist a person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice.
As it is, the Court could not tell whether Miftah Construction and Supplies Limited, whose Memorandum and Articles of Association were not availed and whose name does not suggest a stake in the medical field, actually had the capacity to run the Hospital.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Alfarooq Hospital Limited v Mukua (Civil Appeal E030 of 2022) [2025] KECA 924 (KLR)", Case Analysis (2025). Civil Appeal at Mombasa (Memorandum of Appeal dated 28th February 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/924/eng@2025-03-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.