John Karanja Wanjau, James Waweru Kangethe, Douglas Muchoki, Kinuthia Njoroge & Gikonuo Kihumba v Maina Githaiga, John Ngethe, Daniel Mwangi Muhia, Mureithi Urugari, Kirugi Gathogo, John King’ara, Kamau Njora & Ali Hussein [2015] KEHC 977 (KLR)

REPUBLIC OF KENYA

CIVIL DIVISION

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL CASE NO. 4409 OF 1991

1. JOHN KARANJA WANJAU

2. JAMES WAWERU KANGETHE

3. DOUGLAS MUCHOKI

4. KINUTHIA NJOROGE

5. GIKONUO KIHUMBA…………………..PLAINTIFFS

VERSUS

1. MAINA GITHAIGA

2. JOHN NGETHE

3. DANIEL MWANGI MUHIA

4. MUREITHI URUGARI

5. KIRUGI GATHOGO

6. JOHN KING’ARA

7. KAMAU NJORA

8. ALI HUSSEIN………………………………DEFENDANTS

JUDGEMENT

This matter was instituted vide Plaint filed on 26th August 1991 which was later amended on 31st July 2006. It sought the following orders –

An injunction restraining the defendants by themselves, their servants or agents from selling or offering for sale or disposing of all properties owned by the business being carried out by and in the name of M/S Matumbo Traders or M/S Blue Kongo Hotel without the consent of the Plaintiffs.

An injunction restraining the defendants by themselves or their agents from effecting any change of name or from admitting new partners or registering any change of members of Matumbo Traders or Blue Kongo Hotel without the consent of the Plaintiffs.

A declaration that the plaintiffs are co-owners of L.R 209/136/119 and the business carried out thereon.

A declaration that the defendants do account for all the income received from L.R. No. 209/136/119 (the suit property) from 1977 to the date of Judgment.

The Defendants denied the contents of the Plaint through their amended defence dated 15th August 1994 and put the Plaintiffs to strict proof. They also sought dismissal of the suit with costs.

As this is an old suit filed way back in 1991, all the original Plaintiffs either died or withdrew their claims. The 1st and 3rd Plaintiffs’ legal representatives managed to prosecute the suit to the end as substituted Plaintiffs. The 1st, 3rd, 7th and 8th Defendants died but were not substituted. The 5th Plaintiff withdrew his claim.

The 3rd Substituted Plaintiff testified as the only witness for the Plaintiffs while the 2nd Defendant testified for the defence case.

PW1 Bernard Kanyi Mwangi a son to the original 1st Plaintiff adopted his witness statement filed on 10th June 2014 as his evidence in chief. It was marked P Exh 1. All other Plaintiffs’ documents were produced as P Exh 2.

He testified that the Defendants and Plaintiffs carried out businesses as partners in the names of Matumbo Trading Company and Blue Kongo Hotels which acquired various assets including the suit property. He maintained that the suit property was bought with the contribution of all partners and a loan from the bank which was paid in a period of four and a half years.

That the partners got into some disagreements and around 23rd August 1991, the defendants secretly advertised for sale the suit property together with the bar and restaurant business that was hosted in the building.  That they also proceeded to change the particulars of shareholders with the registrar of companies with a view to ejecting the Plaintiffs.

He went on further to state that when Matumbo Trading Company. partnership was dissolved, the Plaintiffs were swindled out of the suit property yet they had contributed to its purchase.

Upon cross examination the witness confirmed that he did not attend any of the meetings in which the decision to buy and the actual purchase of the suit property materialized. He conceded that his father had failed to raise money expected of him and thus members sought contribution from elsewhere. He still insisted that the 1st and 3rd Plaintiffs were part of the ownership as they still had shares when the property was purchased. Shares of 1st and 3rd Plaintiffs were in Matumbo Trading Company as the initial capital came from that company.

On re-examination, he contended that Matumbo Trading Company was the mother of all the other businesses and money was only borrowed from the bank as the company account did not have enough funds.

The Defence witness, John N’gethe Githu (DW1) produced the following documents in evidence –

Witness statement – Exhibit 1

list of documents filed on 3rd June 2014 – Exhibit 2

Amended defence – Exhibit 3

Notice to Admit – Exhibit 4

List of issues – Exhibit 5

In his testimony he explained that the Matumbo Traders Company. had operated three businesses. He maintained that the suit property was not part of Matumbo Traders Company. he gave the chronology of events that culminated in the purchase of the suit property. According to him, when the said company which consisted of 13 members decided to buy the suit property, all members had a share capital except for the 1st and 3rd Plaintiffs as they had exhausted their capital in the business.

The members were compelled to take a loan amounting to Kshs. 180,000/- as the building cost Kshs. 240,000/-. They had to raise a deposit of Kshs. 60,000/- before the rest of the funds could be released by the Bank. When the members met to deliberate on how they would source for the deposit, the 1st and 3rd Plaintiffs were requested to obtain their share so as to top up the money in the business account amounting to Kshs. 42,441/80. One of the members actually opted to receive his share as he was not interested in participating in the purchase of the suit property. This left the members with Kshs. 40,411/25.

They eventually managed to raise the Kshs. 60,000/- deposit, from outside sources. Two groups emerged; those who had committed to buy the suit property and the original partners of Matumbo trading Company. That even so, the 1st and 3rd Plaintiffs were dormant for a long time in the active running of the partnership. Kuga House Limited was registered to manage the suit property with the Defendants as directors.

In 1979, the 1st and 3rd Plaintiffs emerged and contributed Kshs. 302/50 and Kshs. 922/50 respectively. That the 1st Plaintiff even became the manager of the Matumbo bar and restaurant (which was later re-named Blue Congo Day and Night Club) and promptly paid rent to Kuga House Limited. The 3rd Plaintiff was given the job of Assistant Manager of the club. That it was not until 1991 when the members agreed to voluntarily dissolve the partnership (where all assets were shared except the suit property which was owned by the Defendants only) and the directors/owners of the suit property sought to sell it that the Plaintiffs objected and filed this suit. The witness sought dismissal of the suit to allow the Defendants to deal with the suit property.

Upon cross-examination, the witness maintained that 1st and 3rd Plaintiffs were not part of the group that bought the suit property and that dividends were only allocated to those who had shares in the partnership. That the only interest they had in the partnership was in the business which was dissolved in 1991.

That was the totality of the evidence adduced in Court. Parties filed written submissions. Those on behalf of the Plaintiffs were filed on 21st January 2015 while those on behalf of the Defendants were filed on 9th April 2015.

One of the issues to be decided in this case is whether the Plaintiffs contributed to the purchase of the suit property to support the claim that they are co-owners. PW1 testified that the loan borrowed from the bank was repaid in four and a half years but that the original partners had all paid through the shares they had in the capital used to pay the deposit. However, apart from his testimony, he did not adduce any other documentary evidence to show that the original 1st and 3rd Plaintiffs had any share capital at the time the suit property was purchased.

Furthermore, the fact that the loan was repaid in four and a half years means that by the time the 1st and 3rd Plaintiffs managed to raise their contribution, the suit property had been purchased in full and the amounts they raised could only be used to run the other businesses in the partnership as the task of buying the suit property was complete.

The authority quoted by the Plaintiffs is distinguishable from the case at hand because in that case there were witnesses to corroborate the assertions of the Plaintiff. In this case, without the 5th Plaintiff’s (original Plaintiff) evidence, the Court finds that the burden of proof has not been attained to the required standard. The Plaintiffs unfortunately have not proved their case on a balance of probabilities. For this reason the suit is hereby dismissed. Due to the peculiar circumstances of this case, each party will bear their own costs. It is so ordered

Dated and delivered at Nairobi this 19th   Day of October, 2015.

A.MBOGHOLI MSAGHA

JUDGE