Julius Kabui Mwangi & Teresiah Njeri Mwangi (Suing as heirs and legal representatives of the Estate of Mwangi Cighuka (Deceased) v Wangui Gatundu, John Wanjangi Gatundu & James Mwangi Gatundu (All sued as legal Representative of the estate of Gatundu Wanjangi deceased) & 10 others [2019] KEHC 2597 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL CASE NO. 853 OF 1999

JULIUS KABUI MWANGI.............................................1ST PLAINTIFF

TERESIAH NJERI MWANGI.......................................2ND PLAINTIFF

(Suing as heirs and legal representatives of the

Estate of MWANGI CIGHUKA (Deceased)

VERSUS

WANGUI GATUNDU

JOHN WANJANGI GATUNDU

JAMES MWANGI GATUNDU (All sued as legal

Representative of the estate of Gatundu Wanjangi

(deceased) & 10 others...........................................................DEFENDANT

JUDGEMENT

1) Julius Kabui Mwangi and Teresia Njeri Mwangi, the 1st and2ndplaintiffs respectively, in their capacities as the legal representatives of the estate ofMwangi Gichuka, deceased filed an action against the defendants vide the Further Amended Plaint dated 4thOctober 2005.  In the aforesaid plaint, the plaintiffs sought for judgment Against the defendants as follows:

i. An order for appointment of a receiver to ascertain, collect and take control of the following assets of the partnership pending distribution amongst the decease’s partners, heirs and or estates:

a) A butchery (Kiria-ini Butchery) at Motela, Nairobi

b) A bar business known as “Kiria-ini Bar” in Jericho, Nairobi

c) A plot at Ngara purchased in 1969 in which the partnership bought or acquired one-fifth (1/5) share at ksh.18,300/=.

d) Kangema butchery in Nairobi.

e) Shauri Moyo butchery in Nairobi

f) One motor vehicle make Moris van

g) One motor vehicle make Peugeot.

h) Gatundu Bar in Shauri Moyo, Nairobi

i) Jamaa Butchery in Racecourse, Nairobi

j) Kiria-ini Bar at Kiria-ini market, Fort Hall

k) L.R. No. 152/1/12/13, Ngara, Nairobi

l) L.R. No. 37/262/4, Nairobi west, Nairobi

m) L.R. No. 209/327/98, Juja Road, Nyambene Drive, Nairobi

n) L.R. No. 36/VII/382, Eastleigh, Nairobi

o) L.R. No. 209/4120, Ngara, Nairobi (one-fifth share)

p) L.R No. Murang’a Block II/33, Murang’a

q) L.R. No. Murang’a Block III/17, Murang’a

r) L.R. No. Murang’a Block III/18, Murang’a

ii. An order for accounts and payment of the deceased Mwangi Gichuka’s shares and partnership profits since the year 1970.

iii. An order for the distribution of the net partnership assets in the proportions set out as follows:

a) Gatundu Wanjangi 2 shares

b) Mwati Githuga  2 shares

c) Gatundu Kariuki  1 share

d) Mwangi Wandutu  1 share

e) Maina Ngura  1 share

f) Gachanja Gaita  1 share

g) Macharia Kariuki  1 share

h) Kariuki Wanjangi 1 share

i) Kimiti Githua  1 share

j) Mwangi Gichuka  1 share

iv. Costs of the suit.

2) Upon being served, the defendants filed their defences save for the4thand 9thdefendants who failed to do so.  When this suit came up for hearing three witnesses testified in support of the plaintiffs’ case while two witnesses testified on behalf of the defence.

3) It is the plaintiff’s (PW1) evidence that since the death ofMwangi Gichuka, the properties belonging to the partnershipexpanded to include inter alia:

a) Gatanga Bar in Shauri Moyo, Nairobi

b) Jamaa Butchery in Racecourse, Nairobi

c) Kiriaini Bar at Kiriaini Market, Fort Hall

d) L.R. no. 152/1/12/13, Ngara, Nairobi

e) LR no. 37/262/14 Nairobi West, Nairobi

f) LR no. 209/327/98 Juja Road, Nyambene Drive Nairobi

g) LR no. 36/VII/382 Eastleigh, Nairobi

h) LR no. 209/4120, Ngara, Nairobi (one fifth shares)

i) LR no. Murang’a Block II/33, Murang’a

j) LR no. Murang’a Block III/17, Murang’a

k) LR no. Murang’a Block III/18 Murang’a

4) The plaintiff further averred that the 1st, 2nd and 4th defendants confirmed that the six assets i.e (e), (f), (g), (i), (j) and (k) herein above belong to the partnership.  The plaintiff further stated that finding by the High Court in Nairobi H.C.C.C no. 826 of 1970 that there is insufficient evidence at that stage to show that the plaintiff is entitled to a share in any other business is taken care of by the admission of the 1st, 2nd and 4th defendants in that aforestated 6 properties are assets of the partnership.

5)The plaintiff further stated that the partnership owned one-quarter of L.R. no. 209/2565andone-fifth of L.R. no. 209/4120, Ngara Nairobi.  The plaintiff has maintained in his evidence that all the 10 partners contributed to the initial capital and that his assertion has not been controverted by the defendants.

6) The defendants namely the 1st, 2nd, 4th and 9th defendantsdenied the plaintiff’s claim and averred that Mwangi Gichuka, deceased did not have any interest, share, equity or right in any of the businesses or properties mentioned by the plaintiff.  They further stated that there was no evidence presented to show how the money from the partnership known asKiraini butcherywas utilized to purchase other properties the plaintiff now claim the deceased had a share or interest.

7) It is the evidence of the 6th and 7th  defendants that GachanjaGaita,deceased and Macharia  Kariuki, deceased were partners inKiriaini Butcherywhich partnership which later became known  asGatundu Wanjangiand Partners.  The duo stated that Mwangi Gachuka, deceased was a partner hence the plaintiffs’ are entitled to the claim stated in the plaint.  The aforementioned defendants admitted the plaintiff’s claim but offered no credible evidence to buttress the admission.

8) At the close of the evidence, learned counsels appearing in thismatter were invited to file and exchange written submissions.

It is the submission of the plaintiffs that the prayer for theappointment of a receiver was granted and is therefore spent.  It was pointed out that oneJoseph Wanjau Gathuri (PW3),the receiver manager testified and produced his management report indicating how much  money had been collected so far by the two receivers.  This submission was not contested by the defendants.  With respect, I agree with the plaintiffs that the first prayer was granted and therefore it is no spent.

9) The plaintiffs submitted that the 1st, 2nd , 4th, 6th and 7thdefendants filed a defence to deny the plaintiffs’ claim while the 3rddefendant is said to have admitted the plaintiffs’ claim in his defence.  It is also pointed out by the plaintiffs that the 5thand 9thdefendants filed no defence to resist the plaintiffs claim.

10) The issue which commended itself for determination is whetherthere existed a partnership between the late Mwangi Gichukaand the defendants known as Gatundu Wanjangi & Partners.

11) According to the plaintiffs, the partnership between the partiesto this suit known asKiriani Butcherywas later christened toGatundu Wanjangi & Partners.  It is the submission of the plaintiffs that when the parties and their counsels appeared before Justice Mwera on 16thDecember 2010, they recorded a consent order indicating that there was no dispute as to the existence of the partnership.

12) The 6th and 7th defendants in their submissions appear toconcur with the plaintiffs that the late Mwangi Gichuka was one of the founder partners in the then business known as“Kiriaini Butchery”which later became known as ‘Gatundu Wanjangi & Partners’.The duo urged this court to reject the 2ndand 4thdefendants’ defence as mere denials.  They argued that the business and assets acquired from the proceeds of Kiriaini butchery were businesses and assets of the partners of Kiriaini butchery.

13) It submitted that it is from the income of the original businessthat other businesses and assets were acquired now called“Gatundu Wanjangi and Partners”.The 6thand 7thdefendants urged this court to find that all incomes realized from the said business or assets acquired should be shared equally or according to the share contribution of the partners once accounts are taken.

14) However, the 1st, 2nd, 4th and 9th defendants are of thesubmission that there was insufficient evidence tendered to show that the deceased’s estate was entitled to a share in any other business.  It was pointed out that the late Mwangi Gichuka testified in H.C.C.C no. 826 of 1970 claiming that the profits/moneys from Kiriani butchery was invested in other businesses and properties but he was unable to convince the court that he was a partner in any other business other than‘Kiria-ini Butchery’.

15) It was also argued that the plaintiffs did not tender evidence toshow how the money from the partnership know as‘Kiria-ini Butchery’was utilized to purchase other properties they claimed the deceased had a share or interest in.

16) The 3rd, 5th and 8th defendants are  of the submission that theclaim by the plaintiffs that the proceeds from the business known as Kiriaini Butchery were never used to establish the business presently known as Gatundu WanjAngi & Partners.  It was pointed out that the late Mwangi Gichuka did not tender evidence to show he had a share or claim in Gatundu Wanjangi & Partners when he testified before this court in Nairobi H.C.C.C no.826 of 1970.

17) It was also  submitted that the claim in the aforesaidpartnership was not listed as assets of the estate of Mwangi Gichuka, deceased in the schedule of distribution in the certificate of confirmation of grant videNairobi Succession Cause no. 2371 of 1994.

18) The 3rd, 5th and 8th defendants further argued that thepurported admission by one Gatundu Kariuki made on 13thAugust 1999 should be treated with a pinch salt because the same person denied the plaintiffs’ claim when he with others were sued in Nairobi H.C.C.C no. 826 of 1970.

19) It is also argued that the plaint on which the purportedadmissions were made did not contain a single allegation of the properties ascribed toGatundu Wanjangi & Partners.  The properties ascribed to Gatundu & Wanjangi partners were made vide the Further Amended Plaint dated 4thOctober 2005.

20) It is argued that none of the defendants filed a defence to theFurther Amended Plaint hence the admission cannot be relied upon.  The 3rd, 5thand 8thdefendants further submitted that it is the amendment that introduced the properties generally referred to as“Gatundu Wanjangi & Partners”listed assets for the first time.

21)The trio also argued that the plaintiffs have failed to dischargethe burden of proof as required under Section 107 of the Evidence Act (Cap. 80 Laws of Kenya).  It is stated that no evidence were presented to show that‘Kiria-ini Butchery’later christened as“Gatundu Wanjangi & Partners.

22) I have considered the evidence and submissions presented by both sides over the issue as to whether or not the plaintiffs have established that the late Mwangi Gichuka was a partner in “Gatundu Wanjangi & Partners.”

23) The plaintiffs having claimed that the late Mwangi Githuka wasa partner in aforesaid partnership and therefore they are bound to discharge the burden of proof pursuant to the provisions of Section 107 of the Evidence Act which provides as follows:

“107(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he assets must prove that those facts exist.

(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.”

24) The plaintiffs have stated that some of the defendants admittedin the defence the plaintiffs’ claim. The 3rd, 5thand 8thdefendants have disputed the admissions stating that the same was in respect of a plaint which did not make reference to the properties owned by Gatundu Wanjangi & Partners.

25) With respect, I agree with the 3rd, 5th and 8th defendant’ssubmission.  There is no evidence that the defendants who purported to admit the plaintiffs’ claim filed any defence to the Further Amended Plaint which plaint specifically listed the assets of Gatundu Wanjangi & Partners.

26) The fact that some defendants admitted the plaintiffs’ claim, didnot in itself excuse the plaintiffs from discharging the burden of proof.  The plaintiffs are bound to present evidence to prove that the properties listed as owned by Gatundu Wanjangi & Partners originated from “Kiria-ini Butchery”.

27) It is not in dispute that the plaintiffs submitted as an authorityand evidence, a copy of the judgment in Nairobi H.C.C.C. no.826 of 1970 to bolster their claim in this suit.  In the aforesaid judgement the court found the late Mwangi Gichuka to be partners together with the defendants in the partnership known as“Kiria-ini Butchery”and the court declared that the deceased was entitled to claim his share of the assets or properties owned by Kiriaini Butchery.

28) The court was quite emphatic in its judgment that there wasinsufficient evidence to show that the plaintiff (now deceased) was entitled to a share in any other business.

29) The court further stated that if proper accounts have been keptthey may show that partnership funds were invested in otherbusinesses.

30) It is also apparent from the judgment that the court issued anorder for the taking of accounts and for a receiver to be appointed.  No evidence were tendered to show that the order for taking of accounts was complied with.  Perhaps if the taking of accounts was undertaken it could have revealed that the proceeds from‘Kiria-ini Butchery’were used to purchase or establishGatundu Wanjangi & Partners.

31) However, the plaintiffs have totally failed to present credibleevidence to show that proceeds fromKiria-ini Butcherywere used to acquire the assets registered in the name ofGatundu Wanjangi & Partners.  I therefore find no merit in the plaintiffs’ suit.

32) Three preliminary issues were raised and argued by the 1st, 2nd,3rd, 4th, 5th, 6th, 7thand 9thdefendants against the plaintiffs’ suit.  It is argued that the plaintiffs’ suit is resjudicata, statute barred and abated.

33) On the question of being statute barred, it is the defendants’contention that this suit is statute barred pursuant to the provisions of Section 9(3), 4(4) and 4(1) (e) of the Limitations of Actions Act (Cap 22 Laws of Kenya).It is argued that, so long as this suit is predicated on Nairobi H.C.C.C. No. 826 of 1970, no action can be brought upon the aforesaid judgement after the lapse of twelve (12) years from the date of judgment.

34) Secondly, it is also argued that the plaintiff’s claim for accountswas brought over six (6) years since the cause of action arose hence it is statute barred under Section 4(3) of the Limitation of Actions Act.

35) In response to the defendants’ submission, the plaintiffstogether with the 6thand 7thdefendants are of the view that this suit is not statute barred.  It is their submission that under Section 37 of the Partnership Act every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner, therefore the partnership stood dissolved following the death of Mwangi Gichuka on 7. 5.85 i.e two months after the delivery of the judgment in Nairobi H.C.C.C 826 of 1970 whereof the deceased was declared a partner.

36) It was also pointed out that since all the partners are dead thepartnership should basically be wound up under Section 46 of the Partnership Act.

37) With respect I am persuaded by the submissions of theplaintiffs, the 6thand 7thdefendants’ submissions. Section 46 ofthe Partnership Act provides as follows:

“Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with its capital or assets without any final settlement or accounts as between the firm and the outgoing partner or his estate, then the estate is entitled at the option of himself of his representative to such a share of profits made since the dissolution as the court may find to be attributable to the use of his share of the partnership assessor interest at the rate of eight per centum per annum on the amount of his share of the partnership assets.”

38) I am convinced that the plaintiffs being the legal representativesof the estate of Mwangi Gichuka, deceased are entitled to bring this suit  for purposes of liquidation of the partnership and further to distribute the net assets of the  partnership to the partners.

39) The other preliminary point is whether this suit is resjudicata.It is the submission of the 3rd, 5thand 8thdefendants that the plaintiffs’ suit is resjudicata  and time-barred under Section 4 (4) of the Limitations of Actions Act since the judgment upon which this suit is predicated upon was more than twelve (12) years old at the time of filing this suit.

40) The plaintiffs are of the submission that the cause of action inthis suit is different from that obtaining in H.C.C.C no. 826 of1970.

41) It is pointed out that the instant suit is for liquidation and orwinding up of partnership and the subsequent distribution of assets and profits while in the former suit the deceased prayed for a declaration that he was a partner of the 1stto 9thdefendants under Section 46 of the Partnerships Act.

42) Having considered the rival submissions I am persuaded by thearguments put forward by the plaintiffs that the current suit cannot be regarded as resjudicata because it is in respect of the liquidation and or the winding up of a partnership with a view of eventually distributing the assets and profits of the partnership to the partners and or their successors.

43) It is also clear that the plaintiffs are not seeking to enforce thejudgment in H.C.C.C No. 826 of 1970 but they are basically seeking to have the winding up of ‘Gatundu Wanjangi & Partners’which partnership the plaintiffs have failed to establish that Mwangi Gichuka, deceased was a partner.  The preliminary objections are therefore overruled.

44) The 3rd, 5th and 8th defendants through their advocates haveargued that this suit has abated since all the partners are dead.

45) The plaintiffs have stated that the submission on abatementshould not be entertained because this suit does not concern the individual  defendants named but the estates of the deceased partners.

46)  It is not in dispute that the issue of abatement was brought upin the submissions.  None of the parties tendered evidence showing when any of the defendants died.  It was incumbent upon the parties raising the issue to present evidence so that this court can make a decision based on the evidence required in establishing abatement.  I therefore decline to entertain the argument for above reason  and  on the basis that the same was raised too late in the  proceedings.

47) In the end, the plaintiffs have failed to establish their claim on abalance of probabilities.  Consequently, the suit is dismissed.  Since this suit involves the estates of partners who are now deceased, a fair order on costs is to order which I hereby do, that each party meets their own costs.

48) The funds held in the joint account of advocates  be released tothe respective property owners.

Dated, Signed and Delivered at Nairobi this 16th day of October, 2019.

............................

J. K.  SERGON

JUDGE

In the presence of:

……………………………. for the plaintiff

……………………………. for the defendants