Kofinaf Company Limited & Galba Mining Limited v Nahashon Ngige Nyagah, Jeremy Nyaga Njeru, Judy Wanjiku Ngugi, Job Peter Lenoseuri, Henry Ogada Obande, Jane Muthoni Njanja, Monica Muthoni Magu, Erastus Karanja Kibiro, Jane Wambui Gacoka, Samuel Ojoro Malaki, Jared Omondi Obor, Susan Wairimu, Faith Joan Wanjiru, Sabina Njoki Wanyoike, Nara Company Limited, Solomon Kioko Kivuva, Nelson Havi , Osundwa Sakwa, Purple Saturn Properties Limited, Registrar of Companies & Lucas Akunga Omariba [2017] KEHC 10044 (KLR) | Withdrawal Of Suit | Esheria

Kofinaf Company Limited & Galba Mining Limited v Nahashon Ngige Nyagah, Jeremy Nyaga Njeru, Judy Wanjiku Ngugi, Job Peter Lenoseuri, Henry Ogada Obande, Jane Muthoni Njanja, Monica Muthoni Magu, Erastus Karanja Kibiro, Jane Wambui Gacoka, Samuel Ojoro Malaki, Jared Omondi Obor, Susan Wairimu, Faith Joan Wanjiru, Sabina Njoki Wanyoike, Nara Company Limited, Solomon Kioko Kivuva, Nelson Havi , Osundwa Sakwa, Purple Saturn Properties Limited, Registrar of Companies & Lucas Akunga Omariba [2017] KEHC 10044 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND ADMIRALTY DIVISION

HCCC NO.230 OF 2015

KOFINAF COMPANY LIMITED…………………………………..1STPLAINTIF

GALBA MINING LIMITED…………………………....................2ND PLAINTIFF

VS

NAHASHON NGIGE NYAGAH………………………….…...…1ST DEFENDANT

JEREMY NYAGA NJERU……………………………………….2ND DEFENDANT

JUDY WANJIKU NGUGI………………………………………..3RD DEFENDANT

JOB PETER LENOSEURI……………………………………….4TH DEFENDANT

HENRY OGADA OBANDE…………………………………...…5TH DEFENDANT

JANE MUTHONI NJANJA…………………………………….6TH DEFENDANT

MONICA MUTHONI MAGU…………………………………..7TH DEFENDANT

ERASTUS KARANJA KIBIRO…………………………………8TH DEFENDANT

JANE WAMBUI GACOKA…………………………………….9TH DEFENDANT

SAMUEL OJORO MALAKI………………………………….10THDEFENDANT

JARED OMONDI OBOR………………………………………11TH DEFENDANT

SUSAN WAIRIMU…………………………………………….12TH DEFENDANT

FAITH JOAN WANJIRU……………………………………...13TH DEFENDANT

SABINA NJOKI WANYOIKE……………………………...…..14TH DEFENDANT

NARA COMPANY LIMITED………………………………….15TH DEFENDANT

SOLOMON KIOKO KIVUVA………………………………..…16TH DEFENDANT

NELSON HAVI ………………………………………………….17TH DEFENDANT

OSUNDWA SAKWA…………………………………………….18TH DEFENDANT

PURPLE SATURN PROPERTIES LIMITED……......…………19TH DEFENDANT

THE REGISTRAR OF COMPANIES………….....……………..20TH DEFENDANT

LUCAS AKUNGA OMARIBA………………………......……...21ST DEFENDANT

RULING

1. A controversy has been created by the Notice to withdraw suit dated 15th November 2016 and filed on 16th November 2016 and the Notice to withdraw that Notice dated 30th November 2016 and filed on 1st December 2016 by both the 1st and 2nd Plaintiffs. This Ruling attempts to resolve that controversy.

2. In an affidavit sworn on 3rd April 2017 by one Christopher Barron on behalf of the Plaintiffs, the circumstances surrounding the filing of the two Notices are explained from the viewpoint of the Plaintiffs. The Plaintiffs grievance is that the 1st, 17th and 21st Defendants herein acting in concert, conspired to defraud the Plaintiffs of their beneficial ownership in property known as Land Reference No. 11288 registered in the name of Purple Saturn Properties Limited (Purple Saturn)or the 19th Plaintiff). In summary that fraud is alleged to have been effected through unlawful changes in the ownership of the 19th Defendant. Changes effected in the Register to The Company. This suit was commenced substantially to reverse those changes.

3. As the suit dragged on, the Plaintiffs aver that their advocates Messrs Ahmednasir, Abdikadir & Co advocates received a letter from the 16th Defendant dated 18th July, 2016 disclaiming, resigning and renouncing his appointment as the Company secretary to the 19th Defendant with effect from 27th Febraury 2015. On the strength of that letter, the said firm of Advocates, on 28th July 2016, wrote to the Registrar of Companies seeking to be favoured with the most up todate CR12 in respect to Purple Saturn.   A form from the Registrar gives particulars of the Directors, Shareholders and shareholding of a Company.

4. The Registrar of Companies responded through a letter of 2nd August 2016, in which he gave particulars of names of Shareholders and Directors of the said Company.  Of significance, he advised that the records he had given were after he had expunged the changes that had been made on 27th February 2015. He also purported to revoke all the CR12’s that had been issued on the basis of the expunged changes.

5. Fast forward to 19th August 2016, the Plaintiffs Advocates wrote to the Registrar of Companies on behalf of Galba Mining Limited (the 2nd Plaintiff) Without going into detail of that letter the Advocates made a request, on behalf of their client (Galba), that the Registrar accepts the return of allotment dated 22nd August 2013 and lodged for registration on 27th March, 2015.  The Advocates were asking the Registrar to make changes of ownership in Purple Saturn. Thereafter, on 30th August 2016, the said firm requested the Registrar of Companies for a form CR12 reflecting the changes that would have been caused by the acceptance of the return of allotment.

6. On 1st September, 2016 the Registrar of Companies issued a CR12 which had a significant particular.  That particular was that Galba owned 993 Shares out of 1000 ordinary Shares issued in Purple Saturn.  An outcome always desired by the Plaintiffs. With the confirmation of the changes now reflected in the CR12, this suit was no longer necessary.

7. Mr. Barron depones that it was in that context that the Plaintiffs asked their advocates to file the Notice of withdrawal of suit against the 1st to 15th Defendants and 17th, 18th, 19th and 21st Defendants (jointly “The Affected Defendants).

8. Mr. Baron further depones that when Mr. Havi learnt of what had happened in the Registry of Companies, he demanded that the changes previously effected on 21st February 2015 and 3rd March 2015 be reinstated.  The Registrar acceded to those demands and on 18th November 2016, the Registrar confirmed reversing all the changes effected after 26th July, 2016. This was in a letter to the firm of Havi & Co. Advocates. And to confirm the action another CR12 dated 18th November, 2016 was issued to the said advocates.  Unsurprisingly, the records in respect to the Register of Purple Saturn did not have Galba as owing any shares.

9. In the face of this development, the Plaintiffs contend that they instructed their advocates to withdraw the Notice of withdrawal dated 15th November 2016.  In paragraph 55 of his affidavit Mr. Barron depones,

“55. THAT the Notice of Withdrawal dated 15th November 2015 was therefore filed in error under the mistaken assumption by the Plaintiffs that the documents fraudulently filed by Mr. Nelson Havi on 27th February 2015 had been reversed, removed and expunged from the 19th Defendant’s records pursuant to the provisions of section 862 of the Companies Act 2015 and that the documents lodged by the firm of Anjarwalla & Khanna Advocates on 27th March 2015 had been accepted for registration”.

10. The Affected Defendants take the position that the suit has been withdrawn and the Plaintiffs attempt to reinstate it in terms of the Notice to withdraw the Notice of Withdrawal of suit is not only an abuse of process of Court but is null and void abinitio.

11. In an affidavit filed by Mr. Havi on 19th March 2017, he depones that on 11th November 2016, during the mention two Civil Suits being HCC 237 of 2015 and HCC 238 of 2015 which are matters related to these proceedings, the Plaintiffs’ Advocates notified Court that they were considering withdrawing the said suits as well as this suit.  This surprised him because the issues for which the suits had been filed had not been determined.  Out of caution, Mr. Havi therefore commissioned a search on the Register of Purple Saturn at the Company’s Registry and on the suit property at the Lands office.

12. On 14th November, 2016, the Advocate obtained a CR12 form which indicated that the Shareholding and Directorship of the 19th Defendant had been altered in a manner intended by the Plaintiffs. This discovery prompted two courses.  One, the 19th Defendant filed an application on 16th November 2016 to restrain the Plaintiffs and the Interested Parties from interfering with the Register of the 19th Defendant kept by the Registrar of Companies or from alienating and/or encumbering the suit property.  Second, Mr. Havi attended the offices of the Registrar of Companies to find out the basis of the alterations. The Advocate wrote to the Registrar demanding that the changes effected on the Shareholding and Directorship of Purple Saturn done, at the behest of the Plaintiffs Advocate and the 16th Defendant, be reversed.  And the reversal was done on 16th November 2016.

13. The Affected Defendants read mischief on the part of the Plaintiffs attempt to reinstate the withdrawn suit and Mr. Havi depones,

“I verily believe that it is a gross abuse of the process of the Court for the Plaintiffs, 16th Defendant and the Interested Party to use this suit to vex the Defendants, obtain remedies outside the judicial process, withdraw the suit and again, purport to reinstate the suit when their unlawful actions are brought to fore and reversed”.

14. Mr. Havi alludes to yet another development.  He states that in reliance upon the changes unlawfully effected on the Shareholding and Directorship of the 19th Defendant, the suit property was charged to Cooperative Bank of Kenya Ltd. And that in reliance upon the advise and directives of the Court given on 11th, 18th and 24th November 2016, the 19th Defendant filed HCCC No.499 of 2016, Purple Saturn Properties Limited & Jojoja Properties Limited, vs. Anjarwalla & Khanna Advocates & 8 otherson 16th December, 2016 to restrain further interferences in the Shareholding and Directorship of the 19th Defendant and dealings in the suit property.

15. In view of the controversy as to whether or not the suit had been withdrawn, the Court invited parties to address it.  At the hearing, the position of the Plaintiffs was supported by the 11th and 16th Defendant. The Affected Defendants were supported by Purple Saturn.  The Court has considered the written submissions and oral highlights thereof by Counsel and the oral submissions of Counsel who did not file written submissions. In making its determination the Court bears these arguments in mind and the authorities cited to it.

16. As a starting point, the key provisions of law under discussion in this decision are the provisions of order 25 Rule 1 of The Civil Procedure Rules:-

“At any time before the setting down of the suit for hearing the plaintiff may by notice in writing, which shall be served on all parties, wholly discontinue his suit against all or any of the defendants or may withdraw any part of his claim, and such discontinuance or withdrawal shall not be a defence to any subsequent action”.

And the controversial notice is reproduced below:-

“NOTICE OF WITHDRAWAL

Under Order 25 Rule 1 of The Civil Procedure Rules 2010)

TAKE NOTICE that the 1st and 2nd Plaintiffs hereby wholly withdraw and discontinue this instant suit against the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th 11th, 12th 13th, 14th, 15th, 17th, 18th, 19th 21st Defendants subject to such order as the Court might make as to costs.

DATED AT NAIROIB THIS 5TH DAY OF NOVEMBER 2016.

17. The question as to whether a Notice to Withdraw under Order 25 Rule 1 requires the endorsement of Court before becoming effective is now chartered waters. And while there is divided opinion in the High Court, it may have been settled as the Court of Appeal has had its say.

18. Justice Bosire of the Court of Appeal in Pil Kenya Ltd Vs. Joseph Oppong [2001] eKLR expressed this opinion:-

“As regards High Court Civil Case No. 260 of 2000, the Plaintiff was Jeneby Taita with the appellant as Defendant.  The Respondent herein was not named as a party.  I earlier stated that a notice of withdrawal of suit was filed on 13th November, 2000.  By that date the Respondent had not been made a party. It was on or about 15th November, 2000 that the Respondent brought an Application seeking to be enjoined as a Defendant on the ground that he had an interest in the subject matter of that suit.  The application was heard on 15th November, 2000 by a Commissioner of Assize, Mrs. Tutui, who granted it and directed that an amended Plaint be filed.  There is no evidence before this Court that it was ever filed.  If, however, the notice of withdrawal was valid such an amendment did not arise as there was no suit in existence respecting which an amended Plaint or amended defence could be filed. The order was made ex parte, and later, a Mr. Obura for the Plaintiff lamented that he should have been but was not served with the order enjoining the Respondent herein as Defendant and directing the amendment of the Plaint.  A Plaint could not properly be amended at the instance of a party who was not the Plaintiff.  The said Advocate also asserted that the suit had not been withdrawn and any notice to that effect was a forgery.  It later transpired, however, that the Plaintiff disappeared. He was not answering his advocate’s letters nor did he ever visit him thereafter.  The notice of withdrawal was homemade and I infer that it was indeed filed by the Plaintiff personally.  I say so advisedly.  By his conduct he had no interest in the suit, with the result that his advocates had to formally apply for Leave to cease acting for him.  The Plaintiff in that suit did not need the leave of Court to withdraw his suit nor was a Court order necessary to give effect to the withdrawal.  All that was necessary was for the Plaintiff to file a Notice of withdrawal before Judgement.  After Judgment, however, the leave of the Court was necessary”. (my emphasis)

19. Six years later, the Court of Appeal had another opportunity to comment on a similar question. This was in Beijing Industrial Designing & Research Institute vs. Lagoon Development Ltd (2015) eKLR. Before focusing on the import of Rule 1 of Order 25, the Court set out the three scenarios regarding Discontinuance of Suits or Withdrawal of Claims and it held:-

“The above provision presents three clear scenarios regarding discontinuance of suits or withdrawal of claims.  The first scenario arises where the suit has not been set down for hearing. In such an instance, the Plaintiff is at liberty, any time, to discontinue the suit or to withdraw the claim or any part thereof.  All that is required of the Plaintiff is to give notice in writing to that effect and serve it upon all the parties. In that scenario, the Plaintiff has an absolute right to withdraw his suit, which we agree cannot be curtailed. The second scenario arises where the suit has been set down for hearing. In such a case the suit may be discontinued or the claim or any part thereof withdrawn by all the parties signing and filling a written consent of all the other parties.  The last scenario arises where the suit has been set down for hearing but all the parties have not reached any consent on discontinuance of the suit or withdrawal of the claim or any part thereof.   In such eventuality, the Plaintiff must obtain leave of Court to discontinue the suit or withdraw the claim or any part thereof, which is granted upon such terms as are just. In this scenario too, the Plaintiff’s right to discontinue his suit is circumscribed by the requirement that he must obtain the leave of the Court.  That such leave is granted on terms suggests that it is not a mere formality”. (my emphasis)

20. The situation here is that the suit had not been set down for hearing and the wish of Plaintiffs as declared in the Notice to withdraw was to wholly withdraw and discontinue the Suit against all the Affected Defendants subject to such orders as the Court would make as to costs.  The Plaintiffs further made it clear that the Notice was made pursuant to the provisions of order 25 Rule 1 of The Civil Procedure Rules.

21. From the two decisions of the Court of Appeal (which needless to say are binding on this Court) the law can be stated to be that as a general proposition the right of a Plaintiff to Discontinue a Suit of or Withdraw a Claim under the provisions of order 25 Rule 1 (that is where the suit has not been set down for hearing) is an absolute and untrammeled right. Also, again as a general proposition, it takes effect upon the filing of the Notice. No leave of Court is required nor a Court endorsement necessary to give effect to this withdrawal.

22. And it has to be said that unlike some other procedural Rules, The Civil Procedure Rules, in respect to order 25 Rule 1, does not have any provisions requiring the Leave of Court to Discontinue a suit or withdraw a claim. The Constitution of Kenya (Protection of Rights and Fundamental Freedom) Practice and Procedure Rules, 2013, for example provides as follows in rule 27(1):-

“27(1) The Petitioner may

(a) On notice to Court and the Respondent, apply to withdraw the Petition; or

(b) With Leave of the Court, Discontinue the proceedings.

2) The Court shall, after hearing the parties to the proceedings, decide on the matter and determine the juridical effect of that decision.

3) Despite sub Rule (2), the Court may, for reasons to be recorded, proceed with the hearing of a case in spite of the wish of the Petitioner to withdraw or discontinue the  proceedings”.

Similarly, The Elections (Parliamentary and County Elections) Petition Rules, 2017 requires that Leave of an Election Court be sought before there can be a withdrawal of an Election Petition. The requirement for Leave in both Constitutional and Election Petitions extends to where the Petition has not been set down for hearing.

23. One of the objects of the requirement for Leave in Constitutional or Election matters is that the issues in those Petitions may involve a Public Interest Element and the Court must determine the juridical implication of a withdrawal. In an Election Petitionm for example, a person who is qualified to be a Petitioner may be allowed to step into the shoes of a Petitioner who has applied to withdraw so that a Petition is not defeated merely because a Petitioner has been compromised into withdrawing it.

24. But in Civil matters, like the one before Court, the parties would invariably be agitating Personal Rights and so they would have full control in prosecuting their Claim including the unfettered Right to Discontinue a suit or withdraw a claim. That emboldens the General proposition that no Leave of Court is required nor a Court endorsement necessary to give effect to a withdrawal or Discontinuance under Order 25 Rule 1 of The Civil Procedure Rules.

25. However, even in the midst of that general proposition in respect to Order 25 Rule 1, there would be occasion when the Plaintiffs right to Withdraw or Discontinue ought to be fettered or curtailed. Indeed the decision in Beijeng Industrial Designing & Researching (supra) revolved around one such situation.  There the Plaintiff was facing an application for contempt of Court but on the date it was scheduled for hearing, the Plaintiff filed a Notice of Discontinuation of suit, which was adopted by the High Court.  The Court of Appeal reacted as follows:-

“Order 40 Rule 3 of the Civil Procedure Rules provides that in the event of disobedience of an injunction or breach of its terms, the Court that granted the injunction may order the attachment of the property of the person in breach and may order such person to be detained in prison for a term not exceeding 6 months.  Under order 40 Rule 3(3) an application against a person alleged to be in breach of an injunction must be made in the suit in which the order of injunction was made. It follows therefore that a literal application of Order 25 Rule 1 in the circumstances of this suit would enable a party who is alleged  to have undermined the rule of law to walk away scot-free by simply withdrawing the suit in which the law compels the respondent to file the application for contempt of Court.  As has consistently been stated by the Courts, the law will not countenance a person benefiting from his wrongdoing or alleged wrongdoing. Lord Finlay expressed the principle as follows in NES ZEALAND SHIPPING V. SOCIETE DES ATELIERS ET CHANTIERS DE FRANCE (1919) AC 1, which we agree with:

The decisions on the point are really illustrations of the very old principle laid down by Lord Coke (Co Litt. 206b) that a man shall not be allowed to take advantage of a condition which he himself brought about”.

That case illustrates that a Court will not allow a Plaintiff to use the Right to Discontinue or Withdraw so as to abuse the process of Court or to defeat the ends of justice.

26. A further lesson that the Decision in Beijing (supra), in my view, teaches is that where in a pending suit, the Defendant has acquired a right or is protected by an order, a Plaintiff wishing to invoke the right to Discontinue a Suit or Withdraw a Claim under Order 25 rule 1 must seek the sanction and endorsement of Court. The Court may reject it altogether or allow it on terms. In those circumstances a responsible Plaintiff ought to move Court for leave or endorsement. Where the party fails to act responsibly then the offended party or the court can recall the withdrawal for review and setting aside as the Court of Appeal did in the Beijing matter (Supra).

27. Now, at the time of the filing of the Notice to Discontinue the suit, the  19th Defendant had prosecuted its application dated 14th January 2016 and the same was due for Ruling on 21st December 2016.  The application sought the following orders:-

1. Spent

2. THAT upon hearing exparte, the exparte orders issued on 13th May, 2015 to the effect that the 9th Respondents or their agents be restrained from issuing any notices convening any meetings in relation to the business or affairs of the 19th Respondent and that the 1st – 8th Respondents together with their agents, servants or employees or assigns be restrained from removing, transferring, disposing or charging or dealing in any manner in L.R No.11288 and from acting  or omitting to act in a manner that will induce or cause breach of agreement between the 2nd Applicant and Daykio Plantations Limited, be stayed pending hearing interpartes.

3. THAT upon hearing interpartes, the exparte orders issued on 13th My, 2015 to the effect that the 9th – 16th Respondents or their agents be restrained from issuing any notices convening any meeting in relations to the business or affairs of the 19th Respondent and that the 1st -18th Respondents together with their agents, servants or employees or assigns be restrained form removing, transferring, disposing or charging  or dealing in any manner in L.R No.11288 and from acting or omitting to act in a manner that will induce or cause breach of agreement between the 2nd Applicant and Daykio Plantations Limited be set aside, reviewed, varied and/or vacated and an order be issued restraining the Plaintiffs and the Interested Party from transferring, interfering and/or dealing with any manner whatsoever with the property L.R No. 11288 and/or the management and/or day to-day running of the 19th Defendant company.

4. THAT upon hearing interpartes, the Notice of Appointment of Advocates dated 19th May, 2015 filed by Messrs. Mbugua, Atudo & Macharia Advocates purportedly on behalf of the 19th Defendant be struck out.

5. THAT the costs of this Application be provided for.

28. The Application by the 19th Defendant had been argued together with another application that of the Plaintiff’s of 22nd March 2016.  A composite Ruling on the two applications was due for 21st December 2016.

29. The Court record shows that on 24th March 2016, Kariuki J. made the following orders:-

“However, balancing the interest of all the parties present in the matter, I direct the status quo prevailing be maintained to preserve subject matter pending hearing of the application dated 22nd March 2016 for reinstatement of interim orders.  Parties wishing to oppose the application can file Replying Affidavit within 7 days”. (my emphasis)

Of significance, the status quo was to last upto the hearing of the Application of 22nd March 2016.

30. Logically, the status quo order was binding on both sides of the litigation and was certainly in force on the date the two Applications were prosecuted on 2nd November 2016. The position of the 19th Defendant however was that the status quo orders were in force not only to the date of hearing of the Applications but to their determination (see their Application of 16th November 2016).  Although the orders of the Court of 2nd November 2016 do not show that the status quo orders were expressly extended upto 21st December 2016 (when the Ruling was to be delivered) it might have been expected that any party desirous of a change in the status quo prior to the Ruling date would had to do so with Leave of Court.

31. I would therefore find that in the face of the pending Ruling and the circumstances of this case, where there were status quo order upto the date of the hearing of the applications (which order was binding on the Plaintiff as it was on the Defendants as it afforded protection to both sides), the Plaintiffs Discontinuance of this suit and Withdrawal needed the Leave of the Court.

32. Granted, that, todate no such Leave has been given or endorsement made, would the Plaintiffs be entitled to now withdraw the Notice of Withdrawal of the suit? The Plaintiffs have made arguments to justify their action to file the Notice of Withdrawal and Discontinuance and the subsequent Notice countermanding it.  But before discussing those arguments in the context of the circumstances that prevailed before, during and after filing of the Notice of the Withdrawal, it is necessary to consider whether, in the first place, a Notice of Withdrawal and/or Discontinuance can be withdrawn or reversed.

33. A first observation would be that the Rules do not provide for the withdrawal of a Notice to withdraw. This may be because of the general proposition that a Notice to Withdraw or Discontinue under the provisions of Order 25 Rule 1 becomes effective once filed.  Once that happens then there is no opportunity for recalling it.  Mr. Havi who supports that position drew the Court attention to the following passage in Mulla The code of Civil Procedure 18th Edn 2011 at page 21;

“This is so because withdrawal of the suit under sub-section (i) is complete as soon as it takes place and in any case when the Court is informed of it.  That being so, there is no question of a right to revoke such withdrawal”.

Mullas’s commentary was on provisions which are in pari materia the provisions of Order 25 Rule 1.

34. In further support of this position Mr. Havi referred this Court to the Decision of the Allahabad High Court in Smt Raisa Sultana Begam & others vs. Abdul Qadir & othersAIR(1966 ALL 318)where the Court held,

“Either it is done or not done; there is nothing like its being incompletely or ineffectively.  The consequence of an act of withdrawal is that the Plaintiff ceases to be a Plaintiff before the Court.  If he is the only Plaintiff and withdraws the whole of the suit, the suit comes to an end and nothing remains pending before the Court; if he is only one of several Plaintiffs, he ceases to be a party and the suit of only the other Plaintiffs continues. If he withdraws only a part of the suit that part goes out of jurisdiction of the court and it is left with only the other part.  This is the natural consequence of the act; a further consequence imposed by Sub-rule (3) is that he cannot institute any fresh suit in respect of the subject matter. He becomes subject to this bar as soon as he withdraws the suit.  It follows as a corollary that he cannot revoke or withdraw the act of withdrawal. If he is absolutely barred from instituting a fresh suit, it means that he is absolutely barred from reviving his status as a Plaintiff before the Court.  The bar on his instituting a fresh suit would be meaningless if he were permitted to revoke the withdrawal and get himself restored to the status of a Plaintiff in respect of the withdrawn suit.  There is no provision allowing revocation of the withdrawal”

35. Back home, the Court was urged to find persuasion by the High Court Decision in Bahati Shee Mwafundi v. Elijah Wambua[2015]eKLR,where the Court held,

“11. I have considered the Appellants’ Application.  The Notice to withdraw this Appeal was filed under the provisions of Order 25 of the Civil Procedure Rules.  As rightly submitted by the Respondent there is no provision under that order for withdraw of the Notice to withdraw an Appeal.  Order 25 envisages that once a party withdraws or discontinues a suit such a party may file another suit and such withdrawal or discontinuation cannot be raised as a defence in a subsequent suit.

12. Under Order 25 once a suit is withdrawn or discontinued the Court shall enter judgement for costs against the Plaintiff.

23. It follows that Order 25 does not permit a party to withdraw a notice to withdraw or discontinue a suit. The filing of such a notice to withdraw or discontinue a suit terminates the suit and there cannot be, thereafter, a setting aside of the notice to withdraw or discontinue a suit. The following is what the learned author Stuart Sime in the book “A Practical Approach to Civil Procedure” 9th edition stated:

‘Notice to discontinue takes effect and brings the proceedings to an end as against each defendant, on the date it is served upon the defendant’.

In this case the Respondent had Notice to withdrawal or discontinuous of this Appeal before seeking to set aside the consent before Kwale Court. That Notice of the Withdraw or discontinuous had the effect of terminating this appeal. The appeal having terminated it cannot in my humble view be reinstated or resuscitated. On that ground the Appellant’s Notice of Motion is unmerited and misconceived. It is dismissed with costs to the Respondent”.

36. Lending his support to this argument, Mr. Njuguna for the 19th Defendant asked this Court to find that the jurisdiction of the court to allow for a withdrawal of a Notice of Withdrawal or Discontinuance was deliberately omitted from the provisions of Order 25 Rule 1.  The Court was asked to compare these provisions with corresponding Orders like Order 10 which has expressly reserved the jurisdiction of setting aside.

37. The Plaintiffs, on the other hand argue that not only does a Plaintiff have a Right to withdraw a Notice of Withdrawal but there may be instances where an already Discontinued suit can be resurrected and allowed to continue.

38. In respect to the test for withdrawal of a discontinuance the Court was referred to the Canadian case ofCandominium Plan No. 0724494 vs. Efuwape2012 ABQB 355 (CanLII), in which the Court held:-

“The test for withdrawal of a discontinuance is set out in Neis v. Yancey, (1999) ABCA 272 at para. 27. Madam Justice Russell, writing for the Court found:

[27]      [Master Funduk, in Eisenkrein v. Eisenkrein (1984) 53 A.R. 199,] adopted the test for the withdrawal of a discontinuance equivalent to that enunciated in Barasky v. Quinlan, supra, stating that “where a limitation period has accrued, a discontinuance can be withdrawn only if there are ‘very special circumstances”’ such as where a plaintiff discontinued the wrong action, or where the defendant breached conditions upon which the discontinuance was given. Special circumstances have also been defined to include cases of “inadvertence, mistake or misapprehension of relevant procedural matter”:  Adam and Adam v. Insurance Corporation of British Columbia (1985), 1985 CanLII 584 (BC CA), 66 B.C.L.R. 164 at p. 170 (C.A.); Morten (Litigation guardian of) v. Fanzutti, [1994] O.J. No. 1129 (Q.L.) (Gen. Div.); Singh v. Street Bernt and Traditional Holdings Ltd.,1990 CanLII 7820 (SK CA), [1990] 5 W.W.R. 518 at p. 523 (Sask. C.A.). Such circumstances suggest oversight rather than the sort of substantive mistakes of law in this case. Hence, I agree with Master Funduk that special circumstances in the nature of a slip must be established before a discontinuance may be withdrawn. Therefore, special circumstances must include an absence of actual prejudice to the defendant: Bararsky v. Quinlan, as well as a consideration of the circumstances giving rise to the discontinuance.”

39. This is my view of the matter.  This Court has little difficulty accepting the argument by the Affected Defendants that where the Right of a Plaintiff to withdraw or Discontinue is unfettered, the Plaintiff can, by unilateral action do so by giving a Notice. In which case the Withdrawal is complete once the Court receives the Notice.  In that event the Plaintiff is barred from revoking or recalling the act of withdrawal.

40. However it would be different where a Party is required to seek Leave of Court before Withdrawing  or Discontinuing and the Court has not granted that Leave or made the endorsement. The Withdrawal or Discontinuance having not been effectuated the Plaintiff, where appropriate, should be able to recall the Notice of Withdrawal or Discontinuance. What is appropriate will depend on the circumstance and facts of each case.  One such instance that comes to mind, is where there has been agreement by the parties to withdraw a suit on certain conditions which the Defendant subsequently breaches. The Plaintiff should be permitted to recall the Notice of withdrawal if it had not been endorsed.  One theme of the Court of Appeal decision in Beijing (supra) is that Courts should avoid a literal application of order 25 Rule 1 where such application would aid in the abuse of the process of Court.  In the same vein, I would think, even in the absence of an express provision permitting the withdrawal of a Notice to Discontinue or Withdraw, a Court should apply the Provisions of Order 25 Rule 1 in such manner as may be necessary for the ends of justice where Leave for Withdrawal or Discontinuance is required but is yet to be given. Having held that this matter falls in the category of cases where a unilateral withdrawal could not be permitted, I must now turn to examine whether there is good reason to permit the Plaintiffs to call back their intention.

41. How do the Plaintiffs explain their action and change of heart? I need not paraphrase the Plaintiffs explanation and find it more convenient to reproduce their explanation as captured in their submissions:-

(a) On 18th July 2016, the Plaintiffs received a copy of a letter dated 18th July 2016 from Mr.  Solomon Kivuva, addressed to the Directors of Purple Saturn Properties Limited (Purple Saturn), Gunga Properties Limited (Gunga) and Jojoja Properties Limited (Jojoja) stating that Mr. Nelson Havi, and the fraudulently installed directors of these companies had duped him into performing certain ministerial acts to effect changes in the directorship and shareholding of these companies without making disclosure of certain material facts to him;

(b) As a result, Mr. Solomon Kivuva revoked and rescinded any and all ministerial acts that were carried out by him with a view to effecting changes in the shareholding and directorship in Purple Saturn, Gunga and Jojoja as the same amounted to fraudulent dealing with trust property;

(c) Mr. Solomon Kivuva expressly requested the Registrar of Companies to expunge and disregard any statutory form, instrument or other document purportedly signed, witnessed or otherwise attested by him under the transaction pursuant to which changes were made in the directorship and shareholding of Purple Saturn, Gunga and Jojoja;

(d) Thereafter, the Plaintiffs’ present firm of Advocates, informed the Registrar of Companies that they had received Mr. Solomon Kivuva’s letter dated 18th July 2016 and applied to be issued with the most up to-date CR12 in light of Mr. Solomon Kivuva’s resignation;

(e) Consequently on 2nd August 2016, the Registrar of Companies issued an updated CR12 in respect of Purple Saturn, Gunga and Jojoja after expunging the changes dated 27th February 2015. The Registrar of Companies also wrote to Purple Saturn, Gunga and Jojoja advising that the corporate filings dated 27th February 2015 purporting to change the shareholding and directorship of Purple Saturn, Gunga and Jojoja , were misleading, inaccurate and a forgery and that consequently, the documents had been removed and expunged from the companies’  records with effect from 2nd August 2016;

(f) Thereafter the Registrar of Companies accepted the Return of Allotment dated 22nd August 2013 which was lodged by M/s Anjarwalla & Khanna Advocates on 27th March 2015 in respect of Galba Mining Limited. And issued a CR12 after this was applied for by the Plaintiffs’ present firm of Advocates;

(g) As a result, the gravamen of Kofinaf’s complaint which was to the effect that Mr. Nahashon Nyagah, his family and associates, Mr. Nelson Havi, Mr. Osundwa Sakwa, and Mr. Lucas Omariba, had conspired to fraudulently and illegally seize ownership of Purple Saturn, Jojoja and Gunga by fraudulently altering their  directorship and shareholding was vindicated following the removal and expunging of the documents fraudulently filed by Mr. Nelson Havi and Mr. Osunda Sakwa on 27th February 2015 and 3rd March 2015 respectively;

(h) It is in this context that on 16th November 2016, the Plaintiffs decided to withdraw all the civil cases filed before the High Court at Nairobi, Milimani. However, the Notices of Withdrawal were never  endorsed by the Deputy Registrar;

(i) When Mr. Nelson Havi, learnt that the documents fraudulently filed by him and Mr. Osundwa Sakwa on 27th February 2016 had been reversed, removed and expunged, he demanded that newly appointed Registrar of Companies, Mrs. Muluku Kariuki should reinstate all the fraudulent alterations  effected by him on 27th February 2015 and 3rd March 2015;

(j) When the Plaintiffs learnt of this, they asked on 18th November 2016 that that there should no dealings with the directorships, shareholdings and registers of Purple Saturn, Jojoja and Gunga without their express written consent;

(k) However, on 18th November 2016, the Registrar of Companies after being intensely lobbied by Mr. Nelson Havi purported to restore the fraudulent filings that were made by Mr. Nelson Havi and Mr. Osundwa Sakwa on 27th February 2015 and 3rd March 2015 respectively;

(l) The administrative reversals done on 18th November 2016 were effected without due process or any reference to the Plaintiffs and in spite the decision made on 2nd August 2016 to the effect that the filings done by Mr. Nelson Havi and Mr. Osundwa Sakwa on 27th February 2015 and 3rd March 2015 were misleading, inaccurate and a forgery;

(m) As a result, on 30th November 2016, the Plaintiffs decided to withdraw the Notice of Withdrawal dated 15th November 2016 which was filed based on the presentations made by the Registrar of Companies on 2nd August 2016 that the documents fraudulently filed by Mr. Nelson Havi on 27th February 2015 and 3rd March 2015had been reversed, removed and expunged from the records of Purple Saturn, Gunga and Jojoja pursuant to the provisions of section 862 of the Companies Act 2015;

(n) The Notice of Withdrawal dated 15th November 2015 was therefore filed in error under the mistaken assumption by the Plaintiffs that the documents fraudulently filed by Mr. Nelson Havi on 27th February 2015 and 3rd March 2015 had been reversed, removed and expunged from the records of Purple Saturn, Gunga and Jojoja and that those lodged by the firm of Anjarwalla & Khanna Advocates on 27th March 2015 on behalf of the Plaintiffs had been accepted for registration.

42. On the other hand, the Affected Defendants see the following to be the circumstances:-

“29. The circumstances surrounding the withdrawal of the suit as against the 1st to 15th and 17th Defendants and the attempted reinstatement demonstrates an abuse of the process of the Court. The Plaintiffs withdrew the suit only after pursuing the alteration of the shareholding and directorship of the 19th Defendant.  The alteration resulted in the incorporation of the Interested Party’s representatives as directors of the 19th Defendant.  Using the alterations, the Plaintiffs and the Interested Party charged the suit property to a third party on 9th November, 2016.  They achieved an outcome intended in this suit, through extra judicial means.  The 16th and 20th Defendants were active participants in the scheme set up by the Plaintiffs. The said 16th and 20th Defendants were rewarded by the withdrawal of the suit as against them on 3rd August 2016.

30. The unlawful outcome obtained by the Plaintiffs and the Interested Party with the connivance of the 16th and 20th Defendants was reversed on 18th November, 2016. Faced with this altered position, the Plaintiffs sought to reinstate and/or revive the withdrawn suit.  The reinstatement was sought only in so far as it relates to the 1st to 15th, 17th, 19th and 21st Defendants.  The intention is to saddle the said Defendants with further liability as the 16th and 20th Defendants are freed”.

43. The Plaintiffs position is that it is Mr. Kivuva who requested the Registrar of Companies to expunge and disregard any Statutory form instrument or other documents purportedly signed, witnessed or otherwise attested by him pursuant to which changes were made in the Directorship and Shareholding of Purple Saturn, Gunga and Jojoja. That may be so, but did the Plaintiffs play any role in the changes that the Registrar effected in the Register of Purple Saturn?

44. In a letter of 19th August 2016 to the Registrar of Companies, after introducing themselves as Advocates for Galba Mining Limited (the 2nd Plaintiff), the firm of Ahmednasir, Abdikadir & Co. Advocates requests:-

“….our client is desirous that the Return of Allotment dated 22nd August 2013 which was lodged for Registration on 27th March 2015 be accepted pursuant to the provisions of Section 843(2) of the Companies Act, 2015.

Our Client undertakes to indemnify the Registrar of Companies against all actions, proceedings, claims and demands which may be brought as a result of the registration of the said allotments in favour of our client.

To that end, we enclose herewith the duly registered Deed of Indemnity dated 16th August 2016 and a copy of Form  213 dated 22nd August 2013 and look forward to your prompt action.

We also apply for an updated search reflecting the said registration of the Return of Allotments and undertake to pay your charges”.

45. That letter is followed up with another dated 30th August 2016 in which the said firm requests for a form CR12 reflecting the changes adverted to in the earlier letter of 19th August 2016.  Responding to that letter, the Registrar of Companies furnished a CR 12 form which reflected the changes as desired by the Plaintiffs.

46. It is beyond peradventure that from the two letters (of 19th August 2016 and 30th August 2016), the Plaintiffs or atleast the 2nd Plaintiff (through its Advocates) urged or encouraged or requested the Registrar of Companies to make the changes in the Register of Purple Saturn.  No doubt, the Plaintiffs, through their Advocates were central to the changes made by Registrar. The Plaintiffs did so inspite of the existence of a status quo order that had been issued by Kariuki J. on 24th March 2016. The status quo order was unequivocal that it was to preserve the subject matter pending the hearing of the application dated 22nd March 2016. The Plaintiffs would be aware of this order as the Coram of Court shows that their Advocates were in Court when the Order was made. Indeed, Mr. Baron in his Affidavit of 3rd April, 2017 sworn on behalf of the Plaintiffs alludes to the existence of this Status quo Order in paragraph 28 thereof.

47. From the pleadings herein the subject matter of the proceedings is the ownership of Purple Saturn and by extension a valued piece of land known as and described as LR No. 11288 which is registered in the name of Purple Saturn.  For that reason this Court will have to agree with Counsel for the Affected Defendants that with the changes made in the Register of Purple Saturn at the behest of the Plaintiffs, the Plaintiffs had achieved an outcome intended by the claim herein through use of extra judicial means. In addition and equally disturbing, this was done in disregard of an existing Court order.

48. Matters were aggravated when the Plaintiffs’ Counsel did not inform Court about the fundamental changes in the substratum of the subject matter when they appeared for their Clients on the Application of 22. 3.2016 on 6th September 2016, 14th October 2016, 26th October 2016 and 2nd  November 2016.  It is most cynical that in that Application the Plaintiffs were asking Court for reinstatement or orders restraining the 9th to 16th Defendants from issuing notices and convening any meetings in relation to the business or affairs of Purple Saturn when they were fully aware that none of those Defendants were was now Directors of the Company thanks to the changes made at their behest (or at least with their encouragement) at the Registry of Companies.

49. There was perhaps further defilement of the status quo order when a charge for Khs.3,874,500,000/- over LR No. 11288 was made in favour of Cooperative Bank of Kenya on 9th November 2016.

50. Viewed from this perspective, the Notice to withdraw suit filed by the Plaintiffs on 16th November 2016 lacked bonafides and was in a brazen abuse of Court process.

51. As is common ground the changes that were beneficial to the Plaintiffs were short-lived and have been reversed.  This necessitated the Plaintiffs to file the Notice to withdraw the Notice of Discontinuance.  Should the Court allow it?

52. This question has not been easy to answer and has caused the Court considerable anxiety. The Plaintiffs have misconducted themselves and have abused the process of Court. No doubt they should be admonished.  Mr. Havi argues, with some force, that so as to show its displeasure the Court should hold that it cannot accept the Notice to withdraw the Notice of Withdrawal of the suit and that the Plaintiffs should live with the consequences of their action. The consequence would be that the suit would be treated as withdrawn against the Affected Defendants with the attendant costs.  This Court was asked to take a cue from the Decision inKhalef Khamis Ahmed vs. Ashuinkumar C. Doshi & another [2009]eKLR where Ibrahim J. (as he then was) dismissed a suit with costs as a punishment to the Plaintiff who was in contempt of Court for forging a signature on an Affidavit.

53. The conduct of the Plaintiffs is deplorable. They have engaged in gamesmanship and attempted to pull the rug from under the feet of Affected Defendants.  This is not the way that litigation should be conducted. Yet on the other hand the controversy that was the very reason for the filing of this suit remains unresolved and the interests of Justice might be better served if each side of the divide has its day in Court.  The Court is therefore inclined to, yes admonish the Plaintiffs, but not on a way that detracts from determining this matter on the merits.  In reaching this decision one other thing weighs on my mind.

54. As earlier held by this Court, this suit could not have in the first place been eligible for Withdrawal without the sanction of the Court because an unfettered or unchecked withdrawal would have prejudiced the Affected Defendants in that they were enjoying some status quo Orders.  It is for this reason that even on the very same day that the Notice to Withdraw the suit was filed, the Court granted some Interim Orders of Protection to the 19th Defendant on its application of 16th November 2016 in respect to the suit property herein.  So as to avoid the prejudice that treating the matter as withdrawn could have on the Affected Defendants, the Court treated it as still subsisting on 24th November 2016 when it extended the Protective Orders in favour of the 19th Defendants. Indeed, given that the Affected Defendants were enjoying protection from the Status quo Orders on the day the impeached changes were made, this Court would have had little hesitation in striking out the Notice of Withdrawal of the Suit if the Affected Defendants had so requested.

55. What this Court is saying is that, in the circumstances of this case, the Notice of Withdrawal of Suit would have had no efficacy before receiving the sanction of Court.  In other words, if the Plaintiffs had intended to withdraw the suit by simply filing the Notice and without seeking Leave of Court then it would have been a futile effort because the Court would insist that the Affected Defendants be heard before granting any Orders.

56. On the other hand, the Affected Defendants have been put through a great deal of anxiety and some expenses in reversing the changes that had been made in the Companies Registry.  Costs, also, have been incurred in preparing arguments, Affidavits and attending Court on the Withdrawal proceedings.  The Affected Defendants must be compensated by the persons who have taken them through this arduous and unnecessary path. This will be the condition upon which the court will accept the revocation of the Notice of Withdrawal.  Regrettably, this Court sees the finger prints of the firm of Ahmednasir, Abdikadir & Co. Advocates in this audacious abuse of Court process.  The law firm was on record for the Plaintiffs when Judge Kariuki made the Status quo Order that was breached when the impeached changes were made in the Companies Registry. The law firm was represented in Court when the Orders were made and were aware of them and would be fully conscious of their implications. Yet there is strong evidence that law firm played an active role in procuring the changes that were in breach of a Court Order. Even in the full knowledge that the changes had been made, the law firm failed to make this material disclosure to court notwithstanding various Court attendances by its Lawyers or Representatives. In the end, the law firm drew a Notice of Withdrawal of suit which, if unchecked, would have caused harm to the Affected Defendants.

57. For the reasons given, this Court invites the said law firm to show cause why the costs associated with the reversal of the changes in the Companies Registry and the Withdrawal proceedings in respect to which this Ruling relates should not be met personally by  it (the said firm).

58. Otherwise, in the interest of allowing a substantive resolution of the dispute disclosed in this suit, the Court allows the Withdrawal of The Notice to Withdraw of 25th November 2016. However, the Affected Defendants shall have costs mentioned in paragraph 57 above.  These are costs in any event and shall be payable before the Plaintiff takes any further steps in these Proceedings. A determination as to whom between the Plaintiffs or the Law firm of Ahmednasir Abdikar & co. Advocates shall pay the costs shall be made upon the Court hearing the said firm.

Dated, Signed and Delivered in Court at Nairobi this 6th day of

October, 2017.

F. TUIYOTT

JUDGE

PRESENT;

Havi for 1st – 15th, 17th -18th Defendants

Hannan for Plaintiffs

Gathoin for Interested party

Alex - Court clerk