Ndungu Mugoya & Ndungu Mugoya v Akuisi Farmers Co. Ltd & John Kagai [2020] KEELC 2945 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OFKENYA

AT NAKURU

ELC  NO. 288 OF 2012

PETER  K GITAHI........................................................1ST  PLAINTIFF

NDUNGU MUGOYA...................................................2ND PLAINTIFF

VERSUS

AKUISI  FARMERS CO. LTD...............................1ST DEFENDANT

JOHN KAGAI........................................................2ND DEFENDANT

R U L I N G

1. I have before me for determination the defendants Notice of Motion dated 11th October 2019. The application is expressed to be brought under Order 51 Rule 1, Order 10 Rule 11 of the Civil Procedure Rules and Section 3 of the Civil Procedure Act, Cap 21 Laws of Kenya. The applicants sought the follows orders:-

(a) That this matter be certified urgent and be heard ex-parte in the first instance.

(b) That this honourable Court be pleased to suspend execution of the warrant of arrest against the 2nd defendant herein and stay execution of the decree herein pending hearing of this application inter-parties.

(c ) That this honourable Court be pleased to set  aside the judgment entered against  defendants together  with all consequential orders and the Defendants be granted leave to defend this suit.

(d) That costs of this application be proved for.

2. Theapplication was supported on the grounds set out on the face of the application and the affidavits sworn insupport by Joseph GithaigaNdirangu and John  Kagai together  with  the supplementary affidavit sworn by Ann Wangari Mbugua. In support of the application, the applicants aver that they were never served with summons to enter appearance or any pleadings in the case. The 2nd defendant contended that he was not a director of the 1st defendant and therefore he was improperly enjoined as a party in the suit. The 1st defendant vide the supporting affidavit sworn by Joseph Githaiga Ndirangu a director of the 1st defendant  on 11th October  2019 contended that the 2nd defendant was not a director, or an employee ofthe 1st defendant at all material  times it was  alleged he was served with Court  process on behalf  of the 1st defendant. The deponent averred that the 1st defendant had offices located at AkuisiKiremba farm in Solaiwhere any documents could have been served and service acknowledged by its Staff by signing and stamping  with the Company’s  official stamp. The 1stdefendant annexed a CR 12 from the companies Registry to confirm the particulars of the current directors of the company. The supplementary affidavit sworn by Ann Wangari Mbugua affirmed she was an employee of the 1stdefendant and was the secretary /Receptionist at the office. She stated that the office was open all the time and that no court documents were ever delivered to the office relating to the instant case.

3. In the replying affidavit filed by the 1st plaintiff he averred that the 1st defendant never had an office and that the office alluded to by the 1st defendant was only opened recently. He stated the change ofdirectors wasequally effected recently with a view of defeating the ends of justice. The 1st plaintiff averred the 2nd defendant was a director and a former chairman of the 1st defendant and that when he was served heaccepted servicethough hedeclined to sign. He averred that the defendants have all along been aware of the suit and had not demonstrated any sufficient reason to warrant the Court to set aside the judgment.

4. The 1st plaintiff swore a further supplementary affidavit dated 4th February 2020 filed in Court on 5th February 2020 responding to the applicants averments that they were not served summons to enter appearance and subsequent notices. The 1st plaintiff/respondent inparticular annexed various affidavits of service by process servers. The respondent averred that the affidavits of service filed show that the applicants were served but failed to enter appearance and /or file any defence.

5. The application was agued by way of written submissions. The applicantssubmission was filed on 24thJanuary 2020 while the respondents submissions were filed on 5thFebruary 2020. I have read and considered the filedsubmissions. The contention ofthe 1st applicant is that it was never served with summons to enter appearance and contended that the 2nd defendant was not a director of the company and therefore hecould not be served on behalf of company as depicted on the copies of the affidavits of service filed. The applicants submitted that the 2nd defendant’s name was not amongst the list of Directors as per the CR12 issued by the Registrar of Companies. The Respondents though contending the 2nd defendant was a director andchairman of the 1st defendant did not furnish any evidence to support their assertion. The 2nd defendantindicated that though he had been a director of the 1st defendant he had retired though no evidence of the date of his retirement was given. The respondents by their submissions insisted that the 2nd defendant was served and he accepted service on behalf of the 1st defendant as its chairman.

6. In the suit  instituted  by the  plaintiff/respondents it is clear the 2nd defendant was sued as a director of the 1stdefendant although the plaint does not disclose why  he was sued in his individual  capacity  yet the 1st defendant was a limited company with a separate  legal identity  and therefore  capable  of being sued independently. In the draft defence annexed, the 2nd defendant has pleaded misjoinder and that would be a triable issue. The issue whether the 1stdefendant had allocated land and balloting for the plots had been done before the institution of the suit would equally be a triable .

7. The respondents have not proved that the 2nd defendant was a director of the 1stdefendant when the suit was filed so that he could be served on behalf of the 1st defendant. The 2nd defendant’s joinder as a party to the suit isquestionable and to the extent that there is no evidence that he was a director of the 1st defendant as at the time the suit was filed I have no basis to hold that the 1st defendant was appropriately served with summons to enter appearance. As per the CR 12 exhibited as “JGN2” it is evident that the 2nd defendant is not a director of the 1st defendant. This evidence has not been rebutted. The 2nd defendant not being in the management of the 1st defendant, he could not have had any say in the affairs of the 1st defendant except perhaps as a share holderif he still was a shareholder of the 1st defendant.

8. Having regard to the circumstances surrounding the service of summons to enter appearance and the subsequent processes I am not satisfied appropriate and proper service was effected on the defendants. I accordingly exercise my discretion and hereby order set aside the exparte judgment entered against the defendants on 14th July 2016 and all the consequential orders flowing therefrom. I grant leave to the defendants to file their defence within 21 days from the date of this ruling.

9. The costs of the application shall be in the cause.

Ruling dated signed and delivered electronically at Nakuru this 30thday of April 2020.

J M MUTUNGI

JUDGE