Njigua v Kangema Farmlands Plc [2022] KEHC 12919 (KLR)

Njigua v Kangema Farmlands Plc (Civil Case E002 of 2022) [2022] KEHC 12919 (KLR) (15 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12919 (KLR)

Republic of Kenya

In the High Court at Murang'a

Civil Case E002 of 2022

K Kimondo, J

September 15, 2022

Between

Joseph Kamau Njigua

Applicant

and

Kangema Farmlands Plc

Respondent

Ruling

1. The plaintiff’s notice of motion is two-pronged. Firstly, he seeks an injunction to restrain the respondent company from “winding itself up”; and, secondly, to prohibit it from selling, subdividing, allocating, transferring or alienating the land known as Title No 12505 located in Gatanga.

2. The application is dated March 2, 2022 and predicated upon the plaintiff’s affidavit of even date.

3. He avers that the company has closed down its offices and proceeding with an illegal or clandestine process of winding up. A notice by the registrar of companies in the kenya gazette is attached as exhibit JKN1.

4. He deposes that the company has subdivided the above land into plots measuring 50 x 100 feet and allotted them to members. He also alleges that the company has awarded exorbitantly-priced contracts to service providers including lawyers “to fleece the company to the detriment of its bona fide members”.

5. In a synopsis, the plaintiff contends that the company is acting unlawfully or in an opaque manner; and, that he, the public or shareholders “will suffer great loss or prejudice”.

6. The motion is contested. There is a replying affidavit sworn on April 20, 2022 by Donald Kamweru Gikonyo, a director of the defendant. The objections are four-fold: Firstly, that the application is overtaken by events because the members of the company resolved to subdivide the land and a vast majority of the plots have been allotted to shareholders as per the attached exhibits.

7. Secondly, that pursuant to the annexed gazette notice published on October 29, 2021, the company has been dissolved. Thirdly, that the company has acted lawfully in terminating its business or in the allotment of its land. Lastly, it is contended that the plaintiff is a stranger who has failed to demonstrate any connection with the company or the nature of his loss.

8. Learned counsel for the plaintiff lodged written submissions on June 6, 2022 with a list of authorities. The defendant also filed its submissions on even date.

9. Vide a consent lodged in court on August 5, 2022, learned counsel for both parties opted to rely wholly on those submissions; and, prayed that the ruling be transmitted electronically.

10. I take the following view of the matter. The main suit remains unheard. I thus restrain myself from delving too deep into the merits. But I can safely state the following: The prayers for injunction are primarily anchored upon order 40 of the Civil Procedure Rules2010.

11. The principles governing the grant of prohibitive injunctions are well settled. See Giella v Cassman Brown and Company Limited[1973] EA 358. Those principles are first, that the applicant must show a prima facie case with a probability of success; secondly that he stands to suffer irreparable harm not compensable in damages; and thirdly, if in doubt, the court must assess the balance of convenience.

12. In Mrao Limited Vs First American Bank of Kenya Ltd and others [2003] KLR 125, the Court of Appeal stated that a prima facie case is one –Which on the material presented to the court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.

13. When I juxtapose those principles against the facts here, the application must fail for four main reasons. Firstly, the action is brought against a company challenging its “winding up” or the conduct of its business. The plaintiff is not a shareholder or connected with the defendant. He pleads that “he is a member of the public and privy to the on-goings (sic) of the defendant”. From the materials attached to his deposition, he has not established how the winding up or the business of the company has caused him loss or would occasion irreparable harm.

14. Secondly, I have studied gazette notice No 11661 by the Registrar of Companies published in the kenya gazette on October 29, 2021. It is issued under section 897 (3) of the Companies Act 2015 notifying the public that unless cause be shown, the companies listed thereunder “shall be struck off from the register of companies at the expiry of three months”.

15. The period specified in that notice to show cause has long passed. The defendant is one of the companies listed in the notice. In the absence of evidence to the contrary, it means the defendant has been struckoff the register of companies. I say that very guardedly and without a final finding.

16. Thirdly, it also means that the intended dissolution was at the behest of the registrar of companies. The present action against the company is not only misguided but is brought against an entity that may no longer exist. It raises a live question whether there is a proper defendant. I thus decline to make orders in vain.

17. Fourthly, the prayer to restrain the company from selling, subdividing, allocating, transferring or alienating the land known as Title No 12505 located in Gatanga goes into the root of jurisdiction of this court. On the face of it, it is a matter relating to the use, occupation or title to land. Article 162(3) of the Constitution as read with section 13 of the Environment and Land Court Act donates such jurisdiction to the Environment and Land Court. See generally Republic v Karisa Chengo & Others, Supreme Court of Kenya, Petition No 5 of 2015 [2017] eKLR.

18. For all those reasons, I find that the plaintiff has failed to exhibit a prima facie case with a probability of success; or, that he stands to suffer irreparable harm not compensable in damages. Having reached that conclusion, I do not need to weigh the balance of convenience.Kenya Commercial Finance Company Ltd v Afraha Education Society [2001] 1EA 86.

19. The upshot is that the plaintiff’s notice of motion dated March 2, 2022 is devoid of merit. It is hereby dismissed with costs to the defendant.

It is so ordered.

DATED, SIGNED AND DELIVERED AT MURANG’A THIS 15TH DAY OF SEPTEMBER 2022. KANYI KIMONDOJUDGEORDERNotice for delivery of this ruling was delivered electronically by the Court to both parties or their legal counsel. Pursuant to the Practice Directions by the Hon Chief Justice; and, the parties’ consent filed on 5th August 2022, this ruling has been delivered to the parties by electronic mail. Both parties have accordingly waived compliance with Order 21 Rule 1 of the Civil Procedure Rules which requires that all judgments and rulings be pronounced in open court.KANYI KIMONDOJUDGERuling read in chambers in the presence of:Ms. Susan Waiganjo, Court Assistant.