Steven Njoroge Kamuyu v Board of Directors Thathini Co. Devlopment Ltd, Thathini Co. Development Ltd & Samuel Muciri W’Njuguna [2017] KEHC 6515 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

MISC. CIVIL APPLICATION NO. 362 OF 2014

STEVEN NJOROGE KAMUYU..................................APPLICANT

VERSUS

BOARD OF DIRECTORS THATHINI CO DEVLOPMENT LTD

THATHINI CO. DEVLOPMENT LTD..................RESPONDENTS

SAMUEL MUCIRI W’NJUGUNA................INTERESTED PARTY

R U L I N G

1. It should never be lost to every judicial officer that the call is to do justice to the members of the public who come to the court to have a dispute adjudicated.   To achieve that purpose a judicial officer must maintain the stature and attributes of an impartial, uninterested and unbiased umpire or arbiter.  Traditionally, therefore, a judicial officer would not seek to sit on a decision where; he is party; related to a party; is a material witness, has a direct or indirect financial interest in the outcome of the case or had previously acted as a counsel for a party and in such other related circumstances that would lead to a reasonable fear, by a reasonable and well informed person on the facts of the case, that one is unable to make a fair, even, balanced, just and legally sound decision based on law and demands of justice only and bereft of justifiable accusation of bias.  All these underscore the principle of natural justice that none should be a judge on own cause.

2. In this matter, one SAMUEL MUCIRI W’NGUGUNA, an interested Party, has filed a Notice Motion dated 20/7/2016 and sought orders that:-

i. THAT this Application be certified urgent and heard ex-parte on priority basis in view of its urgency and service be dispensed with in the first instance.

ii. THAT the Honourable Justice P.J.O. Otieno be pleased to disqualify himself from any further conduct of this matter.

iii. THAT this matter ought to be placed urgently before any other Judge of the High Court for its just and conclusive determination.

iv.  THAT the costs of this application be provided for.

3. That application set out six grounds founding the application which grounds can be summarized that; this court having allowed the applicant to participate in the proceedings and ordered that any applications to court be dealt with only after the Annual General Meeting  did  entertained and heard other applications in the absence of the current applicant in a manner contended to be prejudicial to the applicant and  showing that justice cannot be done for which reasons the applicant orally informed the judge in open court that he had petitioned the Judicial Service Commission to have him removed for misconduct.  For those reasons it is contended that there are sufficient causes to warrant the judge for recusing himself from the matter as, to the applicant, it is unlikely that justice would be seen to be done.

4. That application was supported by three affidavits sworn by the interested party himself, SAMUEL MUCIRI W’NJUGUNA, KENNEDY KEANGO NYAENCHA and NGIGE MONDO.  The affidavit by the interested party/applicant point an accusing finger at the judge for having handled an application dated 16/3/2016 on the 17/3/2016 without noting that the Orders of 14/12/2015 had said that no proceedings would be taken before the Annual General Meeting was conducted.  To the applicant that was evident biased conduct which among other things made his advocate Mr. Nyaencha be uncomfortable to continue handling the matter and he was therefore forced to engage another advocate.

5. The affidavit by Mr. Nyaencha Advocate reiterates the concerns of his erstwhile client but modifies the accounts to say that he did, ‘for the sake of resolving the dispute over this file and a related one,’ negotiated and recorded the consent contrary to what his client asserts that he was directed and coerced by the court to craft a consent.

6. The 3rd affidavit by NGIGE MONDO is indeed, a detailed account of what can be rightly termed as the conjured web of tricks, the deponent himself and other people, said to belong to a caucus keen to take control of the company by what can be seen as an ingenious yet ignoble use of the court process to pervert what would be the acceptable and genuine administration of justice. The affidavits gives account how the company has been involved in litigation and how that litigation was conducted allegedly for an on behalf the company but without engagement of the Board of directors or the mandating organ of the company.  It however fails to bring out any material that, to this court, may be pertinent to the application under consideration.

7. The application was opposed by an affidavit of one FRANCIS KAHUMBI, who described himself as a current director and former Board Member of the Company.  His starting point is that the application as presented to court is aimed at intimidating the judge out of the case to enable the interested party forum-shop and is otherwise made in complete ignorance of  or just oblivious to the dictates of section 131 of the Companies Act, that a company conducts an AGM every year.  To him the application is intended to bring back the interested party to the board of the company at all costs.  In his view, the problem started when the interested party was removed as a director on account of age limit hence he commenced intrigues against the company including a demand for payment of the sum of Kshs.1,000,000 to enable him facilitate the holding of an AGM by the company.  To that deponent, the orders that have issued in this file have all been for the good of the company and in compliance with the law that the company holds AGM as dictated by the law.  He opposes the application and seeks that it be dismissed.

8. There were other two affidavits sworn by Stephen Kamau Kimemia and Steven Njoroge Kamuyu all opposed the application for being a mischief  hatched by the interested party and calculated to derail the due administration of the company for the interested parties own selfish interests.  There was also filed a Notice of Preliminary Objection and Lists of authorities, filed by Mr. Mwaniki Gitahi & Partners, all opposing the application.

9. The Notice of preliminary objection was to the effect that the matter is res judicata, that the court has become functus officio and that the applicant is abusing the court process.

10. Curiously,  Mr. Mazuri advocate for the interested party/applicant also filed what he called grounds of opposition, I believe to the Notice of Preliminary Objection.  He equally filed a list of 7 authorities on when a judge would recuse himself from a case.  On the 7/11/2016 and 9/11/2016 the interested party/applicant filed a supplementary affidavit and skeleton submissions respectively.  The gist of the supplementary affidavit is to attack the Replying affidavit of Francis Kahumbi at paragraphs 4,5,6,8,10,12,14 and 18 as scandalous abusive, argumentative, irrelevant and oppressive hence deserving to be struck out.

11. The matter came up for hearing on the 10/11/2016 when the court directed that the Preliminary Objection be heard together with the application and as an opposition to the application.  At the hearing Mr. Kinyua appeared for the interested parties/applicant while Mr. Mwaniki appeared for the initial Respondents and held brief for Mr. Owino for the initial Applicant.

12. Mr. Kinyua submitted that he relied wholly on the pleadings, submissions and authorities filed in support of the application.  On the all-important question of bias, Mr. Kinyua submitted that the orders granted on the 23/5/2016 locked out his client and condemned him unheard and that the judge having joined the interested party/applicant, ought to have inquired where the interested party was before hearing or entertaining any applications.  To him the orders were only prejudicial to the interested party because they called for an AGM of the company.  Lastly, the judge is faulted for failing to deal with an application dated 2/6/2016 on the 2/6/2016 and again on 3/6/2016 and proceeded on leave, purposely, so that the AGM could be conducted.

13. For the Respondents to the application, Mr. Mwaniki summed up his submission that the orders of 14/12/2016 were by consent of the parties and the involvement of the Registrar of Companies was a proposal by Mr. Nyaencha Advocate and that the subsequent orders were equally by consent.  To him the allegations that the judge avoided dealing with the matter on 2nd and 3rd June 2016 to proceed on leave and allow the AGM to proceed was new and afterthought and unsubstantiated as well as ill founded.  He pointed out that there was no attempt to exhibit the cause list of the day to show that the application was ever presented before the judge who shunned it.

14. Mr. Mwaniki then cited the provision of section 35 of the Repealed Companies Act, to give the court the discretion on a motion to order that an AGM be held.  Mr. Mwaniki thereafter reiterated the depositions in the affidavits filed in opposition and cited the decision in NKU ELC No. 231 of 2012 Florence Chalangat Langat vs Timon Farms and Estates Ltd for the proposition that the test to be applied is an objective one asking whether a reasonable, fair minded and informed member of the society not interested in the dispute would consider the judge to be biased and unable to do justice to the parties.

15. In closing submissions Mr. Kinyua referred the court to the decision of the Supreme Court, Ibrahim J in Jasbir Singh Rai vs Tarlochan Singh Rai [2013] eKLR for the proposition that even in the absence of real likelihood of bias disqualification is imperative if a reasonable man would suspect bias.

16. He then applied that pursuant to the provisions of order 19 rules 3,5 & 6 paragraphs of 4, 5, 6, 8, 10, 12, 14, 16 & 18 of the Replying affidavits of Francis Kahumbi and paragraph 7 of the affidavit of Stephen Njoroge be struck out.

Analysis and determination

17. The only issue for determination in this matter is for this court, in applying its mind to the principles applicable to an application for recusal of a Judge, to decide whether to disqualify himself from the case for being biased  and therefore unable to decide the matter justly.  To come to a position of applying that test, there is need to recap a brief history of the matter and its current position.

18. This matter was initiated by an application dated 11/11/2014, Notice of Motion expressed to be premised on overriding objectives of the court, inherent powers of the court and undisclosed/unspecified provisions of the Companies Act.  It sought orders that the Respondent, as directors and  the company, be directed to update the shareholders register within 7 days and thereafter hold an Annual General Meeting within 21 days thereafter.

19. When placed before Kasango J, under certificate of Urgency on the 17/11/2014, the judge declined to certify it urgent or issue any interim orders and directed that the matter be heard inter-parties on a date taken at the Registry. The matter then went into a lull till the 10/9/2015 when two representatives of the advocates for the parties attended at the Registry and took a mutually agreed date purposely for directions on the 12/10/2015.

20. On that day Mr. Omwenga held brief for Mr. Mwaniki while Mr. Angelo owino appeared for the Applicant and the court was requested to adopt the contents of a consent letter dated 11/8/2015 as an order of the court.  The court made an order adopting the content without reproducing the effect of the consent.  I have now looked at that consent letter and it reads:-

“By consent; the Applicant and the 1st & 2nd Respondents have agreed to hold an AGM meeting 2 months from the date of the consent being adopted as an order of the court.  And by a further consent this matter be mentioned after two months to confirm compliance”.

21. In my assessment the only order the parties sought by these proceedings was the compliance which the law then, under section 131 of the Companies Act (Repealed).  That purpose was achieved when the AGM was held and elections conducted.  To this court the controversy between the parties has been put to rest.  If there be a dispute arising out of that meeting, it would be a fresh dispute that would call for an appropriate fresh action.  It cannot be entertained here.  Surely every matter only deserves a legitimate tenure in court.  Matters cannot be kept in court for the sake of addressing personal vendetta or to achieve purposes not revealed or reviewable by the pleadings.

22. On the allegations of bias and prejudice on account of proceedings on 11/4/2016 and 23/5/2016, I give it to the applicant, he did not participate and there is no evidence that he was served.  However, one needs to interrogate what applications were handled by the court on that date.  Were the applications capable of determining any rights of the applicant in a manner evidently or conceivably adverse and prejudicial?  The records bear it that on the 14/12/2015, this court directed, by consent that the company conducts its AGM under the Supervision of the Registrar of Companies within 60 days.  By the 16/3/2016 no AGM had been held or called and therefore an application of that date was filed ostensibly to cite the Registrar companies for contempt.  On 11/4/2016 when the application for contempt was to be heard it was never heard because it turned out that the person cited was no longer the holder of that office.  The matter was then stood over to the 23/5/2016 when one Alice Mwenda, an Assistant Registrar, attended court and undertook to comply with the court orders.

23. To my mind, the proceedings on the two days were intended to effectuate the consent orders of 14/12/2015 and no more.  There is nothing in the applications and the orders issued that can be said to be prejudicial to the applicant.  Having participated when the consent order was recorded, and if he believed in that consent order, the applicant ought to see himself as a beneficiary of the subsequent court proceedings even in his absence.  However, the more revealing fact is the fact that both the applicant and his advocate were all aware or made aware howsoever, and in good time, that the matter was to come to court on the 23/5/2016 but they did nothing to attend.  That is clear, from paragraphs 16, 17 and 18 of Mr. W’Nguguna’s affidavit as well as Mr. Nyaencha’s affidavit at paragraph 9-12.

24. It is not difficult to see that to the applicant, the orders of 14/12/2015 restricting any applications prior to conduct of AGM was to hold the operations and even legal responsibilities of the company in abeyance and even at ransom, provided mechanism were put in place to frustrate holding of the AGM.  That cannot be allowed or blessed.  It would create an absurdity that the court would have stopped the company from complying with the dictates of the law.  The court would thus be acting unlawfully and illegally.  If that was to be the meaning assigned to my orders of 14/12/2015 then the orders would be contrary to the law demanding Annual General Meeting and would thus not only be against the good public order expected by compliance with the law but clearly void.  I have not set to facilitate breach of law and would never.

25. My order simply meant and intended to nip the incessant and diversionary applications by the parties to defeat compliance with the law in holding the AGM.  What this court did on 11/4/2015 and 23/5/2015 was in consonance and furtherance of the need to hold an AGM.  It posed and did visit no prejudice or injury on the applicant or indeed any party so as to be evidence of bias.  But, if bias in this context is to mean fidelity to the law, then such is not the kind of bias calling for recusal.  The application dated 20/7/2017 is, to say the least, a vexation and a conjured trick and machination intended at intimidation or just cowing me into yielding to clear and unmitigated shenanigans of the applicant.  I have taken and serve under an oath to “diligently serve the people and the Republic of Kenya and to impartially do justice in accordance to with the constitution as by law established and the laws and customs of the Republic without any fear, favour, bias, affection, ill will prejudice or any political religious or other influence”.  I refuse to be influenced by any threat in order that this matter that is otherwise concluded should consume any further judicial time undeservedly by recusal so that another judge is engaged to look at and consider  non-existent dispute.

26. In coming to this conclusion, I have had the benefit of the law cited by the parties and setting out the principles applicable and when there would be need for a judge to recuse himself from a case. I am convinced that no justification exist for me to recuse myself. I am in particular guided by the law as succinctly put in the decision of the supreme Court of Kenya in JASBIR SINGH RAI 7 3 OTHERS VS  TARLOCHAN SINGH RAI & 4 OTHERS, (2013) eKLR when the court said:-

“Perception of fairness, of conviction, of moral authority to hear the matter, is the proper test of whether or not the non-participation of a judicial officer is called for.  The object in view, in the recusal of a judicial officer, is that justice as between the parties be uncompromised; that the due process of the law be realised, and be seen to have had its role; that the profile of the rule of law in the matter in question, be seen to have remained uncompromised”.

27. I have come to the finding that a reasonable and informed person who is disinterested in this matter would see that this matter has been moved to its just and logical conclusion in that the company has been directed to comply with the law by holding an AGM.  Such a person would also see that there is nothing outstanding to engage a judge in determining and therefore absolutely no need to send this file to another judge even if bias had been shown. To me the standards of a reasonable person in this matter would be that objective thoughtful and reasoning Kenya who understands that legal disputes need to be adjudicated expeditiously and fairly.  The reasonable man for purposes of recusal is not that ordinary Kenya resident in Mombasa and aboard MV LIKONI, during the evening rush hour, whether on foot or a bicycle, tuk tuk or some long haul heavy duty truck and concerned with prevalent burdens of life in Kenya, including heavy traffic snarl-up occasioned by usual difficulties in crossing the Likoni Channel. It is also not the ordinary Kenyan Youth who spends all his time discussing which politician or celebrity is more powerful, popular or competent than the rest. No. It must be a Kenyan who is well informed, a thoughtful observer and well composed, who understands all the facts in the matter and who is not interested in outcome of the matter for personal reasons.

28. I refuse the application for being not made in good faith or for the just determination of the case.  I now invoke inherent jurisdiction of the Court, to avoid abuse of the court process, and order that this file be marked as closed, as far as the dispute on holding the AGM is concerned.  The only legitimate business that may be transacted on it is the question of taxation of costs and recovery thereof if any be outstanding.  Even that must be done within 12 months from today and on default this file ought to be divorced from the cadre of pending files and designated as appropriate, be in the archives of concluded files.

29. I award the costs of the application to the Respondents, the two initial parties, who opposed it.

30. It is so ordered.

Dated and delivered at Mombasa this 17th day of March 2017.

HON. P.J.O. OTIENO

JUDGE

In the presence of:-

Mr. Tsofwa for Mwaniki for Respondents

Ms Obuga for Kenzi for 2nd Interested Party

Mr. Mathere for Mazrui for the 1st Interested Party

Hon. Justice P.J.O. Otieno

17/3/2017