Waiyaki v Mwachinga & 2 others [2022] KEHC 17041 (KLR)

Waiyaki v Mwachinga & 2 others (Civil Suit 79 of 2015) [2022] KEHC 17041 (KLR) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 17041 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Suit 79 of 2015

MN Mwangi, J

October 7, 2022

Between

Grieve Mungai Waiyaki

Plaintiff

and

Benedict Mwachinga

1st Defendant

Swedan Wanjiru

2nd Defendant

Rolf Schele

3rd Defendant

Judgment

1. On June 19, 2015, the plaintiff filed this suit through a plaint dated June 19, 2015, seeking judgment against the defendants jointly and severally for general damages for loss of user of all the items allegedly looted from his office and costs. The defendants never filed a statement of defence and as a result, on November 5, 2021, the plaintiff vide a Notice of Motion application dated November 4, 2021 sought for an interlocutory judgment. Consequently, on February 7, 2022, this court entered interlocutory judgment for the plaintiff as against the defendants subject to formal proof.

2. The plaintiff’s cause of action was that, sometime in June, 2014, the 3rd defendant contracted the plaintiff’s company Jenokil Horizon Ltd, to provide professional pest control services within his premises on plot no Diani 1979. That the said contract was signed by the 2nd defendant who was the wife-cum manager to the 3rd defendant. The plaintiff averred that the contract was in force for a whole year commencing January, 2014, but the rainy season interfered with the flow of operations occasioning a break, which the 2nd defendant interpreted to mean a breach of contract. The plaintiff averred that the 2nd defendant hired goons led by the 1st defendant, to attack the plaintiff on Sunday the 22nd day of June, 2014 at around 4:15 pm and successfully looted the whole office, which matter was booked in Diani police station O B no 38 of 22/6/2014 at 17. 05 hours.

3. The plaintiff stated that the police carried out investigations and recovered some of the stolen items within the 3rd defendant’s house on plot no Diani 1979. That thereafter, the 1st and 2nd defendants undertook in writing to compensate the plaintiff for everything, including loss of user at the rate of kshs 5,000/= per day. He averred that the 1st instalment of kshs 100,000/= was to be paid on May 25, 2015 but that has not been done. The plaintiff contended that he was humane enough to withdraw Kwale Criminal Case no 827 of 2014 on May 11, 2015, in which the 1st and 2nd defendants had been charged with theft.

Evidence by the plaintiff 4. In support of his case, on April 25, 2022 and May 12, 2022, the plaintiff testified as PW1, to prove his case. His evidence was that in the week ending 22nd June, 2014, his cousin Peter Kahara Njuguna called him from Diani Police Station informing him that he had been arrested because of a contract that the 2nd defendant who was the 3rd defendant’s wife had given them, for pest control within their residential premises and compound in plot no Diani 1979. PW1 stated that his cousin had been arrested on allegations that they had failed to carry out their duties in line with the said contract. He further stated that the 2nd defendant was claiming a refund of part of the kshs 35,000/= which she had paid them for the whole year.

5. It was PW1’s testimony that his cousin Peter Kahara did not fumigate the compound during the rainy season since the chemicals would have been swept off by the rain. The plaintiff stated that he was called by a policeman who had arrested his cousin, and he promised he would be available in his office on 22nd June, 2014 which led to Kahara being released by the police. PW1 further stated that he spoke with the 2nd defendant on 22nd June, 2014 and they agreed that they would meet at 4. 00 p m, at the plaintiff’s office.

6. The plaintiff testified that when the 2nd defendant went to his office, she was accompanied by a group of four young men led by the 1st defendant herein, who looted his office of one computer, a printer and small office items. He stated that thereafter, he booked his complaint at Diani Police Station vide OB no 38/22/06/2014 at 1705 hrs. It was PW1’s testimony that a week later, he was called by the police and they informed him that they had recovered all the items stolen at the premises of the 3rd defendant and they were ready to charge the 1st and 2nd defendants who had since been arrested.

7. The plaintiff alleged that on 2nd July, 2014, he went to Diani police station and got into an agreement with the 2nd defendant that she would compensate the company Jonokil Horizon Ltd kshs 5,000/= from 22nd June, 2014 to the date the items taken away would be returned to the office as per clause 2 of the said agreement. PW1 produced a copy of the said agreement as plaintiff exhibit no 1. The plaintiff however stated that his goods have never been returned up to the time he was testifying in court. He further stated that the amount due from the defendants from 2nd July, 2014 to 12th May, 2022 is kshs 13,778,850. 00, which amount continues to accrue at kshs 5,000/= on a daily basis until payment in full.

Analysis and determination 8. Having considered the evidence above in line with the pleadings filed, I have identified the following issues for determination-a.Whether the plaintiff has the locus standi to file this suit in his own name; andb.Whether the plaintiff is entitled to the claim for general damages and if so how much.

9. Before I delve into the merits and demerits of this case, it is worth noting that the suit herein was brought by Grieve Mungai Waiyaki as the plaintiff, on behalf of Jenokil Horizon Ltd. This is evident from paragraph 5 of the plaint dated June 19, 2015, where the plaintiff avers that the plaintiff’s company Jenokil Horizon Ltd was contracted by the 3rd defendant to provide professional pest control services within his premises on plot no Diani 1979. It is also noteworthy that looking at the agreement dated July 2, 2014, which was produced by the plaintiff as plaintiff exhibit no 1 in support of his case, the same is between Jenokil Horizon Ltd and Swedan Wanjiru, the 2nd defendant herein. The plaintiff’s evidence was to the same effect.

10. This court has to determine whether the plaintiff has the requisite locus standi to bring forth the suit herein as a preliminary issue. It is not disputed that it is Jenokil Horizon Limited and the 2nd defendant who got into the contract that forms the subject of the suit herein. The Black’s Law Dictionary, 10th Edition at page 1084 defines locus standi as “the right to bring an action or to be heard in a given forum.” In addition, the Court of Appeal in Alfred Njau & 5 others v City Council of Nairobi [1983] eKLR when determining whether the appellants therein had locus standi held as follows-“The term locus standi means a right to appear in court and, conversely, as is stated in Jowitt’s Dictionary of English Law, to say that a person has no locus standi means that he has no right to appear or be heard in such and such a proceeding.”

11. Jenokil Horizon Limited is a limited liability company. It is trite that a company is a juridical person capable of suing and/or being sued. A company is distinct from its shareholders and directors, as was held by Lord Macnaghten in the case of Salomon v Salomon & Co [1897] AC 22. I am therefore of the considered view that in proceedings in respect of a wrong done to a company, the proper plaintiff is the company itself.

12. The Court of Appeal in Grace Wanjiru Munyinyi & another v Gedion Waweru Githunguri & 5 others[2011] eKLR, cited the case of Foss v Harbottle [1843] 2 Hare 461, 67 ER 189 where it was held that -“There is also another remedy arising from the leading English legal precedent on Corporate Law which continues to apply in Kenya more than 160 years since it was decided: Foss vs Harbottle (supra). As stated earlier, in any action in which a wrong is alleged to have been done to a company, the proper claimant is the company itself. This is the rule in Foss v Harbottle. But there are four exceptions to that rule which appear in the leading case itself but also in subsequent decisions on the subject. Firstly, where the directors or a shareholding majority use their control of the company to paper over actions which would be ultra vires the company or illegal. Secondly, if some special voting procedure would be necessary under the Company’s constitution or under the companies Act, it would defeat both if they could be sidestepped by ordinary resolutions of a simple majority, and no redress for aggrieved minorities were to be allowed (Edwards v Halliwell [1950] 2 ALL ER 1064. Thirdly, where there is invasion of individual rights, such as voting rights (Pender v Lushington (1877) 6 Ch D 70. Fourthly, where a fraud on the minority is being committed. In all those cases, a “derivative action” could be brought before the court on behalf of the company where the wrongdoer is in control of the company or by the individual shareholder where his personal right is violated.”

13. In view of the foregoing authorities which clearly give the distinction between a company and its directors and/or shareholders, this court finds that the plaintiff has not satisfied any of the four exceptions laid down by the Court of Appeal in the case of Grace Wanjiru Munyinyi & Another v Gedion Waweru Githunguri & 5 others (supra) to warrant him to bring the suit herein in his own name on behalf of Jenokil Horizon Limited. For the reasons given above, this court finds that the plaintiff herein lacked the requisite locus standi to file the suit herein in his personal capacity.

14. Having found so, this court cannot delve into the issue of damages. The upshot is that the suit herein fails for being bad in law. The suit is struck out with no orders as to costs.

It is so ordered.

DATED, SIGNED AND DELIVERED AT MALINDI ON THIS 7TH DAY OF OCTOBER, 2022. Judgment delivered through Microsoft Teams Online Platform.NJOKI MWANGIJUDGENo appearance for the plaintiffNo appearance for the defendantsMr Oliver Musundi – court assistant.