[2011] KECA 42 (KLR)

[2011] KECA 42 (KLR)

The Court of Appeal held that the High Court erred in finding that Moses Munyinyi Mbogo was of unsound mind and thus incapable of granting a power of attorney, as there was no medical or other substantive evidence to rebut the presumption of sanity. The affidavit evidence relied upon was insufficient and untested....

Source-derived case information.

Citation
[2011] KECA 42 (KLR)
Parties
Appellant: Grace Wanjiru Munyinyi; Appellant: Moses Kinyanjui Munyinyi; Respondent: Gedion Waweru Githunguri; Respondent: Kimani Njoroge; Respondent: James Kamau Mwangi; Respondent: Rachel Wanjiku Kamau; Respondent: Mary Wanjiku Kamau; Respondent: Nairobi Frame Industries Limited
Court
Court of Appeal
Court Station
Court of Appeal at Nakuru
Jurisdiction
Kenya
Case Number
Civil Appeal 202 of 2005
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court Ruling Striking Out Suit
Outcome
Appeal allowed. High Court ruling and orders set aside. Suit reinstated for hearing before a different judge.
Legal Topics
Company Law, Derivative Actions, Mental Capacity, Power of Attorney, Minority Shareholder Rights
Source Language
en
Commercial and Corporate Company Law Derivative Actions Mental Capacity Power of Attorney Minority Shareholder Rights

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Parties

Grace Wanjiru Munyinyi

Appellant

Moses Kinyanjui Munyinyi

Appellant

Gedion Waweru Githunguri

Respondent

Kimani Njoroge

Respondent

James Kamau Mwangi

Respondent

Rachel Wanjiku Kamau

Respondent

Mary Wanjiku Kamau

Respondent

Nairobi Frame Industries Limited

Respondent

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court Ruling Striking Out Suit

  1. 1 Whether the High Court erred in finding that Moses Munyinyi Mbogo was of unsound mind and thus incapable of granting a power of attorney.
  2. 2 Whether the suit by the appellants was incompetent for not being brought by way of petition under section 211 of the Companies Act.
  3. 3 Whether the appellants had locus standi to bring the suit on behalf of Mbogo and whether the suit disclosed a reasonable cause of action.

Ratio Decidendi

The Court of Appeal held that the High Court erred in finding that Moses Munyinyi Mbogo was of unsound mind and thus incapable of granting a power of attorney, as there was no medical or other substantive evidence to rebut the presumption of sanity. The affidavit evidence relied upon was insufficient and untested. The court further held that the suit brought by the appellants was not incompetent merely because it was not brought by petition under section 211 of the Companies Act. The exceptions to the rule in Foss v Harbottle permit derivative actions by minority shareholders where the majority are alleged to be acting fraudulently, ultra vires, or oppressively, and the pleadings...

Court Disposition

Appeal allowed. High Court ruling and orders set aside. Suit reinstated for hearing before a different judge.

Orders

  • The ruling of the High Court dated 17th June, 2005 and all consequential orders are set aside.
  • The Chamber Summons dated 16th September, 2004 is dismissed.