[2000] KEHC 410 (KLR)
The court found that the Registrar of Companies was negligent in registering a second company with the same name as the plaintiff, which directly resulted in the diversion of cheques and financial loss to the plaintiff. The defendant's failure to file a defence constituted an admission of the plaintiff's...
Source-derived case information.
- Citation
- [2000] KEHC 410 (KLR)
- Parties
- Plaintiff: Jamsons Industries Limited; Defendant: The Attorney General
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- ? 2066 of 1998
- Procedural Posture
- Civil Case / Judgment
- Outcome
- Judgment for the plaintiff.
- Legal Topics
- Company Registration, Negligence by Registrar, Duplicate Company Names, Damages for Negligence
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Jamsons Industries Limited
Plaintiff
The Attorney General
Defendant
Procedural Posture
Civil Case / Judgment
Legal Issues
- 1 Whether the Registrar of Companies was negligent in registering a second company with the same name as the plaintiff.
- 2 Whether the plaintiff suffered damages as a result of the Registrar's negligence.
Ratio Decidendi
The court found that the Registrar of Companies was negligent in registering a second company with the same name as the plaintiff, which directly resulted in the diversion of cheques and financial loss to the plaintiff. The defendant's failure to file a defence constituted an admission of the plaintiff's allegations, except for the quantum of damages. The plaintiff provided sufficient documentary evidence to prove the loss suffered, including the amounts diverted and interest incurred. The court held the defendant liable for negligence and awarded damages accordingly.
Court Disposition
Judgment for the plaintiff.
Orders
- The defendant shall pay the sum of Kshs. 2,687,374 as damages to the plaintiff.
- The Registrar of Companies is ordered to strike off the register the second company if not already done.
Full Case Text
Judgment text and source record
13 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI HIGH COURT CIVIL CASE NO. 2066 OF 1998
JAMSONS INDUSTRIES LIMITED……………………PLAINTIFF
-VERSUS
THE ATTORNEY GENERAL…………………………DEFENDANT
JUDGMENT
Background
The plaintiff was incorporated as a Company Limited on the 25th October, 1982 in the name of Jamsons Garments Limited. The plaintiff subsequently changed the name to Jamsons Industries Limited and was given a certificate by the Registrar of Companies on 4. 5.95. On 4. 6.1997 the Registrar of Companies registered another Company in the same name. This second company so registered opened an account with Guilders International Bank Ltd. which was used to bank cheques drawn in favour of the plaintiff into this account and then withdrawn. As a result, the plaintiff lost money to this new company. The defendant did not make appearance or file defence. The issue is whether by registering another company in the same name as the plaintiff, the Registrar of Companies was negligent. In his evidence Mr. Paresh Shah for the plaintiff explained how the plaintiff company was registered complying with all the requirements of the law. He explained further that they only came to know of the existence of the new company when they noticed from the account that a number of cheques did not find their way into the company’s account with Barclays Bank in Market Branch. He enumerated the number of cheques which were diverted to the new companies account all totaling kshs.2,687,374. This amount according to his calculations includes interest on the amount diverted between 5th June and 27th June, 1997. He had to borrow Shs. 1 million from his bank to keep his business afloat. He paid interest on this amount at commercial rate.
I accepted Mr. Shah’s evidence which was supported by documents showing the registration of the two companies. His claim on the diverted cheques was supported by the number of each cheque and the amount he also produced, the bank statement which showed the money borrowed.
By registering the second company the Registrar of Companies was clearly negligent. He failed to do what the department was set up to do and that is to regulate the registration of companies to ensure that no two companies would bear the same name. As a result of this negligence the second company was used to defraud the plaintiff company.
The defendant having failed to file a defence, operates as admission of all the allegations in the plaint except as to the damages. I find and hold that the defendant was negligent and there shall be judgement for the plaintiff. The plaintiff has also proved the damages he suffered as a result of the defendants negligence. The defendant shall pay the sum of Kshs. 2,687,374 as damages. The Registrar of Companies is ordered to strike off the registrar the second companies if he has not so yet.
Dated and delivered this 14th day of June, 2000.
KASANGA MULWA
JUDGE