[2010] KEHC 2614 (KLR)
The court found that the Petitioner had raised serious allegations regarding the impartiality of the Official Receiver as interim liquidator, which warranted further inquiry and response. To ensure procedural fairness and a just determination of the winding up petition, the court exercised its discretion to allow...
Source-derived case information.
- Citation
- [2010] KEHC 2614 (KLR)
- Parties
- Plaintiff: John Mwangi Wagako; Defendant: Nyakio Investments Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Winding Up Cause 10 of 2007
- Procedural Posture
- Winding Up Cause / Ruling on Directions
- Outcome
- Application allowed; directions issued for filing of affidavits and further mention.
- Judges
- CM Njagi
- Legal Topics
- Company Liquidation, Appointment of Liquidator, Official Receiver Conduct
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
John Mwangi Wagako
Plaintiff
Nyakio Investments Ltd
Defendant
Procedural Posture
Winding Up Cause / Ruling on Directions
Legal Issues
- 1 Whether the Petitioner should be allowed to file a supplementary affidavit in support of the petition.
- 2 Whether the affidavit supporting the application should be deemed as the supplementary affidavit.
- 3 Whether the Official Receiver has acted impartially as interim liquidator and whether this affects the winding up process.
Ratio Decidendi
The court found that the Petitioner had raised serious allegations regarding the impartiality of the Official Receiver as interim liquidator, which warranted further inquiry and response. To ensure procedural fairness and a just determination of the winding up petition, the court exercised its discretion to allow the Petitioner to file a supplementary affidavit and deemed the affidavit supporting the application as such. The Respondent and the Official Receiver were also granted leave to file replying affidavits to address the allegations. The directions were issued to facilitate a fair process and to ensure all parties had an opportunity to respond to the issues raised before substantive...
Court Disposition
Application allowed; directions issued for filing of affidavits and further mention.
Orders
- Prayers 1 and 2 of the application are granted as prayed.
- Respondent granted leave to file and serve a replying affidavit within 14 days.
Full Case Text
Judgment text and source record
27 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI (MILIMANI COMMERCIAL COURTS) Winding Up Cause 10 of 2007
JOHN MWANGI WAGAKO.................................................PLAINTIFF
VERSUS
NYAKIO INVESTMENTS LTD.......................................DEFENDANT
RULING ON DIRECTIONS
The application before the Court is by a Notice of Motion dated 28th April, 2010, and is brought under Rule 7 of the High Court (Winding Up) Rules. By the application, the Petitioner herein seeks two orders –
1. That the Petitioner be allowed to file a supplementary affidavit in support of the petition herein.
2. That if prayer 1 (above) is granted, the affidavit supporting this application be deemed to be the supplementary affidavit filed and served upon the Respondent.
The application is supported by the affidavit of John Mwangi Wagako,
the Petitioner himself, sworn on 28th April, 2010. It is based on the following grounds –
(a)That on 15th December, 2009, this Honourable Court appointed the Official Receiver the interim liquidator of the Respondent company.
(b)That in law, the interim liquidator is required to act impartially.
(c)That since its appointment, the Official Receiver has acted in a partisan manner in that he has served as the agent of the majority shareholders who control the Respondent.
(d)Under Section 236 of the Companies Act, unless another person is appointed a liquidator, the Official Receiver serves as a liquidator.
(e)That in the event of a Winding Up order being made in this case, the majority shareholders will continue to mismanage the assets of the Respondent through the Official Receiver and defeat the object of Winding Up which is paying creditors and sharing the net assets amongst the shareholders according to their respective shareholding.
Upon reading the supporting affidavit of the Petitioner, I note that some
serious allegations of impartiality have been levelled against the Official Receiver, and it is imperative that this application be disposed of expeditiously. After hearing Dr. Kuria for the Petitioner, Mr. Kahuthu for the Respondent and Mrs. Koech for the Official Receiver, I make the following directions –
(i) Prayers 1 and 2 of the application are hereby granted as prayed.
(ii) The Respondent company be and is hereby granted leave to file and serve a replying affidavit to the Petitioner’s affidavit sworn on 28th April, 2010 to demonstrate why the Official Receiver is suitable for appointment as a liquidator in the event that a Winding Up order is made. The said affidavit be filed and served within 14 days from today.
(iii) The Official Receiver be and is hereby granted leave to file and serve a replying affidavit within 14 days.
(iv)The Petitioner be at liberty to file and serve supplementary affidavits in response to the affidavits filed pursuant to directions (i) and (ii) above, within 7 days of service of the said affidavits.
(v) Mention on 25th June, 2010 to confirm compliance and for further directions.
Orders accordingly.
Dated and delivered at Nairobi this 28th day of May, 2010.
L. NJAGI
JUDGE