[1998] KECA 275 (KLR)
The Court held that since the applicant had not obtained the mandatory leave to proceed against the first respondent, a company in liquidation, the suit was incurably defective and incompetent in law. Consequently, any application for an injunction in such a suit must also fail. The Court further found that the...
Source-derived case information.
- Citation
- [1998] KECA 275 (KLR)
- Parties
- Applicant: Joseph Kaara Mwethaga; Respondent: Thabiti Finance Company Limited (In Liquidation); Respondent: Mugunandu Farm Limited; Respondent: Chris M. Gatutu T/A Crima Enterprises; Respondent: Joel Gatimu Kibuchi; Respondent: Muchohi Gikonyo
- Court
- Court of Appeal
- Court Station
- Court of Appeal at Nairobi
- Jurisdiction
- Kenya
- Case Number
- ? 120 of 1998
- Procedural Posture
- Civil Application / Application for Injunction Pending Appeal
- Outcome
- application dismissed with costs
- Judges
- AM Akiwumi
- Legal Topics
- Injunctions, Power of Sale, Company Liquidation, Registered Land, Mortgage Disputes
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Joseph Kaara Mwethaga
Applicant
Thabiti Finance Company Limited (In Liquidation)
Respondent
Mugunandu Farm Limited
Respondent
Chris M. Gatutu T/A Crima Enterprises
Respondent
Joel Gatimu Kibuchi
Respondent
Muchohi Gikonyo
Respondent
Procedural Posture
Civil Application / Application for Injunction Pending Appeal
Legal Issues
- 1 Whether the applicant is entitled to an injunction restraining the respondents from dealing with the suit property pending the hearing of the suit.
- 2 Whether the suit and application are competent in law in light of the first respondent's liquidation and the absence of leave to sue a company in liquidation.
- 3 Whether reliefs can be granted against other respondents when the suit against the first respondent is incompetent.
Ratio Decidendi
The Court held that since the applicant had not obtained the mandatory leave to proceed against the first respondent, a company in liquidation, the suit was incurably defective and incompetent in law. Consequently, any application for an injunction in such a suit must also fail. The Court further found that the claims against the other respondents, who derived title from the first respondent, could not stand independently in proceedings that were themselves incompetent. Therefore, the application for an injunction was dismissed with costs, and it was unnecessary to consider the other issues raised.
Court Disposition
application dismissed with costs
Orders
- The application for injunction is dismissed with costs.
Full Case Text
Judgment text and source record
37 paragraphs
REPUBLIC OF KENYA
IN THE COURT OF APPEAL
AT NAIROBI
(CORAM: OMOLO, AKIWUMI & LAKHA, JJ.A.) CIVIL APPLICATION NO. NAI. 120 OF 1998
BETWEEN
JOSEPH KAARA MWETHAGA................................APPLICANT
AND
1. THABITI FINANCE COMPANY LIMITED (In Liquidation)
2. MUGUNANDU FARM LIMITED
3. CHRIS M. GATURU T/A CRIMA ENTERPRISES
4. JOEL GATIMU KIBUCHI
5. MUCHOHI GIKONYO .................................RESPONDENTS
(An application for an injunction following the refusal to grant the same in the Ruling of the High Court at Nairobi (Milimani Commercial Court) (The Honourable Mr. Justice Kuloba) given on the 26th March, 1998
in
H.C.C.C. NO. 453 OF 1998)
***************
RULING OF THE COURT
This is an application by the plaintiff under rule 5(2)(b) of the Rules of this Court for an injunction against the defendants seeking to restrain them from alienating, transferring, leasing, offering for sale, charging or otherwise dealing with or parting with the title of all that piece of land known as Title Number MUTIRA/KAGUYU/ 839 Kirinyaga District (the suit property) and further ancillary orders of consequential nature until the hearing of the plaintiff's suit filed in the superior court or further orders.
The facts giving rise to this application may be briefly stated. The plaintiff was at all material times the registered proprietor of the suit property and had charged it to the first defendant to secure the advancement of a loan or overdraft facilities by the first defendant to the plaintiff.
The first defendant is sued while undergoing involuntary liquidation (paragraph 2 of the plaint). The plaintiff in due course allegedly defaulted in the repayment of the loan and the first defendant in exercise of a chargee's power of sale conferred under S.74 of the Registered Land Act (Cap. 300) advertised the suit property for sale by the third defendant, an auctioneer. In or about October 1996 the second and fourth defendants moved into the suit property upon acquisition of the title to the property. The plaintiff filed a suit on the 25th February 1998 and moved for an injunction on the 26th February, 1998. It was the plaintiff's case that the said sale was irregularly and fraudulently held and in breach of the first and second defendants' duty of care to the plaintiff and accordingly the sale was null and void and of no effect whatsoever.
The superior court (Kuloba, J.) after hearing the application for an injunction declined to grant one holding, inter alia, that the suit property had changed hands, that damages would be an appropriate remedy and that there was delay in making the application to the court.
Undeterred, the plaintiff renewed his application before this Court. Before we deal with the merits of the application, we mention one matter that goes to the jurisdiction of the court. As stated earlier, the first defendant is described by the plaintiff in his plaint as being a limited company registered under the Companies Act and is currently undergoing involuntary liquidation. This is not disputed. In such a case the plaintiff required leave of the Court to proceed with the suit against the first defendant.
It is not in dispute that such leave has not been obtained in breach of the mandatory provisions of sections 228 and/or 241 of the Companies Act (Cap. 486) and/or section 35 of the Banking Act (Cap. 488). This renders the suit incurably defective and incompetent in law. It follows that an application for an injunction made in such a suit must also fail as must an application made to this Court.
That notwithstanding, Mr. Kihara on behalf of the plaintiff, in a valiant attempt to save the day, argued that if that was right, then the reliefs sought against the other defendants are not affected. We do not agree. The basis of the suit and the application for an injunction was the claim against the first defendant from whom the second and fourth defendants derived title. Inevitably, claims against these defendants for an injunction made in proceedings which are incompetent must also fail.
In view of our decision on this issue, it is unnecessary for us to express any views on the other issues adumbrated before us. Accordingly and, for the reasons above stated, the application fails and is dismissed with costs.
Dated and delivered at Nairobi this 5th day of June, 1998.
R.S.C. OMOLO
.................
JUDGE OF APPEAL
A.M. AKIWUMI
.................
JUDGE OF APPEAL
A.A. LAKHA
.................
JUDGE OF APPEAL
I certify that this is a true copy of the original.
DEPUTY REGISTRAR