[2018] KECA 167 (KLR)

[2018] KECA 167 (KLR)

The Court of Appeal held that the consolidated suits by shareholders against the company and its directors were incompetent, as they contravened the principle in Foss v. Harbottle, which requires that only the company itself, acting through its proper organs, may sue for wrongs done to it. The suits were not framed...

Source-derived case information.

Citation
[2018] KECA 167 (KLR)
Parties
Appellant: Joseph Kamau Musa; Appellant: James Kariuki Muchiri; Appellant: David Muchiri; Appellant: Ruigu Njuriri; Appellant: Joseph Njehu Boro & Others; Respondent: Ireri Company Ltd; Respondent: Gikonjo Ndirangu; Respondent: Ruigu Kabucho; Respondent: Dr. George Kamau Gikinga
Court
Court of Appeal
Court Station
Court of Appeal at Nairobi
Jurisdiction
Kenya
Case Number
Civil Appeal 172 of 2006
Procedural Posture
Civil Appeal / Judgment
Outcome
Appeals dismissed with costs.
Judges
RN Nambuye, GK Oenga, AK Murgor
Legal Topics
Company Law, Shareholder Locus Standi, Land Allocation, Title Registration, Judicial Review, Injunctions
Source Language
en
Commercial and Corporate Land and Property Company Law Shareholder Locus Standi Land Allocation Title Registration Judicial Review Injunctions

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Summary, issues, holding and outcome

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Parties

Joseph Kamau Musa

Appellant

James Kariuki Muchiri

Appellant

David Muchiri

Appellant

Ruigu Njuriri

Appellant

Joseph Njehu Boro & Others

Appellant

Ireri Company Ltd

Respondent

Gikonjo Ndirangu

Respondent

Ruigu Kabucho

Respondent

Dr. George Kamau Gikinga

Respondent

Procedural Posture

Civil Appeal / Judgment

  1. 1 Whether shareholders had locus standi to bring suit on behalf of the company for alleged wrongful dealings with company assets.
  2. 2 Whether the High Court erred in holding that the letter by the Chief Land Registrar constituted a decision amenable to judicial review.
  3. 3 Whether the High Court erred in declining to issue an order of mandamus to compel cancellation of title deeds issued under the Registered Land Act.

Ratio Decidendi

The Court of Appeal held that the consolidated suits by shareholders against the company and its directors were incompetent, as they contravened the principle in Foss v. Harbottle, which requires that only the company itself, acting through its proper organs, may sue for wrongs done to it. The suits were not framed as derivative actions and thus the plaintiffs lacked locus standi. On the merits, the court found that the increase in share capital and subsequent land allocation were properly authorized by company resolution and filings, and that titles had already been issued and land occupied, rendering some prayers moot. Regarding the judicial review appeal, the court found that the Chief...

Court Disposition

Appeals dismissed with costs.

Orders

  • Civil Appeal No. 172 of 2006 is dismissed with costs.
  • Civil Appeal No. 21 of 2014 is dismissed with costs.