[2022] KEHC 435 (KLR)

Kangema Farmlands PLC v Macharia (Civil Appeal E028 of 2021) [2022] KEHC 435 (KLR) (2 June 2022) (Ruling)

Neutral citation: [2022] KEHC 435 (KLR)

Republic of Kenya

In the High Court at Murang'a

Civil Appeal E028 of 2021

GK Kimondo, J

June 2, 2022

Between

Kangema Farmlands PLC

Appellant

and

Winnie Nyambura Macharia

Respondent

([Appeal from the order of M. Kinyanjui, Senior Principal Magistrate, in Kandara SPMCC No. 39 of 2021 delivered on 24th June 2021])

Ruling

1. There are two applications before the court. The first is a notice of motion by the appellant dated 30th June 2021 seeking stay of the order of the lower court dated 24th June 2021 pending the hearing of this appeal. The impugned order had temporarily stayed “all balloting and allotment process of the properties held by the [appellant]” pending hearing interparties on 8th July 2021.

2. I should add that the motion was filed contemporaneously with the Memorandum of Appeal praying for setting aside of the order; and, “dismissing the entire suit and proceedings” in the subordinate court.

3. That motion is supported by the affidavit of Samuel Mukuna, the appellant’s chairman. The motion is contested by the respondent through grounds of opposition dated 26th July 2021 and a replying affidavit sworn by Winnie Nyambura on even date.

4. The second and counter application is by the respondent dated 17th September 2021. There are three live prayers: Firstly, for stay of transfer or dealings with two shares claimed by the respondent in the appellant company; secondly, for production of a map showing the “subdivided allotted and unalloted plots of the land”; and, thirdly, for “preservation of one prime plot of the [respondent’s] choosing from the unalloted plots”.

5. The appellant contested the latter motion through grounds of opposition dated 10th November 2021 and filed on 11th November 2021. At the hearing, learned counsel for the respondent, Ms. Gakii Nyamu, said she had not been served with the reply.

6. The appellant filed submissions on 10th November 2021. The respondent’s submissions were lodged earlier on 27th July 2021.

7. The matter was listed for hearing on 23rd March 2022. Learned counsel for the appellant, Mr. J. N. Mbuthia, who was holding brief for Mr. Njenga, sought an adjournment. I declined the prayer for want of merit and for the considered reasons on the record. When the matter was called out later, counsel was a no show. Learned counsel for the respondent, Ms. Nyamu, prayed that the appellant’s motion be dismissed; and, that the respondent’s counter motion be allowed.

8. I take the following view of the matter. This is an interlocutory appeal. The suit in the lower court has not been heard. The main appeal at the High Court is also pending. I thus decline the invitation to make any conclusive findings on the merits of that suit or this appeal.

9. Although the appellant’s counsel disappeared from the court room as detailed earlier, I cannot in the interests of justice and the court’s overriding objective disregard the pleadings and affidavits on record. See Harit Sheth Advocate v Shamas CharaniaNairobi, Court of Appeal, Civil Appeal 68 of 2008 [2010] eKLR.

10. In the plaint in the lower court, the respondent claimed ownership of two shares in the company held by Marion Njeri Maina and which entitle her to ballot for a plot of land. Doubt is erased by her annexture WNM1, a copy of a “shares agreement” dated 2nd September 2020. It is for 2 shares in the appellant company to be transferred by the said Njeri to the respondent for the consideration of Kshs 520,000. There is also annexed a separate agreement of even date for another 2 shares held by Sammy Maina Kariuki in the company. The respondent contends that the appellant only transferred 2 of the shares to her.

11. One issue raised in this appeal is whether the lower court had jurisdiction. From the affidavit of Mr. Mukuna, he avers that the suit land is worth over 100,000,000. The company also contends that only the High Court is empowered to deal with ownership of shares in a company under the Companies Act 2015.

12. Like I stated, the appeal is still pending. But I can safely state that the issue of jurisdiction is arguable. This does not mean that the appeal will succeed but any court acting without jurisdiction would be employing its energy, time and resources in futility. See Delmonte Kenya Ltd v Murang’a County & others, Nairobi, High Court Petition 398 of 2015 [2019] eKLR; Owners of Motor Vessel ‘Lillian S’ v Caltex Oil (Kenya) Limited [1989] KLR 1.

13. The less I say about it the better. I am persuaded at this stage that the appellant is entitled to a stay of the impugned order or for review to limit it to the two shares claimed by the respondent.

14. On the other hand, the interests of the respondent would be prejudiced if the company proceeds to allot all the shares or ballot for all the land before her suit in the lower court is determined. Justice of the case demands ring-fencing of her potential shares or equivalent portion of land. I am thus persuaded that she is entitled to a preservation order. I am well guided by section 63 (e) of the Civil Procedure Act and the overriding objective of the court that I referred to earlier.

15. However, the impugned order of the lower court was a little too wide as to bar the company from allotting or balloting for all its property. As I have stated, the respondent’s undetermined claim is for only for 2 shares or the equivalent portion of a plot. I say that very guardedly and without a final finding.

16. I began by stating that this is an interlocutory appeal. Prayers numbers 3 and 4 by the respondent for production of a map showing the “subdivided allotted and unalloted plots of the land”; and, for “preservation of one prime plot of the [respondent’s] choosing from the unalloted plots” are on a procedural quicksand. The reasons are two-fold: They are not anchored as reliefs in the lower court and cannot be entertained at this stage of the interlocutory appeal. Those prayers are disallowed.

17. My final orders are thus as follows-a.That the notice of motion by the appellant dated 30th June 2021 is allowed. The order of the lower court dated 24th June 2021 is hereby stayed pending the hearing and determination of this appeal.b.That the notice of motion by the respondent dated 17th September 2021 is partially allowed in the following terms. That in order to secure the respondent’s rights and to ensure that the ends of justice are not defeated, the appellant company shall not allot the 2 shares claimed by the respondent or ballot for the equivalent share of land until the hearing and determination of this appeal.c.That prayers number 3 and 4 in the respondent’s notice of motion dated 17th September 2021 are without merit and are disallowed.d.That costs shall be in the appeal.It is so ordered.

DATED, SIGNED AND DELIVERED AT MURANG’A THIS 2ND DAY OF JUNE 2022. KANYI KIMONDOJUDGERuling read in open court in the presence of:Ms. Gakii Nyamu holding brief for Mr. Gachau for the respondent instructed by Daniel Henry & Company Advocates.Ms. Susan Waiganjo, Court Assistant.