[2004] KEHC 322 (KLR)
The court found that the 5th Plaintiff, Kiambu Dandora Farmers Co. Ltd., had not authorized the institution of the proceedings in its name, as required by company law. The Respondents failed to demonstrate that they had obtained the necessary authority from the company's Board of Directors or through a resolution in...
Source-derived case information.
- Citation
- [2004] KEHC 322 (KLR)
- Parties
- Plaintiff: Kariuki Njoroge; Plaintiff: Mutegi Karega; Plaintiff: Samuel Ngugi Nganga; Plaintiff: John Kamau Kanjigi; Plaintiff: Kiambu Dandora Farmers Co. Ltd.; Defendant: Stephen Mugo Mutothori; Defendant: Raymond Mwangi Waweru; Defendant: Peter Karumbi Keingati
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 609 of 2004
- Procedural Posture
- Civil Case / Ruling on Application to Strike Out Party
- Outcome
- Application allowed. 5th Plaintiff struck out. Respondents to bear costs.
- Judges
- CN Mugo
- Legal Topics
- Joinder of Parties, Capacity to Sue, Authority of Company, Striking Out Parties
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kariuki Njoroge
Plaintiff
Mutegi Karega
Plaintiff
Samuel Ngugi Nganga
Plaintiff
John Kamau Kanjigi
Plaintiff
Kiambu Dandora Farmers Co. Ltd.
Plaintiff
Stephen Mugo Mutothori
Defendant
Raymond Mwangi Waweru
Defendant
Peter Karumbi Keingati
Defendant
Procedural Posture
Civil Case / Ruling on Application to Strike Out Party
Legal Issues
- 1 Whether the 5th Plaintiff, Kiambu Dandora Farmers Co. Ltd., was properly joined as a party to the suit.
- 2 Whether the proceedings were instituted with proper authority from the 5th Plaintiff company.
- 3 Whether the removal of the 5th Plaintiff would prejudice the interests of the other Plaintiffs.
Ratio Decidendi
The court found that the 5th Plaintiff, Kiambu Dandora Farmers Co. Ltd., had not authorized the institution of the proceedings in its name, as required by company law. The Respondents failed to demonstrate that they had obtained the necessary authority from the company's Board of Directors or through a resolution in a general or special meeting. The absence of such authority rendered the joinder of the 5th Plaintiff improper. The court held that regardless of any legal rights the Respondents may wish to enforce as beneficiaries under a trust deed, they must approach the court with proper authority. Consequently, the application to strike out the 5th Plaintiff from the proceedings was...
Court Disposition
Application allowed. 5th Plaintiff struck out. Respondents to bear costs.
Orders
- The name of Kiambu Dandora Farmers Co. Ltd. is struck out from the proceedings.
- The Respondents shall bear the costs of the application.
Full Case Text
Judgment text and source record
22 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)
Civil Case 609 of 2004
KARIUKI NJOROGE …………………...................………………. 1ST PLAINTIFF
MUTEGI KAREGA………………..................…………………….. 2ND PLAINTIFF
SAMUEL NGUGI NGANGA…………………..................………. 3RD PLAINTIFF
JOHN KAMAU KANJIGI…………………………....................… 4TH PLAINTIFF
KIAMBU DANDORA FARMERS CO. LTD…................……… 5TH PLAINTIFF
VERSUS
STEPHEN MUGO MUTOTHORI ………….............………. 1ST DEFENDANT
RAYMOND MWANGI WAWERU……….............…………. 2ND DEFENDANT
PETER KARUMBI KEINGATI…………….............………. 3RD DEFENDANT
RULING
The 5th Defendant Company Kiambu Dandora Farmers Co. Ltd. has filed this application seeking an order of the Court to strike its name from these proceedings. It contends that it has been improperly joined in the suit which suit has been instituted without authority, by way of resolution against certain of its directors who happen also to be trustees of the 5th Defendants assets. The 5th Defendant applicant also contends that there would be a conflict of interest if the suit is allowed to continue as filed. The applicant also states that it has no complaint against the Defendants in the management of trust affairs, and has therefore no interest in the suit of the reliefs claimed.
The Respondents on the other side claims that the 5th Defendant is a necessary party in the proceedings and should not be allowed to opt out of the proceedings since its removal would prejudice the interests of the Plaintiff/Respondents. Mr. Muriithi for the Respondents submitted that the Court should determine whether it would be able to adjudicate the matters in dispute without the 5th Defendant appearing as party in the suit.
The issue of authority and capacity to sue goes to jurisdiction. The applicants have submitted, and properly so, that a company can only sue in its own name with the sanction of its Board of Directors or under a resolution in general or special meeting. The Respondents have not shown this Court that they have been authorized to take out these proceedings in the name of the 5th Defendant or at all. it matters not whether or not they have certain legal rights that they would wish to enforce as beneficiaries under the relevant Trust deed. They must come to Court properly and with authority. I am not convinced either that these proceedings provide the proper means by which to urge the removal and/or replacement of trustees but I find it unnecessary to venture into the issue. I find that the Respondents have no valid grounds upon which to challenge the present application and proceed to allow the same. The Respondents will bear the costs of the application.
Dated and Delivered at Nairobi this 10th day of December 2004.
M.G. Mugo
Judge
In the presence of
Makori h/b for 5th Plaintiff/Applicant
Muriithi for 1-4 Plaintiffs
N/A for Defendants