[2022] KEHC 14520 (KLR)

Mwangi & another v Kassamali & 2 others (Civil Case E896 of 2021) [2022] KEHC 14520 (KLR) (Commercial and Tax) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14520 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case E896 of 2021

WA Okwany, J

October 13, 2022

Between

Said Ali Mwangi

1st Plaintiff

Rodex East Africa

2nd Plaintiff

and

Zameer Kassamali

1st Defendant

Mahir Nakuru Automotive Limited

2nd Defendant

Bank of Baroda

3rd Defendant

Ruling

1. The plaintiffs commenced this suit by a plaint dated November 2, 2021 seeking judgement against the defendant as follows:-a.A declaration that the 2nd plaintiff is not indebted to any local creditor apart from the 3rd defendantb.A permanent injunction restraining the 1st and 2nd defendants from compelling the 2nd plaintiff to settle the debts of any local creditorc.A declaration that the 1st defendant breached the trust between the 1st plaintiff and the 1st defendantd.Damages for breach of truste.An order that the 1st and 2nd defendant refunds all amounts converted from the 2nd plaintiff by virtue of an overdraft facilityf.An order that the 1st defendant account for stock that was available in January 2020 as at paragraph 43 aboveg.An order that the 1st defendant be compelled to remit stamp duty over the transfer of Flat no A7 on Land reference Number 209/3090 Nairobi to the name of the 2nd plaintiffh.An order be and is hereby issued that the parties execute the relevant forms and documents at the 3rd defendant and the respective Lands Registry to substitute LR no 209/12743/10(IR79061) Soledo Springs Estate, Mugoya Douth C area Nairobi with title No Kisumu Municipality/Block/6/111 and flat No A7 on Land Reference number 209/3090 Nairobi, failure of which the relevant substitution forms shall be signed by the deputy registrar of this court.i.An order be and is hereby issued that the 2nd plaintiff be wound up for untenability in decision making and insolvency.j.General damagesk.Costs of the suit.

2. The 3rd defendant filed its statement of defence dated December 3, 2021.

3. The 1st defendant objected to the suit through the Preliminary Objection dated January 12, 2022 wherein he listed the following grounds:-1. That the plaintiffs herein lack the requisite locus standi to institute the suit herein as have not sought leave to bring the suit as a derivative action under the provisions of section 238 and 239 of the Companies Act no 17 of 2015

2. That the 2nd plaintiff does not have the requisite capacity to institute the suit herein as it has not made any resolutions to institute the suit and/or authorized any party to institute a suit on its behalf

3. That the Honourable Court lacks territorial jurisdiction to handle the matter as all the defendants are based in Nakuru and also the 2nd plaintiff registered offices in Nakuru with all its operations been conducted in Nakuru.

4. The 2nd defendant also raised a preliminary objection (PO) dated January 20, 2022 on the ground that the Honourable court lacks the jurisdiction to hear and determine the matter.

5. The Preliminary Objection were canvassed by way of written submissions which I have considered. The main issue for determination is whether the PO is merited. In other words, does this court have the jurisdiction to hear and determine this suit?

6. The issue of jurisdiction was discussed by the Court of Appeal in the Owners of the Motor Vessel “Lillian S” vs Caltex Oil (Kenya) Ltd[1989] eKLR where it was held: -“Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has continuation of proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”

7. The defendants’ case is that the court lacks territorial jurisdiction to handle the matter. The defendant contends that the suit should be transferred to Nakuru City as the defendant and the plaintiff contracted within Nakuru town and that the 1st defendant was incorporated in Nakuru City where it conducts its business.

8. The plaintiffs, on the other hand, averred that it has properties and business interests in Nairobi, Kisumu and Nakuru and that the suit touches on properties situate in Nairobi. The plaintiffs further contended that the 1st plaintiff works for gain in Nairobi and the 3rd defendant’s headquarters are in Nairobi.

9. Section 15(a) (b) and (c) of the Civil Procedure Act provides as follows on territorial jurisdiction in civil matters:-"15. Subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction—(a)the defendant or each of the defendants (where there are more than one) at the time of the commencement of the suit, actually and voluntarily resides or carries on business, or personally works for gain; or(b)any of the defendants (where there are more than one) at the time of the commencement of the suit, actually and voluntarily resides or carries on business, or personally works for gain, provided either the leave of the court is given, or the defendants who do not reside or carry on business, or personally work for gain, as aforesaid acquiesce in such institution; or(c)the cause of action, wholly or in part, arises."

10. In the case of Peter Wachira Gachura vs Jakcline Mbithe [2015] eKLR the court when deciding on a similar issue observed that:-“Francis Ndichu Gathogo V Kitazi Ondaza Civil Appeal No 287 Of 2002 the Court of Appeal while adopting the decision in Riddlesburger & Another V Robson & Another (1958) EA 375 the court stated Section 15 of the Civil Procedure ordinance applies only to subordinate courts. The said decision is binding upon this court and apart from the said decision the jurisdiction of the High Court is donated by the Constitution which is the Supreme Law of the land. The High Court has unlimited jurisdiction in both civil and criminal matters. Section 15 of the Civil Procedure Act do not apply to the High Court nor can it limit the High court jurisdiction as given by the Constitution.”

11. From the foregoing decisions, it is clear that the jurisdiction of the High Court under Article 165(3) of the Constitution is unlimited original in both criminal and civil matters. This means that its jurisdiction cannot be limited or fettered by any other written law including the Civil Procedure Act and more specifically Section 15 of the Civil Procedure Act.

12. In the upshot, I find that the court has jurisdiction to deal with the matter and the preliminary objections are hereby dismissed with orders that costs shall abide the outcome of the main suit.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 13THDAY OF OCTOBER 2022. W. A. OKWANYJUDGEIn the presence of: -Ms Kimunge for Kavraj for 2nd defendant.Mr. Kiptoo for Plaintiffs.Ms Aoko for 3rd defendantCourt Assistant- Sylvia