https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8685

Gitonga v Michimikuru Tea Factory Ltd (Civil Miscellaneous Application E167 of 2025) [2026] KEHC 8685 (KLR) (16 June 2026) (Ruling) Neutral citation: [2026] KEHC 8685 (KLR) Republic of Kenya In the High Court at Meru Civil Miscellaneous Application E167 of 2025 HM Nyaga, J June 16, 2026 Between Samson Gitonga Applicant and Michimikuru Tea Factory Ltd Respondent Ruling 1.Coming up for determination is the application dated 18th November 2025 in which the applicant sought the following orders:a.Spentb.That pending the hearing and determination of this application inter parties, this honourable court be pleased to issue a temporary injunction restraining the respondent, its servants, agents, officers or any other person acting under its authority from implementing, acting upon, enforcing, giving effect to, or in any way relying upon any resolutions passed or purported to be passed at the annual general meeting scheduled for 19th November, 2025.c.That pending the hearing and determination of this application inter parties, this honourable court be pleased to issue directing the Registrar of Companies not to register, validate, or give effect to any resolutions, changes, filings or decisions arising from the said Annual General Meeting scheduled for 19th November, 2025.d.That pending the hearing and determination of this application inter parties, this honourable court be pleased to stay the implementation of any resolutions passed at the annual general meeting scheduled for 19th November 2025.e.That this honourable court be pleased to issue such further, other or consequential orders as may be necessary to safeguard the member’s rights and ensure compliance with the law.f.That costs of this application be provided for. 2.The application is propped by the grounds set out on its face and the affidavit sworn by the applicant on even date. 3.In a nutshell, the applicant avers that he is a shareholder of the respondent and is also an active grower, supplying green leaf to the respondent through one of its designated tea buying centres. 4.The applicant further avers that on 27th October 2025, the respondent issued a notice convening an annual general meeting (AGM)for 19th November 2025. That the said notice erroneously stated that the meeting would be held on a Thursday, whereas the date was actually on a Wednesday. That despite this error, no correction was made and that the notice did not meet the statutory 21-day notice required under the respondent’s Memorandum and Articles of Association. 5.It is further averred that the notice in question indicated that the AGM would discuss the audited accounts which was only supplied to the members on 17th November 2025, just two days to the AGM. It is averred that the time was insufficient and it denied shareholders the opportunity to analyze the said accounts, make appropriate contributions and hence make informed voting decisions. 6.It is also averred that there was no disclosure as to the basis, justification profitability position or financial status analysis to show how the intended dividends would be arrived at. 7.It is also averred that the Directors fees as proposed were more than the collective share dividend for the company’s shareholders. It was the applicants position that the A GM was not meant to advance the interests of the shareholders, but to disproportionately benefit insiders. 8.It was averred that if the intended AGM proceeded, reversal of the resolutions once registered filed and implemented would be difficult or impossible to effect, hence the orders sought. 9.The application was opposed by the respondent through a replying affidavit sworn on 27th November, 2025 by Kathiri Kobia Stephen the Chairman and a Director thereof. 10.It is averred that the application does not raise any issues that require judicial intervention. That the application offends section 239 of the Companies Act as no leave has been sought to continue the claim which is a derivative action in nature. 11.It was further averred that the notice referred to by the applicant was not the one issued to the shareholders. That the one issued by the respondent did not specify the day of the week that the AGM would be held. That contrary to the applicant’s assertions, the respondent furnished the farmers the Annual Report and Financial Statements on 28th October 2025 which was at least 21 days before the AGM. 12.Parties were directed to file submissions. Only the respondent had filed its submissions at the time of writing this ruling. 13.The respondent raised three issues. 14.The first is that of the question of jurisdiction of the court to grant orders on a miscellaneous application, where no leave has been sought to file a derivative suit. 15.It is argued that the application offends the provisions of section 239 of the Companies Act as no leave had been sought to commence the claim which is a derivative action/claim in its nature. Cited in support of this submission was the decision in David Langat vs- St. Lukes Orthopedic and Trauma Hospital Ltd and 2 Others (2013) KEELC 95 (KLR) where the court cited the well-known decision the Foss -v- Harbottle (1843) Hare 461. 16.Also cited was my very own decision in Meru High Court Misc. Application No. E105 of 2024, George Gitonga and 13 Others vs Michimikuru Tea Company Ltd where I dealt with a similar application. 17.Secondly, it is pointed out that there is no substantive suit that can enable the court establish whether a prima facie case has been established by the applicant in line with the principle set out in Giella vs Cassam Brown (1973) EA 358. Cited in support of this submission was the case of Galot vs Galot and Another (2025) (KEHC) 16623 (KLR). 18.On this question of a lack of a proper suit, the respondent also referred the court to the case of Waimiri vs Muhoro and 2 Others (2025) KEHC 280 (KLR) and Rockland Kenya Limited vs Commissioner General of Kenya Revenue Authority and Another (2020) KEHC 5155 (KLR). 19.Lastly, it was the respondent’s position that the applicant had failed to surmount the threshold set out in Giella vs Cassman Brown (supra). 20.It is important to note that the court allowed the AGM to proceed as scheduled but stayed the implementation of the resolutions therein. 21.As correctly submitted by the respondent, this court has dealt with a similar matter before involving the parties herein. 22.In High Court Misc. Application No. E156 of 2026 the same applicant had moved this court vide another miscellaneous application which culminated in a ruling delivered on 29th April 2026. 23.The first question to deal with is whether there is a competent pleading before the court. 24.The applicant came seeking injunction. However, there is no substantive suit. Therefore, what the applicant sought were interlocutory reliefs that would also be the only reliefs that could be granted if the application was allowed. 25.In Galot vs Galot and another(supra), the court dealt extensively with the nature and function of miscellaneous applications. It held as follows;“Jurisprudence on this point is unequivocal on the procedural limitations of miscellaneous applications. These applications are designed to address straightforward, non-contentious matters, typically of a procedural nature. They are not intended to serve as substitutes for properly instituted suits, nor can they be used to seek substantive reliefs unless anchored in a substantive suit supported by appropriate pleadings.Substantive claims such as declarations of rights, appointment of directors, or shareholder disputes, as raised in the application dated 5th December 2024, must be grounded in a suit that clearly articulates the cause of action and frames the legal and factual issues for determination.Such an irregularity cannot be dismissed as a mere technicality. It strikes at the very heart of the Court's jurisdiction. As affirmed by the Court of Appeal in Scope Telematics International Sales Ltd V Stoic Company Ltd & Another, [2017] eKLR, where a party seeks substantive reliefs without the support of a plaint or proper pleadings, the application is deemed to be "totally incurably defective." Accordingly, on this ground alone, the preliminary objection succeeds and the application must be struck out.” 26.Similarly, in Witmore Investment Limited V County Government of Kirinyaga & 3 Others [2016] eKLR the court dealt with a miscellaneous application. It was held: -“So where a party such as an applicant herein seeks an order that in effect appears to resolve with finality an issue in controversy or a contested issue, the application ceases to be interlocutory and it is a misconception to describe it as such. If the applicant wanted to move this court for a final resolution of the issues in controversy raised in the application, it should have moved this court properly in the manner provided by law.” 27.In the case that I have referred to, I found that that the miscellaneous application was incompetent. 28.I see no distinction between the present application and the one I dealt with. Based on the foregoing, I find that the application is incompetent and incapable of being cured even by an amendment. 29.On this ground alone the application is to be struck out. 30.The second issue is whether this is a derivative claim or not. From the wording of the application the applicant is before the court as a member of the company. He was thus required to seek leave to proceed with the claim as a derivative claim. He did not. Instead he sought temporary/final orders within the miscellaneous application. 31.For a member to sustain a suit against the company he or she has to file a derivative suit which is provided for under section 239(1) of the Companies Act as follows:“In order to continue a derivative claim brought under this Part by a member, the member has to apply to the Court for permission to continue it.” 32.The purpose of such leave is to weed out vexatious or frivolous suits and to ensure that members of a company only come to court on genuine and bona fide claims against the company or its directors. 33.There being no prayer for leave, the application is incompetent. 34.Having found the above, I see no need to delve into the third limb of the response, which will entail the court to look at the merits. 35.Consequently, the application is struck out with costs to the respondent. 36.The respondent is at liberty to proceed with the implementation of the resolutions passed in the AGM in question. 37.The Registrar of Companies is at liberty to act as required of its office. DATED, SIGNED AND DELIVERED AT MERU THIS 16TH DAY OF JUNE 2026.H. M. NYAGAJUDGE