[2018] KEHC 9224 (KLR)
The court found that the applicant, having purchased property at a public auction conducted by the respondent and subsequently having the sale set aside by the courts, had established a prima facie right to sue for recovery of the purchase price and costs. The court held that this satisfied the requirements of...
Source-derived case information.
- Citation
- [2018] KEHC 9224 (KLR)
- Parties
- Applicant: Stephen Boro Gitiha; Respondent: Official Receiver & Liquidator of Rural Urban Credit Finance Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Application 217 of 2018
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Leave to Institute Suit Against Company in Liquidation
- Outcome
- leave granted to applicant to institute proceedings against respondent
- Judges
- MM Kasango
- Legal Topics
- Leave to Sue Company in Liquidation, Statutory Power of Sale, Liquidation Proceedings, Recovery of Purchase Price
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Stephen Boro Gitiha
Applicant
Official Receiver & Liquidator of Rural Urban Credit Finance Limited
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application for Leave to Institute Suit Against Company in Liquidation
Legal Issues
- 1 Whether the applicant should be granted leave to institute proceedings against a company in liquidation under Section 432(2) of the Insolvency Act.
- 2 Whether the applicant has established a prima facie right to sue and liability on the part of the respondent.
Ratio Decidendi
The court found that the applicant, having purchased property at a public auction conducted by the respondent and subsequently having the sale set aside by the courts, had established a prima facie right to sue for recovery of the purchase price and costs. The court held that this satisfied the requirements of Section 432(2) of the Insolvency Act, which mandates that leave of court is necessary to commence or continue proceedings against a company in liquidation. The applicant demonstrated both a right to sue and a prima facie liability on the part of the respondent, justifying the grant of leave to institute proceedings.
Court Disposition
leave granted to applicant to institute proceedings against respondent
Orders
- Leave is granted to Stephen Boro Gitiha to institute proceedings against the official receiver and liquidator of Rural Urban Credit Finance Limited in respect to property LR No. Kiganjo/Kiamwangi/2008.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL AND ADMIRALTY DIVISION
MISC. CASE NO. 217 OF 2018
STEPHEN BORO GITIHA.........................................................PLAINTIFF
VERSUS
OFFICIAL RECEIVER & LIQUIDITOR OF
RURAL URBAN CREDIT FINANCE LIMITED.................DEFENDANT
RULING
1. Steven Boro Gitiha (Gitiha) seeks by his Notice of Motion dated 30th April 2018, leave of this court to institute a suit against the official receiver and liquidator of Rural Urban Credit Finance Limited (Rural Urban). Rural Urban is under liquidation.
2. In 1994, Gitiha purchased a property, being LR. No. Kiganjo/Kiamwangi/2008, at a public auction which auction was at the instructions of Rural Urban in exercise of it’s statutory power of sale.
3. That purchase was successfully challenged before court by the registered owner in HCCC No. 4275 of 1994. That decision of the High Court was upheld by the Court of Appeal in Civil Appeal No. 216 of 2014.
4. Gitiha now seeks to recover the purchase price and other costs from Rural Urban. He seeks leave to file a suit against Rural Urban under Section 432 (2) of the Insolvancy Act.
5. Gitiha has established before this court that he has a right to sue Rural Urban and on a prima facie basis he has shown that Rural Urban is liable to his claim. That suffices for the granting of leave. It meets the requirement under Section 432(2) of the Insolvency Act which states as follows:
“(2)When a liquidation order has been made or a provisional liquidator has been appointed, legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court considers appropriate”.
6. Accordingly, this court grants leave to Steven Boro Gitiha to institute proceedings against the official receiver and liquidator of Rural Urban Credit Finance Limited in respect to the property LR No. Kiganjo/Kiamwangi/ 2008 which Steven Boro Gitahi purchased at the public auction.
DATED, SIGNED and DELIVERED at NAIROBI this13thday of June,2018.
MARY N. KASANGO
JUDGE
Ruling read in open court in the presence of
Court Assistant......................................Sophie
…………………………………...........for the Plaintiff
………………………………………...for the Defendant