[2022] KEHC 12914 (KLR)

Wanjiku v Kangema Farmlands PLC (Civil Case E010 of 2022) [2022] KEHC 12914 (KLR) (15 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12914 (KLR)

Republic of Kenya

In the High Court at Murang'a

Civil Case E010 of 2022

K Kimondo, J

September 15, 2022

Between

Loise Wanjiku

Applicant

and

Kangema Farmlands PLC

Respondent

Ruling

1. The plaintiff’s notice of motion dated 18th July 2022 seeks injunction to restrain the respondent from “winding up the company pending the hearing and determination of the main suit”.

2. The plaintiff avers that she is a shareholder of the company. Following a special general meeting held on 6th December 2019, the company resolved to subdivide its land known as L.R. No. 12505(IR 59847) hereafter referred to as the suit land. The plaintiff balloted for a plot under ballot number 145A annexed as exhibit LW3. She also paid the requisite survey and title fees.

3. At the hearing of the application, her learned counsel, Mr. Kibe, contended that ballot 145A was for a commercial and not a residential plot. I must however point out that that fact was not deposed in the plaintiff’s affidavit. What the plaintiff states is that she has to date not received her title deed yet the company has placed a notice in the Daily Nation of 14th July 2022 of its intention to wind up.

4. In a synopsis, the applicant’s case is that the action is a violation of her right to property; and, that unless the injunction is granted, she will suffer irreparable harm.

5. The motion is contested. There is a replying affidavit sworn on 31st August 2022 by Donald Kamweru Gikonyo, a director of the defendant. He concedes that the company is being wound up following the special resolution by members (annexture A). He has also attached a Gazette Notice No. 11661 by the Registrar of Companies published in the Kenya Gazette on 29th October 2021(exhibit D).

6. The deponent states that the plaintiff balloted and was allotted a plot. The title was then processed and released to her. The plaintiff’s counsel denied that assertion and claimed that the plaintiff was offered a residential plot which she declined. The defendant’s position is that the plot claimed by the plaintiff was allocated to another person. No evidence was presented to support that claim.

7. In a nut-shell, the defendant deposed that it is prepared to allot another plot to the plaintiff, a fact it disclosed to the applicant earlier “and is taken aback by the plaintiff’s institution of this suit which is not necessary”.

8. On 1st September 2022, I heard further submissions from learned counsel for the plaintiff and the defendant. They also consented that this ruling be transmitted electronically.

9. I take the following view of the matter. The main suit is pending for hearing. I thus refuse the invitation to delve too deep into the merits. But I can safely state the following: It is not disputed that the plaintiff was a shareholder of the company as at 6th December 2019 and that she is entitled to one of the sub-plots from the suit land. The defendant also freely concedes that she balloted under ballot number 145A.

10. The core of the dispute is whether the ballot entitled the plaintiff to a commercial plot. No doubt the trial court will determine the matter on tested evidence. But I can also say that the defendant seems to admit it save to allege, without evidence, that the plot was allotted to a different member. I say that very guardedly and without a final finding.

11. The principles governing the grant of prohibitive injunctions are well settled. See Giella v Cassman Brown and Company Limited [1973] E.A. 358. Those principles are first, that the applicant must show a prima facie case with a probability of success; secondly that he stands to suffer irreparable harm not compensable in damages; and thirdly, if in doubt, the court must assess the balance of convenience.

12. In Mrao Limited Vs First American Bank of Kenya Ltd and others[2003] KLR 125, the Court of Appeal stated that a prima facie case is one – Which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.

13. On the face of it, the plaintiff has shown that she is entitled to a sub-plot which the defendant has not delivered. I would have had no hesitation to grant the injunction sought. But I have studied Gazette Notice No. 11661 by the Registrar of Companies published in the Kenya Gazette on 29th October 2021. It is issued under section 897 (3) of the Companies Act 2015 notifying the public that unless cause be shown, the companies listed thereunder “shall be struck off from the Register of Companies at the expiry of three months”.

14. The period specified in that notice to show cause has long expired. The defendant is one of the companies listed in the notice. In the absence of evidence to the contrary, it means the defendant has been struck-off the register of companies. Again, I say that very carefully and without a final finding.

15. It also means that the dissolution was at the behest of the Registrar of Companies. The present motion against the company is hence on a legal quicksand for three reasons: The prayer to restrain the respondent from winding up may have been overtaken by events. Secondly, the Registrar of Companies has not been enjoined; and, thirdly, the defendant may no longer exist as a legal entity. It raises the specter of the court making orders in vain. I must emphasize that this does not mean that the plaintiff is not entitled to a sub-plot of the suit land.

16. For all those reasons, the plaintiff’s notice of motion dated 18th July 2022 is disallowed. Costs shall be in the cause.It is so ordered.

DATED, SIGNED AND DELIVERED AT MURANG’A THIS 15TH DAY OF SEPTEMBER 2022. KANYI KIMONDOJUDGEORDERThe date for delivery of this ruling was taken in open court in the presence of both parties or their legal counsel. Pursuant to the Practice Directions by the Hon Chief Justice; and, the parties’ consent recorded on 1st September 2022, this ruling has been delivered to the parties by electronic mail. Both parties have accordingly waived compliance with Order 21 Rule 1 of the Civil Procedure Rules which requires that all judgments and rulings be pronounced in open court.KANYI KIMONDOJUDGERuling read in chambers in the presence of:Ms. Susan Waiganjo, Court Assistant.