1. The Plaintiffs commenced this suit by way of a Plaint dated 27th September 2012, seeking judgment against the Defendants.
2. The dispute essentially revolves around the alleged fraudulent transfer of shares in the 3rd Plaintiff Company, Technology Today Limited, and the subsequent sale of its prime asset, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. The case presents a complex interplay of company law, the law of trusts, and the doctrine of indefeasibility of title to land. The Plaintiffs’ case is that they were the majority shareholders and directors of the 3rd Plaintiff and that they were defrauded of their shares and the company’s assets by the 1st and 2nd Defendants. The Defendants, on their part, maintain that the share transfers were voluntary and lawful, and that the subsequent sale of the suit property was a valid transaction carried out by the company’s duly appointed directors.
3. By their Plaint, the Plaintiffs pray for judgment against the Defendants for the following reliefs:
a) A declaration that the 1st Defendant holds the 1,750 shares registered in his name in the 3rd Plaintiff upon trust for the 2nd Plaintiff.
b) A declaration that the 2nd Defendant holds the 1,750 shares registered in her name upon trust for the 1st Plaintiff.
c) An order that the 1st Defendant do transfer to the 2nd Plaintiff 1,750 shares registered in her name in the 3rd Plaintiff.
d) An order that the 2nd Defendant do transfer to the 1st Plaintiff 23,249 shares registered in her name in the 3rd Plaintiff.
e) An order that the 1st and 2nd Plaintiffs do account to the Plaintiffs all the revenue realized by them upon realization of the 3rd Defendants assets since 23rd March 2011.
f) A declaration that the 3rd Defendant breached the contract of borrowing by consenting to the purported sale of L.R. No. 1870/6V1/ 145 after receiving the Plaintiffs’ demand that the sale be stopped on 19th October 2011.
g) A declaration that the 3rd Defendant participated in a fraudulent sale by the 1st and 2nd Defendants acting in the name of the 3rd Plaintiff of the said L.R. No. 1870/6VI/145 to 4th to 6th Defendants.
h) A declaration that the purported sale and transfer of LR. No. 1870/6V1/ 145 to the 4th to 6th Defendants is fraudulent within the meaning of the Registration of Titles Act and therefore null and void.
i) A permanent injunction to restrain the 4th to 6th Defendants from selling, charging or subdividing the said L.R. No. 1870/6V1/145.
j) A declaration that the 3rd Plaintiff is the proprietor of L.R. No. 1870/6V1/145.
k) A declaration that the 4th to 6th Defendant are trespassers on the said suit property.
l) A declaration that the 4th to 6th Defendants have committed trespass to the land since 19th October 2011.
m) An order that the 4th to 6th Defendants do deliver up to the Registrar of Titles the transfer and certificate of title in respect of the suit property for cancellation of item no. 10, the purported transfer in favour of the 4th and 6th Defendants.
n) An order that the 1st and 2nd Defendants be arrested to show cause why they should not furnish security for their appearance at the trial.
o) An order that the 4th to 6th Defendants do pay the 3rd Plaintiff mesne profits.
p) General damages.
q) Interest on xv and xvi above.
r) Costs of the suit.
4. The 1st and 2nd Defendants filed their Statement of Defence dated 17th October 2012, denying the Plaintiffs’ claims and asserting that the Plaintiffs voluntarily resigned and transferred their shares. The 3rd Defendant, I&M Bank Limited, filed its Statement of Defence, denying any involvement in the company's internal affairs and maintaining that its role was limited to securing and discharging its charge over the suit property. The 4th – 6th Defendants also filed their Statement of Defence, maintaining that they were bona fide purchasers for value without notice of any defect in title.
5. At the trial, the Plaintiffs called one witness, Anthony Raymond Cordeiro - Pw1, while the Defendants called five witnesses (Dw1 – Dw5).
Plaintiffs’ evidence
6. Pw1 - Anthony Raymond Cordeiro, testified and adopted his witness statements dated 23rd June 2016 and 29th October 2018 as his evidence in chief.
7. He testified that he and the 2nd Plaintiff were the majority shareholders and directors of the 3rd Plaintiff. He stated that in March 2011, they entered into an oral agreement with the 1st and 2nd Defendants to sell their shares for AUD 500,000. He maintained that he signed resignation and share transfer documents pending payment of the consideration, and that the shares were to be held in trust and re-transferred in the event of default. He contended that the consideration was never paid, but the 1st and 2nd Defendants fraudulently procured their registration as shareholders and directors and proceeded to sell the company’s prime asset, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. He maintained that the sale was undertaken without his authority or knowledge.
1st and 2nd Defendant’s evidence
8. Dw1 - Adrian Noel Carvalho, the 1st Defendant, adopted his witness statement dated 3rd October 2018, and produced two bundles of documents dated 17th October 2012 (Volume I) and 4th October 2021 (Volume II) as defence exhibits as his evidence in chief.
9. He testified that the Plaintiffs voluntarily resigned and transferred their shares, and that there was no agreement for payment of AUD 500,000. He maintained that the share transfers were valid and that he and the 2nd Defendant became the sole shareholders and directors of the 3rd Plaintiff. He stated that the company was facing financial difficulties and the suit property was sold to the 4th – 6th Defendants for Kshs. 108 million to address these challenges.
10. Dw2, a Certified Public Accountant, and Dw3, the Operations Manager, corroborated the 1st Defendant’s testimony, confirming the financial difficulties of the company and the voluntary nature of the transfer.
3rd Defendant’s evidence
11. Dw4 - Gilbert Banda, a General Manager at I&M Bank, testified that the Bank held a charge over the suit property as security for a loan advanced to the 3rd Plaintiff. Upon repayment of the loan, the Bank discharged the charge and released the title. He maintained that the Bank was not a party to the sale and acted on the company’s records, which reflected the 1st and 2nd Defendants as directors.
4th - 6th Defendants evidence
12. Dw5 - Jayarthal Jivay testified that the 4th – 6th Defendants conducted due diligence on the property and the company before purchasing it. Official searches confirmed that the 3rd Plaintiff was the registered proprietor and that the 1st and 2nd Defendants were the directors. The purchase price of Kshs. 108 million was paid in full into the 3rd Plaintiff’s account, and the property was duly transferred and registered in their names. He maintained that they were bona fide purchasers for value without notice of any fraud or defect in title.
13. Parties thereafter filed written submissions.
Plaintiffs' submissions
14. The Plaintiffs submit that their claim is founded on fraud in the transfer of their shares in the 3rd Plaintiff and the subsequent sale and transfer of the suit property, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. They contend that the 1st and 2nd Defendants caused themselves to be registered as shareholders and directors of the 3rd Plaintiff before paying the agreed consideration of AUD 500,000 for the Plaintiffs' shares and thereafter assumed control of the company and disposed of its principal asset.
15. The Plaintiffs further submit that the parties entered into an oral agreement on 23rd March 2011 under which the 1st and 2nd Defendants were to purchase their shares for AUD 500,000. They maintain that the share transfer and resignation documents subsequently executed were intended to facilitate that transaction and were conditional upon payment of the agreed consideration. They contend that no consideration was paid and that the 1st and 2nd Defendants instead used those documents to procure their registration as shareholders and directors of the 3rd Plaintiff.
16. As regards the suit property, the Plaintiffs submit that the 1st and 2nd Defendants lacked authority to dispose of it, having allegedly obtained control of the 3rd Plaintiff fraudulently. They contend that despite being informed of their objection to the sale, the Defendants proceeded with the transaction and transferred the property to the 4th – 6th Defendants. They further argue that the advocates involved were aware of the dispute but nevertheless proceeded with the sale.
17. The Plaintiffs challenge the 4th – 6th Defendants' plea that they were bona fide purchasers for value without notice. They submit that the purchasers failed to undertake sufficient due diligence, had notice of the Plaintiffs' objections and proceeded with the transaction notwithstanding the alleged irregularities. Relying on Arthi Highway Developers Ltd v West End Butchery Ltd & 6 Others, they contend that fraud vitiates title and that no valid title could pass through a fraudulent transaction.
18. Finally, the Plaintiffs contend that there was no privity of contract between themselves and the 4th – 6th Defendants. They urge the Court to declare the impugned share transfers and subsequent transfer of the suit property null and void, restore their interests in the 3rd Plaintiff, award general damages and mesne profits, and grant them costs.
1st Defendant's submissions
19. The 1st Defendant submits that the Plaintiffs' suit is premised on allegations that the 1st and 2nd Defendants fraudulently procured the transfer of the Plaintiffs' shares and unlawfully disposed of the suit property. He denies the allegations and maintains that the Plaintiffs voluntarily resigned as directors and transferred their shares to the 1st and 2nd Defendants, who thereafter assumed management when the company was experiencing serious financial difficulties and was technically insolvent.
20. On the alleged agreement for payment of AUD 500,000, the 1st Defendant submits that no evidence was tendered to establish its existence or terms. The 1st Plaintiff voluntarily executed the resignation and share transfer documents and no evidence of fraud, coercion or undue influence was produced. Consequently, the subsequent registration was lawful and could not amount to fraud.
21. The 1st Defendant further disputes the allegation that the shares were held in trust, submitting that neither an express, resulting nor constructive trust was established. The evidence demonstrated an outright transfer intended to enable the 1st and 2nd Defendants to take over and operate the 3rd Plaintiff. No fiduciary duty was owed to the Plaintiffs following their resignation and transfer of shares.
22. As regards the suit property, the 1st Defendant submits that following the transfer of shares, he and the 2nd Defendant were duly appointed directors and were competent to authorize its sale. The property belonged to the 3rd Plaintiff as a separate legal entity and not to its individual shareholders. The subsequent sale to the 4th – 6th Defendants was valid and could not be impeached merely on account of the Plaintiffs' former shareholding.
23. The 1st Defendant raises objections to the competence of the suit, arguing that the 3rd Plaintiff did not authorize the proceedings by a board resolution and that the 1st and 2nd Plaintiffs lacked standing to pursue claims belonging to the company without satisfying derivative action requirements. He further submits that reliefs seeking cancellation of title to land and fall within the jurisdiction of the Environment and Land Court.
24. Finally, the 1st Defendant submits that claims for mesne profits and general damages cannot succeed since the sale was lawful, the 4th – 6th Defendants were not trespassers, and the Plaintiffs neither pleaded nor proved mesne profits. He urges the Court to dismiss the suit with costs.
2nd Defendant's submissions
25. The 2nd Defendant submits that the Plaintiffs' suit is founded on allegations that the 1st and 2nd Defendants fraudulently procured their registration as shareholders and directors. She denies those allegations and maintains that the Plaintiffs voluntarily resigned and transferred their shares, whereupon the company records were duly amended. She further contends that there was no agreement requiring payment of AUD 500,000 as consideration for the shares.
26. On the allegation of fraud, the 2nd Defendant submits that fraud must be specifically pleaded and strictly proved to a standard higher than the ordinary balance of probabilities. The Plaintiffs failed to discharge that burden. The 1st Plaintiff admitted signing the resignation letters, share transfer forms and board resolutions and acknowledged that his signatures were not forged. The subsequent registration was undertaken pursuant to documents voluntarily executed by the Plaintiffs and cannot constitute fraud.
27. As regards the alleged oral agreement for AUD 500,000, the 2nd Defendant submits that no documentary or independent evidence was produced to establish its existence or terms. The share transfer instruments constituted the parties' written agreement and the Plaintiffs cannot introduce an alleged oral arrangement to vary or contradict those instruments. There was no evidence showing any agreed mode or time of payment, instalments or other essential terms of the alleged oral contract.
28. With respect to the suit property, the 2nd Defendant submits that it belonged to the 3rd Plaintiff and was sold after the 1st and 2nd Defendants had lawfully become its directors and shareholders. The sale was undertaken by the company through its duly appointed directors. The purchasers conducted searches, the property was free from any restriction, and the purchase consideration of Kshs.108 million was paid through the 3rd Plaintiff's bank account.
29. The 2nd Defendant submits that claims for cancellation of title, mesne profits and general damages cannot succeed. The purchasers were registered proprietors who entered into possession pursuant to a lawful sale and were therefore not trespassers. Mesne profits are special damages which must be specifically pleaded and strictly proved, which the Plaintiffs failed to do. The 3rd Defendant Bank merely discharged its security after repayment of the outstanding facility.
30. Finally, the 2nd Defendant challenges the competence of the claim brought by the 3rd Plaintiff against its directors, contending that no company resolution authorizing the proceedings was produced and that derivative action requirements were not satisfied. She urges the Court to dismiss the Plaintiffs' suit with costs.
3rd Defendant's submissions
31. The 3rd Defendant, I&M Bank Limited, submits that its involvement with the 3rd Plaintiff was limited to the banking facilities advanced to the 3rd Plaintiff and secured by a charge over L.R. No. 1870/VI/145. It was not involved in the 3rd Plaintiff's internal affairs, the transfer of shares, or the subsequent sale of the suit property. Upon repayment of the outstanding facilities on 29th September 2011, it discharged the charge and released the title in the ordinary course of its banking business.
32. The Bank states it was properly informed via documents filed with the Registrar of Companies that the 1st and 2nd Plaintiffs resigned and that the 1st and 2nd Defendants became directors. It relied on the company's official records and the apparent instructions of its directors. The Bank had no knowledge or reason to suspect any alleged fraud or dispute, and it was not served with any protest, injunction, or court order preventing its actions.
33. On the allegation that it knowingly participated in the unlawful sale, the Bank submits that it was not a party to the sale agreement and received no benefit other than repayment of the outstanding loan. Miller & Company Advocates acted for the 3rd Plaintiff, not for the Bank. Once the secured debt had been fully repaid, it was contractually obliged to discharge its security and had no legal basis to retain the title.
34. The 3rd Defendant argues that the fraud allegations were not clearly proven or backed by evidence showing its involvement, facilitation, or benefit from the alleged fraudulent transactions. The evidence only indicates that it relied on seemingly standard corporate records and instructions as part of its normal banking operations.
35. Finally, the Bank argues that there is no proven causal link between its discharge of the charge and the Plaintiffs' alleged losses. It contends that no damages should be awarded to them. The Bank also requests the Court to dismiss the claim against the 3rd Defendant with costs, claiming that the 3rd Defendant was improperly included in an internal dispute between the Plaintiffs and the 1st and 2nd Defendants.
4th – 6th Defendants' submissions
36. The 4th – 6th Defendants assert they are the rightful registered owners of L.R. No. 1870/VI/145, having purchased it from the 3rd Plaintiff for KShs.108 million. They deny any involvement in the dispute over the transfer of shares and directorship. Prior to purchase, they carried out due diligence confirming that the 3rd Plaintiff was the registered owner and that the 1st and 2nd Defendants served as its directors/shareholders. The property was secured by a charge to the 3rd Defendant for Kshs. 61 million, which was later released.
37. They submit that the purchase was pursuant to an agreement for sale dated 1st July 2011 and that the entire purchase price of Kshs.108 million was paid in accordance with the agreement directly to or for the benefit of the 3rd Plaintiff. Upon payment and discharge of the existing charge, the property was transferred and registered in their names on 20th February 2012. They acquired the property lawfully, for valuable consideration and after undertaking the requisite searches and due diligence.
38. On the allegation of fraud, the 4th – 6th Defendants submit that no evidence was tendered demonstrating that they participated in or had knowledge of any fraud. Their title is protected by the principle of indefeasibility and cannot be impeached in the absence of proof that they participated in fraud, misrepresentation, illegality or an unprocedural acquisition. They rely on Mhasi v Mhasi & another [2025] KECA 1420 and Doshi & Chemutai & Others [2025] KECA 276, for the proposition that a registered title cannot be impeached on mere allegations of fraud unsupported by evidence.
39. The Defendants oppose the Plaintiffs' requests for title cancellation, a permanent injunction, and mesne profits. Because they lawfully acquired and currently possess the property, they are not considered trespassers. Mesne profits are a type of special damages which require specific pleading and proof, but the Plaintiffs have neither quantified nor demonstrated any such losses.
40. They also contend that this Court lacks jurisdiction to order cancellation of their title, arguing that disputes concerning title to land fall within the exclusive jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution and section 13 of the Environment and Land Court Act.
41. Finally, the 4th – 6th Defendants urge the Court to dismiss the Plaintiffs' claims and uphold their title to the property. In the alternative, should the Court invalidate the sale, they seek judgment on their counterclaim against the 3rd Plaintiff for Kshs.108 million, being the purchase price paid, together with interest and costs.
Analysis and determination
42. Having considered the pleadings, the evidence on record, the documents produced and the respective written submissions of counsel, the following issues arise for determination:
i. Whether the transfer of the 1st and 2nd Plaintiffs' shares to the 1st and 2nd Defendants was fraudulent or conditional upon payment of AUD 500,000;
ii. Whether the 1st and 2nd Defendants held the transferred shares in trust for the Plaintiffs;
iii. Whether the sale and transfer of L.R. No. 1870/VI/145 to the 4th – 6th Defendants was fraudulent and liable to be set aside;
iv. Whether the 3rd Defendant participated in or facilitated the alleged fraud; and
v. Whether the Plaintiffs are entitled to the reliefs sought;
43. Before addressing the main issue, I must first resolve the jurisdiction matter, as the 1st and 4th – 6th Defendants raised a preliminary objection. They argued that requests for canceling titles and land-related declarations fall under the exclusive jurisdiction of the Environment and Land Court (ELC), as provided by Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act.
44. Jurisdiction is generally defined by the pleadings and the reliefs being sought. In Co-operative Bank of Kenya Ltd v Patrick Kang’ethe Njuguna & 5 Others [2017] eKLR, the Court of Appeal clarified that disputes involving creating or enforcing a charge fall under the High Court's commercial jurisdiction. In contrast, disputes over land rights, occupation, or use are within the jurisdiction of the Environment and Land Court (ELC). This principle was reaffirmed in Bank of Africa Kenya Ltd & Another v TSS Investment Ltd & 2 Others (Civil Appeal No. E055 of 2022), where it was established that the ELC handles legal issues concerning land ownership or title, not the commercial agreements that lead to those disputes.
45. In this case, the Plaintiff questions the validity of the share transfer, the authority of the directors, and the legality of selling the company’s asset. The requests to cancel the title are directly related to the alleged fraudulent sale. The main issue is not the charge or the sale agreement itself but rather the legitimacy of the share transfer and whether the 1st and 2nd Defendants had the authority to act for the company. This dispute revolves around the internal management of the company and the validity of corporate transactions, which are under the jurisdiction of the High Court.
46. Additionally, the conflict over the shares is not a land dispute. Although the reliefs involve land ownership, this does not exclude this Court’s jurisdiction, as the primary issue concerns the legitimacy of the corporate actions that resulted in the sale. The key question here is whether the share transfer was valid and whether the directors had the proper authority, which are commercial issues. Therefore, I conclude that this Court is competent to hear and resolve this case.
Whether the transfer of shares was fraudulent
47. The Plaintiffs argue that their share transfers to the 1st and 2nd Defendants were fraudulent and invalid since the AUD 500,000 consideration was not paid. In contrast, the 1st and 2nd Defendants assert that the transfers were voluntary and lawful, and that the Plaintiffs signed the necessary documents.
48. The law requires the Plaintiffs to prove their allegations. According to Sections 107 and 109 of the Evidence Act, the assertion of a claim obligates the claimant to provide proof. Since this is a civil case, both parties must demonstrate their cases based on the balance of probabilities, which is the standard of proof involved.
49. Specifically, when fraud is claimed, it must be clearly stated and rigorously proven (See Kinyanjui Kamau v George Kamau Njoroge [2015] eKLR). The required standard exceeds the usual balance of probabilities but is not as strict as the proof beyond a reasonable doubt used in criminal cases.
50. It is undisputed that the 1st Plaintiff (Pw1), admitted to signing the resignation letters, share transfer forms, and board resolutions. He confirmed that his signatures were genuine and not forged. Legally, a share transfer is completed through the execution of a transfer instrument in the prescribed manner. Section 74 of the repealed Companies Act (Cap 486), applicable at the relevant time, states that a share transfer is invalid unless an instrument of transfer is signed by or on behalf of both the transferor and the transferee. The Plaintiffs intentionally signed the transfer documents, which were then submitted to the Registrar of Companies. Consequently, the registration of the 1st and 2nd Defendants as shareholders appears to have been conducted properly on the face of the records.
51. The Plaintiffs’ claim that the transfers depended on payment of the purchase price lacks supporting documentary proof. The alleged oral agreement was not put in writing, and the share transfer forms did not specify any conditions or reservations of title. The Plaintiffs cannot claim fraud after voluntarily signing the documents that completed the transfer. These share transfer documents serve as the parties’ written agreement, and the Plaintiffs are not permitted to introduce an oral agreement that contradicts or alters these documents. According to Section 3(3) of the Law of Contract Act, a lawsuit based on a contract for transferring an interest in land must be in writing and signed by all involved parties. Although shares are not land, the same requirement for certainty and evidence of contractual terms applies.
52. Dw1 stated that no agreement for AUD 500,000 was made and that the Plaintiffs voluntarily signed the transfer forms. These forms indicated consideration amounts of Kshs.2,324,900/= and Kshs.175,000/=. Dw2, an accountant who had worked with the 1st Plaintiff for many years, testified that the transfer documents and board resolutions seemed proper, and that the 1st Plaintiff confirmed his interest transfer. Dw2 also stated he had never seen any agreement involving AUD 500,000.
53. Dw3, who has worked with the 3rd Plaintiff since 1997, provided evidence indicating that the company was experiencing severe financial issues, such as bounced checks, inability to pay suppliers and staff salaries, and layoffs. She stated that Pw1 transferred control of the company to the 1st and 2nd Defendants, and staff even organized a farewell event for him. This evidence suggests a voluntary transfer of management and control rather than a secret takeover.
54. The Court is alive to the fact that non-payment of consideration may, depending upon the contractual arrangement between parties, found an action for recovery of the purchase price or other contractual remedies. However, it does not automatically imply fraud in the registration of instruments that are clearly executed by the transferor.
55. I conclude that the Plaintiffs have not met the required standard of proof to show that the 1st and 2nd Defendants fraudulently caused the transfer of shares or their registration as directors and shareholders of the 3rd Plaintiff.
Whether the shares were held in trust
56. The Plaintiffs also request declarations that the 1st and 2nd Defendants held the transferred shares in trust for them. This trust claim is mainly based on the alleged agreement that the shares would only be transferred after the payment of AUD 500,000 and would be re-transferred if there was a default.
57. A trust, whether explicit, implied, or constructive, must be based on facts that establish the equitable obligation claimed. In this case, there is no written trust declaration. Additionally, the Plaintiffs failed to provide strong evidence of an agreement that the transferees would hold the shares only until payment and then re-transfer them if the payment was not completed.
58. In this case, the objective evidence clearly indicates share transfers, resignations from directorship, and the registration of the 1st and 2nd Defendants as shareholders and directors. Since the Plaintiffs have not proved that these transactions were conditional, there is not enough evidence for this Court to impose the trust they claim. Therefore, I conclude that the Plaintiffs have not demonstrated that the 1st and 2nd Defendants held the shares in trust for them.
Whether the sale and transfer of L.R. No. 1870/VI/145 to the 4th – 6th Defendants was fraudulent and liable to be set aside
59. Having established that the 1st and 2nd Defendants were the legitimate shareholders and directors of the 3rd Plaintiff, they possessed the authority to manage the company’s affairs and handle its assets. The suit property was owned by the 3rd Plaintiff, a separate legal entity, not by the individual shareholders (See Salomon v A Salomon & Co Ltd [1897] AC 22). As the properly appointed directors, the 1st and 2nd Defendants had the capacity to approve the sale of the property.
56. The Plaintiffs’ claim that the sale was fraudulent because they were not consulted is unfounded. After resigning and transferring their shares, they had no further interest in the company or its assets. The evidence relating to the sale is quite clear. Dw5 stated that the 4th – 6th Defendants conducted searches at both the Lands Registry and the Companies Registry. The land search identified the 3rd Plaintiff as the owner, while the company search showed the 1st and 2nd Defendants as directors. An agreement for sale was signed on 1st July 2011 with a purchase price of Kshs.108 million. Payment details were supported by documents including a cheque for Kshs.10,800,000/=, another cheque and bank transfer for Kshs.61 million, and an RTGS transfer for Kshs.36,200,000/=. These totals amount to Kshs.108 million. Dw5 confirmed that the payment was made to the 3rd Plaintiff, not directly to the 1st and 2nd Defendants.
57. That evidence materially undermines the Plaintiffs' contention that the property was secretly appropriated by the 1st and 2nd Defendants. Whatever dispute may have existed regarding the consideration for the Plaintiffs' shares, the evidence before the Court establishes a separate transaction under which the company's property was sold and the consideration paid to the company.
58. The property sale was carried out by the company through its legitimate directors. Consequently, I conclude that the 1st and
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2. The dispute essentially revolves around the alleged fraudulent transfer of shares in the 3rd Plaintiff Company, Technology Today Limited, and the subsequent sale of its prime asset, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. The case presents a complex interplay of company law, the law of trusts, and the doctrine of indefeasibility of title to land. The Plaintiffs’ case is that they were the majority shareholders and directors of the 3rd Plaintiff and that they were defrauded of their shares and the company’s assets by the 1st and 2nd Defendants. The Defendants, on their part, maintain that the share transfers were voluntary and lawful, and that the subsequent sale of the suit property was a valid transaction carried out by the company’s duly appointed directors.
3. By their Plaint, the Plaintiffs pray for judgment against the Defendants for the following reliefs:
a) A declaration that the 1st Defendant holds the 1,750 shares registered in his name in the 3rd Plaintiff upon trust for the 2nd Plaintiff.
b) A declaration that the 2nd Defendant holds the 1,750 shares registered in her name upon trust for the 1st Plaintiff.
c) An order that the 1st Defendant do transfer to the 2nd Plaintiff 1,750 shares registered in her name in the 3rd Plaintiff.
d) An order that the 2nd Defendant do transfer to the 1st Plaintiff 23,249 shares registered in her name in the 3rd Plaintiff.
e) An order that the 1st and 2nd Plaintiffs do account to the Plaintiffs all the revenue realized by them upon realization of the 3rd Defendants assets since 23rd March 2011.
f) A declaration that the 3rd Defendant breached the contract of borrowing by consenting to the purported sale of L.R. No. 1870/6V1/ 145 after receiving the Plaintiffs’ demand that the sale be stopped on 19th October 2011.
g) A declaration that the 3rd Defendant participated in a fraudulent sale by the 1st and 2nd Defendants acting in the name of the 3rd Plaintiff of the said L.R. No. 1870/6VI/145 to 4th to 6th Defendants.
h) A declaration that the purported sale and transfer of LR. No. 1870/6V1/ 145 to the 4th to 6th Defendants is fraudulent within the meaning of the Registration of Titles Act and therefore null and void.
i) A permanent injunction to restrain the 4th to 6th Defendants from selling, charging or subdividing the said L.R. No. 1870/6V1/145.
j) A declaration that the 3rd Plaintiff is the proprietor of L.R. No. 1870/6V1/145.
k) A declaration that the 4th to 6th Defendant are trespassers on the said suit property.
l) A declaration that the 4th to 6th Defendants have committed trespass to the land since 19th October 2011.
m) An order that the 4th to 6th Defendants do deliver up to the Registrar of Titles the transfer and certificate of title in respect of the suit property for cancellation of item no. 10, the purported transfer in favour of the 4th and 6th Defendants.
n) An order that the 1st and 2nd Defendants be arrested to show cause why they should not furnish security for their appearance at the trial.
o) An order that the 4th to 6th Defendants do pay the 3rd Plaintiff mesne profits.
p) General damages.
q) Interest on xv and xvi above.
r) Costs of the suit.
4. The 1st and 2nd Defendants filed their Statement of Defence dated 17th October 2012, denying the Plaintiffs’ claims and asserting that the Plaintiffs voluntarily resigned and transferred their shares. The 3rd Defendant, I&M Bank Limited, filed its Statement of Defence, denying any involvement in the company's internal affairs and maintaining that its role was limited to securing and discharging its charge over the suit property. The 4th – 6th Defendants also filed their Statement of Defence, maintaining that they were bona fide purchasers for value without notice of any defect in title.
5. At the trial, the Plaintiffs called one witness, Anthony Raymond Cordeiro - Pw1, while the Defendants called five witnesses (Dw1 – Dw5).
Plaintiffs’ evidence
6. Pw1 - Anthony Raymond Cordeiro, testified and adopted his witness statements dated 23rd June 2016 and 29th October 2018 as his evidence in chief.
7. He testified that he and the 2nd Plaintiff were the majority shareholders and directors of the 3rd Plaintiff. He stated that in March 2011, they entered into an oral agreement with the 1st and 2nd Defendants to sell their shares for AUD 500,000. He maintained that he signed resignation and share transfer documents pending payment of the consideration, and that the shares were to be held in trust and re-transferred in the event of default. He contended that the consideration was never paid, but the 1st and 2nd Defendants fraudulently procured their registration as shareholders and directors and proceeded to sell the company’s prime asset, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. He maintained that the sale was undertaken without his authority or knowledge.
1st and 2nd Defendant’s evidence
8. Dw1 - Adrian Noel Carvalho, the 1st Defendant, adopted his witness statement dated 3rd October 2018, and produced two bundles of documents dated 17th October 2012 (Volume I) and 4th October 2021 (Volume II) as defence exhibits as his evidence in chief.
9. He testified that the Plaintiffs voluntarily resigned and transferred their shares, and that there was no agreement for payment of AUD 500,000. He maintained that the share transfers were valid and that he and the 2nd Defendant became the sole shareholders and directors of the 3rd Plaintiff. He stated that the company was facing financial difficulties and the suit property was sold to the 4th – 6th Defendants for Kshs. 108 million to address these challenges.
10. Dw2, a Certified Public Accountant, and Dw3, the Operations Manager, corroborated the 1st Defendant’s testimony, confirming the financial difficulties of the company and the voluntary nature of the transfer.
3rd Defendant’s evidence
11. Dw4 - Gilbert Banda, a General Manager at I&M Bank, testified that the Bank held a charge over the suit property as security for a loan advanced to the 3rd Plaintiff. Upon repayment of the loan, the Bank discharged the charge and released the title. He maintained that the Bank was not a party to the sale and acted on the company’s records, which reflected the 1st and 2nd Defendants as directors.
4th - 6th Defendants evidence
12. Dw5 - Jayarthal Jivay testified that the 4th – 6th Defendants conducted due diligence on the property and the company before purchasing it. Official searches confirmed that the 3rd Plaintiff was the registered proprietor and that the 1st and 2nd Defendants were the directors. The purchase price of Kshs. 108 million was paid in full into the 3rd Plaintiff’s account, and the property was duly transferred and registered in their names. He maintained that they were bona fide purchasers for value without notice of any fraud or defect in title.
13. Parties thereafter filed written submissions.
Plaintiffs' submissions
14. The Plaintiffs submit that their claim is founded on fraud in the transfer of their shares in the 3rd Plaintiff and the subsequent sale and transfer of the suit property, L.R. No. 1870/6/V/145, to the 4th – 6th Defendants. They contend that the 1st and 2nd Defendants caused themselves to be registered as shareholders and directors of the 3rd Plaintiff before paying the agreed consideration of AUD 500,000 for the Plaintiffs' shares and thereafter assumed control of the company and disposed of its principal asset.
15. The Plaintiffs further submit that the parties entered into an oral agreement on 23rd March 2011 under which the 1st and 2nd Defendants were to purchase their shares for AUD 500,000. They maintain that the share transfer and resignation documents subsequently executed were intended to facilitate that transaction and were conditional upon payment of the agreed consideration. They contend that no consideration was paid and that the 1st and 2nd Defendants instead used those documents to procure their registration as shareholders and directors of the 3rd Plaintiff.
16. As regards the suit property, the Plaintiffs submit that the 1st and 2nd Defendants lacked authority to dispose of it, having allegedly obtained control of the 3rd Plaintiff fraudulently. They contend that despite being informed of their objection to the sale, the Defendants proceeded with the transaction and transferred the property to the 4th – 6th Defendants. They further argue that the advocates involved were aware of the dispute but nevertheless proceeded with the sale.
17. The Plaintiffs challenge the 4th – 6th Defendants' plea that they were bona fide purchasers for value without notice. They submit that the purchasers failed to undertake sufficient due diligence, had notice of the Plaintiffs' objections and proceeded with the transaction notwithstanding the alleged irregularities. Relying on Arthi Highway Developers Ltd v West End Butchery Ltd & 6 Others, they contend that fraud vitiates title and that no valid title could pass through a fraudulent transaction.
18. Finally, the Plaintiffs contend that there was no privity of contract between themselves and the 4th – 6th Defendants. They urge the Court to declare the impugned share transfers and subsequent transfer of the suit property null and void, restore their interests in the 3rd Plaintiff, award general damages and mesne profits, and grant them costs.
1st Defendant's submissions
19. The 1st Defendant submits that the Plaintiffs' suit is premised on allegations that the 1st and 2nd Defendants fraudulently procured the transfer of the Plaintiffs' shares and unlawfully disposed of the suit property. He denies the allegations and maintains that the Plaintiffs voluntarily resigned as directors and transferred their shares to the 1st and 2nd Defendants, who thereafter assumed management when the company was experiencing serious financial difficulties and was technically insolvent.
20. On the alleged agreement for payment of AUD 500,000, the 1st Defendant submits that no evidence was tendered to establish its existence or terms. The 1st Plaintiff voluntarily executed the resignation and share transfer documents and no evidence of fraud, coercion or undue influence was produced. Consequently, the subsequent registration was lawful and could not amount to fraud.
21. The 1st Defendant further disputes the allegation that the shares were held in trust, submitting that neither an express, resulting nor constructive trust was established. The evidence demonstrated an outright transfer intended to enable the 1st and 2nd Defendants to take over and operate the 3rd Plaintiff. No fiduciary duty was owed to the Plaintiffs following their resignation and transfer of shares.
22. As regards the suit property, the 1st Defendant submits that following the transfer of shares, he and the 2nd Defendant were duly appointed directors and were competent to authorize its sale. The property belonged to the 3rd Plaintiff as a separate legal entity and not to its individual shareholders. The subsequent sale to the 4th – 6th Defendants was valid and could not be impeached merely on account of the Plaintiffs' former shareholding.
23. The 1st Defendant raises objections to the competence of the suit, arguing that the 3rd Plaintiff did not authorize the proceedings by a board resolution and that the 1st and 2nd Plaintiffs lacked standing to pursue claims belonging to the company without satisfying derivative action requirements. He further submits that reliefs seeking cancellation of title to land and fall within the jurisdiction of the Environment and Land Court.
24. Finally, the 1st Defendant submits that claims for mesne profits and general damages cannot succeed since the sale was lawful, the 4th – 6th Defendants were not trespassers, and the Plaintiffs neither pleaded nor proved mesne profits. He urges the Court to dismiss the suit with costs.
2nd Defendant's submissions
25. The 2nd Defendant submits that the Plaintiffs' suit is founded on allegations that the 1st and 2nd Defendants fraudulently procured their registration as shareholders and directors. She denies those allegations and maintains that the Plaintiffs voluntarily resigned and transferred their shares, whereupon the company records were duly amended. She further contends that there was no agreement requiring payment of AUD 500,000 as consideration for the shares.
26. On the allegation of fraud, the 2nd Defendant submits that fraud must be specifically pleaded and strictly proved to a standard higher than the ordinary balance of probabilities. The Plaintiffs failed to discharge that burden. The 1st Plaintiff admitted signing the resignation letters, share transfer forms and board resolutions and acknowledged that his signatures were not forged. The subsequent registration was undertaken pursuant to documents voluntarily executed by the Plaintiffs and cannot constitute fraud.
27. As regards the alleged oral agreement for AUD 500,000, the 2nd Defendant submits that no documentary or independent evidence was produced to establish its existence or terms. The share transfer instruments constituted the parties' written agreement and the Plaintiffs cannot introduce an alleged oral arrangement to vary or contradict those instruments. There was no evidence showing any agreed mode or time of payment, instalments or other essential terms of the alleged oral contract.
28. With respect to the suit property, the 2nd Defendant submits that it belonged to the 3rd Plaintiff and was sold after the 1st and 2nd Defendants had lawfully become its directors and shareholders. The sale was undertaken by the company through its duly appointed directors. The purchasers conducted searches, the property was free from any restriction, and the purchase consideration of Kshs.108 million was paid through the 3rd Plaintiff's bank account.
29. The 2nd Defendant submits that claims for cancellation of title, mesne profits and general damages cannot succeed. The purchasers were registered proprietors who entered into possession pursuant to a lawful sale and were therefore not trespassers. Mesne profits are special damages which must be specifically pleaded and strictly proved, which the Plaintiffs failed to do. The 3rd Defendant Bank merely discharged its security after repayment of the outstanding facility.
30. Finally, the 2nd Defendant challenges the competence of the claim brought by the 3rd Plaintiff against its directors, contending that no company resolution authorizing the proceedings was produced and that derivative action requirements were not satisfied. She urges the Court to dismiss the Plaintiffs' suit with costs.
3rd Defendant's submissions
31. The 3rd Defendant, I&M Bank Limited, submits that its involvement with the 3rd Plaintiff was limited to the banking facilities advanced to the 3rd Plaintiff and secured by a charge over L.R. No. 1870/VI/145. It was not involved in the 3rd Plaintiff's internal affairs, the transfer of shares, or the subsequent sale of the suit property. Upon repayment of the outstanding facilities on 29th September 2011, it discharged the charge and released the title in the ordinary course of its banking business.
32. The Bank states it was properly informed via documents filed with the Registrar of Companies that the 1st and 2nd Plaintiffs resigned and that the 1st and 2nd Defendants became directors. It relied on the company's official records and the apparent instructions of its directors. The Bank had no knowledge or reason to suspect any alleged fraud or dispute, and it was not served with any protest, injunction, or court order preventing its actions.
33. On the allegation that it knowingly participated in the unlawful sale, the Bank submits that it was not a party to the sale agreement and received no benefit other than repayment of the outstanding loan. Miller & Company Advocates acted for the 3rd Plaintiff, not for the Bank. Once the secured debt had been fully repaid, it was contractually obliged to discharge its security and had no legal basis to retain the title.
34. The 3rd Defendant argues that the fraud allegations were not clearly proven or backed by evidence showing its involvement, facilitation, or benefit from the alleged fraudulent transactions. The evidence only indicates that it relied on seemingly standard corporate records and instructions as part of its normal banking operations.
35. Finally, the Bank argues that there is no proven causal link between its discharge of the charge and the Plaintiffs' alleged losses. It contends that no damages should be awarded to them. The Bank also requests the Court to dismiss the claim against the 3rd Defendant with costs, claiming that the 3rd Defendant was improperly included in an internal dispute between the Plaintiffs and the 1st and 2nd Defendants.
4th – 6th Defendants' submissions
36. The 4th – 6th Defendants assert they are the rightful registered owners of L.R. No. 1870/VI/145, having purchased it from the 3rd Plaintiff for KShs.108 million. They deny any involvement in the dispute over the transfer of shares and directorship. Prior to purchase, they carried out due diligence confirming that the 3rd Plaintiff was the registered owner and that the 1st and 2nd Defendants served as its directors/shareholders. The property was secured by a charge to the 3rd Defendant for Kshs. 61 million, which was later released.
37. They submit that the purchase was pursuant to an agreement for sale dated 1st July 2011 and that the entire purchase price of Kshs.108 million was paid in accordance with the agreement directly to or for the benefit of the 3rd Plaintiff. Upon payment and discharge of the existing charge, the property was transferred and registered in their names on 20th February 2012. They acquired the property lawfully, for valuable consideration and after undertaking the requisite searches and due diligence.
38. On the allegation of fraud, the 4th – 6th Defendants submit that no evidence was tendered demonstrating that they participated in or had knowledge of any fraud. Their title is protected by the principle of indefeasibility and cannot be impeached in the absence of proof that they participated in fraud, misrepresentation, illegality or an unprocedural acquisition. They rely on Mhasi v Mhasi & another [2025] KECA 1420 and Doshi & Chemutai & Others [2025] KECA 276, for the proposition that a registered title cannot be impeached on mere allegations of fraud unsupported by evidence.
39. The Defendants oppose the Plaintiffs' requests for title cancellation, a permanent injunction, and mesne profits. Because they lawfully acquired and currently possess the property, they are not considered trespassers. Mesne profits are a type of special damages which require specific pleading and proof, but the Plaintiffs have neither quantified nor demonstrated any such losses.
40. They also contend that this Court lacks jurisdiction to order cancellation of their title, arguing that disputes concerning title to land fall within the exclusive jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution and section 13 of the Environment and Land Court Act.
41. Finally, the 4th – 6th Defendants urge the Court to dismiss the Plaintiffs' claims and uphold their title to the property. In the alternative, should the Court invalidate the sale, they seek judgment on their counterclaim against the 3rd Plaintiff for Kshs.108 million, being the purchase price paid, together with interest and costs.
Analysis and determination
42. Having considered the pleadings, the evidence on record, the documents produced and the respective written submissions of counsel, the following issues arise for determination:
i. Whether the transfer of the 1st and 2nd Plaintiffs' shares to the 1st and 2nd Defendants was fraudulent or conditional upon payment of AUD 500,000;
ii. Whether the 1st and 2nd Defendants held the transferred shares in trust for the Plaintiffs;
iii. Whether the sale and transfer of L.R. No. 1870/VI/145 to the 4th – 6th Defendants was fraudulent and liable to be set aside;
iv. Whether the 3rd Defendant participated in or facilitated the alleged fraud; and
v. Whether the Plaintiffs are entitled to the reliefs sought;
43. Before addressing the main issue, I must first resolve the jurisdiction matter, as the 1st and 4th – 6th Defendants raised a preliminary objection. They argued that requests for canceling titles and land-related declarations fall under the exclusive jurisdiction of the Environment and Land Court (ELC), as provided by Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act.
44. Jurisdiction is generally defined by the pleadings and the reliefs being sought. In Co-operative Bank of Kenya Ltd v Patrick Kang’ethe Njuguna & 5 Others [2017] eKLR, the Court of Appeal clarified that disputes involving creating or enforcing a charge fall under the High Court's commercial jurisdiction. In contrast, disputes over land rights, occupation, or use are within the jurisdiction of the Environment and Land Court (ELC). This principle was reaffirmed in Bank of Africa Kenya Ltd & Another v TSS Investment Ltd & 2 Others (Civil Appeal No. E055 of 2022), where it was established that the ELC handles legal issues concerning land ownership or title, not the commercial agreements that lead to those disputes.
45. In this case, the Plaintiff questions the validity of the share transfer, the authority of the directors, and the legality of selling the company’s asset. The requests to cancel the title are directly related to the alleged fraudulent sale. The main issue is not the charge or the sale agreement itself but rather the legitimacy of the share transfer and whether the 1st and 2nd Defendants had the authority to act for the company. This dispute revolves around the internal management of the company and the validity of corporate transactions, which are under the jurisdiction of the High Court.
46. Additionally, the conflict over the shares is not a land dispute. Although the reliefs involve land ownership, this does not exclude this Court’s jurisdiction, as the primary issue concerns the legitimacy of the corporate actions that resulted in the sale. The key question here is whether the share transfer was valid and whether the directors had the proper authority, which are commercial issues. Therefore, I conclude that this Court is competent to hear and resolve this case.
Whether the transfer of shares was fraudulent
47. The Plaintiffs argue that their share transfers to the 1st and 2nd Defendants were fraudulent and invalid since the AUD 500,000 consideration was not paid. In contrast, the 1st and 2nd Defendants assert that the transfers were voluntary and lawful, and that the Plaintiffs signed the necessary documents.
48. The law requires the Plaintiffs to prove their allegations. According to Sections 107 and 109 of the Evidence Act, the assertion of a claim obligates the claimant to provide proof. Since this is a civil case, both parties must demonstrate their cases based on the balance of probabilities, which is the standard of proof involved.
49. Specifically, when fraud is claimed, it must be clearly stated and rigorously proven (See Kinyanjui Kamau v George Kamau Njoroge [2015] eKLR). The required standard exceeds the usual balance of probabilities but is not as strict as the proof beyond a reasonable doubt used in criminal cases.
50. It is undisputed that the 1st Plaintiff (Pw1), admitted to signing the resignation letters, share transfer forms, and board resolutions. He confirmed that his signatures were genuine and not forged. Legally, a share transfer is completed through the execution of a transfer instrument in the prescribed manner. Section 74 of the repealed Companies Act (Cap 486), applicable at the relevant time, states that a share transfer is invalid unless an instrument of transfer is signed by or on behalf of both the transferor and the transferee. The Plaintiffs intentionally signed the transfer documents, which were then submitted to the Registrar of Companies. Consequently, the registration of the 1st and 2nd Defendants as shareholders appears to have been conducted properly on the face of the records.
51. The Plaintiffs’ claim that the transfers depended on payment of the purchase price lacks supporting documentary proof. The alleged oral agreement was not put in writing, and the share transfer forms did not specify any conditions or reservations of title. The Plaintiffs cannot claim fraud after voluntarily signing the documents that completed the transfer. These share transfer documents serve as the parties’ written agreement, and the Plaintiffs are not permitted to introduce an oral agreement that contradicts or alters these documents. According to Section 3(3) of the Law of Contract Act, a lawsuit based on a contract for transferring an interest in land must be in writing and signed by all involved parties. Although shares are not land, the same requirement for certainty and evidence of contractual terms applies.
52. Dw1 stated that no agreement for AUD 500,000 was made and that the Plaintiffs voluntarily signed the transfer forms. These forms indicated consideration amounts of Kshs.2,324,900/= and Kshs.175,000/=. Dw2, an accountant who had worked with the 1st Plaintiff for many years, testified that the transfer documents and board resolutions seemed proper, and that the 1st Plaintiff confirmed his interest transfer. Dw2 also stated he had never seen any agreement involving AUD 500,000.
53. Dw3, who has worked with the 3rd Plaintiff since 1997, provided evidence indicating that the company was experiencing severe financial issues, such as bounced checks, inability to pay suppliers and staff salaries, and layoffs. She stated that Pw1 transferred control of the company to the 1st and 2nd Defendants, and staff even organized a farewell event for him. This evidence suggests a voluntary transfer of management and control rather than a secret takeover.
54. The Court is alive to the fact that non-payment of consideration may, depending upon the contractual arrangement between parties, found an action for recovery of the purchase price or other contractual remedies. However, it does not automatically imply fraud in the registration of instruments that are clearly executed by the transferor.
55. I conclude that the Plaintiffs have not met the required standard of proof to show that the 1st and 2nd Defendants fraudulently caused the transfer of shares or their registration as directors and shareholders of the 3rd Plaintiff.
Whether the shares were held in trust
56. The Plaintiffs also request declarations that the 1st and 2nd Defendants held the transferred shares in trust for them. This trust claim is mainly based on the alleged agreement that the shares would only be transferred after the payment of AUD 500,000 and would be re-transferred if there was a default.
57. A trust, whether explicit, implied, or constructive, must be based on facts that establish the equitable obligation claimed. In this case, there is no written trust declaration. Additionally, the Plaintiffs failed to provide strong evidence of an agreement that the transferees would hold the shares only until payment and then re-transfer them if the payment was not completed.
58. In this case, the objective evidence clearly indicates share transfers, resignations from directorship, and the registration of the 1st and 2nd Defendants as shareholders and directors. Since the Plaintiffs have not proved that these transactions were conditional, there is not enough evidence for this Court to impose the trust they claim. Therefore, I conclude that the Plaintiffs have not demonstrated that the 1st and 2nd Defendants held the shares in trust for them.
Whether the sale and transfer of L.R. No. 1870/VI/145 to the 4th – 6th Defendants was fraudulent and liable to be set aside
59. Having established that the 1st and 2nd Defendants were the legitimate shareholders and directors of the 3rd Plaintiff, they possessed the authority to manage the company’s affairs and handle its assets. The suit property was owned by the 3rd Plaintiff, a separate legal entity, not by the individual shareholders (See Salomon v A Salomon & Co Ltd [1897] AC 22). As the properly appointed directors, the 1st and 2nd Defendants had the capacity to approve the sale of the property.
56. The Plaintiffs’ claim that the sale was fraudulent because they were not consulted is unfounded. After resigning and transferring their shares, they had no further interest in the company or its assets. The evidence relating to the sale is quite clear. Dw5 stated that the 4th – 6th Defendants conducted searches at both the Lands Registry and the Companies Registry. The land search identified the 3rd Plaintiff as the owner, while the company search showed the 1st and 2nd Defendants as directors. An agreement for sale was signed on 1st July 2011 with a purchase price of Kshs.108 million. Payment details were supported by documents including a cheque for Kshs.10,800,000/=, another cheque and bank transfer for Kshs.61 million, and an RTGS transfer for Kshs.36,200,000/=. These totals amount to Kshs.108 million. Dw5 confirmed that the payment was made to the 3rd Plaintiff, not directly to the 1st and 2nd Defendants.
57. That evidence materially undermines the Plaintiffs' contention that the property was secretly appropriated by the 1st and 2nd Defendants. Whatever dispute may have existed regarding the consideration for the Plaintiffs' shares, the evidence before the Court establishes a separate transaction under which the company's property was sold and the consideration paid to the company.
58. The property sale was carried out by the company through its legitimate directors. Consequently, I conclude that the 1st and
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