Background and Introduction
1. The dispute before this court concerns the management and operations of the 1st defendant, a limited liability company known as KENDA INVESTMENTS LIMITED (hereinafter “the Company”). At the heart of the dispute is a disagreement over the legitimacy of the Company's directorship, shareholding, and membership, pitting the seven plaintiffs against the 2nd and 3rd defendants.
2. The plaintiffs claim that they, along with the late Gerishon Kirima (Kirima), were the Company's founding members and that Kirima served as both director and chairperson. They allege that he unlawfully altered the original shareholder list, increasing the number from 740 to 8,000 without their consent, effectively reducing their role in the Company to that of mere spectators. This is what ultimately led to the filing of the present suit on 23rd November 2011. Following Kirima’s demise, the 2nd and 3rd defendants continued serving as the Company's directors.
3. Against this backdrop, the 2nd and 3rd defendants (hereinafter the defendants), have now brought the application dated 27th August 2024, which arises from court orders issued on 22nd August 2013, following an application dated 12th August 2013. In those orders, the court directed that the status quo on directorship be maintained, meaning that the 2nd and 3rd defendants would continue as directors and operate from Kenda Houses in Nairobi and Murang’a.
4. The defendants contend that despite the existence of the court orders, the plaintiffs have barred them from accessing the premises and have been collecting rent directly from the tenants without providing any accounts. Consequently, they seek the following orders;
i. THAT this Honourable court do issue an injunction restraining the plaintiffs/respondents either by themselves, servants, agents, representatives, assignees or any other person acting for them from managing the affairs of the 1st defendant, collecting rent, locking the 2nd and 3rd defendants from accessing the offices of the 1st defendant and/or any other manner interfering with the operations of the 1st defendant pending the hearing and determination of the application and the appeal.
ii. THAT the 2nd and 3rd defendants do continue managing the operations of the 1st defendant as directed by the Honourable court vide the court’s order given on 22nd August,2013 and issued on 6th September, 2013.
iii. THAT the Honourable court do issue an order directing that Great Mwanzo and Management Properties Valuers Limited, the 2nd and 3rd defendants appointed management agents, do collect rent on behalf of the 1st defendant from the tenants in occupation of Kenda House situated at Tom Mboya street and that the collected rent to be deposited into the 1st defendant’s bank account.
iv. THAT this Honourable court do issue an order directing the plaintiffs to render accounts of all the monies they have collected from the tenants on behalf of the 1st defendant.
v. THAT the O.C.S Kamkunji Police Station do ensure compliance and also provide the necessary security.
vi. THAT costs of this application be provided for/
5. The application is opposed by way of a replying affidavit sworn on 1st October 2024 by John Peter Kamau Ruhanga on behalf of the plaintiffs. While they acknowledge the existence of the court orders, they deny barring the defendants from accessing the Company’s properties or collecting rent on its behalf.
6. The plaintiffs, in turn, accuse the defendants of mismanaging the Company and misappropriating its funds since Kirima’s demise. They claim that, despite court orders and their own efforts to convene an Annual General Meeting (AGM), the defendants have failed to hold one since 2020. Instead, they argue that it is the defendants who have disregarded the very court orders they now seek to enforce. Furthermore, the plaintiffs contend that, in violation of court directives, the defendants have failed to disclose any information regarding withdrawals from the Company’s accounts since 2016.
7. The 7th plaintiff, in a separate replying affidavit sworn on 7th October 2024, also denies preventing the applicants from accessing the Company’s offices in their capacity as directors. She asserts that she has never set foot in the Company's offices and is unaware of any outstanding bills. In her view, the Company is on the verge of collapse due to mismanagement, and unless this court intervenes by ordering the convening of an Extraordinary General Meeting (EGM), its future remains uncertain.
Analysis and Determination
8. I have carefully considered the application, responses and submissions made by the parties in their respective positions.
9. The main issue for determination is whether the defendants have met the threshold for granting the injunction orders they seek. To succeed, the defendants must satisfy the conditions established in Giella v. Cassman Brown & Co., Ltd. [1973] E.A. 358. These conditions require them to demonstrate a prima facie case with a probability of success, show that they would suffer irreparable harm that could not be adequately compensated by damages, and, if the Court is in doubt, have the application determined on the balance of convenience.
10. Orders 4,5,6 and 7 of the courts orders of 22nd August 2013 directed as follows;
4.THAT status quo be maintained being that the 2nd and 3rd defendants will continue being directors and operate form Kenda houses Nairobi and Murang'a;
5. THAT any monies, whether by cheque or cash received by the 2nd and 3rd defendants will continue being deposited in the Kenda Accounts;
6.THAT the 2nd and 3rd defendants are hereby allowed to withdraw monies only for operational expenses with advice to the plaintiffs advocates at any time monies are withdrawn from the Kenda Accounts;
7.THAT it is hereby clarified that the orders of the 2nd and 3rd defendants issued by this court do not amount in any way to eviction of the plaintiffs from Kenda Houses in Nairobi and Muranga.
11. These orders remain uncontested, despite both parties leveling accusations and counteraccusations against each other for allegedly breaching them. When faced with such a situation, the court's role is to evaluate the evidence presented and, applying the appropriate standard, determine which argument is more credible. This principle was affirmed in Miller v. Minister of Pensions [1947] 2 All ER 372, where Lord Denning stated:
"If the evidence is such that the tribunal can say: we think it more probable than not, the burden is discharged, but if the probabilities are equal, it is not."
12. Additionally, Section 107 of the Evidence Act places the burden of proof on the party that asserts a fact, requiring them to provide evidence to support their claim. It states:
"Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist."
13. Against this background, the defendants have produced a Police OB report entry dated 8th July 2019 to substantiate their claim that the plaintiff’s assaulted the 3rd defendant and denied the defendants entry into the Company’s premises. However, on the face of it, without any corroborating evidence the report does not conclusively prove that the plaintiffs committed the alleged assault. Additionally, it does not specify which of the plaintiffs were involved or disclose the outcome of the police investigation.
14. Be that as it may, the defendants have presented a letter dated 22nd February 2024 attached to their further affidavit. The letter, written by their advocates and addressed to all tenants of Kenda House Nairobi is evidence that they, in compliance with the court orders, instructed the tenants to deposit rent into the Company’s account. The letter also specified the account details for payment. However, as evidenced by the affidavit of Lucy Njambi Njonjo sworn on 20th November 2024, which remains uncontroverted, the letter was never delivered to the tenants.
15. Another letter dated 26th February 2024, from J.M. Njengo & Company Advocates on behalf of the 1st to 6th plaintiffs corroborates the submission that these plaintiffs, acting through their advocates, instructed the tenants to disregard the previous letter from the defendants. This directive was contrary to the court’s orders.
16. In my view, instructing the tenants to continue paying rent "as before" and to disregard the defendants' counsel’s letter effectively meant that the 1st to 6th plaintiffs directed the tenants on an alternative undisclosed method of payment of rent. Consequently, they should be able to provide a statement of account detailing the amounts paid in accordance with their instructions.
17. Furthermore, the defendants have presented examples of receipts allegedly issued by the 1st to 6th plaintiff’s in the Company's name as evidence of rent payments. However, a review of the Bank statements provided reveals that these amounts do not appear to have been deposited into the Company's KCB account. The plaintiffs have neither refuted these receipts nor explained where the funds reflected in the attached receipts were deposited. The plaintiffs argue that the defendants have also failed to render an account of the funds withdrawn from the Company’s account, as ordered by the court. However, it is unclear why they waited until this application was filed to raise the issue.
18. My overall finding is that the defendants have established a prima facie case for granting of the injunctive relief. They stand to suffer more loss should the orders not be granted, as it is evident that the 1st to 6th plaintiffs have acted in contravention of this court’s orders. Additionally, I have reviewed the Judgment of the Court of Appeal dated 6th December 2024, which the plaintiffs relied upon. In light of the outcome of the appeal, there is even greater justification for issuing the injunctive orders to preserve the substratum of the matter pending the hearing and determination of the dispute.
Disposition
19. Accordingly, the application dated 27th August 2024 is allowed against the 1st to 6th plaintiffs as prayed. The application is dismissed against the 7th plaintiff with costs. For the avoidance of doubt, the 1st to 6th plaintiffs shall provide the defendants with an account of all the monies they have collected from the tenants on behalf of the 1st defendant within 30 days of this Ruling.
DATED SIGNED AND DELIVERED IN NAIROBI
THIS 23RD DAY OF MAY 2025.
F. MUGAMBI
JUDGE
1. The dispute before this court concerns the management and operations of the 1st defendant, a limited liability company known as KENDA INVESTMENTS LIMITED (hereinafter “the Company”). At the heart of the dispute is a disagreement over the legitimacy of the Company's directorship, shareholding, and membership, pitting the seven plaintiffs against the 2nd and 3rd defendants.
2. The plaintiffs claim that they, along with the late Gerishon Kirima (Kirima), were the Company's founding members and that Kirima served as both director and chairperson. They allege that he unlawfully altered the original shareholder list, increasing the number from 740 to 8,000 without their consent, effectively reducing their role in the Company to that of mere spectators. This is what ultimately led to the filing of the present suit on 23rd November 2011. Following Kirima’s demise, the 2nd and 3rd defendants continued serving as the Company's directors.
3. Against this backdrop, the 2nd and 3rd defendants (hereinafter the defendants), have now brought the application dated 27th August 2024, which arises from court orders issued on 22nd August 2013, following an application dated 12th August 2013. In those orders, the court directed that the status quo on directorship be maintained, meaning that the 2nd and 3rd defendants would continue as directors and operate from Kenda Houses in Nairobi and Murang’a.
4. The defendants contend that despite the existence of the court orders, the plaintiffs have barred them from accessing the premises and have been collecting rent directly from the tenants without providing any accounts. Consequently, they seek the following orders;
i. THAT this Honourable court do issue an injunction restraining the plaintiffs/respondents either by themselves, servants, agents, representatives, assignees or any other person acting for them from managing the affairs of the 1st defendant, collecting rent, locking the 2nd and 3rd defendants from accessing the offices of the 1st defendant and/or any other manner interfering with the operations of the 1st defendant pending the hearing and determination of the application and the appeal.
ii. THAT the 2nd and 3rd defendants do continue managing the operations of the 1st defendant as directed by the Honourable court vide the court’s order given on 22nd August,2013 and issued on 6th September, 2013.
iii. THAT the Honourable court do issue an order directing that Great Mwanzo and Management Properties Valuers Limited, the 2nd and 3rd defendants appointed management agents, do collect rent on behalf of the 1st defendant from the tenants in occupation of Kenda House situated at Tom Mboya street and that the collected rent to be deposited into the 1st defendant’s bank account.
iv. THAT this Honourable court do issue an order directing the plaintiffs to render accounts of all the monies they have collected from the tenants on behalf of the 1st defendant.
v. THAT the O.C.S Kamkunji Police Station do ensure compliance and also provide the necessary security.
vi. THAT costs of this application be provided for/
5. The application is opposed by way of a replying affidavit sworn on 1st October 2024 by John Peter Kamau Ruhanga on behalf of the plaintiffs. While they acknowledge the existence of the court orders, they deny barring the defendants from accessing the Company’s properties or collecting rent on its behalf.
6. The plaintiffs, in turn, accuse the defendants of mismanaging the Company and misappropriating its funds since Kirima’s demise. They claim that, despite court orders and their own efforts to convene an Annual General Meeting (AGM), the defendants have failed to hold one since 2020. Instead, they argue that it is the defendants who have disregarded the very court orders they now seek to enforce. Furthermore, the plaintiffs contend that, in violation of court directives, the defendants have failed to disclose any information regarding withdrawals from the Company’s accounts since 2016.
7. The 7th plaintiff, in a separate replying affidavit sworn on 7th October 2024, also denies preventing the applicants from accessing the Company’s offices in their capacity as directors. She asserts that she has never set foot in the Company's offices and is unaware of any outstanding bills. In her view, the Company is on the verge of collapse due to mismanagement, and unless this court intervenes by ordering the convening of an Extraordinary General Meeting (EGM), its future remains uncertain.
Analysis and Determination
8. I have carefully considered the application, responses and submissions made by the parties in their respective positions.
9. The main issue for determination is whether the defendants have met the threshold for granting the injunction orders they seek. To succeed, the defendants must satisfy the conditions established in Giella v. Cassman Brown & Co., Ltd. [1973] E.A. 358. These conditions require them to demonstrate a prima facie case with a probability of success, show that they would suffer irreparable harm that could not be adequately compensated by damages, and, if the Court is in doubt, have the application determined on the balance of convenience.
10. Orders 4,5,6 and 7 of the courts orders of 22nd August 2013 directed as follows;
4.THAT status quo be maintained being that the 2nd and 3rd defendants will continue being directors and operate form Kenda houses Nairobi and Murang'a;
5. THAT any monies, whether by cheque or cash received by the 2nd and 3rd defendants will continue being deposited in the Kenda Accounts;
6.THAT the 2nd and 3rd defendants are hereby allowed to withdraw monies only for operational expenses with advice to the plaintiffs advocates at any time monies are withdrawn from the Kenda Accounts;
7.THAT it is hereby clarified that the orders of the 2nd and 3rd defendants issued by this court do not amount in any way to eviction of the plaintiffs from Kenda Houses in Nairobi and Muranga.
11. These orders remain uncontested, despite both parties leveling accusations and counteraccusations against each other for allegedly breaching them. When faced with such a situation, the court's role is to evaluate the evidence presented and, applying the appropriate standard, determine which argument is more credible. This principle was affirmed in Miller v. Minister of Pensions [1947] 2 All ER 372, where Lord Denning stated:
"If the evidence is such that the tribunal can say: we think it more probable than not, the burden is discharged, but if the probabilities are equal, it is not."
12. Additionally, Section 107 of the Evidence Act places the burden of proof on the party that asserts a fact, requiring them to provide evidence to support their claim. It states:
"Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist."
13. Against this background, the defendants have produced a Police OB report entry dated 8th July 2019 to substantiate their claim that the plaintiff’s assaulted the 3rd defendant and denied the defendants entry into the Company’s premises. However, on the face of it, without any corroborating evidence the report does not conclusively prove that the plaintiffs committed the alleged assault. Additionally, it does not specify which of the plaintiffs were involved or disclose the outcome of the police investigation.
14. Be that as it may, the defendants have presented a letter dated 22nd February 2024 attached to their further affidavit. The letter, written by their advocates and addressed to all tenants of Kenda House Nairobi is evidence that they, in compliance with the court orders, instructed the tenants to deposit rent into the Company’s account. The letter also specified the account details for payment. However, as evidenced by the affidavit of Lucy Njambi Njonjo sworn on 20th November 2024, which remains uncontroverted, the letter was never delivered to the tenants.
15. Another letter dated 26th February 2024, from J.M. Njengo & Company Advocates on behalf of the 1st to 6th plaintiffs corroborates the submission that these plaintiffs, acting through their advocates, instructed the tenants to disregard the previous letter from the defendants. This directive was contrary to the court’s orders.
16. In my view, instructing the tenants to continue paying rent "as before" and to disregard the defendants' counsel’s letter effectively meant that the 1st to 6th plaintiffs directed the tenants on an alternative undisclosed method of payment of rent. Consequently, they should be able to provide a statement of account detailing the amounts paid in accordance with their instructions.
17. Furthermore, the defendants have presented examples of receipts allegedly issued by the 1st to 6th plaintiff’s in the Company's name as evidence of rent payments. However, a review of the Bank statements provided reveals that these amounts do not appear to have been deposited into the Company's KCB account. The plaintiffs have neither refuted these receipts nor explained where the funds reflected in the attached receipts were deposited. The plaintiffs argue that the defendants have also failed to render an account of the funds withdrawn from the Company’s account, as ordered by the court. However, it is unclear why they waited until this application was filed to raise the issue.
18. My overall finding is that the defendants have established a prima facie case for granting of the injunctive relief. They stand to suffer more loss should the orders not be granted, as it is evident that the 1st to 6th plaintiffs have acted in contravention of this court’s orders. Additionally, I have reviewed the Judgment of the Court of Appeal dated 6th December 2024, which the plaintiffs relied upon. In light of the outcome of the appeal, there is even greater justification for issuing the injunctive orders to preserve the substratum of the matter pending the hearing and determination of the dispute.
Disposition
19. Accordingly, the application dated 27th August 2024 is allowed against the 1st to 6th plaintiffs as prayed. The application is dismissed against the 7th plaintiff with costs. For the avoidance of doubt, the 1st to 6th plaintiffs shall provide the defendants with an account of all the monies they have collected from the tenants on behalf of the 1st defendant within 30 days of this Ruling.
DATED SIGNED AND DELIVERED IN NAIROBI
THIS 23RD DAY OF MAY 2025.
F. MUGAMBI
JUDGE