Introduction and Background
1. For determination is the application dated 14th October 2024 seeking leave to amend the petition and for the draft petition to be deemed as duly filed upon payment of the requisite fees. The application is opposed.
2. The petitioner contends that at the time of drafting the petition dated 10th July 2023, the petitioners inadvertently failed to include the intended 5th respondent, that is the Registrar of Companies who is a necessary party in these proceedings by virtue of prayer (f) in the petition. Further, the petitioners have since filed an authority by four (4) additional bona fide shareholders of the 4th respondent who wish to be part of these proceedings.
3. I have carefully considered the application, responses and submissions filed and highlighted by the parties. The first issue raised is whether the petitioners ought to have sought leave to amend their petition. Order 2 Rule 13 of the Civil Procedure Rules provides that;
“The pleadings in a suit shall be closed fourteen days after service of the reply or defence to counterclaim, or, if neither is served, fourteen days after service of the defence, notwithstanding that any order or request for particulars has been made but not complied with”.
4. The petition herein was filed on 8th July 2023. By the time the amended petition was filed, that is on 1st November 2023, the respondents had not yet filed their response to the original petition. This fact is not denied. I therefore concur with the petitioners that technically, pleadings had not closed and as such, the petitioners did not require leave to amend the petition.
5. That said, the law on amendment of pleadings was articulated in Institute for Social Accountability& Another versus Parliament of Kenya & 3 others [2014] eKLR as follows;
“The object of amendment of pleadings is to enable the parties to alter their pleadings so as to ensure that the litigation between them is conducted, not on the false hypothesis of the facts already pleaded or the relief or remedy already claimed, but rather on the basis of the true state of the facts which the parties really and finally intend to rely on. The power of amendment makes the function of the court more effective in determining the substantive merits of the case rather than holding it captive to form of the action or proceedings”.
6. Additionally, Court of Appeal for Eastern Africa in Eastern Bakery versus Castillo [1958] EA held that;
“It will be sufficient … to say that amendments to pleadings sought before the hearing should be freely allowed, if they can be made without injustice to the other side and that there is no injustice if the other side can be compensated by costs”.
7. Turning to the matter at hand, I disagree with the respondents' assertion that the draft amended petition introduces changes likely to prejudice them. The joinder of the Registrar of Companies to the petition is warranted by prayer (f), which is directed to the Registrar. The joinder will allow the Registrar to respond to the petition if necessary.
8. As regards the addition of the four (4) other petitioners, I do concur with the respondents that such addition converts the character of the suit into a representative suit. I have reviewed the petition and it is clear to me that there are other persons who will be affected in the same way by the legal issue at hand, by virtue of their position as shareholders in the 4th respondent.
9. The petitioners confirm at paragraph 7 of the draft amended petition that indeed, the 1st and 2nd petitioners are among 83 registered owners of various apartments, shops and office suites managed by the 4th respondent. The petition goes on to detail grievances including alleged breaches of the Memorandum and Articles of Association, exclusion of the petitioners from the management of the 4th respondent and oppression of the petitioners by the 4th respondent.
10. These particulars together with the prayers sought in the petition will certainly affect all the other shareholders and not just the petitioners. The decision of this court on the issues raised is also going to bind and affect them all. This petition is therefore in reality, a representative suit.
11. Order 1 Rule 8 of the Civil Procedure Rules allows one or more persons to sue or defend on behalf of others who share a common interest in the subject matter of the suit. This provision is particularly useful in cases involving multiple plaintiffs or defendants where it is impractical for all affected parties to participate individually. This was articulated by the court of appeal in the case of Kenya Trypanosomiasis Research Institute v Anthony Kabimba Gusinjilu [2019] KECA 240 (KLR).
12. I do therefore agree with the respondents that being a representative suit, the petitioner ought to have complied with the requirements of Order 1 Rule 8(2). The said provision requires that notice be given to all affected persons. The purpose of such notice is to ensure that all individuals with a common interest in the matter are aware of the ongoing proceedings. They can make an informed decision on their participation either by supporting or opposing the claim, noting that they would be bound by the decision of the court. This would also avoid a multiplicity of suits.
13. Rule 8(2) further provides that the notice may be published in newspapers, served personally, or issued in any other manner directed by the court.
14. I am not satisfied that such a notice has been served on the affected parties in compliance with the law. I however note that the petitioners have attached the authority to swear process from the additional four (4) shareholders. Since the petition has not yet been confirmed for hearing, and in the interest of justice and expeditious disposal of the issues, the petitioners still have an opportunity to comply and the respondents will have an opportunity to respond to the amended petition, further making the point that the amendment will not cause any prejudice.
15. As to whether the petitioners will meet the threshold of proving the petition is not an issue for determination at this point and must await the full hearing.
Disposition
i. Accordingly, I allow the application dated 14th October 2024. The draft amended petition shall be deemed as duly filed upon payment of the requisite fees.
ii. By the inherent jurisdiction conferred upon this court and in order to expedite the determination of the issues in question, the petitioners shall issue notice in compliance with Order 1 Rule 8(2) within 15 days from the date of this ruling.
iii. The respondents are granted 15 days from the date of service of the amended petition and compliance with Order 1 Rule 8(2) to file and serve their amended responses, if they so wish.
iv. Costs of the application shall await the outcome of the petition.
1. For determination is the application dated 14th October 2024 seeking leave to amend the petition and for the draft petition to be deemed as duly filed upon payment of the requisite fees. The application is opposed.
2. The petitioner contends that at the time of drafting the petition dated 10th July 2023, the petitioners inadvertently failed to include the intended 5th respondent, that is the Registrar of Companies who is a necessary party in these proceedings by virtue of prayer (f) in the petition. Further, the petitioners have since filed an authority by four (4) additional bona fide shareholders of the 4th respondent who wish to be part of these proceedings.
3. I have carefully considered the application, responses and submissions filed and highlighted by the parties. The first issue raised is whether the petitioners ought to have sought leave to amend their petition. Order 2 Rule 13 of the Civil Procedure Rules provides that;
“The pleadings in a suit shall be closed fourteen days after service of the reply or defence to counterclaim, or, if neither is served, fourteen days after service of the defence, notwithstanding that any order or request for particulars has been made but not complied with”.
4. The petition herein was filed on 8th July 2023. By the time the amended petition was filed, that is on 1st November 2023, the respondents had not yet filed their response to the original petition. This fact is not denied. I therefore concur with the petitioners that technically, pleadings had not closed and as such, the petitioners did not require leave to amend the petition.
5. That said, the law on amendment of pleadings was articulated in Institute for Social Accountability& Another versus Parliament of Kenya & 3 others [2014] eKLR as follows;
“The object of amendment of pleadings is to enable the parties to alter their pleadings so as to ensure that the litigation between them is conducted, not on the false hypothesis of the facts already pleaded or the relief or remedy already claimed, but rather on the basis of the true state of the facts which the parties really and finally intend to rely on. The power of amendment makes the function of the court more effective in determining the substantive merits of the case rather than holding it captive to form of the action or proceedings”.
6. Additionally, Court of Appeal for Eastern Africa in Eastern Bakery versus Castillo [1958] EA held that;
“It will be sufficient … to say that amendments to pleadings sought before the hearing should be freely allowed, if they can be made without injustice to the other side and that there is no injustice if the other side can be compensated by costs”.
7. Turning to the matter at hand, I disagree with the respondents' assertion that the draft amended petition introduces changes likely to prejudice them. The joinder of the Registrar of Companies to the petition is warranted by prayer (f), which is directed to the Registrar. The joinder will allow the Registrar to respond to the petition if necessary.
8. As regards the addition of the four (4) other petitioners, I do concur with the respondents that such addition converts the character of the suit into a representative suit. I have reviewed the petition and it is clear to me that there are other persons who will be affected in the same way by the legal issue at hand, by virtue of their position as shareholders in the 4th respondent.
9. The petitioners confirm at paragraph 7 of the draft amended petition that indeed, the 1st and 2nd petitioners are among 83 registered owners of various apartments, shops and office suites managed by the 4th respondent. The petition goes on to detail grievances including alleged breaches of the Memorandum and Articles of Association, exclusion of the petitioners from the management of the 4th respondent and oppression of the petitioners by the 4th respondent.
10. These particulars together with the prayers sought in the petition will certainly affect all the other shareholders and not just the petitioners. The decision of this court on the issues raised is also going to bind and affect them all. This petition is therefore in reality, a representative suit.
11. Order 1 Rule 8 of the Civil Procedure Rules allows one or more persons to sue or defend on behalf of others who share a common interest in the subject matter of the suit. This provision is particularly useful in cases involving multiple plaintiffs or defendants where it is impractical for all affected parties to participate individually. This was articulated by the court of appeal in the case of Kenya Trypanosomiasis Research Institute v Anthony Kabimba Gusinjilu [2019] KECA 240 (KLR).
12. I do therefore agree with the respondents that being a representative suit, the petitioner ought to have complied with the requirements of Order 1 Rule 8(2). The said provision requires that notice be given to all affected persons. The purpose of such notice is to ensure that all individuals with a common interest in the matter are aware of the ongoing proceedings. They can make an informed decision on their participation either by supporting or opposing the claim, noting that they would be bound by the decision of the court. This would also avoid a multiplicity of suits.
13. Rule 8(2) further provides that the notice may be published in newspapers, served personally, or issued in any other manner directed by the court.
14. I am not satisfied that such a notice has been served on the affected parties in compliance with the law. I however note that the petitioners have attached the authority to swear process from the additional four (4) shareholders. Since the petition has not yet been confirmed for hearing, and in the interest of justice and expeditious disposal of the issues, the petitioners still have an opportunity to comply and the respondents will have an opportunity to respond to the amended petition, further making the point that the amendment will not cause any prejudice.
15. As to whether the petitioners will meet the threshold of proving the petition is not an issue for determination at this point and must await the full hearing.
Disposition
i. Accordingly, I allow the application dated 14th October 2024. The draft amended petition shall be deemed as duly filed upon payment of the requisite fees.
ii. By the inherent jurisdiction conferred upon this court and in order to expedite the determination of the issues in question, the petitioners shall issue notice in compliance with Order 1 Rule 8(2) within 15 days from the date of this ruling.
iii. The respondents are granted 15 days from the date of service of the amended petition and compliance with Order 1 Rule 8(2) to file and serve their amended responses, if they so wish.
iv. Costs of the application shall await the outcome of the petition.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 4th day of FEBRUARY 2025
F. MUGAMBI
JUDGE