REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT ELDORET
COMMERCIAL AND TAX DIVISION
MISCELLANEOUS APPLICATION NO. E009 OF 2025
IN THE MATTER OF THE COMPANIES ACT NO. 17 OF 2015
AND
IN THE MATTER OF AN APPLICATION FOR RECTIIFCATION OF THE REGOSTER OF DIRECTORS OF KANKEN CONNECT KENYA
BETWEEN
KANKEN CONNECT USA BOARD OF DIRECTORS ……..1 ST APPLICANT
TIFFANY NINEMIRE ………………………………………...2 ND APPLICANT
HOLY PALACIO ………………………………………………3 RD APPLICANT
DANIEL DUGAS ………………………………………………4 TH APPLICANT
VERSUS
KANKEN CONNECT LITERACY FOUNDATION ……..1 ST RESPONDENT
JOSHUA KIBET CHOGE …………………………………2 ND RESPONDENT
CALEB KIPKOSKEY CHOGE …………………………...3 RD RESPONDENT
WILSON KIMELI ………………………………………….4 TH RESPONDENT
AND
JORDAN CHOGE ……………………………………...INTERESTED PARTY
RULING
1. By a Notice of Motion dated 3 rd May 2025 brought under the provisions of Section 103 and 780 of the Companies Act, 2015 and Article 159 of the Constitution of Kenya 2010 , and all other enabling provisions of the Law, the Applicants seek orders that:
1) Spent.
2) Spent.
3) That an interim order be issued restraining the Registrar of Companies from effecting any changes to the 1 st Respondent’s register of directors or members pending determination of this application.
4) That the register of members of Kanken Connect Literacy Foundation be rectified to include the name of the Applicants, TIFANNY NINEMIRE, HOLY PALACIO and DANIEL DUGAS, as MEMBERS of the 1 st Respondent.
5) That the Honorable Court be pleased to order the rectification of the register of directors of KanKen Connect Literacy Foundation to include the name of the Applicants, TIFFANY NINEMIRE, HOLY PALACIO and DANIEL DUGAS, as DIRECTORS of the 1st Respondent.
6) That a declaration that the omission of the 2nd Applicant's name from the register of directors was unlawful, oppressive, and a breach of fiduciary obligations owed to the Applicants.
7) That an order compelling the Registrar of Companies to issue an amended CR12 reflecting the Applicants as directors and Members of KanKen Connect Literacy Foundation.
8) That costs of this application be borne by the Respondents.
2. The Application is premised on the grounds of the face of it and is supported by the Affidavit sworn by the 2 nd Applicant, Tifanny Ninemire of even date.
3. The 2 nd Applicant deposed that Kanken Connect Inc., established in July 29, 2019 is a charitable organization formed to construct libraries for children and that she is the founder, with the 3 rd and 4 th Applicants as board members. That in 2023, she sought to fund libraries in Kenya and that for reasons that Kanken Connect Inc. was not registered locally, she donated container libraries via Forward Advantage International Foundation.
4. The 2 nd Applicant further deposed that she engaged the 2 nd and 3 rd Respondent to register a Kenyan company limited by guarantee, relying on their knowledge of the Kenyan legal framework and that because at the time the 3 rd Respondent was also a member of the 1 st Applicant thus the Board's decision was to fully depend on him.
5. The 2 nd Applicant asserts that on 12 th October 2021, the 2 nd and 3 rd Respondents advised that non-Kenyans could not be members or directors of a company limited by guarantee and undertook to register Kanken Connect Literacy Foundation, and the 1 st Respondent was to fulfill their objectives. The 2 nd Applicant further asserts that relying on this representation, the Applicants provided Kshs.23 million towards the construction of the 1 st Respondent’s Library and purchase of the piece of land on which the library, some classes and dormitory were to be constructed.
6. She further deposed that they have also been paying the employees of the 1 st Respondent and addition, the 2 nd Applicant deposed that on said 12 th October 2021, the 2 nd, 3 rd and 4 th Respondent registered the 1 st Respondent while omitting the Applicants from the register of members and directors, contrary to their undertaking. The 2 nd Applicant contended that the 2 nd and 3 rd Respondents recommended their own relative, one Jordan Choge, as the contractor and the said Choge misappropriated funds and delivered substandard work thus stalling the project.
7. The 2 nd Applicant further deposed that the 1 st Applicant’s Board members, through her, contacted a lawyer who was detailed to expand the board the lawyer failed to carry out the agreed instructions. The 2 nd Applicant maintained that the Respondents did not object to the expansion of the board and in fact provided all the necessary documentations required for the process including signed minutes.
8. The 2 nd Applicant further deposed that the Applicants' requests for membership and directorship were refused by the 2 nd Respondent, and the 3 rd Respondent disengaged.
9. The 2 nd Applicant contends that the Applicants' omission from the 1 st Respondent’s register is unlawful and oppressive thus entitling them to an order of rectification under Section 103 of the Companies Act, 2015 and further, that the Respondents hold their membership and directorship under a constructive trust for the Applicants. That the Applicants' contribution of Kshs.23 million, induced by the Respondents' promise to perform the objectives of the 1 st Respondent and their vision, makes it unconscionable for them to retain sole control of the 1 st Respondent.
10. The 2 nd Applicant further contends that the Respondents are estopped from denying their membership, and that the 2 nd and 3 rd Respondents' false advice that non-Kenyans could not be members induced the Applicants to fund the 1 st Respondent creates an estoppel.
11. The 2 nd Applicant maintained that the Respondents' control of the 1 st Respondent’s assets constitutes unjust enrichment. She contends that the Respondents' retention of the 1 st Respondent’s assets, funded by the Applicants' Kshs. 23 million, without granting them membership, is unjust and requires an equitable relief.
12. According to the 2 nd Applicant, the Respondents owed a fiduciary duty to the Applicants. She maintained that the Respondents' undertaking to register the 1 st Respondent on their behalf, followed by their misrepresentation and exclusion, breached this duty, harming their equitable interest.
13. The 2 nd Applicant deposed that the equitable maxim "equity will not suffer a wrong to be without a remedy" applies. She contends that the Applicants' exclusion from the register, despite their contributions and the Respondents' promise, is a wrong that can only be remedied by rectification under Section 103 aforesaid.
14. The 2 nd Applicant further contends that the Respondents' actions are unfairly prejudicial under Section 780 of the Companies Act for reasons that the Respondents' exclusion of the Applicants, who funded the 1 st Respondent’s charitable objectives, prejudices their equitable interest as intended members. Further, the 2 nd Applicant deposed that post-incorporation, the Respondents repeatedly contacted her for additional funds thus treating the Applicants as integral to the 1 st Respondent’s operations, akin to members. She added that this conduct acknowledges their equitable interest, yet they have been excluded from the register.
15. The 2 nd Applicant deposed that prior misappropriation of Kshs.13 million by Jordan Choge who was recommended by the 2 nd and 3 rd Respondents, risks further dissipation, necessitating an interim injunction to freeze the 1 st Respondent's accounts, save for Kshs.400,000/= monthly withdrawals to cover payroll, protect employees' jobs while safeguarding charitable funds.
16. The 2 nd Applicant maintained that the primary intent behind her donation to Kanken Connect Kenya was to provide educational resources to the underserved communities in Kenya. She added that the organization was meant to build a library and community center in Saniak community with the ultimate goal of benefiting the public by enhancing educational opportunities, improving literacy, and contributing to the socio-economic development of the community and thus was specifically intended to serve the public good by addressing the critical needs of the local community, as articulated in various communications and agreements between herself and the board members.
17. She asserts that however, due to the mismanagement of the organization, which has resulted in a lack of transparency, the diversion of funds, and the exclusion of legitimate stakeholders such as herself, the core public benefit of this project is now at risk. That should this situation continue unchecked, the project's ability to serve the community will be severely compromised, affecting not only her charitable intentions but also the educational and socio-economic advancement of the local population.
18. That the mismanagement by the current board and the exclusion of legitimate contributors from the decision-making process has halted progress on the construction of the library and community center, thus denying the local population access to the resources they were promised. She claimed that this denial directly undermines the public benefit of the charitable project and added that if allowed to continue, the mismanagement will not only waste the funds donated for this specific purpose but will deny the local community the benefits they are entitled to under Kenyan charity law. She asserts that this is a direct violation of both the public benefit test and the organization's statutory obligations to serve the community.
19. The 2 nd Applicant deponed that it is well-established in Kenyan law that charitable organizations must operate in a manner that upholds their charitable purpose and ensures that donations are used for the public benefit. She reiterated that potential changes to the register of members or directors could prejudice their equitable rights thus justifying an interim order restraining the Registrar of Companies from effecting changes. Lastly, the 2 nd Applicant urged that the Applicants seek to balance the 1 st Respondent's charitable operations with accountability, hence the limited payroll withdrawal allowance to sustain employment.
2 nd Respondent’s Replying Affidavit
20. The Application is opposed by the Respondents vide the Replying Affidavit sworn by Joshua Kibet Choge , the 2 nd Respondent and a member and Director of the 1 st Respondent, Kanken Connect Literacy Foundation. Therein, the 2 nd Respondent deposed that the Application is fatally defective, an abuse of the court process and lacks merit and that the orders sought therein should be disallowed with costs.
21. The 2 nd Respondent contends that whereas the Applicants are seeking final orders, they have approached this Honorable Court by way of a Notice of Motion Application without any suit filed before the Court. He maintained that this is an abuse of the Court process because issuance of final Orders would only be premised on a full hearing of the parties to ascertain the truth, veracity of the evidence given, and for the matter to be fully determined which essentially requires the filing of a main suit. The 2 nd Respondent pointed out that in the present Application, there is no Plaint on Court's records or any that has been served upon the Respondents deserving of the orders sought.
22. The 2 nd Respondent maintained that an interim injunction is only issued to maintain the substratum of the subject matter to be determined in the main suit and cannot be issued where there is no suit in place. That this being the case, the present application bad in law. Further, he contended that an interim injunction cannot automatically mutate to a permanent injunction if there are no such prayers made by a party either in its own application or in the main suit. He therefore contended that in the present application, there is no such a prayer and so the order sought therefore unsustainable.
23. The 2 nd Respondent asserts that this is for reasons that it is a well settled principle of law that the sole intention of seeking an interim injunction-otherwise known as an interlocutory injunction is to maintain the substratum of the case for fear that irreparable harm may occur before the full resolution of the dispute. He urged that in the present application, particularly because the facts are disputed and a resolution can only be achieved if parties are fully heard, the instant application, filed as a Miscellaneous application, without any suit filed, is incompetent is fatally defective and is an abuse of the Court process. That this is for reasons that miscellaneous applications cannot be used to circumvent statutory procedures or to commence proceedings where a substantive suit is required. The 2 nd Respondent cited Order 40 Rule 1 of the Civil Procedure Rules in this regard.
24. The 2 nd Respondent further deposed that the 1 st Respondent is a Company Limited by Guarantee incorporated on 12 th October 2021 under the Companies Act 2015 with its members and Directors mandated to discharge their duties under the aforesaid Act and in accordance with the Memorandum and Articles of Association of the 1 st Respondent.
25. That the 1 st Respondent at the time of its incorporation adopted the Model Articles for Companies Limited by Guarantee which gives powers to the Directors to run and manage the affairs of the 1 st Respondent and not under the directions of the Applicants. That indeed Article 2 of the Model Articles bestows the Directors with the powers and general authority to do so.
26. That in this regard, the 1 st Respondent is a separate legal entity distinct from the 1 st Applicant and the legal framework establishing and governing the 1 st Respondent is distinct and separate from the legal framework establishing and governing the 1 st Applicant or any of its affiliated entities or persons and therefore the 1 st Respondent cannot be viewed or portrayed to be legally related to the 1 st Applicant and bound to act pursuant to the directions of the Applicants.
27. The 2 nd Respondent claims that the decision to register the 1 st Respondent was arrived at following their common vision with the 2 nd Applicant to collaborate and engage in activities that promote literacy in Kenya through the support of the 1 st Applicant but nothing in the arrangement limited the 1 st Respondent from making its own independent decisions and collaborating with other likeminded organizations. The 2 nd Respondent further claims that the relationship was thus mutual and did not negate the independence of the 1 st Respondent to operate within the applicable legal framework that governs its operations in Kenya.
28. The 2 nd Respondent asserts that the allegation by the 2 nd Applicant are misleading. He stated that whereas the 2 nd Applicant has referred to her own email communication annexed as "TN-3" purporting that the same was a communication between herself and the 2 nd and 3 rd Respondents, the email in reference shows that it is a communication between herself and her Advocate. He denied that 2 nd Applicant was misled by the Respondents and added that the 2 nd Applicant had the right and full autonomy to seek independent legal advice.
29. The 2 nd Respondent asserts that the 2 nd Applicant entered into an arrangement with the Interested Party based on their friendship and she engaged the Interested party independently and directly through a separate entity (Leah & Moses Ltd) to carryout construction for the 1 st Respondent. He claimed that the 2 nd Applicant did not rely on any representation by the Respondents in doing so.
30. The 2 nd Respondent further deposed that at no time did the Applicants send any construction moneys for the library to the Respondents and denied that the alleged Kshs.23 million was received by the Respondents. He claimed that he only received a payment from the 1 st Applicant towards acquisition of his piece of land which the 1 st Applicant agreed to fund on behalf of the 1 st Respondent.
31. The 2 nd Respondent further maintained that the 1 st Respondent did not make any payments to the 2 nd Respondent for the land and asserts that it was indeed the 1 st Applicant through the 2 nd Applicant who offered to donate funds, negotiated and made payments towards the land which the 2 nd Respondent had offered at a subsidized price as part of his contribution to the charity. He added that a sale agreement was thereafter drawn to set out the terms and conditions of the sale between the 1 st Respondent and the 2 nd Respondent.
32. The 2 nd Respondent annexed exhibit marked "TN-4" which he asserts can clearly guide the court to verify the contents. He further deposed that the said Annexure "TN-4" contains other payments made to parties who are not the Respondents herein and the Applicant has annexed the same to mislead the Court. He contended that the said misleading payments are as follows: -
a. On or about 20 th June 2023, USD. 5,400 was transferred by the 1st Applicant and/or its agent to one Katie Thompson and the reason for funds transfer is marked as "for purchase of furniture”.
b. On or about 22 nd February 2023, USD. 6,500 was transferred by the 1st Applicant to a beneficiary known as Underground Village and the reason for funds transfer given is "Investment".
c. On or about 28 th August 2023, only USD. 57,177 was transferred to the 2nd Respondent for Land Purchase and not for Library construction. The reason given for transfer is for land purchase.
d. On or about 13 th March 2023 on USD. 8,000 was transferred from the 1st Applicant to the 1st Respondent.
33. The 2 nd Respondent further contends that the 2 nd Applicant also engaged the services of Leah & Moses Ltd to carry out the library construction works without involving the Respondents, that indeed, the 2 nd Applicant on her own, sent the construction money for the first phase of the project directly to Leah & Moses Ltd through the Interested Party without involvement of the Respondents, and further that the 2 nd Applicant and arranged with the Interested Party to start the construction works and that all these was made between the two based on their friendship/relationship and the Respondents were not a party to the said arrangement.
34. The 2 nd Respondent maintained that the agreement between the 1 st Applicant and Leah & Moses Ltd was later on executed by the 2 nd Applicant and the Interested Party as their representatives. The 2 nd Respondent indicates that the first decision to register the 1st Respondent and have the 2 nd , 3 rd and 4 th Respondents as its members/Directors was made with the full knowledge and understanding of the 2 nd Applicant and that the 2 nd Applicant did not intend to be included as a member/director at that time.
35. The 2 nd Respondent asserts that it is a fact that, registration of the 1 st Respondent followed a shared vision that the 2 nd Respondent had with the 2 nd Applicant to collaborate and promote literacy and education. He added that the 4th Respondent at that time was a Board member of the 1 st Applicant and also became a founding member of the 1 st Respondent because of his experience which was considered vital in the running of the affairs of the 1 st Respondent.
36. The 2 nd Respondent further deposed that it was the 2 nd Applicant who had engaged the law firm of Kenei & Associates Advocates LLP through her representative by the name Hope to oversee the registration of the 1 st Respondent Company. He deposed that the registration of the 1 st Respondent was initiated on or about the month of July 2021 and the 2 nd Applicant was aware of the process since she was always copied in the email correspondence as she was eager to see the registration process concluded to enable their collaboration to be commenced. He maintained that indeed, even the email that contained the details of Directors of the 1 st Respondent indicates that she was in copy.
37. The 2 nd Respondent claimed that the Interested Party was never recommended by the 2 nd and 3 rd Respondents as a Contractor and that it is a fact that the 2 nd Applicant directly sourced for the services of the Interested Party following their friendship at their personal level and not through any recommendations. He claimed that through WhatsApp messages, the 2 nd Applicant engaged the Interested Party and agreed to remit funds to him directly.
38. In regard to the allegation of misappropriation of funds by the Interested Party, delivery of substandard work, and stalling the project, the 2 nd Respondents deposed that these are false allegations. The 2 nd Respondent insisted that the interested Party indeed performed the works in accordance with the agreement and utilized all the funds received towards the project. He claimed that indeed, a report by a licensed Structural Engineer has given a detailed satisfactory report of the work done by the Contractor and any report to the contrary is inaccurate, not backed by any professional opinion and only intended to mislead the Court.
39. The 2 nd Respondent asserts that it is the 2 nd Applicant's worker who stole the materials that were at the construction site during the period of construction that led to stalling of the project. He deposed that this is a matter that was reported by the Interested Party and the police carried out investigations and arrested the person who was arraigned and is facing criminal charges in Court.
40. The 2 nd Respondent further asserts that it came as a surprise to the Respondents that the 2 nd Applicant engaged another company by the name Vast Engineering & Logistics Limited to provide her with a different report that contradicts the report by the Licensed Engineer. He contends that the said second report is not signed, does not have the license details of any Engineer and cannot be relied on and that the said report is annexed as annex T-7 in the Applicant's Supporting Affidavit sworn on 3 rd May 2025.
41. The 2 nd Respondent confirmed that there was a proposal to expand the Board way after the incorporation of the 1 st Respondent and have the 2 nd Applicant as a Member. However, the implementation could have only been done in accordance with the law. He noted that while the Respondents did not object the 2 nd Applicant’s proposal to join the Board, it is the 2 nd Applicant who engaged a lawyer to assist in the process which never materialized. That therefore, the Respondents cannot be faulted for the 2 nd Applicant’s own failures to seek proper legal advice or guidance.
42. The 2 nd Respondent claimed that the allegation that the Applicants membership and directorship requests were refused by the 2 nd Respondent and the 3 rd Respondent is false. He contended that it is clear from the minutes of the meeting held on 18 th March 2025 that both the 2 nd and 3 rd Respondents did not object the Applicants request/proposal to join the Board at that time.
43. The 2 nd Respondent contends that the Applicant has cited a case law purportedly making a misleading reference that the court has powers under Section 118 of the Companies Act to rectify the register of members where a person's name is wrongly entered or omitted. He maintained that there was no error of omission of names or wrong entry of any name at the time of incorporation of the 1 st Respondent as a Company Limited by Guarantee. In addition, he deposed that Section 118 of the Companies Act as cited does not grant the Court power to rectify the register but deals with the right of a member or nominated person to receive information and documents. He urged that the said citation is therefore misleading and should not be relied upon by this Honorable Court.
44. The 2 nd Respondent deposed that a Constructive Trust does not apply where the law is expressly clear on the establishment of a corporate entity and the entity is governed by its Memorandum and Articles of Association. He reiterated that in the present case, the 1 st Respondent was established as a Company Limited by Guarantee, which is a body corporate under the Companies Act 2015 and that the members are the subscribers to its memorandum and the Directors carry out the day to day duties of the 1 st Respondent Company in accordance with the Laws of Kenya and the Model Articles that the 1 st Respondent adopted.
45. The 2 nd Respondent further deposed that the 1 st Respondent can receive donations and support from various other charitable organization within and outside Kenya, and that does not mean that any organization contributing or donating towards its activities will be obliged to a constructive trust and that their nominated persons must join the 1 st Respondent as Members or Directors. According to the 2 nd Respondent that is not how a Company Limited by Guarantee should operate.
46. The 2 nd Respondent contends that there is no agreement between the 1 st Respondent and the Applicants that they will have exclusive rights to be the sole donors to the 1 st Respondent and that moreover, donation or a charitable contribution to a Company Limited by Guarantee does not create a right or trust such as constructive trust.
47. The 2 nd Respondent maintained that a constructive trust under the Kenya law cannot be directly created by a donation from a charitable organization to a company limited by guarantee. Instead, the 2 nd Respondent claimed that a constructive trusts arise by operation of law in specific circumstances. He contended that in the present case, there is no fraud committed by the Respondents, there is no breach of fiduciary duty, or other inequitable conduct by the Members/Directors of the 1 st Respondent that would give rise to a constructive trust.
48. The 2 nd Respondent maintains that the principle of estoppel does not apply or cannot arise where statutory provisions have been applied in the establishment of a corporate body. According to the 2 nd Respondent it cannot be said that there is a denial of the Applicants membership right where the Applicants are not members of the 1 st Respondent in the first place. Further, the 2 nd Respondent asserts that denial only applies where facts support the case. The 2 nd Respondent further claims that a cursory look at the company's registry CR12 search of the membership of the 1 st Respondent would disclose who the Members and Directors are and that the Applicants are not and as such the issue of denial does not arise.
49. The 2 nd Respondent insists that the Respondents are the legitimate and registered members/directors of the 1 st Respondent who are by law entitled and mandated with the control and management of the assets of the 1 st Respondent. And further that The 2 nd Respondents are indeed the only subscribers to the memorandum and articles of the 1 st Respondent and they are liable to the extent of their guarantee. That it cannot therefore be said that their exercise of lawful duties of managing and controlling the assets of the 1 st Respondent amounts to unjust enrichment and that this is a misconception of the law which this court should not allow.
50. The 2 nd Respondent further contends that a donation to a separate body corporate by a charitable organization does not give rise to a fiduciary duty and there being no director/shareholder relationship, and for the further reason that all funds donated by the Applicants to the 1st Respondent have been accounted for, that that accountability is the only responsibility that the Directors of the 1 st Respondent owe to all its donors, but not a fiduciary duty.
51. The 2 nd Respondent further deposes that that the Applicants have not been excluded from the register. They are simply not members or directors of the 1 st Respondent. He contends that they never subscribed to the memorandum of the 1 st Respondent at the time of its establishment and therefore cannot allege non-inclusion from the register.
52. The 2 nd Respondent further deposed that the register of members and directors of the 1 st Respondent held at the Companies Registry only contain the actual details of the subscribers and directors but not persons proposing to join the company either as members or directors. He contends that the allegations are therefore based on pure misconception of the law and equitable maxims cited thereon do not apply neither is there any prejudice occasioned to the Applicants.
53. Lastly, the 2 nd Respondents deposes that the Respondents did not make any payments to one Jordan Choge nor did they contract the said Jordan Choge and that they also have never misappropriated the alleged sums of Kshs.13 million as stated in the affidavit. The 2 nd Respondent therefore asserts that the statement is false and the order of interim Injunction is not merited ought to be disallowed.
Interested Party’s Replying Affidavit
54. The Application is also opposed by the Interested Party, Jordan Choge who too filed Replying Affidavit in response thereto. He restated the 2 nd Respondent’s depositions regarding the filing of a Miscellaneous Application that is not anchored to a main suit and I need not therefore regurgitate the same.
55. He submitted that the 1 st Respondent is a Company Limited by Guarantee incorporated on 12th October 2021 under the Companies Act 2015 with its members and Directors mandated to discharge their duties under the aforesaid Act and in accordance with the Memorandum and Articles of Association of the 1 st Respondent.
56. The Interested Party further deposed that the 2nd Applicant entered into an arrangement with him based on their personal friendship and also, she knew all along as the brother to her son-in law. He stated that through WhatsApp messages, the 2 nd Applicant engaged him directly and agreed to remit funds to him to start the construction w
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IN THE HIGH COURT OF KENYA AT ELDORET
COMMERCIAL AND TAX DIVISION
MISCELLANEOUS APPLICATION NO. E009 OF 2025
IN THE MATTER OF THE COMPANIES ACT NO. 17 OF 2015
AND
IN THE MATTER OF AN APPLICATION FOR RECTIIFCATION OF THE REGOSTER OF DIRECTORS OF KANKEN CONNECT KENYA
BETWEEN
KANKEN CONNECT USA BOARD OF DIRECTORS ……..1 ST APPLICANT
TIFFANY NINEMIRE ………………………………………...2 ND APPLICANT
HOLY PALACIO ………………………………………………3 RD APPLICANT
DANIEL DUGAS ………………………………………………4 TH APPLICANT
VERSUS
KANKEN CONNECT LITERACY FOUNDATION ……..1 ST RESPONDENT
JOSHUA KIBET CHOGE …………………………………2 ND RESPONDENT
CALEB KIPKOSKEY CHOGE …………………………...3 RD RESPONDENT
WILSON KIMELI ………………………………………….4 TH RESPONDENT
AND
JORDAN CHOGE ……………………………………...INTERESTED PARTY
RULING
1. By a Notice of Motion dated 3 rd May 2025 brought under the provisions of Section 103 and 780 of the Companies Act, 2015 and Article 159 of the Constitution of Kenya 2010 , and all other enabling provisions of the Law, the Applicants seek orders that:
1) Spent.
2) Spent.
3) That an interim order be issued restraining the Registrar of Companies from effecting any changes to the 1 st Respondent’s register of directors or members pending determination of this application.
4) That the register of members of Kanken Connect Literacy Foundation be rectified to include the name of the Applicants, TIFANNY NINEMIRE, HOLY PALACIO and DANIEL DUGAS, as MEMBERS of the 1 st Respondent.
5) That the Honorable Court be pleased to order the rectification of the register of directors of KanKen Connect Literacy Foundation to include the name of the Applicants, TIFFANY NINEMIRE, HOLY PALACIO and DANIEL DUGAS, as DIRECTORS of the 1st Respondent.
6) That a declaration that the omission of the 2nd Applicant's name from the register of directors was unlawful, oppressive, and a breach of fiduciary obligations owed to the Applicants.
7) That an order compelling the Registrar of Companies to issue an amended CR12 reflecting the Applicants as directors and Members of KanKen Connect Literacy Foundation.
8) That costs of this application be borne by the Respondents.
2. The Application is premised on the grounds of the face of it and is supported by the Affidavit sworn by the 2 nd Applicant, Tifanny Ninemire of even date.
3. The 2 nd Applicant deposed that Kanken Connect Inc., established in July 29, 2019 is a charitable organization formed to construct libraries for children and that she is the founder, with the 3 rd and 4 th Applicants as board members. That in 2023, she sought to fund libraries in Kenya and that for reasons that Kanken Connect Inc. was not registered locally, she donated container libraries via Forward Advantage International Foundation.
4. The 2 nd Applicant further deposed that she engaged the 2 nd and 3 rd Respondent to register a Kenyan company limited by guarantee, relying on their knowledge of the Kenyan legal framework and that because at the time the 3 rd Respondent was also a member of the 1 st Applicant thus the Board's decision was to fully depend on him.
5. The 2 nd Applicant asserts that on 12 th October 2021, the 2 nd and 3 rd Respondents advised that non-Kenyans could not be members or directors of a company limited by guarantee and undertook to register Kanken Connect Literacy Foundation, and the 1 st Respondent was to fulfill their objectives. The 2 nd Applicant further asserts that relying on this representation, the Applicants provided Kshs.23 million towards the construction of the 1 st Respondent’s Library and purchase of the piece of land on which the library, some classes and dormitory were to be constructed.
6. She further deposed that they have also been paying the employees of the 1 st Respondent and addition, the 2 nd Applicant deposed that on said 12 th October 2021, the 2 nd, 3 rd and 4 th Respondent registered the 1 st Respondent while omitting the Applicants from the register of members and directors, contrary to their undertaking. The 2 nd Applicant contended that the 2 nd and 3 rd Respondents recommended their own relative, one Jordan Choge, as the contractor and the said Choge misappropriated funds and delivered substandard work thus stalling the project.
7. The 2 nd Applicant further deposed that the 1 st Applicant’s Board members, through her, contacted a lawyer who was detailed to expand the board the lawyer failed to carry out the agreed instructions. The 2 nd Applicant maintained that the Respondents did not object to the expansion of the board and in fact provided all the necessary documentations required for the process including signed minutes.
8. The 2 nd Applicant further deposed that the Applicants' requests for membership and directorship were refused by the 2 nd Respondent, and the 3 rd Respondent disengaged.
9. The 2 nd Applicant contends that the Applicants' omission from the 1 st Respondent’s register is unlawful and oppressive thus entitling them to an order of rectification under Section 103 of the Companies Act, 2015 and further, that the Respondents hold their membership and directorship under a constructive trust for the Applicants. That the Applicants' contribution of Kshs.23 million, induced by the Respondents' promise to perform the objectives of the 1 st Respondent and their vision, makes it unconscionable for them to retain sole control of the 1 st Respondent.
10. The 2 nd Applicant further contends that the Respondents are estopped from denying their membership, and that the 2 nd and 3 rd Respondents' false advice that non-Kenyans could not be members induced the Applicants to fund the 1 st Respondent creates an estoppel.
11. The 2 nd Applicant maintained that the Respondents' control of the 1 st Respondent’s assets constitutes unjust enrichment. She contends that the Respondents' retention of the 1 st Respondent’s assets, funded by the Applicants' Kshs. 23 million, without granting them membership, is unjust and requires an equitable relief.
12. According to the 2 nd Applicant, the Respondents owed a fiduciary duty to the Applicants. She maintained that the Respondents' undertaking to register the 1 st Respondent on their behalf, followed by their misrepresentation and exclusion, breached this duty, harming their equitable interest.
13. The 2 nd Applicant deposed that the equitable maxim "equity will not suffer a wrong to be without a remedy" applies. She contends that the Applicants' exclusion from the register, despite their contributions and the Respondents' promise, is a wrong that can only be remedied by rectification under Section 103 aforesaid.
14. The 2 nd Applicant further contends that the Respondents' actions are unfairly prejudicial under Section 780 of the Companies Act for reasons that the Respondents' exclusion of the Applicants, who funded the 1 st Respondent’s charitable objectives, prejudices their equitable interest as intended members. Further, the 2 nd Applicant deposed that post-incorporation, the Respondents repeatedly contacted her for additional funds thus treating the Applicants as integral to the 1 st Respondent’s operations, akin to members. She added that this conduct acknowledges their equitable interest, yet they have been excluded from the register.
15. The 2 nd Applicant deposed that prior misappropriation of Kshs.13 million by Jordan Choge who was recommended by the 2 nd and 3 rd Respondents, risks further dissipation, necessitating an interim injunction to freeze the 1 st Respondent's accounts, save for Kshs.400,000/= monthly withdrawals to cover payroll, protect employees' jobs while safeguarding charitable funds.
16. The 2 nd Applicant maintained that the primary intent behind her donation to Kanken Connect Kenya was to provide educational resources to the underserved communities in Kenya. She added that the organization was meant to build a library and community center in Saniak community with the ultimate goal of benefiting the public by enhancing educational opportunities, improving literacy, and contributing to the socio-economic development of the community and thus was specifically intended to serve the public good by addressing the critical needs of the local community, as articulated in various communications and agreements between herself and the board members.
17. She asserts that however, due to the mismanagement of the organization, which has resulted in a lack of transparency, the diversion of funds, and the exclusion of legitimate stakeholders such as herself, the core public benefit of this project is now at risk. That should this situation continue unchecked, the project's ability to serve the community will be severely compromised, affecting not only her charitable intentions but also the educational and socio-economic advancement of the local population.
18. That the mismanagement by the current board and the exclusion of legitimate contributors from the decision-making process has halted progress on the construction of the library and community center, thus denying the local population access to the resources they were promised. She claimed that this denial directly undermines the public benefit of the charitable project and added that if allowed to continue, the mismanagement will not only waste the funds donated for this specific purpose but will deny the local community the benefits they are entitled to under Kenyan charity law. She asserts that this is a direct violation of both the public benefit test and the organization's statutory obligations to serve the community.
19. The 2 nd Applicant deponed that it is well-established in Kenyan law that charitable organizations must operate in a manner that upholds their charitable purpose and ensures that donations are used for the public benefit. She reiterated that potential changes to the register of members or directors could prejudice their equitable rights thus justifying an interim order restraining the Registrar of Companies from effecting changes. Lastly, the 2 nd Applicant urged that the Applicants seek to balance the 1 st Respondent's charitable operations with accountability, hence the limited payroll withdrawal allowance to sustain employment.
2 nd Respondent’s Replying Affidavit
20. The Application is opposed by the Respondents vide the Replying Affidavit sworn by Joshua Kibet Choge , the 2 nd Respondent and a member and Director of the 1 st Respondent, Kanken Connect Literacy Foundation. Therein, the 2 nd Respondent deposed that the Application is fatally defective, an abuse of the court process and lacks merit and that the orders sought therein should be disallowed with costs.
21. The 2 nd Respondent contends that whereas the Applicants are seeking final orders, they have approached this Honorable Court by way of a Notice of Motion Application without any suit filed before the Court. He maintained that this is an abuse of the Court process because issuance of final Orders would only be premised on a full hearing of the parties to ascertain the truth, veracity of the evidence given, and for the matter to be fully determined which essentially requires the filing of a main suit. The 2 nd Respondent pointed out that in the present Application, there is no Plaint on Court's records or any that has been served upon the Respondents deserving of the orders sought.
22. The 2 nd Respondent maintained that an interim injunction is only issued to maintain the substratum of the subject matter to be determined in the main suit and cannot be issued where there is no suit in place. That this being the case, the present application bad in law. Further, he contended that an interim injunction cannot automatically mutate to a permanent injunction if there are no such prayers made by a party either in its own application or in the main suit. He therefore contended that in the present application, there is no such a prayer and so the order sought therefore unsustainable.
23. The 2 nd Respondent asserts that this is for reasons that it is a well settled principle of law that the sole intention of seeking an interim injunction-otherwise known as an interlocutory injunction is to maintain the substratum of the case for fear that irreparable harm may occur before the full resolution of the dispute. He urged that in the present application, particularly because the facts are disputed and a resolution can only be achieved if parties are fully heard, the instant application, filed as a Miscellaneous application, without any suit filed, is incompetent is fatally defective and is an abuse of the Court process. That this is for reasons that miscellaneous applications cannot be used to circumvent statutory procedures or to commence proceedings where a substantive suit is required. The 2 nd Respondent cited Order 40 Rule 1 of the Civil Procedure Rules in this regard.
24. The 2 nd Respondent further deposed that the 1 st Respondent is a Company Limited by Guarantee incorporated on 12 th October 2021 under the Companies Act 2015 with its members and Directors mandated to discharge their duties under the aforesaid Act and in accordance with the Memorandum and Articles of Association of the 1 st Respondent.
25. That the 1 st Respondent at the time of its incorporation adopted the Model Articles for Companies Limited by Guarantee which gives powers to the Directors to run and manage the affairs of the 1 st Respondent and not under the directions of the Applicants. That indeed Article 2 of the Model Articles bestows the Directors with the powers and general authority to do so.
26. That in this regard, the 1 st Respondent is a separate legal entity distinct from the 1 st Applicant and the legal framework establishing and governing the 1 st Respondent is distinct and separate from the legal framework establishing and governing the 1 st Applicant or any of its affiliated entities or persons and therefore the 1 st Respondent cannot be viewed or portrayed to be legally related to the 1 st Applicant and bound to act pursuant to the directions of the Applicants.
27. The 2 nd Respondent claims that the decision to register the 1 st Respondent was arrived at following their common vision with the 2 nd Applicant to collaborate and engage in activities that promote literacy in Kenya through the support of the 1 st Applicant but nothing in the arrangement limited the 1 st Respondent from making its own independent decisions and collaborating with other likeminded organizations. The 2 nd Respondent further claims that the relationship was thus mutual and did not negate the independence of the 1 st Respondent to operate within the applicable legal framework that governs its operations in Kenya.
28. The 2 nd Respondent asserts that the allegation by the 2 nd Applicant are misleading. He stated that whereas the 2 nd Applicant has referred to her own email communication annexed as "TN-3" purporting that the same was a communication between herself and the 2 nd and 3 rd Respondents, the email in reference shows that it is a communication between herself and her Advocate. He denied that 2 nd Applicant was misled by the Respondents and added that the 2 nd Applicant had the right and full autonomy to seek independent legal advice.
29. The 2 nd Respondent asserts that the 2 nd Applicant entered into an arrangement with the Interested Party based on their friendship and she engaged the Interested party independently and directly through a separate entity (Leah & Moses Ltd) to carryout construction for the 1 st Respondent. He claimed that the 2 nd Applicant did not rely on any representation by the Respondents in doing so.
30. The 2 nd Respondent further deposed that at no time did the Applicants send any construction moneys for the library to the Respondents and denied that the alleged Kshs.23 million was received by the Respondents. He claimed that he only received a payment from the 1 st Applicant towards acquisition of his piece of land which the 1 st Applicant agreed to fund on behalf of the 1 st Respondent.
31. The 2 nd Respondent further maintained that the 1 st Respondent did not make any payments to the 2 nd Respondent for the land and asserts that it was indeed the 1 st Applicant through the 2 nd Applicant who offered to donate funds, negotiated and made payments towards the land which the 2 nd Respondent had offered at a subsidized price as part of his contribution to the charity. He added that a sale agreement was thereafter drawn to set out the terms and conditions of the sale between the 1 st Respondent and the 2 nd Respondent.
32. The 2 nd Respondent annexed exhibit marked "TN-4" which he asserts can clearly guide the court to verify the contents. He further deposed that the said Annexure "TN-4" contains other payments made to parties who are not the Respondents herein and the Applicant has annexed the same to mislead the Court. He contended that the said misleading payments are as follows: -
a. On or about 20 th June 2023, USD. 5,400 was transferred by the 1st Applicant and/or its agent to one Katie Thompson and the reason for funds transfer is marked as "for purchase of furniture”.
b. On or about 22 nd February 2023, USD. 6,500 was transferred by the 1st Applicant to a beneficiary known as Underground Village and the reason for funds transfer given is "Investment".
c. On or about 28 th August 2023, only USD. 57,177 was transferred to the 2nd Respondent for Land Purchase and not for Library construction. The reason given for transfer is for land purchase.
d. On or about 13 th March 2023 on USD. 8,000 was transferred from the 1st Applicant to the 1st Respondent.
33. The 2 nd Respondent further contends that the 2 nd Applicant also engaged the services of Leah & Moses Ltd to carry out the library construction works without involving the Respondents, that indeed, the 2 nd Applicant on her own, sent the construction money for the first phase of the project directly to Leah & Moses Ltd through the Interested Party without involvement of the Respondents, and further that the 2 nd Applicant and arranged with the Interested Party to start the construction works and that all these was made between the two based on their friendship/relationship and the Respondents were not a party to the said arrangement.
34. The 2 nd Respondent maintained that the agreement between the 1 st Applicant and Leah & Moses Ltd was later on executed by the 2 nd Applicant and the Interested Party as their representatives. The 2 nd Respondent indicates that the first decision to register the 1st Respondent and have the 2 nd , 3 rd and 4 th Respondents as its members/Directors was made with the full knowledge and understanding of the 2 nd Applicant and that the 2 nd Applicant did not intend to be included as a member/director at that time.
35. The 2 nd Respondent asserts that it is a fact that, registration of the 1 st Respondent followed a shared vision that the 2 nd Respondent had with the 2 nd Applicant to collaborate and promote literacy and education. He added that the 4th Respondent at that time was a Board member of the 1 st Applicant and also became a founding member of the 1 st Respondent because of his experience which was considered vital in the running of the affairs of the 1 st Respondent.
36. The 2 nd Respondent further deposed that it was the 2 nd Applicant who had engaged the law firm of Kenei & Associates Advocates LLP through her representative by the name Hope to oversee the registration of the 1 st Respondent Company. He deposed that the registration of the 1 st Respondent was initiated on or about the month of July 2021 and the 2 nd Applicant was aware of the process since she was always copied in the email correspondence as she was eager to see the registration process concluded to enable their collaboration to be commenced. He maintained that indeed, even the email that contained the details of Directors of the 1 st Respondent indicates that she was in copy.
37. The 2 nd Respondent claimed that the Interested Party was never recommended by the 2 nd and 3 rd Respondents as a Contractor and that it is a fact that the 2 nd Applicant directly sourced for the services of the Interested Party following their friendship at their personal level and not through any recommendations. He claimed that through WhatsApp messages, the 2 nd Applicant engaged the Interested Party and agreed to remit funds to him directly.
38. In regard to the allegation of misappropriation of funds by the Interested Party, delivery of substandard work, and stalling the project, the 2 nd Respondents deposed that these are false allegations. The 2 nd Respondent insisted that the interested Party indeed performed the works in accordance with the agreement and utilized all the funds received towards the project. He claimed that indeed, a report by a licensed Structural Engineer has given a detailed satisfactory report of the work done by the Contractor and any report to the contrary is inaccurate, not backed by any professional opinion and only intended to mislead the Court.
39. The 2 nd Respondent asserts that it is the 2 nd Applicant's worker who stole the materials that were at the construction site during the period of construction that led to stalling of the project. He deposed that this is a matter that was reported by the Interested Party and the police carried out investigations and arrested the person who was arraigned and is facing criminal charges in Court.
40. The 2 nd Respondent further asserts that it came as a surprise to the Respondents that the 2 nd Applicant engaged another company by the name Vast Engineering & Logistics Limited to provide her with a different report that contradicts the report by the Licensed Engineer. He contends that the said second report is not signed, does not have the license details of any Engineer and cannot be relied on and that the said report is annexed as annex T-7 in the Applicant's Supporting Affidavit sworn on 3 rd May 2025.
41. The 2 nd Respondent confirmed that there was a proposal to expand the Board way after the incorporation of the 1 st Respondent and have the 2 nd Applicant as a Member. However, the implementation could have only been done in accordance with the law. He noted that while the Respondents did not object the 2 nd Applicant’s proposal to join the Board, it is the 2 nd Applicant who engaged a lawyer to assist in the process which never materialized. That therefore, the Respondents cannot be faulted for the 2 nd Applicant’s own failures to seek proper legal advice or guidance.
42. The 2 nd Respondent claimed that the allegation that the Applicants membership and directorship requests were refused by the 2 nd Respondent and the 3 rd Respondent is false. He contended that it is clear from the minutes of the meeting held on 18 th March 2025 that both the 2 nd and 3 rd Respondents did not object the Applicants request/proposal to join the Board at that time.
43. The 2 nd Respondent contends that the Applicant has cited a case law purportedly making a misleading reference that the court has powers under Section 118 of the Companies Act to rectify the register of members where a person's name is wrongly entered or omitted. He maintained that there was no error of omission of names or wrong entry of any name at the time of incorporation of the 1 st Respondent as a Company Limited by Guarantee. In addition, he deposed that Section 118 of the Companies Act as cited does not grant the Court power to rectify the register but deals with the right of a member or nominated person to receive information and documents. He urged that the said citation is therefore misleading and should not be relied upon by this Honorable Court.
44. The 2 nd Respondent deposed that a Constructive Trust does not apply where the law is expressly clear on the establishment of a corporate entity and the entity is governed by its Memorandum and Articles of Association. He reiterated that in the present case, the 1 st Respondent was established as a Company Limited by Guarantee, which is a body corporate under the Companies Act 2015 and that the members are the subscribers to its memorandum and the Directors carry out the day to day duties of the 1 st Respondent Company in accordance with the Laws of Kenya and the Model Articles that the 1 st Respondent adopted.
45. The 2 nd Respondent further deposed that the 1 st Respondent can receive donations and support from various other charitable organization within and outside Kenya, and that does not mean that any organization contributing or donating towards its activities will be obliged to a constructive trust and that their nominated persons must join the 1 st Respondent as Members or Directors. According to the 2 nd Respondent that is not how a Company Limited by Guarantee should operate.
46. The 2 nd Respondent contends that there is no agreement between the 1 st Respondent and the Applicants that they will have exclusive rights to be the sole donors to the 1 st Respondent and that moreover, donation or a charitable contribution to a Company Limited by Guarantee does not create a right or trust such as constructive trust.
47. The 2 nd Respondent maintained that a constructive trust under the Kenya law cannot be directly created by a donation from a charitable organization to a company limited by guarantee. Instead, the 2 nd Respondent claimed that a constructive trusts arise by operation of law in specific circumstances. He contended that in the present case, there is no fraud committed by the Respondents, there is no breach of fiduciary duty, or other inequitable conduct by the Members/Directors of the 1 st Respondent that would give rise to a constructive trust.
48. The 2 nd Respondent maintains that the principle of estoppel does not apply or cannot arise where statutory provisions have been applied in the establishment of a corporate body. According to the 2 nd Respondent it cannot be said that there is a denial of the Applicants membership right where the Applicants are not members of the 1 st Respondent in the first place. Further, the 2 nd Respondent asserts that denial only applies where facts support the case. The 2 nd Respondent further claims that a cursory look at the company's registry CR12 search of the membership of the 1 st Respondent would disclose who the Members and Directors are and that the Applicants are not and as such the issue of denial does not arise.
49. The 2 nd Respondent insists that the Respondents are the legitimate and registered members/directors of the 1 st Respondent who are by law entitled and mandated with the control and management of the assets of the 1 st Respondent. And further that The 2 nd Respondents are indeed the only subscribers to the memorandum and articles of the 1 st Respondent and they are liable to the extent of their guarantee. That it cannot therefore be said that their exercise of lawful duties of managing and controlling the assets of the 1 st Respondent amounts to unjust enrichment and that this is a misconception of the law which this court should not allow.
50. The 2 nd Respondent further contends that a donation to a separate body corporate by a charitable organization does not give rise to a fiduciary duty and there being no director/shareholder relationship, and for the further reason that all funds donated by the Applicants to the 1st Respondent have been accounted for, that that accountability is the only responsibility that the Directors of the 1 st Respondent owe to all its donors, but not a fiduciary duty.
51. The 2 nd Respondent further deposes that that the Applicants have not been excluded from the register. They are simply not members or directors of the 1 st Respondent. He contends that they never subscribed to the memorandum of the 1 st Respondent at the time of its establishment and therefore cannot allege non-inclusion from the register.
52. The 2 nd Respondent further deposed that the register of members and directors of the 1 st Respondent held at the Companies Registry only contain the actual details of the subscribers and directors but not persons proposing to join the company either as members or directors. He contends that the allegations are therefore based on pure misconception of the law and equitable maxims cited thereon do not apply neither is there any prejudice occasioned to the Applicants.
53. Lastly, the 2 nd Respondents deposes that the Respondents did not make any payments to one Jordan Choge nor did they contract the said Jordan Choge and that they also have never misappropriated the alleged sums of Kshs.13 million as stated in the affidavit. The 2 nd Respondent therefore asserts that the statement is false and the order of interim Injunction is not merited ought to be disallowed.
Interested Party’s Replying Affidavit
54. The Application is also opposed by the Interested Party, Jordan Choge who too filed Replying Affidavit in response thereto. He restated the 2 nd Respondent’s depositions regarding the filing of a Miscellaneous Application that is not anchored to a main suit and I need not therefore regurgitate the same.
55. He submitted that the 1 st Respondent is a Company Limited by Guarantee incorporated on 12th October 2021 under the Companies Act 2015 with its members and Directors mandated to discharge their duties under the aforesaid Act and in accordance with the Memorandum and Articles of Association of the 1 st Respondent.
56. The Interested Party further deposed that the 2nd Applicant entered into an arrangement with him based on their personal friendship and also, she knew all along as the brother to her son-in law. He stated that through WhatsApp messages, the 2 nd Applicant engaged him directly and agreed to remit funds to him to start the construction w
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