Background
1. This ruling determines 3 applications:
i. The application dated 24/9/2021 filed by the plaintiffs;
ii. The application dated 2/7/2022 filed by the intended parties,
(to which there is a preliminary objection); and
iii. The application dated 14/9/2023 filed by the defendants,
(to which a preliminary issue on locus has been raised).
2. By way of background, the suit herein was filed vide a plaint dated 15/4/2019. The dispute relates to the management and control of the 1st plaintiff company. The other plaintiffs are the, 1st plaintiff’s Chairman, Secretary and Treasurer respectively. Their suit is against former officials of the 1st plaintiff, whom the plaintiffs accuse of fraud, irregularities and illegal acts with respect to the plaintiff company.
I. Ruling on the application dated 2/9/2021:
3. The application is brought by the plaintiffs under the provisions of the Judicature Act Chapter 8 Laws of Kenya as well as Order 52(2) of the Rules of the Supreme Court of England. It seeks leave to institute contempt proceedings against the 1st defendant WAWERU KIRATU and the 4th defendant, LILIAN WAMBUI WAWERU and for them to be committed to civil jail for 6 months for contempt of Court.
4. The application is supported by the affidavit of FRANCIS MWANGI GITHUA, the 2nd plaintiff. The plaintiffs aver that the defendants have sold land belonging to the 1st plaintiff and issued fake share certificates to 3rd parties in disregard of the court order issued on 18/11/2019. The import of the said orders was that the defendants would not subdivide, dispose, alienate or in any way deal with the 1st plaintiff’s property, being LR 13468 (the subject property).
5. The plaintiffs also contend that this was against the 1st plaintiff’s constitution as the purported purchasers were 3rd parties and not members of the 1st plaintiff. In support of this averment the plaintiffs attached a receipt dated 7/9/2021 issued to one JOSEPH KARUGA MBUTHI for the purchase of 1 ordinary share of the 1st plaintiff.
6. The application is opposed by way of a replying affidavit sworn by the 1st defendant WAWERU KIRATU on 25/11/2021, on behalf of the 4th defendant. The 1st defendant confirms that he issued a promise to transfer his 1 plot held under the company title. The same was issued to JOSEPH KARUGA MBUTHI, a shareholder of the 1st plaintiff company. He is categorical that he did not transfer the plot but promised to sell the same to him upon determination of the suit.
7. The 1st defendant desires the court’s pardon arguing that he did so out of necessity, arising from his need for medical attention. He had since rescinded and cancelled the said promissory agreement. This is evidenced by the Indemnity Agreement dated 16/11/2021. He therefore prays that the court finds that the said contempt had been purged.
Analysis and determination:
8. I should begin by noting that one of the plaintiff’s substantive prayers is for leave to institute contempt proceedings against the defendants. As correctly pointed out, the application is governed by Order 52(2) of the Rules of the Supreme Court of England.
9. As noted by Justice Mativo in North Tetu Farmers Co. Ltd V Joseph Nderitu Wanjohi, [2016] eKLR, the said provision had been amended in its entirety in 2012. The Learned Judge observed that under Rule 81.4, which is the substantive provision relating to this application, leave was not required where committal proceedings relate to a breach of a judgment, order, or undertaking.
10. Be that as it may, it is my finding that the application is not defective by virtue of this prayer. Since leave is not required, the prudent thing to do is to consider the substantive contempt prayer, in order to avoid any further delays.
11. I have considered the 1st defendant’s affidavit and evidence to the extent that the intended sale and transfer has since been cancelled and rescinded, hence the alleged acts of contempt have since been purged. The same is evidenced by the indemnity agreement whose veracity has not been questioned. I see no reason to disbelieve the averment by the 1st defendant.
12. I therefore associate myself with the dictum by Justice Ogolla in Directline Assurance Co Ltd V Jamii Bora Bank Ltd & 5 Others, (2015) eKLR where he stated that:
“To my mind contempt proceedings are quasi – criminal in nature, and is a tool employed by a civil court to ensure obedience to the civil court’s orders and directions. A civil court has no interest in punishing a litigant, unless a litigant leaves the court with no option but to resort to quasi- criminal proceedings to punish a litigant. When a court orders are being disobeyed, or are about to be disobeyed, and the contemnor comes down and purges the contempt, either out of his own freewill or at the prompt of the court, the court will accept the purge of the contempt unless circumstances exist to suggest that the coming down, or the alleged purging of the contempt, is not genuine, or is done in bad faith, or is in itself a continuation of the original contempt. In accepting the coming down of the contemnor, the court will assess the reasons given for the disobedience, the time taken to come down, and the cost incurred in the process”.
Disposition
13. Accordingly, this court finds that the 1st and 4th defendants have purged their contempt and therefore there is nothing to punish the contemnors for. The application dated 2/9/2021 is dismissed. There shall be no orders to costs on the application.
II. The application dated 2/7/2022 and the preliminary objection:
14. The applicants are MIRIAM MUTHONI MACHARIA, PHILLEMON NDOLO, JAMES MUTUA, PHYLIS MUTUA, FRANCIS. C. MAINA and PETER MAGOMA.
15. The application is for the joinder of the 6 as parties in this suit. The applicants contend that they have valid titles and that the 6th applicant has a valid share certificate to the land owned by the 1st plaintiff. They seek to be enjoined in the suit so as to stop the sale by the 2-4 plaintiffs of the plots owned by the 1st plaintiff.
16. The application is supported by the affidavit sworn by the 2nd applicant, PHILEMON NDOLO on behalf of the other applicants reiterating the grounds of the application. It is opposed by way of a replying affidavit sworn on 19/9/2022 by the plaintiffs as well as a replying affidavit and a Notice of Preliminary Objection (PO) both dated 7/11/2023, filed by the defendants.
17. I will begin by determining the PO which is premised on the lack of jurisdiction of this court to determine the application. The defendants argue that by the said joinder the issues in question will go beyond the jurisdiction of this court to that of the ELC. The defendants contend that the applicant’s claim is solely based on a claim to land, boundary and ownership, which does not fall within the jurisdiction of this court.
Analysis and determination
18. I have considered the PO and the submissions filed thereto. Article 162(2)(b) of the Constitution empowers Parliament to establish courts to hear and determine disputes relating to the environment and the use and occupation of, and title to, land. By dint of this article Parliament enacted the Environment and Land Court Act, whose jurisdiction is set out under section 13(2)(a). The same includes settlement of disputes relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources; (emphasis).
19. The defendant has cited a decision of this court in Mbutu V Middle East Bank Kenya Limited, [2021] KEHC 21. The court in that matter held as follows:
“The jurisdiction of the Environment and Land Court is limited to the disputes contemplated under Article 162(2) (b) of the Constitution and Section 13 of the Act. In this regard, the intention of the Constitution is that if an issue arises touching on land in respect of its use, possession, control, title, compulsory acquisition or any other dispute touching on land, then this court has no jurisdiction. In Republic V National Land Commission & another -Ex parte Cecilia Chepkoech Leting & 2 others, [2018] eKLR, the court stated that since the determination of the (Supreme Court) in R V Karisa Chengo & 2 Others (Supreme Court No.5 of 2015) it has become clear the matters contemplated in the above provisions ought to be dealt with by the specialized courts.”
20. I therefore agree with the submission by the defendants that the application for joinder of the 6 applicants shifts the dispute beyond the jurisdictional reach of this court. In any case, the issues at the center of the present dispute relate to the control, management and directorship of the 1st plaintiff.
Disposition
21. For these reasons the application dated 2/7/2022 is struck out for want of jurisdiction with costs to the plaintiffs and the defendants.
III. The application dated 14/9/2023:
22. The application, filed by the defendants, seeks orders that the 1-4 plaintiffs lack locus standi to institute the suit and an alternative prayer for leave to the defendants to amend their statement of defense and put in a counterclaim. The application is premised on the ground that the suit herein was founded on an erroneous assumption that the plaintiffs were the legitimate officials of the 1st plaintiff. Since the Registrar of Companies had recalled the online searches issued by that office, the plaintiffs had lost the locus to institute the suit before court.
23. The defendants further argue that the 2-4 plaintiffs had elected themselves as the signatories of the 1st plaintiff’s bank accounts and caused loss to the company. It is for these reasons that they seek leave to amend their defense so as to include the fact of the recall of the searches which is a new issue that was not in their knowledge at the time the suit was filed. In addition, the 2-4 plaintiffs had been placed on their defense in a criminal matter regarding forgery of documents and they seek to bring this to the attention of the court.
24. The application is opposed by way of a replying affidavit sworn by the 2nd plaintiff on behalf of the plaintiffs, on 2/10/2022. The plaintiffs contend that the fact of recall of the official searches by the Registrar of Companies is not proof that the 2-4 plaintiff is not proof of lack of locus. They insist that the 2-4 plaintiffs were duly elected into office and are therefore legitimate.
Analysis and determination:
25. The issue relating to the locus of the 2nd to 4th plaintiffs is controversial as between the parties. I agree with the submission that this is a question of fact that will require evidence to be produced by respective parties during the hearing. As such, I am of the view that the issue is not one to be determined at this interlocutory stage.
26. On the second and alternative prayer, section 100 of the Civil Procedure Act and Order 8 rule 3 of the Civil Procedure Rules, 2010, gives the court discretion to allow parties to amend pleadings at any time, and on such terms as to costs or otherwise as it may think fit. The cardinal consideration is that amendments should serve the purpose of determining the real issues in dispute, as was echoed by the court in KK Lodgit Limited V Geminia Insurance Company Ltd & Another, (2021) eKLR.
27. It is my observation that there is no particular objection to the amendment of the statement of defense raised by the plaintiffs. The reason given by the defendants for seeking leave to amend is the need to enjoin the interested party in the suit, bring to the fore the Ruling by the Makadara Criminal Court, to include the incidence of recall of the official search by the Registrar of Companies and to plead damages which will not be awarded if not pleaded.
28. Having considered these reasons, I note that the plaintiffs have not controverted the submission that the same is new evidence. It is therefore my finding that the defendants have made a case for grant of the said orders.
Disposition
29. Accordingly, the application dated 14/9/2023 is allowed and the defendants are granted leave to amend their statement of defense so as to include a counter claim. The costs of the application shall await the outcome of the suit.