YUSUF ABDI ADAN & ANOR VS. HUSSEIN AHMED FARAH & 2 OTHERS

 REPUBLIC OF KENYA
 IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL AND TAX DIVISION
CIVIL SUIT NO. 100 OF 2016
YUSUF ABDI ADAN ……………………………………………....APPLICANT
     VERSUS
HUSSEIN AHMED FARAH ………………………………..1ST RESPONDENT
HUSSEIN UNSHUR MOHAMMED ………………….......2ND RESPONDENT
MOHAMMED ABDIKADIR ADAN………………………3RD RESPONDENT
BLUE BIRD AVIATION LIMITED……………………….4TH RESPONDENT
RULING
1. This ruling arises from an application filed by the plaintiff/applicant dated 15th September, 2022. The said application is anchored on the provisions of Order 51 of the Civil Procedure Rules, 2010, Sections 1A, 1B and 3A and 63(e) of the Civil Procedure Act, Articles 40, 50 and 159 of the Constitution of Kenya, 2010 and other enabling provisions of the law. The applicant seeks the following orders-
(a) That this Honourable Court be pleased to set aside the appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited;
(b)  That upon granting prayer (a) above, this Honourable Court be pleased to set aside the Business Valuation Report by RSM (East Africa) Consulting Limited dated 6th December, 2021;
(c)  That this Honourable Court be pleased to appoint a reputable firm to undertake the valuation of the 4th respondent within fourteen (14) days with a view of ascertaining the value of the applicant’s shareholding thereon for subsequent purchase by the 1st, 2nd and 3rd respondents or any one of them or by the 4th respondent, and the company’s capital be reduced accordingly within fourteen (14) days thereafter in compliance with this Court’s orders of 1st October, 2021; and
(d)  That the costs of the application be provided for.
2. The application is premised on the grounds in support of it and the supporting affidavit sworn on 15th September, 2022 by Yusuf Abdi Adan, the applicant herein. He also filed a further affidavit sworn on 25th October, 2022.
3. The application was opposed by the 2nd, 3rd and 4th defendants/respondents, who filed their responses. The 1st defendant neither filed a response nor written submissions. The 2nd respondent, Hussein Unshur Mohamed, filed grounds of objection dated 23rd September, 2022. He also filed a replying affidavit sworn on 26th October, 2022 in response to the applicant’s further affidavit. The 3rd respondent, Mohamed Abdikadir Adan, filed a replying affidavit sworn on 17th October, 2022. The 4th respondent filed a Notice of Preliminary Objection dated 26th September, 2022. The Counsel for the applicant, 2nd, 3rd and 4th respondents thereafter filed written submissions.
4. In the supporting affidavit filed by the applicant he deposed that an order for a buy-out was made as the Court considered the same as a proportionate remedy where unfair prejudice has been established but he had not obtained due returns from the buy-out which resulted from the impugned valuation conducted by RSM (East Africa) Consulting Limited after parties agreed to appoint the said firm to undertake the valuation.
5. The applicant also deposed that subsequent to the engagement of RSM (East Africa) Consulting Limited to conduct the valuation, the applicant’s Advocates on record raised several queries but in the spirit of cooperation and mutual engagement, the parties agreed to address the issues vide a letter signed by the parties on 9th November, 2021. He stated that in the said letter, under paragraph 3, the parties agreed that the value of all other assets other than aircraft and land, be carried at their netbook values based on the latest audited financial accounts and amendments were made to the letter of engagement that was signed on 10th November, 2021 as agreed between the parties.
6. The applicant deposed that in clause 1.1 of the said letter of engagement, on the issue of independent valuation of underlying assets, it was agreed that RSM (East Africa) Consulting Limited would engage an independent professional Valuer to conduct a valuation of the company’s aircraft and all buildings; and all other assets shall be carried at their netbook value based on the latest audited financial statements. Further, that RSM (East Africa) Consulting Limited would present the Asset Valuation Report to the appointing parties’ Advocates as an appendix to the Business Valuation Report.
7. That in regard to clause 1.1 on enterprise valuation, it was agreed that RSM (East Africa) Consulting Limited would perform a high level review of the balance sheet to ascertain the carrying value of the assets and liabilities and prepare a financial model incorporating historical performance over the preceding three (3) years; and present a recoverable balance sheet.
8. The applicant averred that the Business Valuation Report sent on 7th December, 2021 was promptly lodged in Court by the 2nd respondent’s Advocates but the Asset Valuation Report by Lloyd Masika Ltd attached thereto was not signed by the director and/or sealed as required by the limiting conditions, as limiting condition No. 11 provided that the Valuation Report shall be invalid unless it is signed by a director and bears the official company seal.
9. He stated that when the matter was mentioned on 8th December, 2021, he sought seven (7) more days to study and analyze the report on the basis that the respondents had intimately participated in the report making process as disclosed by the Valuer in their letter dated 6th December, 2021 that all the information contained therein had been provided by the Management of the 4th respondent.
10.  The applicant deposed that the letter forwarding the referenced Valuation Report clearly invited the parties to seek any clarification or further information relating to the issues contained in the report. He stated that his Advocates received a hard copy of the Valuation Report dated 6th December, 2021 on 17th December, 2021 but audited financial reports for the financial years 2021, 2020, 2019, 2018 and 2017 were not availed.
11.  That he sought a disclosure of all related parties of the group since the words “group’s audited financial statements” had been used in the Valuation Report. That he also sought a summary of their transactions, the terms of their transactions and the outstanding balances only to the extent of the business enterprise of Bluebird Aviation Limited.
12.  That RSM (East Africa) Consulting Limited vide their letter dated 7th January, 2022 responded to the issues and one of them was that the Management of the 4th respondent prepared the assumption underlying the future projections and RSM (East Africa) Consulting Limited only reviewed them for reasonableness based on past trend and the market outlook, taking into account the capacity available and found the assumption to be adequate. That the net asset value of the business was derived using the financial position as reflected in the signed audited financial statements audited by external Auditors Deloitte; and which were approved by the Board of the company (4th respondent).
13.  He stated that in its response, RSM (East Africa) Consulting Limited stated that provision of copies of the audited financial statements for Blue Bird Aviation Limited was not part of the enclosures. It relied on Section 1.1 of the letter of engagement referenced RSMC/2021/462. That it also stated that the provision of the mentioned schedules was not within the scope of their engagement. The applicant further stated that RSM (East Africa) Consulting Limited also stated that the signed and sealed copy of the independent asset valuation report was attached to the letter dated 7th January, 2022. The applicant maintained that he or his Advocates never received a signed copy of the Valuation Report and the audited financial statements for the 4th respondent.
14.  The applicant deposed that the sum of Kshs. 320,912,500.00 is a speculative figure as the financial statements relied on were not provided in support of the said sum. He further deposed that he made a formal request to Deloitte to supply him with the 4th respondent’s audited financial statements but they (Deloitte) declined/ignored and/or failed to respond and/or provide him with the requested financial statements. His contention is that the financial statements were deliberately excluded from the Business Valuation Report to compel him to accept the shareholding as ascertained in the said Report which he believes is baseless and unsupported.
15.  The applicant averred that to demonstrate dishonesty, partiality and non-independence of the valuation report, RSM (East Africa) Consulting Limited failed to, declined and/or deliberately refused to consider certain crucial facts integral to the valuation exercise such as the 4th respondent having subsidiaries or associates. That RSM (East Africa) Consulting Limited in its letter dated 7th January, 2022 addressed to the applicant’s Advocates responded to his queries by stating that the mention of the word “group” in the valuation report shall be removed from the report. That they however said that from their analysis, they did not discover any subsidiary or associate relationship in the context of a group.
16.  The applicant referred to a letter dated 5th December, 2018 by the Kenya Revenue Authority addressed to the 4th respondent requesting for information under Section 59 of the Tax Procedures Act (TPA) and Legal Notice No. 67 of 2016 - Income Tax (Transfer Pricing) Rules, 2006. That he interpreted the contents of the said letter to mean that the 4th respondent has subsidiaries and/or related parties that are engaged in transactions but the assets and/or liabilities held by the subsidiaries and/or related parties were not included in the valuation.  He stated that he also understood the said letter to mean that the 4th respondent in the year 2018 had related parties that were non-resident and that the 4th respondent in the year 2018 was involved in a transaction or transactions which related to non-resident parties and that KRA was aware of a transaction or transactions within the 4th respondent and related non-resident parties and it required more information and documents to ascertain that the transaction or transactions were in accordance with the applicable legislation.
17.  The applicant averred that the RSM (East Africa) Consulting Limited’s Valuation Report included the year 2018 as part of the analysis but it did not identify any related party transaction. He stated that the foregoing is only possible if the 4th respondent did not have any subsidiaries and/or related parties and KRA did not have accurate information, and if the 4th respondent did not engage in any transaction or transactions worth reporting with related non-resident parties. The applicant stated that the information on the 4th respondent, its related parties and/or subsidiaries was not provided to RSM (East Africa) Consulting Limited for valuation.
18.  On the issue of subsidiaries and related parties, the applicant concluded that the 4th respondent has non-resident subsidiaries and/or related parties and that RSM (East Africa) Consulting Limited did not identify and include subsidiaries and/or related parties in the valuation of the 3rd respondent. The applicant averred that the Valuation Report is not accurate having not captured all assets and/or liabilities held by subsidiaries and/or related parties of the 4th respondent.
19.  The applicant questioned the conduct of RSM (East Africa) Consulting Limited and stated that its conduct reveals that the valuation process was not independently conducted as the valuation was conducted negligently as they expressly state in their report that their conclusions are based on the assumption that the information is accurate and complete, that the said assumptions were prepared by the Management of the 4th respondents and not by RSM (East Africa) Consulting Limited. That the audited financial statements significantly relied upon in the Valuation Report were neither attached to the Business Valuation Report nor were they supplied to him.
20.  The applicant deposed that RSM (East Africa) Consulting Limited did not produce a “speaking valuation” as they had not provided reasons through supporting documents for the value of Kshs. 320,912,500.00 alleged to be his shareholding and that the said value remains a speculative figure triggering the litigation herein as the financial statements significantly relied on were not provided in support of the said sum.
21.  He averred that the purpose of the valuation as expressly indicated by the Court was for purposes of ascertaining the value of his shareholding for subsequent purchase, where ascertainment means to establish and/or demonstrate on the basis of facts, the true value of the shares. He further averred that due to the Valuer’s conduct and the outcome of the sham valuation process, the Valuer is in breach of the appointment letter dated 2nd November, 2021 as RSM (East Africa) Consulting Limited did not ascertain the true value of his shareholding in the 4th respondent for purposes of a buy-out. That RSM (East Africa) Consulting Limited produced a speculative value for his shareholding in the 4th respondent as the said value is not supported by any documents.
22.  The applicant also averred that the Valuer relied on an invalid Asset Valuation by Lloyd Masika Ltd to ascertain his shareholding and that RSM (East Africa) Consulting Limited undertook the valuation of his shareholding based on a Valuation Report founded on fundamentally erroneous basis, dishonesty and partiality. That RSM (East Africa) Consulting Limited submitted a Valuation Report that was manifestly unjust and the value therein grossly inadequate and in non-conformity with the terms of engagement dated 10th November, 2021.
23.  The applicant stated that the financial statements were deliberately excluded from the Business Valuation Report to compel him to accept the shareholding as ascertained in the said Report which he strongly believes is an undervalue.
24.  The applicant expressed apprehension that the Business Valuation Report was not arrived at through an independent valuation process as the 4th respondent’s audited financial statements relied on to ascertain his shareholding for purposes of a buy-out were deliberately excluded in the report and requests to obtain the same had been ignored and/or declined.
25.  The applicant stated that the Valuation Report by  RSM (East Africa) Consulting Limited which declined to provide the basis of the purported Valuation Report while admitting the source of the information to the audited books of accounts clearly undermines the transparency, independence and sanctity of the Court order.
26.  He averred that at the time the 2nd respondent filed the application for adoption of the Business Valuation Report, all the parties herein had not agreed on its adoption as he had several reservations on the same which were yet to be adequately addressed. That he vehemently opposed the adoption of the Valuation Report and brought to the attention of the Court all his reservations with regard to the Business Valuation Report, culminating in the ruling of 3rd June, 2022.
27.  The applicant also averred that at the time the application for adoption of the Valuation Report was filed, parties were yet to agree on the adoption of the said Report or any settlement as evidenced through the various correspondences, thus he could not prematurely file an application for setting aside. He further stated that since the 2nd respondent had filed the application for adoption of the Report before any settlement could be reached, his only recourse was to challenge the application for adoption of the Valuation Report.
28.  He asserted that the Business Valuation Report whose essence was to establish a true and fair value of his shareholding for purposes of a buy-out was not achieved through an independent and transparent process, thus it is his prayer that the same be set aside and for this Court to direct that another valuation be conducted by an independent Valuer to be appointed by the Court.
29.  The applicant urged this Court not to give weight to the Valuation Report without tangible evidence proving the source of information used in formulation of the same. He asserted that a Valuation Report should communicate the methods considered and approaches used along with the reasoning for using a particular approach, as well as present the supporting documentation in a simple and concise manner.
30.  He stated that a Valuation Report is the total sum of facts and figures, and it must be demonstrable as to how calculative conclusions were arrived at by clearly providing the basis of the information used to arrive at the arithmetic conclusions.
31.  He deposed that in the underlying circumstances, the parties opted to pursue the valuation by consensus but the Valuation Report is disputed and since the Court has a reserved mandate to appoint a Valuer, as expressed in the order, the Court may exercise such power and appoint a Valuer to undertake another valuation in the interest of justice and equity.
32.  The applicant deposed that the orders of 1st October, 2021 had not been complied with as a Valuation Report capable of ascertaining the value of the shares should offer a conclusion on the worth of shares based on ascertainable assessment, analysis and corroboration of pertinent facts such as audited statements of accounts.
33.  He asserted that his shareholding cannot be acquired on the basis and reliance of an unascertainable valuation process where the purported source of the information contained in the report is kept secret and without full disclosure to a shareholder being bought out.
34.  He deposed that his constitutional right to property, being the actual and ascertainable value of his shares is a fundamental issue, which is threatened and he is highly likely to be deprived of his rights recognized in law.
35.  He averred that an independent valuation process is not prejudicial to the respondents, the shareholders of the company in any way. That it is imperative for the Court to ask itself why the Valuer, while admitting to have used the signed audited books of accounts in the valuation of shares, declines to provide the same. He stated that it is not a coincidence that the Valuer and the respondents have both refused and/or declined to provide the signed audited books of accounts which were allegedly used in the valuation process.
36.  He asserted that the need to obviate the injustice visited upon him outweighs the need to finalize the instant suit, hence the necessity to set aside the valuation report.
37.  He stated that there is sufficient reason to warrant the setting aside of the appointment letter dated 2nd November, 2021 and the impugned Valuation Report dated 6th December, 2021.
38.  In the grounds of opposition filed by the 2nd respondent, he raises the following issues-
(i) That the suit is manifestly scandalous, vexatious and an abuse of the Court’s procedure/process;
(ii) That the plaintiff is no longer a shareholder/director of the 4th defendant. Accordingly, the application has been overtaken by events;
(iii) That the Court having rendered its final decision on the derivative action and a ruling to the review application is functus officio thus lacks jurisdiction to entertain the application; and
(iv) That the application does not lie in law, is incurably defective, incompetent and ought to be struck out with costs to the respondents.
39.  In his replying affidavit, the 3rd respondent averred that the present application is an impermissible attempt to review its review application dated 23rd August, 2021 which resulted in the Court issuing several orders. That in the present application, the applicant is seeking an order for appointment of a Valuer but the issue of appointment of a Valuer was determined through the Court order of 1st October, 2021.
40.  He deposed that he was aware that the parties agreed by consent to appoint RSM (East Africa) Consulting Limited to undertake the valuation of the 4th respondent but the applicant has not filed an application to set aside the consent order or even demonstrate that the consent was obtained by fraud, collusion or without sufficient material facts. That the said company conducted the valuation of the 4th respondent and submitted its Valuation Report dated 6th December, 2021 but the plaintiff sought to undermine the said report and refused to abide by it and never provided any evidence to show why the Valuation Report is not accurate.
41.  The 3rd respondent deposed that due to the applicant’s intransigence, the 2nd respondent then filed the application dated 9th February, 2022, which was granted through a ruling dated 3rd June, 2022. That to give effect to the said orders, his Advocate wrote to the applicant’s Advocate requesting for details of the applicant’s bank account in order to deposit the sum of Kshs. 320,912,500.00 but the information was not forthcoming.
42.  The 3rd respondent stated that the applicant’s Advocate vide a letter dated 16th June, 2022 contested the interpretation of prayer 3 of the order issued on 3rd June, 2022 and filed a Notice of Appeal to the Court of Appeal at Nairobi dated 14th June, 2022 and an application for stay of the orders issued on 3rd June, 2022.
43.  He stated that following several correspondences between the parties’ Advocates on the true purport of the default clause, the matter was fixed on 8th July, 2022 before the Judge for purposes of clarifying the orders of 3rd June, 2022, which was done. That on 12th July, 2022 his Advocate wrote to the applicant’s Advocate requesting for the details of the applicant’s bank account but the same was never provided by either the applicant or his Advocate and that he instructed his Advocate to remit the sum of Kshs. 320,912,500.00 to the Judiciary Account at KCB bank, which was done.
44.  He deposed that the Deputy Registrar signed the share transfer forms in his favour, in place of the applicant herein, and that the said forms were lodged at the Companies’ Registry to effect the changes in the shareholding in the 4th respondent. That in a letter dated 29th July, 2022, his Advocate informed the Deputy Registrar and copied to all parties, that they had transferred the shares to the 3rd respondent pursuant to the Court order and obtained the CR12 and that the funds deposited may be released to the applicant.
45.  The 3rd respondent deposed that it is evident that although the applicant makes no mention of the foregoing, he was well aware of the fact that he is no longer a member of the 4th respondent and his present application has been overtaken by events.
46.  He further deposed that a hundred and three (103) days after the Court delivered its ruling of 3rd June, 2022, the applicant had made this application regurgitating the same grounds he had made in opposition to the 2nd respondent’s application dated 9th February, 2022, without disclosing any new evidence or facts. That in its ruling of 3rd June, 2022, the Court rendered its final decision thus becoming functus officio and that the applicant is in any case trying to set aside a consent order without a formal application.
47.  He averred that the matter regarding the Valuation Report by RSM (East Africa) Consulting Limited had been fully litigated but the applicant had introduced one document, a letter purportedly from Kenya Revenue Authority (KRA) dated 5th December, 2018 to make the argument that the 4th respondent has subsidiaries, although the said letter does not mention any alleged subsidiary, does not refer to the 4th respondent as being in a group of companies and it does not accuse the 4th respondent or demand any payment from it. He stated that the said letter has no evidentiary value which would have influenced the outcome of the case differently. 
48.  He deposed that in his supporting affidavit, the applicant for the first time discloses that he has been writing to the auditors of the 4th respondent and makes reference to a letter dated 17th February, 2022 requesting for the audited financial statements, but the said letter was not copied to Advocates for the respondents.
49.  The 4th respondent in his Notice of Preliminary Objection raised the following issues and urged this Court to determine the same in limine- 
(i) That in view of the express provisions of Order 45 Rule 6 of the    Civil Procedure Rules, 2010, this Honourable Court lacks jurisdiction          to entertain the applicant’s Notice of Motion application;
(ii) That having ceased to be a director of the 4th respondent, the applicant lacks locus standi to sustain this suit either under Sections 238 and 239 of the Companies Act, 2015 (derivative action) or under Sections 780 and 782 of the Companies Act, 2015 (claim for protection against oppressive conduct and unfair prejudice);
(iii) That after the ruling delivered by this Court on 3rd June, 2022 and the clarification ruling of 8th July, 2022, this Court became functus officio and therefore lacks jurisdiction to hear and determine the applicant’s Notice of Motion application dated 15th September, 2022; and
(iv) That consequently, the applicant’s Notice of Motion application dated 15th September, 2022 is woefully incompetent, incurably and fatally defective and ought to be dismissed with costs.
50.  The applicant in his further affidavit deposed that from Judicial Review Miscellaneous Application No. E087 of 2022, the 4th respondent through the verifying affidavit sworn by Hussein Ahmed Farah, the 1st respondent herein, swears under paragraphs 5 and 6 therein that it has endured in depth audits of its tax affairs over the years in compliance with demands by KRA. That it was further sworn therein that all the audits and enquiries by KRA have never resulted in unresolved disputes between KRA and the 4th respondent, which implies that the 4th respondent submitted signed audited accounts to KRA.
51.  He also deposed that the selective provision of the 4th respondent’s audited accounts to other parties demonstrates malice and a deliberate intention to withhold from the applicant the 4th respondent’s audited accounts despite numerous formal requests to the 4th respondent, RSM (East Africa) Consulting Limited and Deloitte, the 4th respondent’s external auditors.
52.  He deposed that the unsigned Asset Valuation Report by Lloyd Masika Ltd annexed to the final Business Valuation Report by RSM (East Africa) Consulting Limited dated 6th December, 2021 has valued some of the aircrafts at ridiculously low prices compared to the superficial analysis of the global prices of similar aircrafts by global aircraft. The applicant gave the average prices for various aircraft as obtained from internet search engines, valuation companies as compared to the valuation given in the Valuation Report in issue. He stated that he believes that the said comparison reveals that the impugned Valuation Report was carefully calculated to deny him his fair and rightful shareholding in the 4th respondent as it does not reflect the true market value.
53.  The applicant averred that notwithstanding that the Asset Valuation Report is invalid, the contents therein, being the value of the aircrafts are fictitious, delusive and deceitful and aimed at deliberately and unfairly undervaluing the company.
54.  The 2nd respondent swore an affidavit in response to the further affidavit filed by the applicant. He deposed that the allegations contained in the further affidavit were allegedly obtained from the internet and it was not claimed that the information had been sourced from an established aircraft manufacturer or aircraft leasing companies. He stated that the dubious information from the internet is inadmissible and has no probative value.
55.  He further deposed that it is not claimed by the applicant that he has the requisite expertise to interpret data as to the value of an aircraft and that the applicant is not also claiming that the supposed new information could not have been discovered after exercise of due diligence or since he filed his review application dated 23rd August, 2021 seeking the valuation of his shares in the 4th respondent and a buy-out.
56.  The 2nd respondent averred that the applicant is introducing new issues which have not previously been adjudicated upon, and that he is seeking to invite the Court to wade into a new controversy which will offend the provisions of Order 45 Rule 1 of the Civil Procedure Rules.
57.  He stated that all the issues raised by the applicant in the application and the various affidavits are matters/issues raised by the applicant in the application and the various affidavits are matters/issues that ought to have been raised when the Court was invited to adopt the Valuation Report either in response or by way of filing an application. He averred that the application offends Section 7 explanation 4 of the Civil Procedure Act and is res judicata.

SUBMISSIONS
58.  To bolster each party’s case, Counsel for the applicant, 2nd, 3rd and 4th respondents highlighted their written submissions. Counsel for the 1st respondent made oral submissions as she had not filed written submissions.
59.  Mr. Kibet, learned Counsel for the applicant expressed the view that this is a straightforward matter about injustice occasioned on Mr. Yusuf Abdi Adan, the applicant. He stated that the applicant founded Blue Bird Aviation in the year 1992 and he incorporated the 1st, 2nd and 3rd respondents into the company. Mr. Kibet stated that the applicant tried to sue the 1st, 2nd and 3rd respondents through a derivative suit and he also tried to wind up the company but he was not successful and that he gave up his company and opted to be bought out of the said company, which was allowed on 1st October, 2021. The applicant’s Counsel further stated that the Court found a case of oppression and unfair prejudice had been made out against the applicant as per Sections 780 and 782 of the Companies Act. 
60.  Mr. Kibet submitted that the Court ordered that valuation be undertaken of the company and the share of the applicant be ascertained and that he be bought out. He stated that after delivery of the ruling on 1st October, 2021, other proceedings became supplemental to the valuation of the company. He indicated that they had in their written submissions submitted on the jurisdiction of this Court on whether it is complementary or supplementary or facilitative of the Court order. He cited the case of Mombasa Bricks & Tiles Limited & 5 others v Arvind Shah & 7 others [2018] eKLR, which decision addresses the bone of contention in this matter on the issue of functus officio and locus standi.
61.  The applicant’s Counsel stated that the Court entertained an application by the 2nd respondent for adoption of the Valuation Report. He submitted that the said application and the present one derive their jurisdiction from the residual power of the Court to entertain a consequent application on a complementary, supplementary or facilitative issue. He stated that the epicentre of this application is the ruling of 1st October, 2021.
62.  He submitted that the Valuation Report cannot stand because it was reached by collusion amongst the Valuer, RSM (East Africa) Consulting Limited (RSM Ltd) and the 1st, 2nd, 3rd and 4th respondents. He contended that the valuation is contrary to the policy of the Court as it contains insufficient material facts, and a misapprehension and ignorance of material facts. He further contended that the valuation goes against the Court order as it does not ascertain the value of the applicant’s shareholding in the company.
63.  Mr. Kibet submitted that upon the valuation report being submitted to the parties on 6th December, 2021, it was promptly lodged in Court through the case tracking system by Counsel for the 2nd respondent and that the Valuer invited them to raise any issues to them. That vide a letter dated 3rd January, 2022, the applicant sought several clarifications and they received a letter from RSM Ltd dated 7th January, 2022 responding to their letter. He stated that in their letter, they had asked RSM Ltd if they authenticated the audited financial reports but they said it was not their work.
64.  The applicant’s Counsel stated that the valuation report contained no audited financial statements but when they asked RSM Ltd for the same, they said that they did not have them. He also stated that in their letter of 7th January, 2022, RSM Ltd conceded that they did not do the valuation and said that all the valuation was done by the Management of the company.
65.  Mr. Kibet submitted that the management of the company is the 1st, 2nd, 3rd and 4th respondents and where a case of unfair prejudice has been made against them, it then turns out that the management of the company was involved in the valuation.
66.  He submitted that the Valuation Report was neither signed nor sealed by the Valuers and that in itself was self-invalidating as condition No. 11 stated that unless the Valuation Report was signed and sealed, it was invalid. He stated that as of 6th December, 2021, when the Valuation Report was presented in soft copy, and it was not signed. He also stated that the Valuation Report uploaded on the CTS in Court was not signed and when they wrote to RSM Ltd and asked for a hard copy of the Valuation Report, they sent to them a hard copy that was not signed. That they informed RSM Ltd that the hard copy of the Valuation Report was unsigned and they conceded to the fact that it was not signed and said that they would send a signed copy. Mr. Kibet asserted that the Asset Valuation Report attached to the Valuation Report was invalid. He submitted that when the Counsel for the 2nd respondent sought clarity from the Valuer on the validity of the Report, RSM Ltd responded and said that the Valuation Report of 6th December, 2021 is final and remains unchanged.
67.  Mr. Kibet posited that RSM Ltd tried to delete the word “group” from the valuation report under the topic “matters of scope” and they stated that they obtained the valuation from a group. He expressed the view that some subsidiaries were concealed, yet this case is about the buy-out of the applicant.
68.  He submitted that the applicant applies for another valuation to be done because the Valuation Report is invalid, illegal and incompetent. He stated that this Court should give justice to the applicant who is 84 years old. He also stated that no injustice shall be occasioned to the respondents.
69.  Mr. Kemboy, for the 4th respondent gave a brief history of this matter. He explained that the 1st, 2nd and the 3rd respondents were shareholders, with each holding 25% of the shares. He stated that on 22nd July, 2021, a derivative suit was filed and in a ruling delivered on 29th July, 2021, the Court declined to hear the suit as a derivative suit. He stated that on 14th August, 2021, the applicant sought to review the ruling of 29th July, 2021 but the Court declined to grant the orders sought. That the Court gave guidelines on how the orders of 1st October, 2021 were to be implemented and on how a Valuer was to be appointed by consent. He stated that RSM Ltd was appointed to conduct valuation and it presented a Valuation Report dated 6th December, 2021.
70.  He stated that on 9th February, 2022, the 2nd respondent filed an application to have the Valuation Report adopted by the Court but the applicant in his affidavit sworn on 22nd February, 2022 opposed the adoption of the Report and in a ruling dated 3rd June, 2022, the application by the 2nd respondent was allowed. Mr. Kemboy submitted that in paragraphs 15, 19, 20, 25, 26, 27 and 28 of the said ruling, the Court took account of the objections raised.
71.  He stated that on 16th June, 2022, the applicant filed a Notice of Appeal and an application for stay of execution. He further stated that the parties sought the Court’s directions as to whether the payment of the valuation of the applicant’s shares would be made after 60 or 180 Days as the 3rd respondent was to pay the value of the shares. That on 12th July, 2022, the Court clarified what it meant by its orders of 3rd June, 2022, but the applicant did not comply with the said orders and the default provisions kicked in. He indicated that the 3rd respondent paid the value of the applicant’s shares in the company in Court.
72.  Mr. Kemboy further stated that the Deputy Registrar transferred the shares of the applicant to the 3rd respondent and a CR12 was issued showing that shareholding had changed. He submitted that as at 22nd July, 2022, the orders of the Court were complied with in full. He also submitted that a Court can set aside its orders on review but the application before this Court is not an application for review as it has been brought under the provisions of Sections 1, 1A, 3, 3A and 63(e) of the Civil Procedure Act and some constitutional provisions. He submitted that the present application does not seek to review any order of the Court but to undo the appointment of RSM Ltd, set aside the Valuation Report and appoint another Valuer.
73.  He stated that the order of 1st October, 2021 directed parties to appoint a Valuer or the Court would appoint one. He contended that if the Court order of 3rd June, 2022 adopting the Valuation Report is not set aside, then the Valuation Report cannot be set aside. He also contended that there was no room for other valuation reports and that the ruling of 3rd June, 2022 wanted parties to be bound by the valuation.
74.  Mr Kemboy submitted that orders of 1st October, 2021 are not available for a review as a reviewed order cannot be reviewed again. He also stated that the orders of 3rd June, 2022 are not subject to review. He submitted that the current application is res judicata as the issues raised now are captured in the ruling of the Court in paragraphs 27 and 28 and as such, the applicant is bound by the ruling.
75.  When expounding on the issue of the present application being res judicata, Mr. Kemboy posited that the applicant could have filed an objection immediately after the Valuation Report was filed.
76.  He submitted that the applicant has no locus standi after the Court dismissed the application for a derivative suit and after the ruling of 3rd June, 2022. He submitted that the reliefs being sought will be of no effect if granted as by setting aside the letter of engagement, the Court will be issuing orders in vain.
77.  Mr. Kemboy stated that once a Court has pronounced itself on the rights of parties, it can no longer address itself on the same issues. He invited this Court to read the applicant’s written submissions and the authorities relied on.
78.  Mr. Biriq, learned Counsel for the 2nd respondent associated himself with the submissions by Mr. Kemboy. He stated that after the ruling of 1st October, 2021, the 2nd respondent through its Advocates requested for a proposal for Valuers save for Deloitte & Touche the 4th respondent’s Auditors. That on 6th October, 2021, three (3) accounting firms were proposed including RSM Ltd and the Valuer was adopted by the applicant.
79.  The 2nd respondent’s Counsel stated that there was no suit under Section 780 of the Companies Act on unfair prejudice and oppression as claimed by the plaintiff. He also stated that there is a difference between valuation and auditing and that although the applicant has referred to the letter dated 7th July, 2022 from RSM Ltd, he has not disclosed what the said letter says and that the said letter states that a valuation is not an audit.
80.  On whether the audited financial statements ought to have been annexed to the Valuation Report, Mr. Biriq stated that the Valuer referred to clause 1.1 of the conditions of engagement. He stated that the valuation from RSM Ltd was conducted on the understanding of the applicant and the respondents, save for the 1st respondent.  He stated that there is nothing that the applicant’s Counsel has said today that has not been said before Judge Mabeya.
81.  He submitted that the rules of practice apply and that the orders of the Court were implemented and carried out to the fullest and the shareholding has changed. He stated that the applicant’s Counsel had not mentioned the ruling of 3rd June, 2022 and the effect of the same.
82.  He further submitted that litigation cannot be done retrospectively but that is what the applicant is urging in his application. He stated that they were in Court because of gratuitous advice of the Court in paragraph 22 of its ruling of 3rd June, 2022.
83.  Mr. Biriq pointed out that the applicant in the present application refers to the ruling of 3rd June, 2022 and what the Judge told him. That in paragraphs 5, 6 and 7 of his supporting affidavit, the applicant justifies the reason for filing the present application now. Counsel for the 2nd respondent stated that litigation is not supposed to be done in piecemeal and that the applicant had not disclosed if a new valuation was to be done, if he would accept it, if it was below the current valuation. He expressed the view that this Court is being invited to go into a quagmire which happens when people abandon the rules.
84.  He submitted that the power to review a Court’s position is derived from Section 80 of the Civil Procedure Rules and that is not an inherent power. He stated that Order 45 of the Civil Procedure Rules prescribes the scope and jurisdiction for review. He urged the Court to go through the said provisions. 
85.  He submitted that although the applicant’s Advocate mentioned about the valuation, he did not mention if he has any expertise similar to that of the Valuers. He urged this Court to dismiss the application with costs as the orders of the Court have been implemented and the application is res judicata.
86.  Mr. Daud, learned Counsel for the 3rd respondent associated himself with the submissions by Messrs Kemboy and Biriq. He was of the view that the applicant was trying to justify the present application on the doctrine of unfair prejudice. He stated that the applicant sought a review of the Judge’s ruling dismissing the application to commence the derivative suit and a ruling was made on 1st October, 2021 and the Judge allowed part of the application and a valuation was to be done.
87.  The 3rd respondent’s Counsel stated that there was no suit under unfair prejudice and that the company had been valued and a Valuation Report filed. He also stated that the adoption of the Valuation Report was opposed by the applicant and a ruling was delivered on 3rd June, 2022. He submitted that the applicant now relies on the provisions of Section 63(e) of the Civil Procedure Act regurgitating the same grounds, which is an abuse of the Court process. Mr. Daud stated that an appeal had been filed against the said ruling of 3rd June, 2022 and this Court was functus officio as a final decision was made.
88.  He stated that 25% of the shares of Blue Bird valuation was paid to the Court and the Deputy Registrar signed the share transfer forms effecting the transfer of the shares of the applicant’s shares to the 3rd respondent.
89.  He submitted that the present application is res judicata and this Court cannot seat as an appellate Court to an order of another Court of competent jurisdiction. According to him, the case is finished and dusted. 
90.  On behalf of the 1st respondent, Ms Jan Mohamed, SC submitted that Judge Mabeya in his ruling of 1st October, 2021 referred to this case as an unending circus. She indicated that there were other matters that were struck out. She stated that litigation has to come to an end and that the applicant had appealed the decision of 1st October, 2021, where Judge Mabeya directed parties to go for valuation. She pointed out that the 1st respondent did not engage in the consent appointing a Valuer.
91.  She submitted that it was appalling for the applicant to state that there was collusion among the respondents but the 1st respondent did not collude with the with them. She stated that Judge Mabeya was of the view that the applicant’s allegations were speculative. She further stated that one cannot have a review of a review and an appeal at the same time. She submitted that the money has been deposited in Court, the matter has come to a close and the company has to move on. She prayed for dismissal of the application.
92.  In a rejoinder, Mr. Kibet for the applicant informed the Court that although Mr. Kemboy had stated that an appeal was filed, none was filed. The applicant’s Counsel stated that there was an application for stay of execution but the same was overtaken by execution.
93.  He submitted that the cardinal anchor of the applicant’s application is Article 48 of the Constitution on the right to be heard and also on the right to property. He stated that the matter in issue is the shareholding. He urged this Court to issue substantive justice.
94.  He further submitted that only the appointment of the Valuer was by consent but the outcome of the valuation was not. He stated that he had raised more than ten points as to why the valuation report should be set aside.
95.  Mr. Kibet stated that the order of 1st of October, 2021 cannot have been issued in vain and that a valuation is derived from audited books of accounts but on asking for the audited financial statements the applicant was not given. He indicated that he had also submitted on the need for a report to have a basis.
96.  In responding to Mr. Biriq’s question on what would happen if a subsequent Valuation Report comes below the value of the current report, Mr. Kibet indicated that they have no other report and that the reason why they need another valuation.
97.  In responding to Mr. Daud’s contention that there was no case that was made out of unfair prejudice, Mr. Kibet stated that the remedies of a derivative action, buy-out and winding up were available to the applicant but Judge Mabeya gave the option of a buy-out.
98.  Mr. Kibet maintained that the Valuer stated that the Management did the valuation, yet the applicant is exiting his company, which calls for a valid valuation report.
99.  He contended that nothing had been submitted on the invalidity of the report and the concessions made by the Valuer. He concluded by stating that the Valuation Report cannot hold as for a buy-out of the applicant from the company, a fair value of the buy-out should be provided to the applicant.

ANALYSIS AND DETERMINATION
100. Apart the submissions highlighted by the Counsel for the applicant, 2nd, 3rd and 4th respondents, I have considered their written submission together will the oral submissions made by Counsel for the 1st respondent. I have also considered the depositions made by the applicant, the 2nd and 3rd defendants, the grounds of opposition by the 3rd respondent and the Notice of Preliminary Objection by the 4th respondent. I have also borne in mind the authorities relied on by Counsel for the parties. The issues that arise for determination are if-
(i) If this Court is functus officio;
(ii) If the applicant had the locus standi to file the application dated 15th September, 2022;
(iii) If the said application dated 15th September, 2022 is res judicata;
(iv) If the appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited should be set aside;
(v) If the Business Valuation Report by RSM (East Africa) Consulting Limited dated 6th December, 2021 should be set aside.
101. In determining the application dated 15th September, 2022, this Court will first determine the issues raised in the Notice of Preliminary Objection filed by the 4th respondent. In Mukisa Biscuit Manufacturing Co. Ltd v West end Distributors Ltd (supra) the Court stated as follows on what comprises a Notice of Preliminary Objection-
“so far as I’m aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of a suit.
Sir Charles Newbold in the same case stated as follows-
“The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way of preliminary objection. A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact had to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points of law by way of preliminary objection does nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop.”  (emphasis added).

If this Court is functus officio
102. The term functus officio is defined in Black’s Law Dictionary, 10th Edition as “having performed his or her office. Of an officer or official, without further authority or legal competence because the duties and functions of the original commission have been accomplished.”
103. The respondents’ contention is that this Court is functus officio as the orders of the Court that directed the applicant to be bought out by one of the shareholders were completed when the 3rd respondent’s Counsel transmitted the sum of Kshs. 320,912,500.00 in the Judiciary account being the value of the shareholding of the applicant’s shares at the 4th respondent. It is apparent that thereafter the Deputy Registrar executed the share transfer form in favour of the 3rd respondent when the applicant declined to do so. A copy of the 4th respondent’s CR12 shows who the current shareholders are. The respondents therefore submitted that as such, the orders issued by the Court on 3rd June, 2022 have been perfected and this Court became functus officio and cannot issue further orders and/or directions in this matter. In submitting on the said issue, the Counsel for the 3rd respondent relied on the Supreme Court decision of Raila Odinga & 2 others v Independent Electoral & Boundaries Commission & 3 others [2013] eKLR.
104. In urging the Court to find that the functus officio doctrine applies to the present application and not to reopen the suit herein, the Counsel for the 2nd respondent relied on the case of ICEA Lion Insurance Co. Ltd v Julius Nyaga Chomba [2020] eKLR, which made reference to the Supreme Court decision in Election Petitions Nos. 3, 4 & 5 Raila Odinga & others v IEBC & others (supra). It was submitted that the applicant appealed to the Court of Appeal and he should pursue his appeal. It was also submitted that the present application seeks to review a ruling that had reviewed an earlier ruling.
105. On his part, the applicant’s Counsel submitted that the present application does not seek to review an earlier ruling and that it has been brought as supplemental proceedings under Section 63(e) of the Civil Procedure Act. He maintained that this Court is not functus officio as it has not perfected its decision.
106. The 3rd respondent’s Counsel submitted that the orders which are being sought are not interlocutory in nature as the Court pronounced itself in this matter. He relied on the case of Anastacia Wagiciengo v Ezekiel Wafula [2018] eKLR in stating that the word interlocutory refers to something that is intermediate, between the filing of the suit and the final judgment and that the main suit has to be alive for there to be an interlocutory order.
107. Section 63(e) of the Civil Procedure Act provides that in order to prevent the
ends of justice from being defeated, the Court may, if it is so prescribed 
make such other interlocutory orders as may appear to the Court to be just
and convenient.
108. Black’s Law Dictionary 10th Edition at p. 1399 defines the term supplementary proceedings as “a proceeding held in connection with the enforcement of a judgment………. A proceeding in some way that supplements another.”
109.  In paragraph 5 of his supporting affidavit, the applicant states that he is aggrieved and/or dissatisfied by the outcome of the valuation conducted by RSM Ltd contained in the Valuation Report dated 6th December, 2021 and he has come to Court for intervention for ascertainment of his true shareholding in the 4th respondent.
110. My understanding of the above deposition is that the present application is supplemental to the proceedings that have taken place after 6th December, 2021 being the date of the Valuation Report, including the adoption of the valuation report by the Court and any other order made thereafter by the Court.
111. In the case of Equatorial Commercial Bank v Wilfred Nyasim Oroko [2015] eKLR, the Court held as follows of supplemental jurisdiction-
“Section 63 Section 6(e)(sic) of the Civil Procedure Act grants the Court power to make interlocutory order as and when it appears to the Court to be just and convenient. The section is on supplemental proceedings and jurisdiction. Supplemental jurisdiction is defined in Black’s Law Dictionary as; jurisdiction over a claim that is part of the same case or controversy as another claim over which the Court has original jurisdiction” (emphasis added).
112. In order to give context to the provisions of Section 63(e) of the Civil Procedure Act and more particularly, the use of the term “interlocutory order”, this Court must bear in mind the nature of the orders being sought by the applicant herein. They are for this Court to- (a) set aside the appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited; (b) upon granting prayer (a), for this Court to set aside the Business Valuation Report by RSM (East Africa) Consulting Limited dated 6th December, 2021 and (c ) for this Court to appoint a reputable firm to undertake the valuation of the 4th respondent within fourteen days (14) with a view of ascertaining the value of the applicant’s shareholding for subsequent purchase by the 1st, 2nd and 3rd respondents or by any one of them or by the 4th respondent, and the company’s capital be reduced accordingly within fourteen (14) days thereafter in compliance with the this Court’s orders of 1st October, 2021.
113. The above reveals that the applicant takes into cognizance of the fact that there have been previous proceedings revolving around the issue of his shares and has opted to file the present application as supplemental proceedings in order to ascertain the true value of his shareholding in the 4th respondent. In view of the foregoing, I am in agreement with Mr. Kibet, that the use of the term “interlocutory” in the provisions of Section 63(e) of the Civil Procedure Act, denotes a temporary order given during the pendency of the supplemental proceedings.
114. In Bellevue Development Company Limited v Vinayak Builders Limited & Another [2014] eKLR, the Court warned against overstretching the functus officio doctrine and advised that the order or relief sought would determine whether the Court was functus officio or not. The Court held as follows-
“... care should be taken not to inadvertently or otherwise overstretch the application of the concept of functus officio; for, in all senses of the law, it does not foreclose proceedings which are incidental to or natural consequence of the final decision of the court such as the execution proceedings including contempt of court proceedings, or any other matter on which the court could exercise supplemental jurisdiction. Therefore, in determining whether the court is functus officio one should look at the order or relief which is being sought in the case despite that judgment has already been rendered by the court.”  (emphasis added).
115. In the case of Telkom Kenya Limited v John Ochanda (suing on his own behalf and on behalf of 996 Former employees of Telkom Kenya Limited [2014] eKLR, the Court stated as follows on the doctrine of functus officio-
“Functus officio is an enduring principle of law that prevents the re-opening of a matter before a Court that rendered the final decision thereon…….the doctrine is not to be understood to bar any engagement by a Court with a case that it has already decided or pronounced itself on. What it does bar is a merit-based decisional re-engagement with the case once the final judgment has been entered and a decree thereon issued.”
116. In the case of Habiba Sharuhirbo v Ibrahim Sharu Hirbo & another [2021] eKLR, the Court cited the decision of Telkom Kenya Limited v John Ochanda (supra) and held thus-
“In my considered view, the orders being sought are incidental to and direct consequence of the orders made by this Court to which this Court has supplementary jurisdiction to handle even after it has delivered its judgment. The orders being sought are not seeking any merit-based re-engagement with the case in terms of changing anything in the judgment but only to perfect the judgement over something that the Court may have inadvertently overlooked…….” (emphasis added).
117. In regard to the contention raised by the respondents that there is an appeal that was filed before the Court of appeal, I have perused the documents marked as MAA10 and MAA10A annexed to the 3rd respondent’s replying affidavit, being a Notice of Motion application under Rule 5(2)(b) of the Court of Appeal Rules and a Memorandum of Appeal, respectively. It is trite that what constitutes an appeal is the Record of Appeal. As such, a Memorandum of Appeal is a far cry from being convincingly referred to as an Appeal. In any event, it was stated by the applicant that he did not pursue the matter at the Court of Appeal when the said Court declined to certify his application for stay of execution under certificate of urgency, as urgent. It therefore follows that without a Record of Appeal having been filed before the Court of Appeal, there is no valid appeal pending before the Court of Appeal. In HA v LB [2022] eKLR the Court relied on the finding in Yani Haryanto vs. E. D. & F. Man. (Sugar) Limited Civil Appeal No. 122 of 1992 and held that: -
“A Notice of Appeal is not an appeal but just a formal notification of an intended appeal. In fact, under Rule 77(1) of the Court of Appeal Rules it is provided that an intended appellant shall, before or within seven days after lodging notice of appeal, serve copies thereof on all persons directly affected by the appeal. Clearly, a strict reading of this rule contemplates a situation where a Notice of Appeal may even be served before the same is lodged. Where that happens I cannot see how such a Notice which has not even been lodged can by any stretch of imagination be equated to an appeal. Accordingly, the mere fact that a party has given a Notice of intention to appeal does not amount to an appeal for the purposes of review.” (emphasis added).
118. Bearing in mind the decisions I have referred to in the preceding paragraphs, and the orders being sought by the applicant in the application dated 15th September, 2022, this Court holds that it is not functus officio and it has the jurisdiction to hear the present application under the provisions of Section 63(e) of the Civil Procedure Act.

If the application dated 15th September, 2022 is res judicata
119. The 2nd and 4th respondents submitted that the present application is res judicata. The reasons given by the 2nd respondent’s Counsel is that the issues raised by the applicant in the application and the various affidavits are matters/issues that ought to have been raised or canvassed when the Court was invited to adopt the Valuation Report either in response or by filing an application, and as such, the present application offends the provisions of Section 7 and more particularly, explanation 4 of the Civil Procedure Act and is therefore res judicata. He relied on the case of the Independent Electoral and Boundaries Commission vs Maian Kiai & 5 others [2017[ eKLR, where the said doctrine was discussed at length by the Court of Appeal.
120. On his part, the 4th respondent’s Counsel was of the view that the present application is res judicata because although it is couched as an application seeking orders to set aside the appointment of a Valuer, impeach the valuation report by RSM Ltd and appoint a new Valuer to carry out another valuation, an in-depth analysis of the instant application shows that it is indeed not only an application seeking to review the orders issued by this Honourable Court pursuant to its ruling delivered on 3rd June, 2022 but also a review application seeking to review the review orders in the ruling delivered on 1st October, 2021. He submitted that the present application is not anchored on Order 45 of the Civil Procedure Rules, 2010 but rather, it has been deceptively brought under the provisions of Articles 40, 50 & 159 of the Constitution among other provisions.
121. He contended that the issues advanced in the instant application are directly and substantively the same issues that were addressed by Judge Mabeya in determination of the 2nd respondent’s application dated 9th February, 2022, where he had sought orders of adoption of the Valuation Report. That in response thereto, the applicant filed a replying affidavit dated 22nd February, 2022 on grounds similar to those presented as grounds in support of the instant application. The 4th respondent’s Counsel stated that that in arriving at its determination of the application dated 9th February, 2022, the Court (Mabeya J), considered all the issues raised by the parties herein, and even proceeded to address the grounds relied upon by the applicant in opposing the application, and therefore the same cannot be presented as forming the basis of the instant application.
122. The 4th respondent’s Counsel stated that in the ruling of 3rd June, 2022 the Judge found that whereas the applicant alleged that he had not been furnished with audited books of account and that the report by Lloyd Masika Ltd was not signed, it had been signed and the audited books availed as per page 8 of the said ruling. Counsel as such submitted that the present application is res judicata as the issues raised in the instant application are similar to those raised by the applicant in his replying affidavit of 22nd February, 2022 in response to the application which the said Court considered and determined. He cited the decision in the Estate of James Karanja alias James Kioi (deceased).
123. The applicant’s Counsel submitted that the Notice of Preliminary Objection did not fit the definition of one as intended by the law. He cited the case of Samuel Waweru v Geoffrey Muhoro Mwangi [2014] eKLR, where the Court relied on the definition of a Preliminary Objection in the case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696.  He also relied on the case of Republic v Eldoret Water and Sanitation Company Limited Ex-parte Booker Onyango & 2 others [2007] eKLR.
124. Relying on the two decisions, the applicant’s Counsel submitted that the first issue raised in the Preliminary Objection is not a pure point of law as there will be need to verify the orders and/or records before the Court can fully consider the said issue.
125. The Court of Appeal in Independent Electoral & Boundaries Commission –vs- Maina Kiai & 5 Others (2017) eKLR, stated as follows on the application of the res judicata doctrine-
“The rule or doctrine of res judicata serves the salutary aim of bringing finality to litigation and affords parties closure and respite from the spectre of being vexed, haunted and hounded by issues and suits that have already been determined by a competent court. It is designed as a pragmatic and common-sensical protection against wastage of time and resources in an endless round of litigation at the behest of intrepid pleaders hoping, by a multiplicity of suits and fora, to obtain at last, outcomes favourable to themselves. Without it, there would be no end to litigation, and the judicial process would be rendered a noisome nuisance and brought to disrepute and calumny. The foundations of res judicata thus rest in the public interest for swift, sure and certain justice.”
126. In Abok James Odera vs. John Patrick Machira Civil Application No. Nai. 49 of 2001, it was held that in order to rely on the defence of res judicata there must be:
(i) a previous suit in which the matter was in issue;
(ii) the parties were the same or litigating under the same title;
(iii) a competent court heard the matter in issue;
(iv) the issue had been raised once again in a fresh suit.
127. In the present application, there is no doubt that the parties are the same. In regard to the issues raised in the Notice of Motion application dated 9th February, 2022 filed by the 2nd respondent, the substantive order that he sought was for adoption of the Business Valuation Report of Blue Bird Aviation (the 4th respondent herein) dated 6th December, 2021 submitted by RSM Ltd carried out pursuant to the Order of the Court issued on 1st October, 2021.  In the present application, the applicant’s 1st prayer is – (a) for this Court to set aside the appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited. The 2nd prayer is that upon granting prayer (a), this Court be pleased to set aside the Business Valuation Report by RSM (East Africa) Limited dated 6th December, 2021; and (c) that this Honourable Court be pleased to appoint a reputable firm to undertake the valuation of the 4th respondent within fourteen (14) days with a view of ascertaining the value of the applicant’s shareholding thereon for subsequent purchase by the 1st, 2nd and 3rd respondents or any of them or by the 4th respondent.
128. The present application comes after the ruling of 3rd June, 2022. It is evident that the applicant took a cue from the said ruling, d as he states as follows in paragraph 6 of his affidavit sworn on 15th September, 2022-
“That this Honourable Court in its ruling issued on 3rd June, 2022 stated that my submissions were applicable in an application challenging the valuation report by RSM dated 6th December, 2021. The Court explicitly stated under paragraph 26 of the ruling-
“I have considered at the submissions and authorities relied on (sic) by the plaintiff. They would have been applicable in an application challenging the report. There is no such application before this Court. The application before this Court is the one to adopt the report.”
129. In paragraph 7 of the applicant’s affidavit in support of the application he states as follows-
“That the Court further stated as follows under paragraph 27 of the said ruling-
“In any event, if the plaintiff was truly aggrieved by the conduct of the valuers, all that he could have done was to make an appropriate application to impeach the consent and the valuers conduct and thereby have their report set aside. This has not been done. He has attempted to do so in his reply to the application by the 2nd defendant and the submissions. There is no jurisdiction to do so.”
130. From the above depositions in the applicant’s affidavit, it is clear that his present application is premised on issues that were not considered by Judge Mabeya in the 2nd respondent’s application dated 9th February, 2022. The Judge found that what the applicant herein had raised in his response to the said application and in his written submissions should have been canvassed in Court by way of a substantive application. The Judge found that there was no jurisdiction for the applicant to raise the issues he did in response to the application dated 9th February, 2022. Having found that there was no substantive prayer before the Court, on the issues captured in paragraphs 128 and 129 of this ruling, the issues that the applicant has raised in the present application cannot be said to be res judicata. The Judge who was seized of this matter then found that he did not have jurisdiction to consider matters raised by the applicant as there was no application challenging the report by impeaching the conduct of the Valuers. This Court therefore holds that the validity or invalidity of the Valuation Report has not been determined yet, as Judge Mabeya was not considering the validity of the report in the application dated 9th February, 2022. It is therefore my finding that the application dated 15th September, 2022 is not res judicata. This Court therefore has the jurisdiction to hear and determine the present application.

If the applicant has the locus standi to file the application dated 15th September, 2022.
131. The 4th respondent’s other issue raised in the Preliminary Objection is that the applicant having ceased to be a director of the 4th respondent lacks the locus standi to sustain the suit and the present application. The applicant brought this suit in his capacity as a shareholder of the 4th respondnet. Although the Court did not grant him leave to continue with the derivative suit on behalf of the 4th respondent, it granted him the right to a buy-out of his shares. It is on the basis of that finding that the Court ordered that a valuation of the company be conducted to ascertain the true value of his shares. The applicant now challenges the Valuation Report on the basis that the same was is invalid and grossly undermined his shares.
132. This Court notes that the ascertainment of his shares is independent of his capacity in the 4th respondent. Whether or not he is a past or current shareholder, the applicant has locus standi to raise issues involving his shares in the 4th respondent, despite the fact that they have been purchased by the 3rd respondent. In the circumstances, the 4th respondent’s Preliminary Objection dated 15th September, 2022 as well as the 2nd respondent’s grounds of opposition dated 23rd September, 2022 are hereby dismissed.

Whether the letter of appointment to RSM (East Africa) Consulting Limited should be set aside and if the Valuation Report dated 6th December, 2021 should be set aside and another firm appointed to conduct valuation of the 4th respondent.
133. In making a determination of the above issues, this Court is guided by the following Court of Appeal decisions on the conditions that can lead to the setting aside of a consent. In Hirani v. Kassam (1952) 19 EACA 131, the predecessor of the present Court of Appeal cited with approval, the following passage from Setton on Judgments and Orders, 7th Edition, Vol.1 p.124-
“Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them...... and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of the Court..... or if consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in general for a reason which would enable the Court to set aside an agreement."
134. The Court of Appeal in the case of Kenya Commercial Bank Ltd v Specialized Engineering Co. Ltd (1982) KLR P. 485 held that:
“A consent order entered into by counsel is binding on all parties to the proceedings and cannot be set aside or varied unless it is proved that it was obtained by fraud or by an agreement contrary to the Policy of the Court or where the consent was given without sufficient material facts or in misapprehension or ignorance of such facts in general for a reason which would enable the Court to set aside an agreement.
135. It must be noted that the respondents did not respond to the issues raised by the applicant in regard to the validity of the Valuation Report, save for the letter from KRA dated 5th December, 2018 and the estimated value of some air crafts as the applicant had sourced for the information from the internet. The other allegations not responded to remained uncontested.
136. This Court notes that the letter of engagement to RSM Ltd, was arrived at by the consent of the parties on record. The applicant stated that RSM Ltd sent its Valuation Report on 7th December, 2021 and that the same was promptly lodged in Court by the 2nd respondent. The applicant consistently maintained that the Asset Valuation Report by Lloyd Masika Ltd attached to the Business Valuation Report was not signed by the director and/or sealed as required under condition 11 of its limiting conditions, between Lloyd Masika Ltd and RSM Ltd, thus the Asset Valuation Report was invalid. The applicant therefore contended that the Court adopted an invalid Asset Valuation Report.
137. The applicant in a letter dated 3rd January, 2022, informed RSM Ltd that the attached Asset Valuation Report was neither signed by the director nor sealed with the company’s seal and it was therefore invalid. It also informed RSM Ltd that even the hard copy of the Asset Valuation Report delivered to them was unsigned.
138.  In a letter dated 7th January, 2022, RSM Ltd wrote to the applicant denying that the Valuation Report that was served on the parties and filed in Court on the same day had an Asset Valuation Report by Lloyd Masika Ltd which was not signed by the director and sealed with the company’s seal. RSM Ltd then purported to attach a signed report vide its letter. It must be noted that the alleged signed report was being availed a month after RSM Ltd had already sent the report to all the parties’ Advocates. The actions of the RSM Ltd were not in tandem with clause 11 of the limiting conditions in the sub-contract between it and Lloyd Masika Ltd. It therefore ran counter to the mandatory clause that required the said Asset Valuation Report to be signed by the director and sealed with the company seal of Lloyd Masika Ltd. The release of a signed Asset Valuation Report a month later renders credence to the contention by the applicant and proves that the allegation that RSM Ltd had delivered an unsigned and unsealed Asset Valuation Report.
139. Through an email dated 12th January, 2022 addressed to the parties, RSM Ltd communicated that it was recalling the message ‘Final Business Valuation Report: Bluebird Aviation Limited’, however on 7th February, 2022, it communicated to the parties that the report of 6th December, 2021 remained final and unchanged and that they could not recall a report once submitted to the appointing authority.
140.  This then indicates that the unsigned and unsealed report that was filed in Court on 7th December, 2021 was the one adopted by the Court on 3rd June, 2022. Further, although RSM Ltd claimed to have forwarded the signed and sealed report afterwards, the applicant averred that the same was never delivered to its Advocates, a position which was communicated on 7th February, 2022 to the respondents’ Advocates. The respondents did not contest the said issue.
141. Condition 11 of the limiting conditions of the terms of reference between RSM Ltd and Lloyd Masika Ltd provides that-
“This valuation is invalid unless it is signed by a director and bears the official company seal.”
142. This brings this Court to the issue of admissibility of documentary evidence. Section 35(4) of the Evidence Act provides as follows-
“(4) For the purposes of this section, a statement in a document shall not be deemed to have been made by a person unless the document or the material part thereof was written, made or produced by him with his own hand, or was signed or initialed by him or otherwise recognized by him in writing as one for the accuracy of which he is responsible.”
143. In Mugo Mungai & 4 others v Official Receiver & Provisional Liquidator (Capital Finance Limited and Pioneer) & 2 others [2019] eKLR, the Court held as follows on the evidential value to be given to unsigned documents-
“In conclusion I find that an unsigned document has no probative value as the contents genuineness cannot be proved.  It is worth noting that documents do not prove themselves; a witness must be examined to prove the documents.  The evidence of the contents of the document is hearsay evidence unless the author thereof is known or identifies himself as owning the document.  For the above reasons, I uphold the petitioners’ objection to the production of the impugned report.”
144. In Scandviken Consultants & Trade (K) Ltd v Daniel Onyango Nyagwara & another [2020] eKLR, the Court pronounced itself thus-
“I wish to add that the valuation report dated 11th July, 2012 that gave the market value of the go-down as Kshs. 25,000,000/= was not signed by the valuers who prepared the same.  As rightly submitted by the defendants, unsigned valuation report has no evidential value. In the circumstances, the plaintiff’s claim for Kshs. 22,000,000/= from the defendants has no basis.”
145. The Asset Valuation Report which was unsigned and unsealed at the time of issuance to the parties remains invalid. This leads to the only conclusion that the Asset Valuation Report was for all intents and purposes incompetent and is of no value. The said report was an integral part and was meant to inform the final Business Valuation Report as per clause 1.1 of the letter of engagement. Failure to have the Asset Valuation Report signed and sealed was a serious breach of the letter of engagement. It in turn affects the credibility and contents of the final Business Valuation Report of 6th December, 2021, which RSM Ltd termed as “final and unchanged.”  It then follows that the invalid Asset Valuation Report, invalidated the final Business Valuation Report
146. This Court has perused the Business Valuation Report that was uploaded by the 2nd respondent’s Counsel on 7th December, 2021 to the Court Tracking System (CTS) and confirmed that indeed the Asset Valuation Report by Lloyd Masika Ltd was not signed by the director and sealed with the company seal of the said company.  In essence, it means that the Business Valuation Report that was availed to the respondents by RSM Ltd in terms of the value of the land, buildings and aircrafts of the 4th respondent cannot be relied on. It is noted that Lloyd Masika Ltd was sub-contracted by RSM Ltd to undertake the said valuation. The Asset Valuation Report by Lloyd Masika Ltd was a sub-component of the Business Valuation Report.
147. It follows then that the Asset Valuation Report was not properly before Court at the time when the application for adoption was brought before it. The adoption of the Business Valuation Report cannot undo a wrong that was already done. This Court’s finding is that RSM Ltd failed to meet a cardinal principle of the law of contract by presenting an unsigned Asset Valuation Report. Since the said action invalidated the Asset Valuation Report, it also vitiated the agreement that had been entered into by the consent of the parties herein due breach of condition No. 11 of the limiting conditions of the terms of reference between RSM Ltd and Lloyd Masika Ltd.  For the said reason, I hereby set aside the appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited.
148. Apart from the invalid Asset Valuation Report, RSM Ltd declined to share with the applicant the audited financial statements for the financial years 2017, 2018, 2019, 2020 and 2021, which it relied on when undertaking the valuation of the 4th respondent. It therefore denied the applicant an opportunity to independently look at the said audited financial statements to clarify if the 4th respondent had any subsidiaries or not. The applicant after going through the said audited financial statements would have made any comments or posed any question to RSM Ltd based on the said audited accounts. It is this Court’s finding that by so doing, RSM Ltd unreasonably withheld the audited financial statements from the applicant and denied him the right to ascertain if the valuation was above board. This infringed on his rights under Article 40 of the Constitution.
149. The fact that there was a consent in the appointment of the RSM Ltd to conduct an audit of the 4th respondent did not mean that it was a direct consequence that the Business Valuation Report would be adopted by consent. That was not the case. The applicant was entitled to being given the audited financial statements for reference. There was no condition in the Terms of Reference engaging RSM Ltd that forbid it to share the said documentation with its instructing clients, who are the parties to this case.
150. The approximate values of the aircrafts obtained from the internet by the applicant was objected to due to the fact that they were not derived from companies that manufacture aircrafts or aircraft leasing companies. This Court takes judicial notice of the fact that in the world we are living in today, it is possible to get approximate costs of cars, aircrafts, ships and all manner of commodities from online sources. As long as the sources of the information are disclosed, such approximate costs cannot be totally wished away. If one looks at the Business Valuation Report, it is evident that RSM Ltd used various sources of information when undertaking the valuation. These include discussions and consultations with Management, country default spreads and risk premiums as computed by Aswath Damodoran in July, 2021, Yahoo Finance, Osiris financial data base, Kenya airfreight forecast, Fitch Connect, world air cargo forecast 2020-2039 and other third party sources.  If the argument by the 2nd respondent is to be applied in equal measure to the Valuation Report by RSM Ltd, then it would be argued that it also sourced for some of its information from internet sources, including the use of yahoo finance to guide its report.
151. In addition to the above, Lloyd Masika Ltd relied on Management of the 4th respondent to give it business projections among other information. That is evidence that the said Management which comprises the 1st, 2nd and 3rd respondents, who are directors of the 4th respondent, was closely involved in the preparation of the Valuation Report.
152. RSM Ltd’s conduct points towards lack of transparency. A Valuer must always remain unbiased and independent, more so when appointed by rivaling parties. If the Valuer concedes to the fact that the valuation is based on various sources including audited financial statements which he was instructed to rely on, he should not have denied one of its appointing authorities access to the said statements. This Court notes that the applicant made a similar request to Deloitte vide letter dated 17th December, 202, but was once again denied the audited financial statements of the 4th respondent.
153. It is this Court’s finding that in order for a valuation to be reliable, it must be underpinned on the principle of transparency and independence. The Business Valuation Report dated 6th December, 2021 is however shrouded in mystery as RSM Ltd declined to provide the audited financial statements it relied on in arriving at the Business Valuation Report. Noting that this is a case where the applicant is being bought out of the 4th respondent, the Management of the company, who in this instance are represented by the 1st, 2nd and 3rd respondents should have stayed at arms’ length and only provided the audited financial statements and other documentation that were going to assist the Valuer to arrive at a just decision. 
154. The other issue raised was the use of the phrase ‘groups audited financial statements’ in the valuation report from whom all the assumptions in the report were drawn from. The applicant requested for a summary and terms of their transactions and outstanding balances to the company. In its response of 7th January, 2022, RSM Ltd stated that it would remove the word ‘group’ from the report and that no subsidiary or associate relationship was discovered in the group.
155. RSM Ltd vide its letter dated 7th February, 2022 stated that the Valuation Report was final and unchanged and could not be recalled. As such, the word ‘group’ was never removed from the said report. The applicant averred that from the valuation, it appeared that the company had subsidiaries and associate relationships that were not disclosed. The applicant also relied on KRA’s letter dated 5th December, 2018 to the 4th respondent requesting for its transfer pricing policies. The applicant’s contention was that from the said letter, it could be inferred that KRA had discovered transactions with the company’s subsidiaries or associate relationship in 2018 that triggered the request for the policy and the company’s global organization structure of the enterprise.
156. The Companies Act 2015 defines the word ‘group’ as: -
“group", in relation to a body corporate, means the body corporate, any other body corporate that is its holding company or subsidiary and any other body corporate that is a subsidiary of that holding company”
157. At paragraph 8 of the Business Valuation Report of 6th December, 2021, RMS Ltd stated that-
“All assumptions underpinning the valuation derived herein were sourced from the group’s audited financial statements.”
158. Although the letter from KRA does not disclose any solid evidence on existence of subsidiaries, the applicant cannot be blamed for inferring from the Business Valuation Report that indeed there are in existent subsidiaries for the 4th respondent. Notably, there is no mention of their values or any of the information requested for by the applicant. RSM Ltd did not respond to the request made by the applicant.
159. I have said enough to show that from the foregoing, it is this Court’s finding that the applicant has established a case for the setting aside of the Valuation Report dated 6th December, 2021. It is noted that although the same was adopted by the Court, the adoption orders were also obtained through material non-disclosure of the fact that RSM Ltd relied upon an invalid Asset Valuation Report to arrive at its conclusions having accepted an unsigned and unsealed Asset Valuation Report from Lloyd Masika Ltd. RSM Ltd produced the invalid report to its appointing authorities as its final and unchanged Valuation Report and the same was filed in Court. Having found that the report was invalid, this Court cannot aid in an illegality.
160.  It is not a disputed fact that the applicant’s shares have already been transferred to the 3rd respondent. That it not a contested issue as what the applicant sought was a buy-out of his shares in the first place. What is contested is the value placed on the shares at Kshs. 320,912,500.00 and paid into Court. The said amount continues to sit there uncollected due to the dispute on the Valuation Report
161. In paragraph 44 of the ruling dated 1st October, 2021 Judge Mabeya reiterated that it was not in dispute that as at the time of hearing of the application for permission (to continue with this suit as a derivative suit), the applicant had established a case of unfair prejudice. That finding led to the order for the applicant to be bought out. I have said enough to show that the applicant is entitled to being granted the 2nd prayer in his application dated 15th September, 2022.
162. The upshot is that the application dated 15th September, 2022 is found to be with merit. Consequently, the following orders are hereby issued:
(i) The appointment letter dated 2nd November, 2021 appointing RSM (East Africa) Consulting Limited to conduct a valuation of Blue Bird Aviation Limited is hereby set aside.
(ii)  The Business Valuation Report by RSM (East Africa) Consulting Limited dated 6th December, 2021 is hereby set aside.
(iii) The parties shall appoint another Valuer within seven (7) days from 26th April, 2023, in default, the Deputy Registrar shall make such appointment forthwith, after the elapse of the seven (7) days.
(iv) The Valuer to be appointed shall conduct a valuation of Blue Bird Aviation Limited (4th respondent) to ascertain the true value of the applicant’s shareholding in the 4th respondent company. A report of the said valuation shall be filed in Court within fourteen (14) days of such appointment.
(v)  The terms of reference that had been agreed upon in the valuation that was undertaken by RSM Ltd shall be applicable to the valuer that shall be appointed.
(vi)  If the value of the applicant’s shareholding in the 4th respondent is found to be less than the sum of Kshs. 320,912,500.00 already paid into the Judiciary bank account by the 3rd respondent, the difference shall be refunded to the 3rd respondent within seven (7) days of the filing of the Valuation Report.  If the value will be more, the difference shall be paid by the 3rd respondent or any of the respondents to the applicant herein within sixty (60) days of the date of the filing of the Valuation Report. 
(vii) The sum held in Court shall be released to the applicant’s Advocates within seven (7) days of the Valuation Report being filed in Court, subject to the value that will be determined of the applicant’s shareholding in the 4th respondent; 
(viii) The applicant shall bear the costs of the valuation; and
(ix) Each party shall bear his/its own costs of this application.
It is so ordered.
DELIVERED, DATED and SIGNED at NAIROBI on this 25th day of April, 2023. Ruling delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
No appearance for the applicant
Ms Jan Mohamed SC for the 1st respondent and h/b for Mr. Biriq for the 2nd respondent, Mr. Kemboy for the 3rd respondent and Mr. Daud for the 4th respondent.
Ms B. Wokabi – Court Assistant.