Automated Summary
Key Facts
The Applicants, George Wanyoike Njuguna and Leonard Matheri Njuguna (as legal representatives of the deceased Paul Njuguna Wanyoike's estate), seek leave to commence proceedings against Ngundu Farmers Co-operative Society Ltd (in liquidation) and 23 other respondents. The claim arises from land allocated to the deceased as a co-operative member, which was allegedly encroached upon and transferred to the respondents. The court granted leave under Article 48 of Kenya's Constitution, emphasizing access to justice as a fundamental right, while citing mandatory provisions of Sections 228 of the Companies Act and 64(1) of the Co-operatives Act.
Deceased Name
Paul Njuguna Wanyoike
Issues
- The court examined the applicability of Section 228 of the Companies Act to co-operative societies under liquidation, referencing Section 94 of the Co-operatives Act, which incorporates certain Companies Act provisions mutatis mutandis. The court confirmed that the requirement to seek leave before suing a liquidated company extends to co-operatives, as the relevant sections apply to them by virtue of the Co-operatives Act.
- The court addressed whether the Applicants can proceed with their lawsuit against Ngundu Farmers Co-operative Society Ltd, a company in liquidation, under Sections 228 of the Companies Act and Section 94 of the Co-operatives Act. The Applicants sought to claim land against the co-operative and others, who had encroached on a parcel allocated to the deceased member. The court ruled that leave is mandatory before initiating legal action against a liquidated company, as per the Companies Act, and this applies to co-operatives via Section 94. The court also considered Article 48 of the Constitution, which enshrines access to justice, and held that leave should generally be granted without restrictive conditions.
- The court considered the impact of Article 48 of the Constitution, which guarantees access to justice for all, on the requirement to seek leave for legal proceedings against a liquidated company. The court emphasized that this constitutional right should generally lead to granting leave without imposing inhibitive conditions, aligning with the principle of access to justice.
Holdings
The court ruled that the Applicants must obtain leave to proceed against Ngundu Farmers Co-operative Society Ltd (in liquidation) under Sections 228 of the Companies Act and 94 of the Co-operatives Act. It emphasized that such leave is mandatory and cannot be sought retrospectively. The court found the Applicants have a valid cause of action and, citing Article 48 of Kenya’s Constitution (access to justice), granted leave as of right without imposing conditions. The application to commence proceedings was allowed in terms of prayers 2 and 3.
Remedies
The Environment and Land Court at Nairobi (ELC MISC NO.3 OF 2021) granted the Applicants leave to commence proceedings against Ngundu Farmers Co-operative Society Ltd (in liquidation) and other respondents under Section 228 of the Companies Act and Section 94 of the Co-operatives Act. The ruling emphasized that access to justice under Article 48 of the Constitution necessitates granting such leave as of right without inhibitive conditions. The application was allowed specifically in terms of prayers numbers 2 and 3.
Probate Status
Letters of Administration Ad Litem issued by Githunguri Magistrates Court
Legal Principles
- The ruling highlighted Article 48 of the Constitution of Kenya, which enshrines access to justice as a fundamental right. The court stated that this constitutional right should generally grant leave to file suits without imposing excessive conditions, aligning with the principle of equal access to legal redress.
- The court applied the mandatory provisions of Sections 228 of the Companies Act and Section 94 of the Co-operative Societies Act, which require obtaining leave from the court before commencing legal proceedings against a company or co-operative in liquidation. These provisions were interpreted as non-discretionary, with the court emphasizing that failure to seek prior leave would render proceedings invalid.
Precedent Name
- Bisai & Another v Kenya Commercial Bank Ltd
- Mwethaga v Thabiti Finance Co. Ltd
Executor Name
- George Wanyoike Njuguna
- Leonard Matheri Njuguna
Cited Statute
- Co-operative Societies Act
- Insolvency Act 2015
- Constitution of Kenya
- Companies Act 2015
- Co-operatives Act
Executor Appointment
Court-appointed administrator of the Estate of Paul Njuguna Wanyoike (Deceased)
Judge Name
M.D. Mwangi
Passage Text
- in order to commence any action or proceedings against the 3rd Defendant (a company in Liquidation), the Plaintiffs were obliged, mandatorily by the companies Act to first obtain leave from the Court. That the Leave ought to be sought before bringing an action or proceedings and not retrospectively.
- In view of the provisions of article 48, above, leave to file suit as sought by the applicants herein in my view should generally be granted as of right without imposition of any inhibitive conditions.
- Accordingly, I allow the Applicants' application in terms of prayers numbers 2 and 3.