Automated Summary
Key Facts
The case involves Mark Muriuki Ndung'u (claimant) suing Nash Financial Services Limited and Anthony Wangacha Mwangi (respondents) for unfair termination in June 2023. The claimant worked as a Software Engineer-Back End Applications from June 2021, earning Kshs.110,000/month (claimant) or Kshs.50,000/month (respondents' account). The 2nd respondent sought to be struck out of the proceedings, arguing he was acting as the 1st respondent's CEO, but the court dismissed this application due to lack of evidence. The 2nd respondent is the sole shareholder and chairman of the 1st respondent and a shareholder in Nasheq Inc., a Delaware-based shell company. The court ruled the case requires full trial evidence.
Issues
- The court considered whether the 2nd Respondent, Anthony Mwangi, could be removed from the case as he was acting in his role as CEO of the 1st Respondent company, and no evidence of a personal contract was presented.
- The Respondents argued the 2nd Respondent acted as the 1st Respondent's CEO (a legal entity) and should not be individually sued. The court dismissed the motion to strike him out, citing lack of contractual evidence to determine liability.
- The Claimant alleged summary dismissal under false redundancy claims, while the Respondents argued proper procedures under Section 40 of the Employment Act 2007 were followed. The court found insufficient evidence to resolve this at the application stage.
Holdings
The court dismissed the 2nd Respondent's Notice of Motion dated 17th June 2024 seeking to be struck out of the proceedings, ruling that there is insufficient evidence to justify his removal at this stage. The application was dismissed with costs, requiring full trial evidence.
Remedies
- The court ordered that the costs of the 2nd Respondent's application be borne by the Claimant. This decision was part of the dismissal ruling on 17th December 2024, indicating the Claimant must cover these expenses.
- The 2nd Respondent's Notice of Motion seeking to strike out Anthony Wangacha Mwangi from the proceedings was dismissed by the court on 17th December 2024. The court ruled that there was insufficient evidence to justify the strike out at this stage.
Legal Principles
- The judgment references David Njuguna Ngotho v Family Bank Limited [2018] eKLR, which establishes that a contract cannot confer rights or impose obligations on any person other than the parties to the contract. This principle was used to argue that the 2nd Respondent could not be struck out without proper contractual evidence.
- The court emphasized the principle that a company is a legal person with its own identity, separate from its directors and shareholders, citing Moir v Wallersteiner [1975] 1 All ER 849. This includes the rule in Foss v Harbottle [1943] 2 Hane 461 that a company alone can sue for fraud, regardless of whether it is caused by insiders or outsiders.
- The court dismissed the 2nd Respondent's application to be struck out because neither party had produced the alleged employment contract. This highlights the burden of proof requirement, where the absence of contractual evidence prevented the application from succeeding at this stage.
Precedent Name
- David Njuguna Ngotho v Family Bank Limited
- Moir v Wallersteiner
Cited Statute
- Employment Act 2007
- Employment and Labour Relations Court Act
Judge Name
Agnes Kitiku Nzei
Passage Text
- 10. That being the case, there is nothing before the court on the basis of which the 2nd Respondent, Anthony Wangacha Mwangi, can be struck out of the proceedings herein at this stage. Evidence will have to be taken in full trial.
- 7. It was stated as follows in Moir v Wallersteiner [1975] 1 All ER 849 at p. 857; 'It is a fundamental principle of our law that a company is a legal person with its own legal identity, separate from the directors or shareholders...'
- 9. While appreciating the foregoing ages-old principles of law, I must state here that none of the parties herein has placed on record the contract and/or signed contract alleged by the Respondents to have been signed and/or entered into by the Claimant and the 1st Respondent on 30th May, 2021, or that alleged by the Claimant to have been entered into between himself and the Respondents in June 2021.