Geoffrey Makana Asanyo v Nakuru Water and Sanitation Services Company & 7 others [2014] eKLR

Key Facts

Issues

• The court found that the petitioner held the position of a director representing the business community in the 1st respondent's board at all material times, based on the credible evidence of the appointment letter and the absence of minutes from the 17.12.2012 meeting.
• The court concluded there was no vacancy in the petitioner's position because his term was ongoing (serving until 18.12.2015), no termination decision was made, and the advertisement declaring a vacancy lacked jurisdictional authority.
• The court granted the petitioner's prayers for declarations regarding unconstitutional advertising processes and ordered the respondents to pay costs. Transitional measures were mandated to respect accrued rights, but claims against specific respondents (2nd, 4th, 6th) failed due to insufficient evidence of their direct role.
• The court ruled that the petitioner's position as a director representing the business community was not abolished in the amended articles of the company. The office was retained, and no redundancy situation arose.

Holdings

• The court determined that the petitioner held the position of a director representing the business community at all material times, based on the letter issued by the company secretary and the absence of minutes from the relevant meeting.
• The position of the petitioner as a director representing the business community was not abolished. The court emphasized that office abolition requires a valid decision and that no such action occurred here.
• The petitioner is entitled to remedies including declarations that the advertisement process was unconstitutional (violating Articles 41 and 47) and that transitional measures must respect his accrued rights. Costs were awarded to the petitioner.
• There was no vacancy in the petitioner's director position at any material time. The court ruled that termination or resignation would be required for a vacancy, which did not occur.

Remedies

• The court declared that the decision and process of advertising and intended filling of the positions of 6 directors of the 1st respondent was opaque, egregious, clandestine, capricious, whimsical, and contrary to Articles 41 and 47 of the Constitution of Kenya, rendering the decision unconstitutional and null and void.
• The court ordered that in realigning the 1st respondent to the Constitution and corporate governance, the respondents must institute just transitional measures that respect the petitioner's accrued constitutional and other rights and obligations as the appointed serving director representing the local business community.
• The court awarded the petitioner the costs of the petition, as the petitioner substantially succeeded in the case.

Legal Principles

• The court emphasized that the respondents' actions violated principles of natural justice by failing to provide the petitioner with procedural fairness, including the opportunity to comment on decisions affecting his directorship.
• The court declared the advertisement process ultra vires, as it was made without a valid general meeting resolution and failed to comply with constitutional and statutory requirements for transparency and accountability.
• The court held that the petitioner's legitimate expectation to serve his 3-year term as a director representing the business community was not legally terminated, as the respondents' actions lacked proper authority and violated constitutional protections against unfair administrative practices (Article 47 of the Constitution).

Precedent Name

• Council of Civil Service Unions -Versus- the Minister of Civil Service
• Diana Kethi Kilonzo -Versus- the IEBC and Another

Cited Statute

• Constitution of Kenya
• Employment Act of 2007
• Companies Act
• Public Officer Ethics Act of 2003
• Water Act of 2002

Judge Name

Passage Text

• The court holds that the power to abolish office supersedes the power to appoint a holder of office or the holder to continue in office. Thus, where the office is abolished, the holder of the office will invariably have the employment terminated in what is known as redundancy.
• The court finds that the 2nd respondent's action of not filing the record of the proceedings of 17.12.2012 and instead filing belated extracts of other general meetings was suspect and incredible.
• The court finds that in attempting to implement the corporate governance guidelines and aligning the 1st respondent's governance to the Constitution of Kenya 2010, the respondents failed to institute elaborate and fair transitional provisions to cater for accrued rights and obligations like those urged for the petitioner.