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Court of AppealPartially AllowedCivil Application No. 137 of 2017 (UR 100/2017)

Kiru Tea Factory Company Ltd v Stephen Maina Githiga & 14 others [2019] KECA 923 (KLR)

Court of Appeal of Kenya
22 February 2019
6,176 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed it can punish contempt despite the Contempt of Court Act's collapse, convicting six officials for defying a status quo order.

What this practically means

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Executive summary

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This ruling of the Court of Appeal (Ouko, P, Sichale and Otieno-Odek, JJ.A) determines an application by Kiru Tea Factory Company Limited to cite fifteen respondents, largely directors of KTDA and its subsidiaries, for contempt of a status quo order issued on 6th December 2017 by the Court (GBM Kariuki, Sichale and Kantai, JJ.A), which directed that no elections be held pending a ruling. The respondents countered that the order did not prohibit an AGM so long as no elections were held, and raised a jurisdictional objection: the Contempt of Court Act, 2016, under which the proceedings were initiated, had been declared unconstitutional, and it had deleted Section 5 of the Judicature Act. The Court held that a statute declared unconstitutional is void ab initio, so its repeals were nullities; Section 5 of the Judicature Act and Section 35 of the Court of Appeal (Organization and Administration) Act remained in force and conferred jurisdiction. On the merits, the Court construed the status quo order as freezing the entire position as at 6th December 2017; the AGM of 14th December 2017, which altered Board membership and removed the Company Secretary, breached it. Applying the quasi-criminal standard of proof and the principle that knowledge supersedes personal service, the Court found six respondents (Githiga, Gikoreh, Kinyua, Mark, Tiampati and Omanga) guilty of contempt and ordered them to appear for mitigation and sentencing on 22nd March 2019. Eight respondents were absolved for lack of proof of any violating act. The application was thus partially successful.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Court has a legal framework conferring jurisdiction to punish for contempt following the declaration of unconstitutionality of the Contempt of Court Act, 2016
  2. 2.Whether the respondents had knowledge of the status quo order issued on 6th December 2017
  3. 3.Whether the holding of the AGM on 14th December 2017 violated the status quo order
  4. 4.Which of the named respondents committed acts amounting to contempt of the order of 6th December 2017
  5. 5.Whether directors of a company can be personally liable for contempt committed in the name of the company

Key legal issues

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01

Whether the Court retains jurisdiction to punish contempt after the Contempt of Court Act, 2016 was declared unconstitutional

Holding

Yes. The Contempt of Court Act being void ab initio, its repeal of Section 5 of the Judicature Act and Sections 35/36 of the Court of Appeal and High Court (Organization and Administration) Acts never took effect, so those provisions remain the legal framework for contempt.

Reasoning

The court applied the doctrine that a statute declared unconstitutional is void ab initio as if never enacted, citing the Supreme Court decision in Mary Wambui Munene v Peter Gichuki King'ara. Anything done under the invalidated Act, including its deletions of prior provisions, is a nullity. Section 5 of the Judicature Act and Section 35 of the Court of Appeal (Organization and Administration) Act therefore remained in force at the time of the alleged contempt and confer jurisdiction on the Court.

p. 4
02

Whether the AGM of 14th December 2017 breached the status quo order

Holding

Yes. The status quo order preserved the position as at 6th December 2017; convening and holding the AGM which altered Board membership and removed the Company Secretary violated it even though no elections were conducted.

Reasoning

The court construed the order of 6th December 2017 as preserving the entire position then obtaining, not merely prohibiting elections. Since no AGM had been held when the order issued, holding one on 14th December 2017, passing resolutions removing the Company Secretary and incorporating two new Directors, altered the preserved status quo and constituted the specific act prohibited by the order.

p. 5
03

Whether service was proved and which respondents had knowledge of the order

Holding

Knowledge supersedes personal service. Six respondents were proved to have knowledge by personal service, email or conduct, and were guilty; eight others, though some were served, did no act in violation.

Reasoning

Relying on Basil Criticos, Shimmers Plaza and the English CPR rule 81.8, the court held notice or knowledge suffices where an order is prohibitory. Some respondents were served by email or process server; others demonstrated knowledge by convening rallies referring to the order or by attending the AGM where it was read. However, service or knowledge alone was insufficient; the applicant had to prove a positive act of disobedience by each individual to the quasi-criminal standard.

p. 5
04

Personal liability of directors and officers for contempt committed in the company's name

Holding

Directors and officers who knowingly participate in breach of an order are personally liable for contempt; a CEO served with an order who fails to prevent subordinate organs from breaching it commits contempt by inaction.

Reasoning

The court considered Katsuri Limited (lifting the corporate veil first), the Smith case (company liability), Beech Ovens, S. Hemalatha and Eliud Muturi Mwangi. It distinguished between mere service or attendance without proven acts, and active participation: convening, presiding over or attending the prohibited AGM with knowledge. The CEO's failure to act upon service of the order, allowing the KTDA circular announcing the AGM, was held to be tacit positive approval constituting contempt.

p. 7

Legal principles established

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  • Once an Act is declared unconstitutional it is void ab initio, and anything done under it is a nullity; consequently provisions it purported to repeal (including Section 5 of the Judicature Act and Sections 35/36 of the Court of Appeal and High Court Organization and Administration Acts) remain in force as the legal framework for punishing contempt.
  • A status quo order preserves the state of affairs as at the date of the order; convening a meeting that alters Board membership or the Company Secretary breaches it, even if no election is held.
  • Knowledge of a court order supersedes personal service; where a party clearly acts showing knowledge of an order, the requirement of personal service is dispensed with.
  • The standard of proof in contempt proceedings is higher than the balance of probabilities, almost but not exactly beyond reasonable doubt.
  • Directors and officers of a company may be personally committed for contempt, and a CEO who is personally served and fails to ensure compliance through those under him commits contempt by inaction.
  • Where committal for breach of an injunction is sought, it must be made clear what each defendant is alleged to have done and whether it was in breach of the injunctive order.

Court orders

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  1. 1.The Notice of Motion dated 13th December 2017 found to be partially successful
  2. 2.Six respondents (Stephen Maina Githiga, Eston Gakunju Gikoreh, Peter Kinyua, Francis Macharia Mark, Lerioka Tiampati and Dr. John F. Kennedy Omanga) cited and found guilty of contempt of court for disobeying the status quo order issued on 6th December 2017
  3. 3.The six respondents found guilty ordered to present themselves before the Court on 22nd March 2019 for mitigation and sentencing
  4. 4.Eight respondents (Peter Kanyago, Phillip Ngetich, Joseph Wakimani, Erastus Gakuya, Benson Ngari, Alfred Njagi, Arthur Rimberia and J. Kipngetich) not cited or convicted, no act in violation of the order being established against them

The bench

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One judgment of the whole court — no separate or dissenting opinions.

William Ouko
W. OukoJA
Currently serving
majority
majority
majority
On appeal from
Court of Appeal of Kenya at Nyeri
Nyeri Civil Application No. 132 of 2017 & Nyeri Civil Application No. 133 of 2017
Jurisdiction invoked
Section 5 of the Judicature Act (Cap 8) and Section 35 of the Court of Appeal (Organization and Administration) Act, conferring power to punish for contempt

Relief refused

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Committal of eight respondents (Peter Kanyago, Phillip Ngetich, Joseph Wakimani, Erastus Gakuya, Benson Ngari, Alfred Njagi, Arthur Rimberia and J. Kipngetich) for contempt

No evidence that they did anything in violation of the court order of 6th December 2017

p. 8

Costs

No order as to costs was made in the judgment.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It must be stressed that once an Act has been declared unconstitutional, it is void ab initio as if it had never been enacted.
p. 4Effect of a declaration of unconstitutionality on repeals effected by the void statute
…...............the law has changed. And as it stands today knowledge supersedes personal service.
p. 4Knowledge of a court order as dispending with personal service
…. the standard of proof in contempt proceedings must be higher than proof on the balance of probabilities, almost but not exactly, beyond reasonable doubt
p. 4Standard of proof in contempt proceedings
Accordingly, we find that whoever convened, presided over and attended the AGM held on 14 th December 2017 violated the status quo order of this Court issued on 6th December 2017 if the person had knowledge of that order.
p. 5Breach of a status quo order by convening and attending a prohibited meeting
The final order of this Court is that we find the six above guilty of contempt of court for disobeying the status quo order issued by this Court on 6th December 2017. We order that the six to present themselves before this Court on 22 nd March 2019 for mitigation and sentencing. It is so ordered.
p. 8Final orders - conviction of six respondents and reference for mitigation and sentencing

Issues in the judgment

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minor

Spelling of the 5th respondent's name varies within the judgment ('Lerionka Tiampati', 'Mr. S. L. Tiampati', 'Mr. Lerioka Tiampati')

minor

Spelling of the 2nd respondent's name varies ('Eston Gakungu Gikoreh' vs 'Eston Gakunju Gikoreh')

minor

The ruling refers to a ruling 'slated for 22 nd December 2017' but earlier records it as 'finally delivered on 20 th December 2017'

minor

The coram lists the presiding judge as 'OUKO (P)' and the signature block as 'W. OUKO (P)' with the title Judge of Appeal, not a Chief Justice

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kiru Tea Factory Company Ltd v Stephen Maina Githiga & 14 others [2019] KECA 923 (KLR)", Case Analysis (2019). Civil Application No. 137 of 2017 (UR 100/2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/923/eng@2019-02-22

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.