Emily Wanjira Muriithi v City Millers Limited & 5 others [2019] KEELC 127 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Locus standi to sue in respect of company property
The Plaintiff lacked capacity; the proper plaintiff for injury to Kardag Limited's asset was the Company itself, and the Plaintiff ought to have sought and obtained leave to bring a derivative suit.
The Suit Property was registered in the name of Kardag Limited, a separate legal person. The Plaintiff's earlier application dated 18/9/2009 only granted leave to amend the plaint and strike out Kardag Limited as a plaintiff; it was not leave to continue the suit as a derivative action. The court agreed with the Defendants that without such leave the Plaintiff could not sustain the claim for the Company's property.
Delay in bringing the claim
The Plaintiff was guilty of inordinate and inexcusable delay; she should have diligently pursued restoration of the property under the Companies Act once she learnt of the transfer.
The Plaintiff learnt of the transfer through a search after learning in July 2006 that the title had been collected from the bank; John Kariuki died on 17/6/2006 and the suit was filed in 2009. The court held that as a director and shareholder she ought to have taken a keen interest in the Company's affairs and pursued the remedies available under the Companies Act promptly.
Alleged fraudulent transfer of the Suit Property
The court observed facial anomalies and impropriety in the transfer documents but made no finding of fraud entitling the Plaintiff to relief, given her lack of standing.
The court noted that the documents facilitating the transfer appeared on their face to contain anomalies and impropriety, including the unsigned Land Control Board application and questions of consideration and stamp duty, but because the Plaintiff lacked capacity to prosecute the claim for the Company, the orders sought were declined rather than a definitive finding on fraud being made.
Legal principles established
#- A shareholder and director cannot prosecute a claim for injury done to a company's property in a personal capacity; leave of the court is required to bring a derivative action on behalf of the company, which is a separate legal person.
Court orders
#- 1.The court declined to grant the orders sought in the Amended Plaint dated 31/1/2011
- 2.Each party to bear its own costs
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under Article 162(2) of the Constitution (dispute relating to title to land)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Emily Wanjira Muriithi v City Millers Limited & 5 others [2019] KEELC 127 (KLR)", Case Analysis (2019). ELC Case No. 54 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/127/eng@2019-12-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.