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ELCStruck OutNot stated in the judgment text· [2020] KEELC 2965 (KLR)

Monica Wangui Njenga v Davis Kinyanjui Njenga & another [2020] KEELC 2965 (KLR)

Environment and Land Court
30 April 2020
2,775 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A mother suing her son's family company over land had her entire case struck out because company management disputes belong in the High Court, not the Environment and Land Court.

What this practically means

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Executive summary

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The plaintiff, mother of the first defendant and co-director/shareholder with him of the second defendant (a family company), filed a plaint on 5th December 2019 together with a Notice of Motion dated 3rd November 2019 seeking leave to bring a derivative action under Section 238 of the Companies Act, prohibitory and inhibitory orders over several company properties (including LR No. 451/2055 IR 33556), disclosure of particulars of a KShs 25,000,000 loan from Consolidated Bank of Kenya secured by that property without her knowledge, and surrender of title documents. She alleged the first defendant took unilateral management decisions, charged company land and forged company resolutions. The defendants opposed, contending the corporate structure was intact, internal remedies existed, the plaintiff participated in the loan resolution, and related issues were pending in Nakuru HC Succession Cause No. 211 of 2015. The court framed two issues: jurisdiction and whether the orders sought should issue. It held that although the reliefs referenced land, the suit revolved exclusively around the management and control of the company, a matter within the exclusive jurisdiction of the High Court under Section 3(1) of the Companies Act, 2015; the Environment and Land Court therefore lacked jurisdiction. Following Phoenix of E.A. Assurance v S.M. Thiga, the court declined to transfer the suit, holding a suit filed without jurisdiction is a nullity, dead on arrival and not transferable. It struck out the suit, did not determine the application, and ordered each party to bear their own costs given the family relationship of the parties.

Key legal issues

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01

Jurisdiction of the Environment and Land Court over a shareholder/director dispute concerning company land

Holding

The court lacked jurisdiction because the suit, though dressed in land reliefs, revolved exclusively around the management and control of the company, a matter for the High Court under Section 3(1) of the Companies Act, 2015

Reasoning

Although the plaint sought declarations about charges, transfers and subleases over land, none of those could be resolved without first determining the validity of internal company processes (resolutions, director conduct). The pivotal statutory provisions on company management are in the Companies Act, 2015, and Section 3(1) vests jurisdiction over such matters in the High Court. Article 162(2)(b) and Section 13 of the ELC Act could not stretch to cover company governance disputes.

p. 3
02

Whether the suit could be salvaged by transfer to the High Court

Holding

No; a suit filed without jurisdiction is a nullity and cannot be transferred or remedied

Reasoning

Relying on Phoenix of E.A. Assurance Co Ltd v S.M. Thiga, the court held that jurisdiction must exist when the suit is filed; a suit filed without it is dead on arrival, cannot be conferred by consent, and all orders emanating from it are null and void. The only option was striking out, with liberty to file properly before the High Court.

p. 4

Legal principles established

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  • A suit filed in a court devoid of jurisdiction is a nullity ab initio and cannot be transferred to another court; jurisdiction cannot be conferred by consent

Court orders

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  1. 1.This suit is hereby struck out.
  2. 2.Each party bears own costs.

Authorities

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Legislation

  • Companies ActSection 238
  • Companies Act, 2015Section 2
  • Companies Act, 2015Section 3(1)
  • Land Registration ActSection 68(1)
  • Environment and Land Court Act, 2011Section 13
  • Constitution of KenyaArticles 42, 69, 70, 162(2)(b), 162(3)

Cases cited (5)

  • Spinners & Spinners Limited v Spinners & Spinners Limited
    [2017] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd
    [1989] eKLR
  • Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others
    [2012] eKLR
  • Daniel N Mugendi v Kenyatta University & 3 others
    [2013] eKLR
  • Phoenix of E.A. Assurance Company Limited v S. M. Thiga t/a Newspaper Service
    [2019] eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act, 2011

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Monica Wangui Njenga v Davis Kinyanjui Njenga & another [2020] KEELC 2965 (KLR)", Case Analysis (2020). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2965/eng@2020-04-30

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