George Wanyoike Njuguna & another v Daniel Mbugua Mari & 23 others [2021] KEELC 1620 (KLR)
The bottom line
#You must get court permission before suing a Kenyan co-operative or company in liquidation — filing first without leave could get your case thrown out.
What this practically means
#Executive summary
#Key legal issues
#Mandatory nature of leave requirement under Section 228 of the Companies Act
Section 228 applies mutatis mutandis to co-operative societies in winding up via Section 94 of the Co-operative Societies Act, and leave must precede commencement of proceedings
The court noted Section 94 of the Co-operative Societies Act imports Section 228 of the Companies Act into the winding up of co-operative societies, that Section 228 is mandatory, and that authorities (Bisai and Mwethaga) confirm leave must be sought before, not after, filing suit.
Access to justice and terms of leave
Leave should generally be granted without inhibitive conditions given the Article 48 right of access to justice
Relying on Article 48 of the Constitution, the court held that applicants, like all persons, have a constitutional right to institute the intended suit, and leave should not ordinarily be fettered with inhibitive conditions.
Existence of an actionable cause of action
The Applicants demonstrated an actionable claim against the intended Respondents
The applicants, as legal representatives of a deceased member allocated land by the co-operative society in liquidation, alleged encroachment and transfer of the land with the society's involvement, satisfying the court that an actionable cause exists.
Legal principles established
#- Leave to commence proceedings against a company (or co-operative society in winding up) must be obtained before the action is brought, not retrospectively, and should generally be granted without inhibitive conditions in light of Article 48
Court orders
#- 1.Leave granted to the Applicants to commence proceedings against Ngundu Farmers' Co-operative Society Ltd (in liquidation) and the other intended Respondents, in terms of prayers 2 and 3 of the Notice of Motion
- Jurisdiction invoked
- Section 228 of the Companies Act, 2015 read with Section 94 of the Co-operative Societies Act and Section 432 of the Insolvency Act, 2015
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mbaru & 12 others v Wangui; Muhihi & 4 others (Third party)[2023] KEELC 19298 (KLR)26 Jul 2023
Cite this brief
#Cite this brief
Caselaw, "George Wanyoike Njuguna & another v Daniel Mbugua Mari & 23 others [2021] KEELC 1620 (KLR)", Case Analysis (2021). Not stated on the face of the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1620/eng@2021-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.