Gitere Kahura Investment Ltd & another v Kenya Planters Cooporative Uniion Ltd & another [2022] KEELC 1899 (KLR)

The court noted that Cap 486 was repealed in its entirety and replaced by the Companies Act, 2015. Relying on the observation in the IEBC v David Ndii case that a deleted provision becomes invalid, the court held that a repealed law cannot be invoked, and any corresponding provision should have been identified and authenticated by the Defendants. The objection founded on the repealed section was therefore misconceived and a nullity ab initio.

Section 432(2) itself allows proceedings against a company in liquidation to be begun or continued with the court's approval, so it cannot be used to defeat the very application for leave it contemplates. Sections 52-60 of the Co-operative Societies Act were held irrelevant. Following Mukisa Biscuits, a preliminary objection cannot lie where judicial discretion is sought; a stay of proceedings likewise requires a proper application under Section 6 of the Civil Procedure Act.

The Court of Appeal proceedings concerned the legality of the decision to place the 1st Defendant in liquidation, whereas this suit concerns leave to continue pre-liquidation foreclosure proceedings. The Court of Appeal's directions confirmed the 1st Defendant remains in liquidation, a status the Applicants acknowledge and which underpins their application. The matters share a party only and the application is not an abuse of due process.

The suit was filed in 2016, long before the liquidation, and the foreclosure notices issued in August 2016 seeking to realize the suit properties for a debt of over KES 212 million remain alive and executable. Unless the suit proceeds, the Plaintiffs would suffer continuing prejudice and anxiety. Invoking Article 159(2)(b) and the Plaintiffs' rights under Articles 10, 19, 27, 47, 48 and 50(1), and following the Peter Harris Kimathi Kinyua decision, the court found the Applicants deserving of leave.