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ELCPartially AllowedPetition dated September 23, 2020· [2022] KEELC 3641 (KLR)

Mulwa (Petitioning in the interest of members of Mitaboni Katani Company and/or their respective nominees) v County Land Registrar, Machakos & 2 others; Mitaboni Katani Company Limited (Interested Party) (Environment & Land Petition E5 of 2020) [2022] KEELC 3641 (KLR)

Environment and Land Court of Kenya
30 May 2022
1,863 words in judgment
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The bottom line

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A Kenyan court ordered the Lands Registrar to register land transfers from a once-struck-off company, confirming restored companies are legally 'alive' again.

What this practically means

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Executive summary

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By a petition dated September 23, 2020, the petitioner, representing shareholders and purchasers of plots allotted by Mitaboni Katani Company Limited, sought declarations and prerogative orders against the Registrar of Lands for refusing to register transfers in respect of Mavoko Town Block 2/12203 and 2/12244 on the grounds that the company had been wound up and the transferees were not on the members' register. The company had been struck off the register by Gazette Notice No. 3586 of July 10, 1998, but that notice was reversed by corrigenda in Gazette Notice No. 2653 of March 23, 2007 after the petitioner requested restoration for the limited purpose of effecting transfers. The respondents were served but did not enter appearance, and the petition was canvassed by written submissions. The court framed a single issue: whether the petitioner was entitled to the orders sought. Relying on sections 914 and 915 of the Companies Act, the court found the company had continued in existence as if never struck off. On legitimate expectation, the court applied the cited textbook and case authorities and held that the 1st respondent, having previously effected over 200 similar transfers and having been informed of the reinstatement, was not justified in declining registration of properly executed transfers. The petition succeeded: the court issued a declaration that the company is subsisting, quashed the refusal decisions by certiorari, and mandated registration of the transfers. However, compensation and general or exemplary damages were refused for want of proof. Costs were ordered in the cause.

Key legal issues

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01

Whether Mitaboni Katani Company Limited subsists by virtue of the corrigenda in Gazette Notice No. 2653 of March 23, 2007

Holding

The company continues in existence as if it had not been struck off the register

Reasoning

Restoration of a struck-off company is governed by sections 914 and 915 of the Companies Act. Section 915 provides that upon restoration the company is deemed to have continued in existence as if never dissolved or struck off. Since the Gazette Notice of July 10, 1998 striking off the company was deleted by the corrigendum of March 23, 2007, the court found the interested party has continued to be in existence.

p. 3
02

Whether the 1st respondent's refusal to register the transfers infringed the petitioner's legitimate expectation

Holding

The refusal was unjustified given the company's subsistence, the 1st respondent's prior registration of over 200 similar transfers, and receipt of correspondence on the reinstatement

Reasoning

Legitimate expectation may arise from consistent past practice or representation. The registrar had earlier effected over 200 transfers under similar circumstances and was informed of the reinstatement, yet declined to register properly executed transfers. The court associated itself with the cited authorities on legitimate expectation and held the 1st respondent was legally mandated to register the transfers.

p. 4
03

Whether the petitioner was entitled to compensation and/or general and exemplary damages

Holding

No damages awarded for want of proof

Reasoning

While the petition sought damages for violation of rights, the court held that damages must be proved. In the absence of proof of loss, no compensation or general or exemplary damages could be awarded against the respondents. This head of relief was accordingly left ungranted even though the petition otherwise succeeded.

p. 4

Legal principles established

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  • The effect of restoration of a company to the register is that it is deemed to have continued in existence as if it had not been dissolved or struck off
  • Legitimate expectation arises from a representation, promise or consistent past practice by an administrative authority

Court orders

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  1. 1.A declaration that by virtue of corrigenda contained in Gazette Notice Number 2653 of March 23, 2007 Mitaboni Katani Company Limited is subsisting and that the 1st respondent is not entitled to decline registration of the transfers presented by the company on the ground that it was wound up
  2. 2.An order of certiorari quashing the decisions of the 1st respondent refusing to register transfers in respect of title numbers Mavoko Town Block 2/12203 and Mavoko Town Block 2/12244
  3. 3.An order of mandamus compelling the 1st respondent to register transfers by Mitaboni Katani Company Limited as presented by the petitioner without considering the fact that the company was once struck off the register of companies
  4. 4.Costs of the Petition in the cause

Authorities

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Legislation

  • Companies Act (Cap 486)Incorporation of the interested party
  • Companies ActSection 914
  • Companies ActSection 915(1)
  • Constitution of Kenya 2010Article 40

Cases cited (2)

  • National Director of Public Prosecutions v Phillips and Others
    [2002] (4) SA 60 (W)
  • Jane Kiongo & 15 others v Laikipia University & 6 others
    [2019] eKLR
Jurisdiction invoked
Constitution of Kenya 2010, including Article 40 (property rights), by way of a petition for declaratory and prerogative orders

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, "Mulwa (Petitioning in the interest of members of Mitaboni Katani Company and/or their respective nominees) v County Land Registrar, Machakos & 2 others; Mitaboni Katani Company Limited (Interested Party) (Environment & Land Petition E5 of 2020) [2022] KEELC 3641 (KLR)", Case Analysis (2022). Petition dated September 23, 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3641/eng@2022-05-30

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