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ELCOtherNot stated in the excerpt· [2023] KEELC 754 (KLR)

Gatigithu & 5 others v Kiambiriria Investment Co Ltd (Environment & Land Case 47 of 2019) [2023] KEELC 754 (KLR)

Environment and Land Court
14 February 2023
MNMwangi Njoroge
2,438 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nakuru court refused to force a property management company to hand over more financial records, but made it pay the legal costs for not sharing information upfront.

What this practically means

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Executive summary

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This interlocutory ruling of the Environment and Land Court at Nakuru (Mwangi Njoroge J, delivered 14 February 2023) determines a motion dated October 5, 2022 lodged by the plaintiffs, Ndungu Gathige and Kagimbi Mungai, against Kiambiriria Investment Company Limited, the defendant which manages their property LR 1144/21/XXIV Naivasha. The motion, lodged pursuant to directions of September 28 and October 27, 2022 (the latter confirming Mr Njuguna as counsel for the de facto management), sought an order compelling the company to disclose details of tenants, rents collected, bank and Mpesa accounts, distribution of rental proceeds, audited accounts, expenditure and overheads from 2017. The plaintiffs alleged opacity, exclusion of elderly and deceased owners' dependants from rental income, irregular change of directors, unauthorised borrowing and attempts to buy members' shares cheaply. The defendant, through its treasurer Stephen Njoroge Mungai, responded that directorial wrangles had locked the Registrar of Companies portal, that pre-2018 records were not handed over, that it borrowed Kshs 1.2 million for renovations, and that it had produced income and expense statements. The court held the application was interlocutory and spent, the defendant having declared all it could; any gaps could be pursued via discovery, cross-examination and adverse presumptions at the viva voce hearing. The application was deemed spent, but the defendant was ordered to bear the costs for failing to volunteer the information at the outset of the suit.

Key legal issues

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01

Adequacy of the defendant's disclosure at the interlocutory stage

Holding

The defendant had 'opened up and declared all it says it can' and the application, which sought only provision of information, was therefore spent

Reasoning

The court noted this was an interlocutory application in a suit destined for viva voce evidence. The defendant had sworn that what it availed was all the information it could. Any further relevant information could be obtained through discovery notices, cross-examination, or adverse presumptions for non-disclosure at the main hearing. The court could not, at this stage, confirm non-disclosure unless demonstrated by the plaintiffs.

p. 5
02

Costs of the application

Holding

Although the application was spent, the defendant was to bear costs because it should have volunteered the information as part of its initial disclosure

Reasoning

The court reasoned that the defendant ought to have volunteered the information when the suit was filed, as part of its disclosure obligations. Its failure to do so justified ordering it to pay the costs of the application notwithstanding the deemed-spent outcome.

p. 5

Legal principles established

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  • An interlocutory application for disclosure is spent once the responding party has availed what it claims it can, and gaps in disclosure should be pursued through discovery notices, cross-examination and adverse presumptions at the main hearing

Court orders

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  1. 1.The application dated October 5, 2022 deemed spent
  2. 2.The defendant to bear the costs of the application

Authorities

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Legislation

  • Companies Act (implied by reference to CR 12 search from the Registrar of Companies)CR 12 search
Jurisdiction invoked
Original civil suit before the Environment and Land Court; no specific constitutional or statutory provision invoked in the ruling

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, "Gatigithu & 5 others v Kiambiriria Investment Co Ltd (Environment & Land Case 47 of 2019) [2023] KEELC 754 (KLR)", Case Analysis (2023). Not stated in the excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/754/eng@2023-02-14

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