Mbaru & 12 others v Wangui; Muhihi & 4 others (Third party)
The bottom line
#Kenya's Environment and Land Court struck out a claim against a co-operative in liquidation because the claimant never got the court's permission required by law.
What this practically means
#Executive summary
#Key legal issues
#Whether a suit against a co-operative society in liquidation commenced without leave is competent
The suit against the 2nd third party was incompetent for want of leave under section 432(2) of the Insolvency Act and was struck out
The court found it undisputed that the 2nd third party was placed under liquidation on February 9, 2009 and that no leave was sought when the defendant enjoined the liquidator. Section 432(2) of the Insolvency Act mandates court approval for proceedings against a company in liquidation. Relying on Republic v Official Receiver and Liquidator Ex parte Transmatter, the court held that action commenced without such sanction is fatally defective and incompetent, and struck out the defendant's suit against the 2nd third party.
Nature of a preliminary objection
A preliminary objection must be a pure point of law on assumed facts, not a matter requiring investigation of facts
The court adopted the classic statements in Oraro v Mbaja and Mukisa Biscuits v West End Distributors that a preliminary objection is a point of law argued on the assumption that all facts pleaded by the other side are correct, and cannot be raised where facts need to be ascertained or judicial discretion exercised. The objection here turned on undisputed facts (liquidation and absence of leave), so it qualified as a true preliminary point.
Legal principles established
#- Legal proceedings against a company in liquidation may be begun or continued only with the approval of the court
- It is mandatory to obtain leave to commence a suit against a company or society under liquidation; action commenced without sanction is fatally defective
- A preliminary objection must be a pure point of law, not blurred with factual details requiring proof
Court orders
#- 1.The 2nd third party's preliminary objection dated April 21, 2022 is upheld as merited
- 2.The defendant's suit against the 2nd third party is struck out for failure to comply with section 432(2) of the Insolvency Act
- 3.Costs to be borne by the defendant
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over land disputes (Environment and Land Court Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbaru & 12 others v Wangui; Muhihi & 4 others (Third party)", Case Analysis (2023). Environment & Land Case 636 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/19298/eng@2023-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.