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ELCDismissedNot stated in the judgment· [2024] KEELC 1327 (KLR)

Ntutu v County Government of Narok & another (Environment and Land Case 21 of 2021) [2024] KEELC 1327 (KLR)

Environment and Land Court
12 March 2024
2,970 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~12 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court ruled that once a party withdraws a suit, it cannot be reinstated — and an estate representative could not act for a company without authority.

What this practically means

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Executive summary

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This is a ruling on a Notice of Motion dated 1st February, 2024 by Peggy Resiato Keiuwa (Keiwua), administratrix of the estate of the late Moijo Ole Keiwua, seeking under Order 25 Rule 3 of the Civil Procedure Rules to set aside the order of 27th April, 2023 and reinstate Ol Kiombo Limited, a former interested party that had withdrawn from the suit by notice dated 26th April, 2023. The applicant contended that the company's directors and shareholders never resolved to withdraw and never instructed Rachier & Amollo Advocates, alleging fraud and misrepresentation, and that reinstatement was necessary to protect the company's interest in tented camps standing on 400 acres of the suit land. The plaintiff opposed, arguing that Order 25 Rule 3 confers no power of reinstatement, that the applicant lacked locus standi as neither director nor proven shareholder and had no board resolution or leave under Sections 238 and 239 of the Companies Act, that fraud was unproved, and that reinstatement would prejudice a part-heard matter. The court framed the issue as whether the application had merit. Relying on Order 25 Rule 1 and authorities including Beijing Industrial Designing & Research Institute v Lagoon Development Ltd, Bahati Shee Mwafundi, George Mwangi Kinuthia and Priscilla Nyambura Njue, the court held that a notice of withdrawal takes effect immediately and no provision permits reinstatement. It further found no board resolution, no proof the deceased's shares formed part of the estate, and no proof of fraud, concluding the applicant lacked locus standi. The notice of motion was dismissed with no orders as to costs.

Key legal issues

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01

Whether Order 25 Rule 3 of the Civil Procedure Rules empowers the court to reinstate a party/suit after withdrawal

Holding

It does not. Withdrawal terminates the suit and there is no right to revoke or reinstate it; the remedy is a fresh suit under Order 25 Rule 4.

Reasoning

The court analysed Order 25 Rule 1, which confers an absolute right to withdraw by notice before setting down for hearing, as happened here. Relying on Bahati Shee Mwafundi, George Mwangi Kinuthia and Priscilla Nyambura Njue, the court held that a notice of withdrawal takes effect immediately and there is no provision conferring a right to revoke the withdrawal or reinstate the suit.

p. 5
02

Whether the applicant, as administratrix of a deceased original subscriber, had locus standi to apply for reinstatement of the company

Holding

She had no locus standi: no board resolution authorised the application, she did not prove she was a shareholder, and it was not shown the deceased's shares formed part of the estate.

Reasoning

The court held that claims touching a company must be brought in accordance with the Companies Act and the company's Articles of Association. An individual shareholder cannot sue for wrongs done to a company (Foss v Harbottle principle). No resolution of the directors of Ol Kiombo Limited supported the application, and no evidence showed the deceased's shares formed part of the estate, so the administratrix could not act for the company.

p. 6
03

Whether the withdrawal was procured by fraud and misrepresentation

Holding

The allegations of fraud and misrepresentation were not proved at all.

Reasoning

The applicant asserted that the notice of withdrawal filed by Rachier & Amollo Advocates was without instructions from the directors and shareholders and could only have been done through fraud. The court found no evidence tendered to prove the firm acted without instructions or engaged in wrongdoing, and concluded the fraud allegations were wholly unestablished.

p. 6

Legal principles established

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  • Once a party withdraws its suit, there is no provision permitting reinstatement; the withdrawing party's only option is to institute a fresh action under Order 25 Rule 4
  • An individual who is not shown to be a director or shareholder, acting without a board resolution and without proof that deceased shares formed part of the estate, has no locus standi to move the court on behalf of a company

Court orders

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  1. 1.The notice of motion dated 1st February, 2024 is dismissed
  2. 2.No orders as to costs

Authorities

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Legislation

  • Civil Procedure RulesOrder 25 Rule 1
  • Civil Procedure RulesOrder 25 Rule 3
  • Civil Procedure RulesOrder 25 Rule 4
  • Companies ActSections 238 and 239

Cases cited (16)

  • Tara Singh Dogra suing through Manmohan Singh Dogra v Elesh Chandrakant Gheewala (Kenyan) & 4 Others
    [2018] eKLR
  • Ghelani Metals Limited & 3 Others v Elesh Ghelani Natwarlal & Another
    [2017] eKLR
  • Joseph Munyoki Nzioka v Raindrops Limited & 3 Others
    [2019] eKLR
  • Shiawse Limited & Another v Pianesi Gino
    [2012] eKLR
  • Abdukrazak Khalifa Salimu v Harun Rashid Khator & 2 Others
    [2018] eKLR
  • Kaka Mohamed v Mohamed Ali
    [2018] eKLR
  • John Harun Mwau v Simone Haysom & 2 Others; Attorney General & 2 Others (Interested Parties)
    [2021] eKLR
  • Florence Nafula Ayodi & 5 Others v Jonathan Ayodi Ligure v John Tabalya Mukite & Another; Benson Girenge Kidiavi & 67 Others (Applicants/Interested Parties)
    [2021] eKLR
  • Skov Estate Limited & 5 Others v Agricultural Development Corporation & Another
    [2015] eKLR
  • Communications Commission of Kenya & 4 Others v Royal Media Services Limited & 7 Others
    [2014] eKLR
  • Elina Mwayitsi Nakaya & Another v Nancy Wanjiru Wanga; Ephraim Miano Thamani & Another (Interested Parties)
    [2022] eKLR
  • Beijing Industrial Designing & Research Institute v Lagoon Development Ltd
    [2015] eKLR
  • Bahati Shee Mwafundi v Elijah Wambua
    [2015] eKLR
  • George Mwangi Kinuthia v Attorney General
    [2019] eKLR
  • Priscilla Nyambura Njue v Geovhem Middle East Ltd; Kenya Bureau of Standards (Interested Party)
    [2021] eKLR
  • Foss v Harbottle
Jurisdiction invoked
Inherent jurisdiction of the first-instance court over its own suit; application brought under Order 25 Rule 3 of the Civil Procedure Rules

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, "Ntutu v County Government of Narok & another (Environment and Land Case 21 of 2021) [2024] KEELC 1327 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/1327/eng@2024-03-12

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