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ELCStruck Out· [2024] KEELC 6311 (KLR)

Gatura & another v Mungania & another (Environment & Land Case E006 of 2024) [2024] KEELC 6311 (KLR)

Environment and Land Court
25 September 2024
TMT. MURIGI
3,306 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A land court struck out a shareholder dispute over a medical centre because quarrels about how a company is run belong to the High Court, not the Environment and Land Court.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court determines a Notice of Preliminary Objection dated 4th April 2024 raised by the 1st Defendant on three grounds: that the suit is sub judice Makueni High Court HCCC E003/2024; that the subject matter falls outside the court's jurisdiction under Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act; and that the 1st Plaintiff required leave under Section 29 of the Companies Act to sue in respect of a cause of action vested in a company. The plaintiffs sought declarations that the 1st Plaintiff is the bona fide owner of Makindu Medical Centre and LR No. 254 Makindu, orders for audits and restitution of monies drawn by the Defendants, declarations of breach of duty, and prohibitory orders. Both sides filed written submissions. The court first confirmed that the objection was a true preliminary objection on a pure point of law insofar as it raised jurisdiction, citing Mukisa Biscuits, Oraro v Mbaja and the Lillian S jurisdiction doctrine. Examining the plaint, the court found that although one prayer touched on land, the substratum of the dispute - audits, restitution of commissions, determination of shareholding equity and restraint of directors - concerned the conduct of the company's affairs, which belongs to the High Court. The court held it lacked jurisdiction, downed its tools, and declined to determine the remaining issues of sub judice and whether the suit was derivative. The preliminary objection was upheld and the suit struck out with costs to the 1st Defendant.

Key legal issues

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01

Whether the Environment and Land Court has jurisdiction over a dispute concerning the conduct of a company's affairs where a declaration of ownership of land is sought

Holding

The court lacks jurisdiction because the substratum of the dispute relates to the conduct of the company's affairs, which falls within the High Court's jurisdiction, notwithstanding that one prayer touches on land

Reasoning

Although prayer (iv) of the plaint sought a declaration of ownership of LR No. 254 Makindu, the court found the dispute cannot be resolved without first determining the shareholder dispute that led to the claimed use, occupation or title. The reliefs - audits, restitution of commissions, declarations on equity and prohibitions on directors - relate to how the company's affairs were conducted, matters for the High Court.

p. 7
02

Whether the preliminary objection was a true preliminary objection on a point of law

Holding

Yes; the jurisdictional objection is a pure point of law capable of disposing of the suit without ascertaining facts

Reasoning

Applying Mukisa Biscuits and Oraro v Mbaja, the court held that a jurisdictional challenge requires no ascertainment of facts or exercise of judicial discretion. The court distinguished the jurisdictional ground from the sub judice and derivative-suit grounds, which would have required probing evidence, but resolved the matter on jurisdiction alone and declined to consider the remaining issues.

p. 5

Legal principles established

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  • Jurisdiction is everything and a court without jurisdiction must down its tools
  • A valid preliminary objection must be on a pure point of law founded on undisputed facts
  • The Environment and Land Court's jurisdiction is derived from Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act

Court orders

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  1. 1.The preliminary objection dated 4th April 2024 is upheld
  2. 2.This suit is struck out with costs to the 1st Defendant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)(b)
  • Environment and Land Court Act, No. 19 of 2011Sections 13(1) and 13(2)
  • Civil Procedure ActSection 6
  • Companies Act, 2015Section 29
  • Land ActSection 150
  • Land Registration ActSection 101
  • Medical Practitioners and Dentists ActNot specified
  • High Court (Companies) Practice RulesSection 3
  • High Court Protection of Fundamental Rights and Freedoms Practice DirectionsSection 3

Cases cited (4)

  • Mukisa Biscuits Manufacturers Ltd v West End Distributors Ltd
    (1969) E.A 696
  • Oraro Vs Mbaja
    2005 eKLR
  • Owners of Motor Vessel 'Lillian S' Vs Caltex Oil (Kenya) Limited
    (1989) eKLR
  • Samuel Kamau Macharia & Another Vs Kenya Commercial Bank Limited & 2 Others
    [2012] eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution of Kenya, 2010 and Section 13 of the Environment and Land Court Act, No. 19 of 2011

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, "Gatura & another v Mungania & another (Environment & Land Case E006 of 2024) [2024] KEELC 6311 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6311/eng@2024-09-25

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