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ELRCStruck OutNot stated in judgment· [2018] KEELRC 2040 (KLR)

Peter O. Bala & 13 others v Gitari T. Njeru (Receiver Manager) Tourist Paradise Investments Ltd Respondent [2018] KEELRC 2040 (KLR)

Employment and Labour Relations Court
11 May 2018
RSRadido Stephen
1,160 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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Fourteen Claimants sued the Respondent alleging unlawful termination of their employment on grounds of redundancy on or around 5 July 2001, claiming notice pay, severance pay and bonus. The Respondent denied the employment relationship, maintained any terminations were lawful, and denied any terminal benefits were owed. The suit, filed in the High Court in May 2007, was transferred to the Employment and Labour Relations Court in November 2016 on jurisdictional grounds. Hearing proceeded on 5 April 2018 in the absence of the Respondent and his advocate, the date having been fixed in their presence. Only one Claimant testified and submissions were filed on 20 April 2018. The court raised, of its own motion, the competency of the Cause: a Gazette Notice of 11 June 2010 showed the Respondent company, Tourist Paradise Investments Ltd, had been dissolved, and a High Court decree of 14 May 2010 had vacated the appointment of the Respondent as Receiver Manager. Applying Canadian authorities and the Kenyan Court of Appeal decision in Kenya Power & Lighting Company Ltd v Benzene Holdings, the court held that a dissolved company has no legal existence and cannot sue or be sued, and that a Receiver Manager could not survive dissolution. The Cause was struck out with no order as to costs. The merits of the alleged unlawful terminations and remedies were therefore never determined.

Key legal issues

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01

Whether a suit can be maintained against a dissolved company

Holding

No. A dissolved company has no legal existence and no proceedings can be maintained against it; the Cause was struck out.

Reasoning

The court relied on a Gazette Notice of 11 June 2010 showing the Respondent company was dissolved, and on Kenyan and comparative authorities establishing that a dissolved corporation is a non-existent person incapable of suing or being sued. A Receiver Manager could not legally survive the dissolution, and his appointment had in any event been vacated by a High Court decree.

p. 3
02

Whether there was unlawful termination of employment and appropriate remedies

Holding

Not determined, as the Cause failed on competency.

Reasoning

Though framed as a question for determination, the court did not reach the merits of the alleged redundancy terminations of July 2001 because the threshold question of competency against a dissolved company disposed of the Cause. Evidence was given by only one Claimant and the Respondent did not address the two legal questions in testimony or submissions.

p. 2

Legal principles established

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  • A dissolved company cannot be sued because it does not exist in the eyes of the law

Court orders

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  1. 1.The Cause struck out
  2. 2.No order as to costs

Authorities

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Cases cited (6)

  • Swale Investments v. National Bank of Greece (Canada)
    (1997) O.J. No. 4997
  • Reliable Life Insurance v. Ingle et al
    2009 CanLII 28225 (On SC)
  • Wolf Offshore Transport Ltd. v. Sulzer Canada Inc.
    (1992) N.J. No. 82
  • Kenya Power & Lighting Company Limited v Benzene Holdings Limited t/a Wyco Paints
    (2016) eKLR
  • Banque Internationale De Commerce
  • Fort Hall Bakery Supply Co. v Fredrick Muigai Wangoe
    (1959) EA 474
Jurisdiction invoked
Jurisdictional transfer by the High Court on 21 November 2016 to the Employment and Labour Relations Court

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, "Peter O. Bala & 13 others v Gitari T. Njeru (Receiver Manager) Tourist Paradise Investments Ltd Respondent [2018] KEELRC 2040 (KLR)", Case Analysis (2018). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2040/eng@2018-05-11

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