Ndunde Investments Limited v Wamburi & 2 others; Mbugua

iv. That this Honorable Court be and is hereby pleased to satisfy itself with the power of attorneys that has been uploaded on the CTS system, and deems Wanjiru Mwangi as properly on record for the applicant/interested party. v. That this Honorable Court be and is hereby pleased to satisfy itself with the sworn adavits signed by the applicant / interested party and deems Wanjiru Mwangi properly on record for the applicant / interested party. 2. The instant application is anchored on various grounds which have been elaborated at the foot thereof. Furthermore, the application is supported by the adavit of Daniel Mwangi Mbugua [deponent] sworn on the 28th October 2024 and a supplementary adavit sworn on the 21st November 2024. 3. Upon being served with the instant application, the Plainti/Respondent led a replying adavit through her counsel, namely, Kelvin Mogeni Advocate. For coherence, the replying adavit was sworn on the 20th November 2024. In addition, the deponent has attached/annexed thereto one document, namely, board resolution of the Plainti company dated the 2nd June 2015. 4. The Application beforehand came up for hearing on the 7th November 2024 whereupon the proposed interested party/Applicant and the advocate for the Plainti/Respondent agreed to canvass the application by way of written submissions. Consequently and in this regard, the court proceeded to and directed the respective parties to le and exchange their written submissions within the circumscribed timeline. 5. Pursuant to the direction[s] of the court, the proposed interested party/Applicant led written submissions dated the 26th November 2024. However, the Plainti/Respondent did not le any written submissions. Parties Submissions: a. Proposed Interested Party’s/applicant’s Submissions: 6. The Applicant led written submissions dated the 26th November 2024 and wherein the Applicant adopted the grounds contained in the body of the application. In addition, the Applicant also reiterated the contents of the supporting adavit as well as the supplementary adavit. 7. Furthermore, the Applicant proceeded to and highlighted three [3] salient issues for consideration by the court. Firstly, the Applicant submitted that same [Applicant] is a director and shareholder of the Plainti company. In particular, the Applicant contended that same [Applicant] holds 25% shares in the Plainti company. 8. Additionally, the Applicant also submitted that other being a director/shareholder of the Plainti company same [Applicant] is also the duly appointed and constituted legal administrator of the estate of one Christine Mithiri Mbugua [now deceased]. At any rate, it has also been submitted that the said Christine Mithiri Mbugu was also a shareholder and director in the Plainti company. 9. Arising from the foregoing, the Applicant has submitted that by virtue of being a director and shareholder in the Plainti company and coupled with the facts that same [Applicant] is also the appointed administrator of another director, same [Applicant] is therefore an interested party and thus deserving of being joined into the matter/ proceeding[s]. 10. In addition, the Applicant has submitted that the issues touching on and concerning the aairs of the Plainti company will impact on him and the estate of Chritine Mithiri Mbugua [now deceased]. In https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 2

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this regard, it has been contended that the intended joinder would therefore enable the Applicant to protect not only his [Applicant’s] interest, but also the interest[s] of the estate of the deceased. 11. To vindicate the position that the Applicant is an interested party and thus has a stake/interest in the suit herein, the Applicant has cited and referenced the decision in the case of Trusted Society of Human rights Aliance v Mumo matemu & 5 Others [2014]eKLR and Francis Kariuki Muruatetu & Another v Republic & Another [2016]eKLR, respectively. 12. Secondly, the Applicant has contended that even though same [Applicant] is a director and shareholder in the Plainti company as well as the duly appointed administrator of the estate of Chritine Mithiri Mbugua [deceased], same [Applicant] was neither consulted nor involved in the process leading to the appointment/retention of the rm of M/s Kelvin Mogeni & Company Advocates, as advocates for the Plainti company. 13. To this end, it has been contended that the appointment of the rm of M/s Kelvin Mogeni and Company Advocates to act for and on behalf of the Plainti company was therefore irregular, illegal and unlawful. 14. Thirdly, the Applicant has submitted that even though same [Applicant] was neither involved nor consulted in the process leading to the appointment of the rm of M/s Kelvin Mogeni & Co Advocates to act for the Plainti company, same [Applicant] shall be disposed to suer/shoulder the liability attendant to the professional fees to be raised and charged by the rm of M/s Kelvin Mogeni & Co Advocates, on account of being a Director and shareholder of the Plainti Company. 15. Be that as it may, the Applicant has contended that any such liability would inict loss not only on himself but also on the estate of Christine Mithiri Mbugua [deceased] despite the fact that same [Applicant and the Estate of Christine Mithiri Mbugua] were not involved in the institution of the suit. 16. Finally, the Applicant has submitted that the board resolution which has been annexed to the replying adavit sworn on the 20th November 2024 is ctitious and misleading. Furthermore, it has been contended that the impugned board resolution is decient and thus does not comply with the Companies Act 2015 and Regulation 7, 8, 17, 18 and 19 of the General Regulations made pursuant to the Companies Act. 17. Flowing from the foregoing, the Applicant herein has contended that it is therefore just, expedient and mete to allow the application and to constitute same [Applicant] as an interested party in respect of the matter beforehand so as to allow same to protect his [Applicant’s] interest in the aairs of the Plainti company. 18. Consequently and in the premises, the Applicant has invited the court to nd and hold that the Application beforehand is meritorious and thus same [Application] ought to be allowed. b. Respondent’s Submissions: 19. Though the learned counsel for the Plainti/Respondent took part in the directions issued on the 7th November 2024, same [learned counsel] however failed to le written submissions. In any event, it suces to underscore that when the matter came up for mention on the 3rd December 2024, learned counsel intimated to court that same shall not be ling any written submissions. 20. Other than the foregoing, learned counsel for the Plainti/Respondent posited that same [counsel] shall be adopting and relying on the replying adavit sworn on the 20th November 2024. In this regard, counsel invited the court to take the averments in the said adavit as the response on behalf of the Respondent and thereafter to proceed and craft the Ruling. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 3

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Issues for Determination: 21. Having reviewed the Notice of Motion application dated the 24th October 2024; the supporting/ supplementary adavit[s] thereto; the replying adavit and upon consideration of the written submissions led by the Applicant, the following issues emerge and are thus worthy of determination; i. Whether the application for joinder of the Applicant into the suit is merited taking into account that the suit has since terminated/determined. ii. Whether the Applicant herein has established/demonstrated any interest and/or stake in the suit and/or suit property to warrant [sic] joinder or otherwise. Analysis and Determination Issue Number 1 Whether the application for joinder of the Applicant into the suit is merited taking into account that the suit has since terminated/determined. 22. The instant suit was led and/or commenced way back on the 9th June 2015. From the pleadings led, it is evident that the suit was led by and on behalf of the Plainti company who contended that the suit property, namely, L.R No Ruiru Township/239 had been illegally transferred and registered in the names of the 1st and 2nd Defendants. 23. Pertinently, the Plainti company contended that the suit property lawfully belonged to it. Furthermore, it was contended that the Plainti company had neither sold nor transferred the suit property to and in favour of the 1st and 2nd Defendant. 24. Additionally, the Plainti company contended that the transfer and registration of the suit property in favour of the 1st and 2nd Defendants was fraudulent, illegal and unlawful. In any event, it was posited that the impugned transfer was occasioned by collusion with and connivance of the chief land registrar [the 3rd defendant]. 25. Pertinently, the 1st and 2nd Defendants duly entered appearance and thereafter led a statement of defence and counterclaim. For coherence, the statement of defence and counterclaim is dated the 16th May 2018. 26. First forward, it is instructive to point out that the suit beforehand was subsequently heard and disposed of culminating into a judgment delivered on the 16th June 2023. Suce it to point out that the court found and held that the impugned transfer and registration of the suit property in favour of the 1st and 2nd defendants was illegal, unlawful and void. In this regard, the transfer in favour of the 1st and 2nd Defendants was revoked and nullied. 27. From the brief background, which has been highlighted in the preceding paragraphs, there is no gainsaying that the instant suit has been heard and determined. Furthermore, it is crystal clear that judgment was rendered/delivered. In any event, the Judgment under reference has not been set aside and/ or varied. 28. For good measure, by the time the proposed interested party/applicant led the application beforehand and wherein same [Applicant] seeks to be joined as an interested party, the suit herein stood terminated/determined. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 4

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29. Owing to the foregoing position, the question that the court must now grapple with is whether the Applicant can be joined into the suit herein yet the suit has since been determined vide judgment. Furthermore, the incidental/ancilliary question would relate to the purpose or basis for [sic] joinder of the Applicant in a matter that has been concluded. 30. To start with, there is no gainsaying that any person, the Applicant not excepted, can apply to be joined into a suit at any stage of the proceedings. In any event, it suces to underscore that the joinder of the intended person/party is calculated to assist the court to eectively and eectually determine all the issue[s] in controversy. [See Order 1 Rule 10[2] of the Civil Procedure Rules, 2010]. 31. Nevertheless, the critical issue that begs to be answered in respect of the instant matter is whether a party, the Applicant not excepted, can be joined as an interested party in a concluded matter. To my mind, the joinder of a person/party into a suit is intended to achieve a purpose. The intended purpose is to enable the joined party to assist the court in eectively and eectually determining the issues in controversy. 32. In my humble view, a party/person cannot be joined into a matter which has since terminated and or been determined vide judgment. In such a scenario, the joinder shall be meaningless insofar as all the issues hitherto in dispute [controversy] shall have been determined and/or disposed of. 33. Put dierently, the joinder of a party, the Applicant herein not excepted, long after delivery of a judgment shall be an act in futility and/or vanity. Unfortunately, courts of law do not act in futility and/or vanity. 34. Flowing from the foregoing position, it is my considered position that to the extent that the matter herein has since terminated, the proposed joinder of the applicant herein in the manner sought would be for cosmetic or aesthetic purposes. 35. Furthermore, it is imperative to state and underscore that the Applicant herein has not sought for the setting aside of the judgment. In this regard, it is inconceivable as to what the Applicant would want to achieve ex-post joinder, that is, in the event the joinder was/ is allowed. 36. Be that as it may and without belabouring the point, it is instructive to take cognizance of the decision of the Court of Appeal in the case J.M.K v MWK & Another 2015 eKLR where the court dealt with and elaborated upon a similar scenario like the one beforehand. 37. For coherence, the Court stated thus: We would however agree with the respondent that Order 1 Rule (10)(2) contemplates an application for amendment or joinder of parties where proceedings are still pending before the Court. Sarkar’s Code, (supra) quoting as authority, decisions of Indian Courts on the provision, expresses the view that an application for joinder of parties can be led only in pending proceedings. In the same vein, the Court of Appeal of Tanzania, while considering the equivalent of Order 1 Rule 10(2) of our Civil Procedure Rules, in Tang Gas Distributors Ltd v. Said & Others [2014] EA 448, stated that the power of the court to add a party to proceedings can be exercised at any stage of the proceedings; that a party can be joined even without applying; that the joinder may be done either before, or during the trial; that it can be done even after judgment where damages are yet to be assessed; that it is only when a suit or proceeding has been nally disposed of and there is nothing more to be done that the rule becomes inapplicable; and that a party can even be added at the appellate stage. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 5

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38. Additionally, the position that a party/person can only be joined into a suit which is still pending and not otherwise was also highlighted by the court in the case of Mayfair Holdings Ltd v Municipal Council of Kisumu; Pauline Mauwa Akwacha (Interested Party/Applicant) [2020] eKLR where the court referenced the decision of Nyamweya J in Lilian Wairimu Ngatho & another v Moki Savings CoOperative Society Limited & another [2014] eKLR and proceeded to hold thus: “ The provisions of Order 1 Rule 10(2) state that joinder of a party can be made “at any stage of the proceedings”. “Proceedings” are dened in Black’s Law Dictionary Ninth Edition at page 1324 as “the regular and orderly progression of a lawsuit, including all acts and events between the time of commencement and the entry of judgment”. A party can therefore only be joined to a suit at any time during the pendency of the suit, but not after the same has been concluded. This nding is premised on the basis that the purpose for joinder is to enable the court eectually and completely adjudicate upon and settle all questions involved in a suit. It is therefore of no use if a party seeks to be joined when the court has already made its ndings on the issues arising. Similarly, the main purpose for joining a party as a Defendant under Order 1 Rule 3 of the Civil Procedure Rules is to claim some relief from the said party, and therefore such joinder can only be made during the pendency of a suit. As this court has declined to set aside the judgment herein, there is no suit pending before this court, and the Applicants cannot therefore be joined as parties at this stage.” The upshot is therefore that the Applicant herein cannot be joined to this suit, the proceedings having been long concluded and judgment delivered. 39. Arising from the foregoing erudite exposition of the law, my answer to issue number one [1] is twofold. Firstly, the joinder of a person/party to a suit, ought to be made and/or mounted at any stage albeit during the pendency of the suit. Notably, a suit terminates and/or determines upon entry of judgment. Henceforth, what remains is execution proceedings and no joinder can be made ex-post-facto, subject only to the provisions of Order 22 Rules 51, 52 and 53 of the Civil Procedure Rules 2010. 40. Secondly, the joinder of a party/person, the Applicant herein not excepted, is intended to assist the court to eectively and eectually determined the issues in controversy and not otherwise. Quite clearly, the joinder is not for aesthetic or cosmetic purpose; or for the sake of it. Issue Number 2 Whether the Applicant herein has established/demonstrated any interest and/or stake in the suit and/or suit property to warrant [sic] joinder or otherwise. 41. Other than the timelines for joinder of a party in accordance with the provisions of Order 1 Rule 10[2] of the Civil Procedure Rules 2010, which has been canvassed in the preceding paragraphs, there is also the question of the nature of interest[s], if any; that underpin joinder. 42. To start with, it is important to point out that a party/person, the Applicant not excepted who desires to be joined in a suit as an interested party must clearly demarcate his/her interest[s] in the suit and by extension, the suit property, if any. 43. Furthermore, the nature of interests/stake in the suit must be one that is clearly identiable and must be proximate enough to the dispute beforehand. Instructively, the nature of the interests must not be peripheral, supercial, remote or moot. In any event, the nature of interests which underpin[s] the desire for joinder must also be clearly stated/captured in the application/adavit beforehand. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 6

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44. To this end, it is imperative to take cognizance of the clear guidelines that were stipulated by the Supreme Court of Kenya in the case of Muruatetu & another v Republic; Kenya National Commission on Human Rights & 2 others (Interested Parties); Death Penalty Project (Intended Amicus Curiae) (Petition 15 & 16 of 2015 (Consolidated)) [2016] KESC 12 (KLR) (Civ) (28 January 2016) (Ruling), where the court stated as hereunder; 37. 45. From the foregoing legal provisions, and from the case law, the following elements emerge as applicable where a party seeks to be enjoined in proceedings as an interested party: One must move the Court by way of a formal application. Enjoinment is not as of right, but is at the discretion of the Court; hence, sucient grounds must be laid before the Court, on the basis of the following elements: The personal interest or stake that the party has in the matter must be set out in the application. The interest must be clearly identiable and must be proximate enough, to stand apart from anything that is merely peripheral. The prejudice to be suered by the intended interested party in case of non-joinder, must also be demonstrated to the satisfaction of the Court. It must also be clearly outlined and not something remote. Lastly, a party must, in its application, set out the case and/or submissions it intends to make before the Court, and demonstrate the relevance of those submissions. It should also demonstrate that these submissions are not merely a replication of what the other parties will be making before the Court. The legal parameters to be considered before a party can be joined as an interested party were also elaborated upon in the case Trusted Society of Human Rights Alliance v. Mumo Matemu & 5 Others, Supreme Court Petition No. 12 of 2013, [2014] eKLR (an application by the Law Society of Kenya), where the court held thus; “ 17. Suce it to say that while an interested party has a ‘stake/interest’ directly in the case, an amicus’s interest is its ‘delity’ to the law: that an informed decision is reached by the Court having taken into account all relevant laws, and entertained legal arguments and principles brought to light in the Courtroom. 18. Consequently, an interested party is one who has a stake in the proceedings, though he or she was not party to the cause ab initio. He or she is one who will be aected by the decision of the Court when it is made, either way. Such a person feels that his or her interest will not be well articulated unless he himself or she herself appears in the proceedings, and champions his or her cause…” 46. Guided by the ratio decidendi in the decision [supra], it is now apposite to revert to the subject matter and to discern whether the Applicant herein has any demonstrable stake or interests in the matter beforehand. 47. First and foremost, it is not lost on the court that the suit was led/commenced by the Plainti company. In addition, there is no gainsaying that the Plainti company is a separate and independent legal entity from its directors, shareholders, promoters and/or subscribers. 48. To underscore the foregoing exposition of the law, it suces to cite and reference the decision in the case of Omondi v National Bank of Kenya Ltd [2001]eKLR, where the court stated and observed as hereunder; It is a basic principle of company law that the company has a distinct and separate personality from its shareholders and directors even when the directors happen to be the sole shareholders (see Salmon v a Salmon & Co Ltd [1897] AC 22). The property of the company is distinct from that of its https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 7

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shareholders and the shareholders have no proprietary rights to the company’s property apart from the shares they own. From that basic consequence of incorporation ows another principle: only the company has capacity to take action to enforce its legal rights. The contention by counsel for the plainti that the investment in LVF is by the plaintis and they are accordingly the proper plaintis in this action is manifestly without legal foundation. And although it is true that the appointment of a receiver manager has the eect of rendering the board of directors functus ocio, it does not destroy the corporate existence and personality of the company. 49. Despite the foregoing, the crux of the Applicant’s case and the basis for the intended joinder is that same [Applicant] is a director and shareholder in the Plainti company. On the basis of his claim to be a director and shareholder in the Plainti company, the Applicant contends that same [Applicant] has a stake/interest in the suit led by the company. 50. To my mind, the contention by and on behalf of the Applicant herein ies on the face of the hackneyed albeit elementary principle canvassed/espoused in the case Salmond v Salmond [1897] AC 22 [see also Ardhi Highways Developers Ltd v Westend Butchery & 6 Others [2015]eKLR. 51. Nevertheless and without belabouring the point, it is my humble albeit considered position that the Applicant herein has conated his interests and those of the Plainti company. However, it suces to underscore that whereas the Applicant may very well be a director/shareholder in the Plainti company; same is however separate and distinct from the company. 52. Other than the foregoing, it is also worthy to interrogate the basis/reasons why the Applicant desires to be joined into the instant suit. Instructively, the Applicant contends that same [Applicant] seeks to be joined into the suit to enable same [Applicant] to contest the propriety/legality attendant to the institution of the suit on behalf of the Plainti company. 53. Other than the foregoing, the Applicant also contends that same seeks to be joined into the suit because same [Applicant] was never involved in the giving of instructions to the Plainti’s advocate. Notably, the Applicant desires to canvass the question that instructions to M/s Kelvin Mogeni & Company Advocates were given in contravention of the Articles of Association; Memorandum of Association; Companies Act 2015 and various Regulations made thereunder. 54. Additionally, the gist of the Applicants application for joinder relates to the question of payment of advocates fees, if any; that shall be payable to the rm of M/s Kelvin Mogeni & Co Advocates. To this end, the Applicant contends that any such payment would impact upon and/or aects him [Applicant] and hence same [Applicant] stands to lose money through such liability by the company. 55. I beg to state that the various issues highlighted in the preceding paragraphs, may very well be pertinent. However, it is not lost on this court that the dispute beforehand touched on and concerned the propriety and validity of the transfer and registration of the suit property in the names of the 1st and 2nd Defendants. Period. 56. From the foregoing, it is not lost on this court that the issues that the Applicant [sic] desires to canvass and ventilate upon joinder, are separate and distinct from the issues which were in dispute in the subject matter. Quite clearly, the issues that the Applicant seeks to bring on board are at variance with the issue that were canvassed by the principal parties. 57. Furthermore, there is no gainsaying that the Applicant herein desires to achieve joinder into the instant suit and upon such joinder, the Applicant intends to canvass own issues, which are alien to the dispute beforehand. For coherence, the nature of dispute that the Applicant seeks to canvass subject to joinder https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 8

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are highlighted between paragraphs 18 to 24 of the submissions dated the 26th November 2024, led on behalf of the Applicant. 58. Without endeavouring to consider the merits or otherwise of the intended issues,[some of which do not even fall within the jurisdiction of this Court], it suces to state that an interested party cannot seek to be joined into a matter and upon such joinder [if at all], seek to canvass separate and independent issues. Such a scenario is antithetical to the established rules of engagement and procedure. 59. Barring repetition, if the Applicant herein is convicted about the issues that same [Applicant] desires to canvass, then it behoves the Applicant to commence a separate and distinct suit. Nevertheless, there is no gainsaying that the Applicant would still have to embrace and surmount the principle in Salmond v Salmond [1897] AC 22; and Foss v Harbottle (1843) 2 UKHL 60. Finally and before departing from this issue, it is instructive to take cognizance of the decision of the Supreme Court of Kenya in the case of Communications Commission of Kenya & 3 others v Royal Media Services Limited & 7 others [2014] eKLR, where the court stated as hereunder; (27) We cannot exercise our discretion to enjoin a party that disguises itself as an Interested Party, while in actual fact merely seeking to institute fresh cause. On this point, we are guided by the principle which we had pronounced in the Mumo Matemo case (at paragraph 24), as follows: A suit in Court is a ‘solemn’ process, ‘owned’ solely by the parties. This is the reason why there are laws and Rules, under the Civil Procedure Code, regarding Parties to suits, and on who can be a party to a suit. A suit can be struck out if a wrong party is enjoined in it. Consequently, where a person not initially a party to a suit is enjoined as an interested party, this new party cannot be heard to seek to strike out the suit, on the grounds of defective pleadings.” (28) In our view, the standards to be applied in considering whether or not the applicant should be enjoined as an Interested Party, have not been established. This application, in our perception, is premised upon mere apprehension and speculation, that rights not-yet crystallized, will be violated. 61. Flowing from the foregoing, my answer to issue number two [2] is twofold. Firstly, the Applicant herein has neither established nor demonstrated the nature and kind of interests/stake that same [Applicant] has in the suit. For coherence, there is a dichotomy between a company and the Applicant herein. Suces it to posit that the legal entity of company cannot be conated with that of its directors/ shareholders. 62. Secondly, the Applicant herein cannot [sic] disguise himself as an interested party and yet the issues that the Applicant desires to canvass [subject to joinder] are separate and distinct from the issue[s] that were/are in dispute between the principal parties. Final Disposition: 63. Flowing from the analysis [details highlighted in the body of the ruling] it must have become apparent that the application beforehand is not only premature and misconceived, but same [application] is also legally untenable. 64. Consequently, and in the premises, the nal orders that commend themselves to the court are as hereunder; i. The Application dated the 28th October 2024, be and is hereby dismissed. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 9

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ii. 65. However, each party shall bear own costs of the application. It is so ordered. DATED, SIGNED AND DELIVERED ON THE 19TH DAY OF DECEMBER 2024. OGUTTU MBOYA, JUDGE. In the presence of: Benson – Court Assistant. Ms. Wanjiru Mwangi [sic] proxy of the Applicant. Mr. Kelvin Mogeni for the Plainti/Respondent. N/A for the 1st, 2nd and 3rd Defendants/Respondents. https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/14150/eng@2024-12-19 10

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