High Court 3708 of 2010

transfer of any of his shares in favour of those defendants. (vi) In paragraphs 7,8 and 9 of its defence dated 10 th September, 2009 and filed on 15 th September, 2009 the 8th defendant admits that the registration of the transfer of 1 st plaintiff’s shares in favour of 1 st – 5th defendants was done without any instrument of transfer executed by 1st plaintiff; that the document purporting to be a resolution dated 29th December, 2008 is not on its records; that no payments were made to 8 th defendant on the purported presentation or lodging of the said resolution; and that, therefore any registration of a change in the shareholding of 3 rd plaintiff or any certificate issued by 8th defendant concerning such change was done in error and by mistake. (vii) As 8th defendant has admitted that the certificate, CR 12 or letter dated 16th January, 2009 was issued in error and by mistake, it is fair, just and equitable that the letter, certificate or CR 12 be nullified without waiting for any other issue to be determined. (viii) The 1st – 7th defendants have admitted that 6 th defendant was not appointed as 3 rd plaintiff’s secretary; and therefore 6 th defendant is not authorized to act as such secretary or to transact any business on behalf of 3 rd plaintiff. (ix) It is fair and just that the fraud committed and the misappropriation of 3 rd defendant’s funds be addressed at the earliest opportunity, to save 3rd plaintiff from collapsing. (x) The 6th defendant continues to illegally and fraudulently discharge the duties of 3 rd plaintiff although he was not appointed to do so, and although 3rd plaintiff has another secretary, one Charles Kioko Muthusi who has not ceased to be the secretary of 3rd plaintiff. The detailed facts relating to the application are set out in the supporting affidavit of Ismail Gulamali sworn on 23rd September, 2009, and that of David Bett Langat sworn on the same date; and to these depositions Joseph Kipkurui Ngetich, the 3rd defendant, swore a replying affidavit dated 14th October, 2009. Learned counsel, Mr. Kinyua submitted that 8th defendant, who raises no opposition to the plaintiffs’ claim, admits that there had been a theft of 1st plaintiff’s shares, and an unlawful registration of shares illegally transferred from 1 st plaintiff; and since 1st – 5th defendants admit that the plaintiff’s shares were fully paid for, it is urged that this question need not be taken to the trial stage. Counsel submitted that 1st – 5th defendants had no lawful authority to take 1 st plaintiff’s shares, and that there was no basis in law for these defendants to make the counterclaim that 1 st and 2nd plaintiffs had ceased to be shareholders. Counsel urges that 1st plaintiff’s shares were protected under the Constitution as private property, which, by virtue of the guarantees in s.75 of that document, could not be taken away in the manner it was purportedly done by 1st – 5th defendants. Learned counsel submitted that the defendants had failed to respond to the dozensome grounds set out in the application, or indeed to some of the elements in the applicants’ depositions: in particular, the replying affidavit by Joseph Kipkurui Ngetich failed to respond to the claim that 1st plaintiff’s shares had been taken away unlawfully. In response, learned counsel Mr. Opulu, for 1st – 7th defendants, urged that 1st and 2nd plaintiffs lacked locus standi to file the suit for and on behalf of 3rd plaintiff – for there was no letter from 3rd plaintiff confirming 3rd plaintiff’s instructions to their advocates to file suit. Counsel contended that “the plaintiff’s suit and Notice of Motion are incompetent and incurably and fatally defective” on certain grounds: that the suit was res judicata; that the suit against 8 th defendant is incompetent because “the 1 st and 2nd plaintiffs should have filed an application for judicial review under the provisions of section 89 of the Civil Procedure [Act] and Order LIII of the Civil Procedure Rules for orders of prohibition or certiorari or mandamus against the 8 th defendant, the Registrar of Companies.” It is obvious that the facts relating to the suit herein are minutely detailed; and this has led to many of the contending points taken up by counsel, appearing somewhat abstract and substantially technical. Counsel for the respondents, for instance, has attributed incompetence to many aspects of the suit and the application, but without supplying full illustration and justification to the claims made. This state of affairs makes a clear case for emerging questions of merit to be ventilated at full hearings; and on this account I would not, as proposed by learned counsel for the plaintiffs/applicants, dispose of certain controversial issues at this stage. From the application, the depositions, and the submissions of counsel, however, prima facie status attends a number of the prayers made by the applicants; and I will, therefore, make orders in favour of the applicants as follows: (a) The 6th defendant is hereby restrained from acting or purporting to act as 3 rd plaintiff’s secretary until the hearing and determination of the suit. (b) The 8th defendant’s letter dated 16th January, 2009 purporting to bear the description CR 12 and emanating from 3 rd plaintiff

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is hereby declared to be null and void ab initio. (c) The defendants shall bear the costs of the application. SIGNED ……………. J. B. OJWANG JUDGE DATED and DELIVERED at MOMBASA this 26th day of February, 2010. Coram: Court Clerk: Ibrahim For the Plaintiffs/Applicants: For the Defendants/ Respondents:

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