Sunrose Nurseries Ltd v Gatoka Limited

for the purpose of affording the Plaintiff an opportunity to be heard, no such response was ever filed. The Application therefore falls to be determined as an unopposed application. 3. This notwithstanding, I am obliged to interrogate the veracity of the averments placed before me, and to satisfy myself, on a proper consideration of the merits, that the Defendant has made out a case entitling it to the relief sought, rather than to grant the orders sought as a matter of course. Analysis and Determination 4. Turning to the substantive issue in question, it is trite law that a company is a creature of statute. It derives its separate legal personality by virtue of registration, under Sections 18 and 19 of the Companies Act, 2015. Conversely, a company’s corporate existence may be ended either on its own application or on the Registrar’s own motion, under Sections 894 and 897 of the Companies Act, 2015. Where a company is struck off and dissolved under those provisions, Sections 916 and 917 of the Companies Act, 2015 provide the exclusive statutory mechanism of restoration to the Register, whether administratively or by order of court, by which its corporate personality may be revived. Absent such restoration, the dissolution stands. 5. This position was restated by Ngaah, J in Root Capital Incorporated V Tekangu Farmers’ Co-operative Society Ltd & Another, [2018] eKLR, Civil Case No. 11 of 2016 where the Learned Judge held as follows: “ The only proof that a company is duly registered and it is a body corporate capable of exercising all the functions of an incorporated company including the power to sue is a certificate of incorporation given under the hand of the registrar of companies. ... Under section 17 of that Act, a certificate of incorporation issued by the registrar in respect of any association was conclusive evidence that all the requirements of the Act in respect of registration and matters precedent and incidental thereto had been complied with. ... Sections 16 and 17 relating to issue of a certificate of incorporation and the effect of registration of a company in the repealed Act have been retained as sections 18 and 19 of the new Companies Act 2015.” 6. The question before this Court is whether a company that has been voluntarily dissolved and struck off the Register of Companies can continue to maintain an action before a court of law. The record confirms that the suit herein was instituted by way of a Plaint dated 1st November 2012, filed by the firm of Karanja Kiarie & Company Advocates on behalf of the Plaintiff. The Defendant entered appearance and filed a Statement of Defence dated 20th December, 2012. The record further shows that sometime in or about the year 2017, conduct of the matter on behalf of the Plaintiff was taken over by the firm of Githii & Company Advocates. 7. The suit proceeded to full hearing. The Plaintiff called its witnesses and closed its case. The Defendant, on its part, had lined up three (3) witnesses, of whom only one had testified by the time the matter was next scheduled for further hearing on 23rd July 2025. It is deposed and uncontroverted that in the course of preparing for that hearing, Counsel for the Defendant together with the Defendant’s representatives, undertook due diligence on the Plaintiff and discovered that the Plaintiff had, in fact, been dissolved and struck off the Register of Companies. 8. The evidence annexed to the supporting affidavit, particularly Gazette Notice Vol. CXVI–No. 106 of 5th September 2014, confirms that the Plaintiff had applied to the Registrar of Companies for a voluntary dissolution. The Registrar thereafter published a further Gazette Notice Vol. CXVI–No. 151 of 24th December 2014, confirming that the Plaintiff’s name had been struck off the Register of https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11348/eng@2026-07-24 2

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Companies, upon expiry of the statutory three (3) months’ notice period. It is on this basis that the Plaintiff stood dissolved and ceased to exist as a body corporate, with effect from 24th December 2014, some ten and a half (10½) years before the discovery giving rise to the present Application and well before the substantive hearing of the suit commenced. 9. The legal position in such circumstances is documented in jurisprudence. In somewhat similar circumstances the Court of Appeal in Kenya Power & Lighting Company Limited V Benzene Holdings Limited T/A Wyco Paints, [2016] eKLR; KECA 73 (KLR), (Makhandia, Ouko & M’Inoti, JJ.A.) held as follows: “ It has been held consistently by the courts over the years that a company that has been dissolved cannot maintain an action and conversely that no action can be brought against it simply because it does not exist in the eyes of the law. This principle was emphasized as long ago as 1923 by Bankes L.J in Banque Internationale De Commerce (supra), which was subsequently in 1959 cited with approval by Templeton, J of then Supreme Court of Kenya in Fort Hall Bakery Supply Co. v Fredrick Muigai Wangoe (1959) EA 474, who said: 'The party seeking to maintain the action is in the eye of our law no party at all but a mere name only, with no legal existence. ... A non-existent person cannot sue, and once the court is made aware that the plaintiff is non-existent, and therefore incapable of maintaining the action, it cannot allow the action to proceed. ... Since a non-existent plaintiff can neither pay nor receive costs there can be no order as to costs’.” 10. As rightfully stated, the Plaintiff cannot therefore sustain the present litigation. 11. On the question of costs, while the Defendant has prayed for costs of the Application and of the suit, I am mindful that I have not been shown any evidence that would lead one to conclude that the Plaintiff’s Counsels on record knew and failed to inform the parties of the incapacity of the Plaintiff, for them to be condemned to pay costs. I am equally guided by the very authority upon which the substantive finding of dissolution rests. 12. As held by the Court of Appeal in KPLC V Benzene (supra), a non-existent plaintiff can neither pay nor receive costs, and no order as to costs can properly be made against it. It would be incongruous for this Court, having found and declared that the Plaintiff ceased to exist as a body corporate with effect from 24th December 2014, to nonetheless purport to visit that same non-existent entity with an order for costs which it has no legal capacity to satisfy. Disposition 13. For the foregoing reasons, and on the strength of the binding decision, I am satisfied that there is merit in the application dated 22nd July 2025. It is hereby allowed and the following final orders do hereby issue: i. A declaration is hereby issued that the Plaintiff, having been voluntarily dissolved and struck off the Register of Companies with effect from 24th December 2014, ceased to be and has not since been restored as, a juristic person capable of maintaining or sustaining the present suit. ii. The Plaint dated 1st November 2012, and the entirety of the pleadings and proceedings in this suit, be and are hereby struck out for want of locus standi on the part of the Plaintiff. iii. Each party shall bear their own costs. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 24TH DAY OF JULY 2026. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11348/eng@2026-07-24 3

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F. MUGAMBI JUDGE Delivered in presence of: Ms Radol for the applicant Ms Wanjala h/b for Chege for the respondent Court Assistant: Lillian https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11348/eng@2026-07-24 4

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