Company Law-winding-up-winding up petition by a share holder- where it was ordered by consent that the petitioner was to be bought out from the Company and the quantum to be paid to the petitioner to be determined by the court-computation of the total sum by the court

Meghji & Brothers v Bungoma District Co-operative Union Limited

High Court, at Nairobi

March 2, 1989

Cockar J

Civil Suit No 1329 of 1988

Chattels mortgage – created by co-operative society - whether such instrument subject to the provisions of the Chattels Transfers Act ( cap 28) - whether instrument can be rendered fraudulent because it prefers a creditor against another.

Co-operative Society - chattels mortgage created by a co-operative society - instrument presented to Commissioner of Co-operatives for registration outside the prescribed time - Commissioner nevertheless issuing certificate of registration - Co-operative Societies Act (cap 490) providing that such certificate was conclusive - whether court can go behind the certificate tofind whether it was properly issued.

The objector in this suit sought to resist execution against the defendant claiming a motor vehicle which had been attached by the decree holder was subject to a chattels mortgage in its favour.

It was contended on behalf of the decree holder that the chattels mortgage being relied on was void as it did not comply with Chattels Transfer Act (cap 28). It was further contended that the same was fraudulently created in favour of the objector.

It transpired that the instrument creating the charge was registered outside the thirty days stipulated by section 50 (1) of the Co-operative Societies Act (cap 490).

Counsel for the objector however contended that the fact that the commissioner issued a certificate of registration was conclusive evidence that all the provisions pertaining to instruments including delivery within thirty days of creating were complied with and that therefore the court could not look behind the certificate.

Held:

1. An instrument created under the Chattels Transfer Act does include mortgages or charges granted or created by a Co-operative Society registered under the Co-operative Societies Act (cap 490).

2. An instrument like the one in issue is not rendered fraudulent merely because it is given to prefer a creditor or because its defeats an expected execution.

3. Even though section 53(2) of the Co-operative Societies Act has prescribed that a certificate of registration issue dunder the Commissioner’s hands shall be conclusive evidence that the requirements of part IX of the Act have been complied with, a court in such cases nevertheless has a power and a duty to go behind such a certificate and find if it was properly issued.

4. The instrument was presented at the commissioner’s office 12 days after expiry of 30 days allowed within which it was to be presented. This non-compliance was fatal and rendered the instrument void.

5. The certificate of registration ought not to have been issued because there was no compliance with the mandatory provisions of section 50(1) of the Co-operative Societies Act. This non-compliance rendered the instrument void against the decree holder/ executor.

Application dismissed.

Cases

Patel v Patel [1958] EA 743

Statutes

1. Chattels Transfer Act (cap 28) section 2

2. Co-operative Societies Act (cap 490) [Repealed] sections 50, 50(1), 50(2)(b), 53(2)

3. Stamp Duty Act (cap 480)

Advocates

Mr B Sheth for the Plaintiff.

Mr Gichachi for the Defendant.

Ingra v National Construction Corporation

High Court, at Nairobi September 30, 1986

Cockar J

Civil Case No 460 of 1980

Judgment – decretal amount – in foreign currency – exchange rate to be applied – factors to be considered.

Foreign currency – decretal amount in foreign currency - exchange rate to be applied - protection of parties against fluctuation in currency rates - whether the rate of exchange should be as it stood at judgment or when actually paid – whether the devaluation of the Kenyan shilling amounts to unjust enrichment – relevance of the policy on preservation of foreign currency – factors to be taken into account in deciding the conversion date.

The plaintiffs obtained judgment for a sum stated in United States dollars. The defendants paid two amounts in local currency and subsequently filed a chamber summons application seeking orders that the decree had been fully satisfied and that they had in fact overpaid. The plaintiffs denied that the decree had been satisfied, the bone of contention being whether the rate of currency exchange to be applied was as it stood at the time of judgment or at the date of payment.

Held:

1. It does not amount to unjust enrichment, where the amount of dollars does not exceed the judgment sum even though the amount in Kenya shillings may have increased.

2. The question of preservation of foreign exchange is irrelevant in this particular case.

3. In foreign currency obligations, the guiding factor as to the mode of payment and exchange rate should be from the claim. In this instance the claim was specifically for foreign currency.

4. In deciding the conversion date, the court has the following options, namely, the date the action was brought, the date of judgment and the date of payment.

5. The date of conversion should not place the creditor too severely at the mercy of the debtor’s obstructive defences or the law’s delay.

6. In the instant case the defendants deprived the plaintiffs of their money for long and it should not be just that because of this the plaintiffs should suffer loss. The blame lies wholly with the defendants and the loss must fall where the blame lies.

7. In order that the plaintiffs get the value of the judgment sum rightfully due to them, the conversion should be as it stood on the day of payment.

Application dismissed.

Cases

1. Life Insurance Corporation of India v Valji [1968] EA 225

2. Intercontinental Greetings v Kenya Litho Ltd (1982-1988) 1 KAR 902

3. Miliangos v George Frank (Textiles) Ltd [1976] AC 443

Statutes

No statutes referred.

Advocates

Mr Barasa for Defendant

Njeru v Agip (K) Ltd

High Court, at Nairobi July 9, 1986

Cockar J

Civil Application No 519 of 1979

Employment – summary dismissal – of employee – dismissal for neglect of duty and incompetence – employer alleging failure of employee to exercise supervision over unqualified colleague - employer suffering loss due to wrong performance of work – whether dismissal of employee justified – whether employee liable to employer for the loss.

The plaintiff, who was an employee of the defendant company, sued it for damages for his summary dismissal from employment.

In its defence, the defendant attributed the plaintiff’s dismissal to his contravention of express or implied instructions and an incident was narrated in which the plaintiff had allegedly failed to supervise an inexperienced and unqualified colleague who was loading off the defendant’s fuel from a tank wagon so that the fuel was contaminated causing the defendant to incur a loss of Kshs 50,832.24. The defendant further claimed that the plaintiff lacked reasonable competence in the performance his duties and counterclaimed for the loss it had allegedly suffered due to the plaintiff’s faults.

Held:

1. The plaintiff had not been reasonably competent to perform his duties, had been habitually neglectful in the performance of his duties, had failed to perform those duties with due care and attention and had been unfaithful to his employer.

2. The defendant had good grounds to dismiss the plaintiff and that dismissal was justified.

3. The plaintiff was liable for damages and loss caused to the defendant through his negligence.

Suit dismissed, defendant given judgment on counterclaim.

Cases

No cases referred to.

Statutes

No statutes referred.

Advocates

Mr Kaai for the Plaintiff.

Mr Mohammed for the Defendant.

Waindi v Pharmaceutical Manufacturing Co Ltd & another

High Court, at Nairobi April 25, 1986

Cockar J

Civil Application No 1624 of 1979

Negligence– road traffic accident– plaintiff pedestrian knocked down by defendant’s vehicle while on the road – plaintiff inability to recall how accident happened – plaintiff’s failure to use a pedestrian foot-bridge – whether defendant negligent – whether plaintiff entitled to compensation.

The plaintiff, who was knocked down by the defendant’s motor vehicle, sought compensation from the defendant and his driver (the second defendant) claiming that the accident was a result of the defendant’s negligence.

The defendant however refuted negligence on his part stating that the plaintiff had so suddenly emerged onto the vehicle’s path that there was nothing that could have been done to avoid the accident.

It transpired during the trial that the plaintiff could not recollect how the accident had occurred and that she had failed to use a pedestrian’s footbridge which had been built over the road.

Held:

1. The court was unable to place any reliance on the evidence of the plaintiff on the events immediately preceding the accident particularly as they regarded her actions.

2. In the circumstances, the court was satisfied that the accident had happened in the manner described by the second defendant.

3. Because at the time of the accident the foot-bridge was in use, a driver of ordinary common sense, reason or prudence would in such circumstances not expect pedestrians to be on the road.

4. The accident had been made inevitable by the action of the plaintiff herself.

Suit dismissed.

Cases

No cases referred to.

Statutes

No statutes referred.

Advocates

Mr O Otieno for the Plaintiff

Mr M Rana for the Defendant