JOSEPH NDUNGU vs ONESMUS MBUGUA [1983] KECA 107 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a partner who withdraws partnership funds must account for the other partner's half, especially where he admits the withdrawals.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned judge erred in ordering the appellant to account for shs. 44,000 without the partnership accounts first being taken
- 2.Whether the judge could act on the appellant's admission of withdrawals from the partnership account and the consent order for taking accounts
- 3.Whether the distributions of partnership assets ordered by the High Court should stand
Key legal issues
#Whether the accounts had to be formally taken before an order to account could be made
No - the consent order governed, and the advocates appointed had reported there were no accounts to take, leaving only distribution of assets.
The parties themselves had, by consent, directed how accounts were to be taken, including the cheques totalling shs. 43,000. Their advocates reported that no accounts existed to be taken. The appellant admitted withdrawing shs. 24,000 and shs. 20,000 into his personal savings account. On the appellant's own admission the judge could order him to account for half of shs. 44,000, since only half was lawfully his under the equal partnership.
Whether the appellant proved the shs. 19,000/22,000 was the proceeds of his wheat
The learned judge did not believe the money was the proceeds of the appellant's wheat, and the appellant was unable to prove the funds were used for partnership purposes.
Chesoni Ag JA noted the appellant admitted in evidence that he used two signed blank cheques to withdraw shs. 24,000 and shs. 20,000 from the Barclays Bank partnership account. The burden lay on him to show the money was for partnership use to be distributed; he failed to discharge it. The trial judge's finding that the sum was not the proceeds of the appellant's wheat was therefore open to him.
Legal principles established
#- A trial court may act on a consent order recorded by the parties themselves for the taking of accounts, and on a party's own admission of withdrawals from a partnership account.
- A partner who clandestinely withdraws partnership funds into his personal account is bound to account to the other partner for the other partner's half share.
Court orders
#- 1.Appeal dismissed
- 2.Appellant to pay costs of the appeal
- 3.Judgment of the High Court (accounting for shs. 22,000, sale of remaining partnership assets and equal division of proceeds) affirmed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the leading judgment holding the appeal devoid of merit because the learned judge acted in accordance with the consent order and the appellant had admitted withdrawing shs. 44,000 from the partnership account; recommended dismissal with costs.
The learned judge acted in accordance with the terms of the consent order recorded by the parties themselves.p. 1
Wrote the judgment
Separate judgment agreeing the appellant failed to prove the withdrawn funds were applied for partnership purposes and that the appeal had no merit.
There is no merit in this appeal and I fully agree wit the judgement proposed by Madan J A which I have had the advantage of reading that this appeal should be dismissed with costs.p. 2
- On appeal from
- High Court of Kenya at Nakuru
- Civil Suit No 164 of 1977
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court (Judicature framework; no specific provision quoted in the judgment)
Relief refused
#Appellant's prayer to set aside the order to account for shs. 44,000
The judge acted in accordance with the consent order and the appellant had admitted the withdrawals; only half the sum was lawfully his.
Costs
Appeal dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I would dismiss the appeal with costs.
The sum of shs. 44,000/= was found to have been taken from the partnership banking account by the appellant upon his own admission. Only half that sum was lawfully his.
There is no merit in this appeal and I fully agree wit the judgement proposed by Madan J A which I have had the advantage of reading that this appeal should be dismissed with costs.
I have read the judgements of Madan J A and Chesoni Ag J A and I respectfully agree with them and that the appeal should be dismissed with costs.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "JOSEPH NDUNGU vs ONESMUS MBUGUA [1983] KECA 107 (KLR)", Case Analysis (1983). Civil Appeal 51 of 1983. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1983/107/eng@1983-04-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.