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Court of AppealPartially AllowedCivil Appeal (Mombasa)

Ismail Adam Suleman & another v Nawaz Transport Company [1983] KECA 54 (KLR)

Court of Appeal of Kenya
6 April 1983
5,067 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~20 min to read original · ~4 min brief

The bottom line

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In Kenya, a business name can still be sued even after its owner dies, as long as the business keeps operating under that name.

What this practically means

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Executive summary

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The late Mohamed Haji Mirdor carried on business as Nawaz Transport Company and died on July 20, 1979. His administrators continued running the business under the same registered trade name. The appellant sued the business in that name for unpaid hire charges of Kshs 258,912, serving the first-named administrator with a notice of the capacity of service. After an ex parte judgment, the administrators obtained a ruling from Kneller J setting aside the service, the judgment and the decree, on the ground that the suit was in substance against a dead person and therefore a nullity. The appellant appealed. The Court of Appeal (Madan, Law and Hancox JJA) allowed the appeal. The court held that order XXIX rule 9 of the Civil Procedure Rules, taken from Indian order XXX rule 10, allows a business carried on under an assumed name to be sued in that name; where the sole proprietor dies but the business continues in the same name under his legal representatives, the suit is properly against the business and the decree is not a nullity. The rules of order XXIX apply mutatis mutandis, so service on a person having control or management of the business was valid, the words referring to partnership in the notice being redundant. The court preferred the reasoning of the Calcutta High Court in Jamunaram Poddar Firm v Jamunaram Bhakat, which had not been cited below, and distinguished the Indian and English authorities relied on by the administrators. Policy considerations of commerce, credit and fraud were decisive: administrators who continue a business in its registered name cannot claim the firm ceased to exist to escape its liabilities. The High Court order was set aside and the administrators' motion dismissed with costs payable by them personally, together with the costs of the appeal.

Key legal issues

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01

Whether a suit against a business whose sole proprietor has died is a suit against a dead person and thus a nullity

Holding

No. Order XXIX rule 9 creates a statutory fiction allowing the business to be sued in its trade name; where the business continues in that name, the suit is properly against the business and the decree is not a nullity.

Reasoning

The court adopted the reasoning of the Calcutta High Court in the Jamunaram Poddar Firm case: order XXX rule 10 (mirrored by order XXIX rule 9) was made in the interest of commerce, since merchants dealing by correspondence cannot be expected to know who owns a business carried on under an assumed name. The administrators continued running the business under the registered name, without filing a notice of change under the Registration of Business Names Act, and could not simultaneously enjoy the goodwill of the name and avoid the firm's liabilities.

p. 4
02

Whether the notice of service stating the capacity of service ('as a partner or as a person having the control or management of the partnership business or in both characters') rendered service irregular

Holding

No. The words referring to partnership were redundant and inapplicable and were to be ignored; service on the administrator as a person having control or management of the business was good and valid.

Reasoning

Rule 4 of order XXIX, applicable mutatis mutandis through the enabling words of rule 9, requires notice of the capacity in which a person is served. The administrators knew they were not partners because there was no partnership. The redundant words were included unthinkingly from rule 3(1)(b). The word 'partnership' in rule 6 should be deemed not to exist when the rule applies mutatis mutandis, and a person served with control or management of the business need not appear unless he is a partner.

p. 2
03

The weight of English and Indian authorities on suing a business in an assumed name where the proprietor is dead

Holding

The court was not bound by them; it preferred the Calcutta High Court decision in Jamunaram Poddar Firm v Jamunaram Bhakat, which had not been cited to Kneller J, and distinguished the authorities relied on below.

Reasoning

Madan JA stated he felt free to make his own decision since there was no local precedent. Law JA found the question res integra governed by no Kenyan decision and decided it on principle. Hancox JA distinguished Rampratab v Gavrishankar and Dawson (Bradford) Ltd v Dove as concerning different situations, noted the obiter character of Hari Bhandhu Pal, and found the Oudh case of Hafiz Abdul Razzaq supportive of the appellant.

p. 3

Legal principles established

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  • A person carrying on business in a name or style other than his own may be sued in that name under order XXIX rule 9, and where the sole proprietor dies but the business continues in the same name under his legal representatives, the business remains sueable in that name and the suit is not a nullity.
  • The rules of order XXIX apply to suits under rule 9 mutatis mutandis, so that service on a person having control or management of the business is valid service.
  • Setting aside a decree against an assumed trading name as a nullity would cause hardship, open a door to fraud, and undermine commercial credit.

Court orders

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  1. 1.Appeal allowed with costs
  2. 2.Order of the High Court (Kneller J granting the administrators' application) set aside
  3. 3.Substituted therefor an order dismissing the administrators' notice of motion
  4. 4.Costs of the motion to be paid by the administrators personally
  5. 5.Costs of the appeal to be paid by the administrators
On appeal from
High Court of Kenya at Mombasa
Jurisdiction invoked
Appellate jurisdiction of the Court of Appeal over a ruling of the High Court (order XXIX of the Civil Procedure Rules; appeal against setting aside service of summons and ex parte judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Ismail Adam Suleman & another v Nawaz Transport Company [1983] KECA 54 (KLR)", Case Analysis (1983). Civil Appeal (Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1983/54/eng@1983-04-06

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.