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Court of AppealPartially AllowedCivil Appeal No. 247 of 2005· [2013] KECA 204 (KLR)

Mabachi & another v Nurtun Bates Ltd (Civil Appeal 247 of 2005) [2013] KECA 204 (KLR)

Court of Appeal
4 October 2013
KKKihara KariukiPhilomena Mbete MwiluP. M. MwiluSKS. Gatembu Kairu
2,683 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed you cannot sue an agent personally when the principal company was disclosed—unless you first plead reasons to lift the corporate veil.

What this practically means

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Executive summary

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This interlocutory appeal from the High Court (Kasango, J.) concerned the dismissal of the appellants' application to strike out Nurtun Bates Limited's suit against them as vexatious, frivolous and an abuse of process. The respondent had sued Mediacom East Africa Limited and the appellants jointly and severally for Kshs. 1,789,529.00 in agency commissions, contending that the appellants negotiated and signed the relevant contracts and were personally liable. The High Court held the evidence did not establish agency and that the power to strike out under Order 6 Rule 13 is drastic and to be exercised sparingly. The Court of Appeal distilled two issues: whether the appellants were disclosed agents of Mediacom, and whether their joinder breached the principle that an agent of a disclosed principal cannot be sued. The Court found, on the respondent's own plaint and the record, that the appellants were disclosed agents of Mediacom. Relying on the Wareheim decision, which it declared still holds good, it held that absent factors vitiating the principal's liability, the joinder of the agents was unwarranted. Mediacom's corporate personality was not in issue in the pleadings, and the respondent's plaint itself averred that Mediacom was a limited liability company under Cap 486; a company is a separate legal person distinct from its directors and agents unless the veil is properly lifted. The appeal was allowed and the suit against the appellants struck out with costs. The decision binds subordinate courts on the rule that a disclosed agent is not to be sued absent grounds for lifting the corporate veil.

Key legal issues

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01

Whether the appellants were disclosed agents of Mediacom East Africa Ltd

Holding

Yes. The plaint and the record were dispositive: the appellants negotiated and signed the agreements on behalf of Mediacom and disclosed the principal to the respondent.

Reasoning

The Court examined paragraph 7 of the respondent's own plaint, which described the appellants as Mediacom's agents. It found that the appellants negotiated and signed the agreements relied on by the respondent on behalf of Mediacom, and that the record demonstrated disclosure of the principal to the respondent. It therefore agreed with the appellants that they were agents of a disclosed principal.

p. 4
02

Whether the appellants' joinder breached the principle that an agent cannot be sued where there is a disclosed principal

Holding

Yes. The appellants ought not to have been joined; the suit against them should be struck out.

Reasoning

Relying on the Wareheim principle, which the Court reaffirmed as still holding good, it held that absent factors vitiating the principal's liability, an agent of a disclosed principal cannot be sued. The respondent's own plaint averred that Mediacom was a limited liability company, and its corporate status was not in issue in the pleadings; a company is a separate legal person distinct from its directors and agents unless the veil is properly lifted, which was not pleaded.

p. 5

Legal principles established

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  • Where the principal is disclosed, the agent is not to be sued; joinder of a disclosed agent in a suit is unwarranted absent factors vitiating the principal's liability.
  • A body corporate has a separate independent legal identity distinct from its shareholders, directors and agents unless there are factors warranting lifting of the veil.

Court orders

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  1. 1.The appeal is allowed
  2. 2.The suit as against the appellants in the High Court is struck out with costs

Authorities

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Legislation

  • Civil Procedure RulesOrder 6 Rule 13(1)(b) and (d)
  • Civil Procedure RulesOrder 1 Rule 1
  • Civil Procedure RulesOrder 10 Rule 2
  • Civil Procedure ActSection 3A
  • Laws of Kenya (Companies legislation)Cap 486

Cases cited (2)

  • Anthony Francis Wareheim t/a A. F. Wareheim & 2 Others vs Kenya Post Office Savings Bank
    Civil Application Nos. Nai 5 and 48 of 2002 (consolidated)
  • Jones & Another vs. Lipman & Another
    (1962) 1 W.L.R 833
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 149 of 2004
Jurisdiction invoked
First appellate jurisdiction over an interlocutory appeal from the High Court (Civil Procedure Act and Rules; Court of Appeal Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (15)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mabachi & another v Nurtun Bates Ltd (Civil Appeal 247 of 2005) [2013] KECA 204 (KLR)", Case Analysis (2013). Civil Appeal No. 247 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/204/eng@2013-10-04

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