Defined Property Management Ltd & 11 others v Hassan Said Omar & another [2015] KEELC 780 (KLR)
The bottom line
#Kenya's Environment and Land Court refused to strike out a company's suit over a defective affidavit, but denied the tenants' injunction and Kshs 50.7 million security demands.
What this practically means
#Executive summary
#Key legal issues
#Whether the verifying affidavits sworn by principal officers without authorities under seal warranted striking out the plaint as against the 1st, 4th, 8th and 11th Plaintiffs
The verifying affidavits were defective for want of authorities under seal, but the defect did not render the suits incompetent; the companies subsequently filed sealed authorizations and striking out would offend Article 159(2)(d) and the overriding objective
Order 4 rule 1(4) requires a corporation's verifying affidavit to be sworn by an officer authorized under the company seal. The affidavits here lacked such authorities, but the sealed resolutions were later filed on 1st October 2012. Order 4 rule 1(6) is discretionary, not mandatory. Following Akaba Investments Ltd v Kenrod Ltd, the court held the defect curable and declined to strike out, directing fresh verifying affidavits within 10 days.
Whether an interlocutory injunction should issue restraining dealings with L.R. No. 2/206 Kilimani
No - the property had been converted to Nairobi/Block 17/318 and transferred, rendering the injunction incapable of enforcement, and the plaintiffs' claim is for damages which would be an adequate remedy
Applying the Giella v Cassman Brown conditions, an applicant must show a prima facie case and irreparable harm not compensable by damages. The plaintiffs' pleadings show their claim is for damages and they do not claim ownership or possession. Further, the suit property no longer exists under the pleaded title, having been converted and transferred, so any injunction could not be enforced.
Whether the 2nd Defendant should deposit Kshs. 50,762,575/- as security
No - the plaintiffs failed to establish the statutory preconditions under Order 39, particularly intent by the 2nd Defendant to obstruct or delay execution
Order 39 governs arrest and attachment before judgment where a defendant intends to delay or obstruct execution of a decree. The plaintiffs merely alleged an unquantified loss and provided no evidence of intent to defeat a decree; the application was filed simultaneously with the plaint, imposing a high burden they did not discharge.
Whether the suit should be consolidated with HC ELC No. 259 of 2012
No - although the suits concern the same property, the issues and evidence are distinct and trial together would be inconvenient
The present suit concerns damages for alleged unlawful eviction, while HC ELC No. 259 of 2012 principally concerns ownership of the suit property among additional parties. The evidence to be led in each suit is different, so concurrent trial would serve no purpose.
Legal principles established
#- A corporation must authorize institution of a suit through its corporate seal or a board/shareholders resolution; a verifying affidavit sworn without such authority under seal is defective but does not necessarily render the suit incompetent
- A defective verifying affidavit can be cured by filing a fresh verifying affidavit annexing a duly sealed authority, in line with the overriding objective and Article 159(2)(d)
- Section 181 of the Companies Act protects acts of directors with defective appointment or qualification and does not cure a lack of authority to commence a suit
- An injunction cannot be granted where it is incapable of enforcement or implementation
- A party seeking security for a future decree under Order 39 must prove the defendant's intent to obstruct or delay execution
Court orders
#- 1.The 2nd Defendant's Notice of Motion dated 24th September 2012 seeking striking out of the plaint as against the 1st, 4th, 8th and 11th Plaintiffs is declined
- 2.The 1st, 4th, 8th and 11th plaintiffs to file and serve fresh verifying affidavits exhibiting the sealed authorizations within 10 days of the ruling
- 3.The plaintiffs' application dated 31st July 2012 is dismissed
- 4.Each party to meet their own costs of the applications
- Jurisdiction invoked
- Civil Procedure Act (Cap 21), sections 1A, 1B, 3A and 63, and Orders 39, 40 and 51 of the Civil Procedure Rules 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Defined Property Management Ltd & 11 others v Hassan Said Omar & another [2015] KEELC 780 (KLR)", Case Analysis (2015). Not stated in judgment (suit concerning L.R. No. 2/206 Kilimani, Nairobi; related suit HCCC/HC ELC No. 259 of 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2015/780/eng@2015-02-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.