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ELCStruck OutELC Case No. 254 of 2015· [2020] KEELC 1265 (KLR)

Asmuhar Developers Limited v Abdalla Nzaro & 50 others [2020] KEELC 1265 (KLR)

Environment and Land Court
29 September 2020
NMN. A. Matheka
1,453 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan company lost its land dispute before trial because it filed the lawsuit without a board resolution authorizing the case.

What this practically means

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Executive summary

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The plaintiff, a limited liability company, sued Abdalla Nzaro and 50 others for vacant possession of LR No. 4826/I/MN at Mwembe Legeza, Bamburi, Mombasa, together with a permanent injunction and, in default, an eviction order, alleging that the defendants had encroached upon and erected structures on the right-hand side of the Bamburi Factory-Kiembeni road without consent. The plaintiff traced title through a deed of partition dated 24th January 1989 and a transfer to the company in 1990, and asserted that some 30 portions had been sold, 27 of them registered. The defendants were served by newspaper advertisement but neither entered appearance nor filed a defence. The court, however, addressed a preliminary point of law before reaching the merits: a suit instituted for and on behalf of a company requires a company resolution authorizing it. Relying on Assia Pharmaceuticals, Affordable Homes Africa and Philomena Ndanga Karanja, the court found that no resolution authorizing institution of the suit had been lodged in the court file and that no letter of authority for the verifying affidavit was exhibited. Further, PW1's claimed directorship was unproved, and Hirji Karsan Patel, who swore the verifying affidavit, never testified; PW1's locus standi was accordingly not established. The court held there was no reason to descend into the merits and struck out the suit, with no orders as to costs since it was undefended.

Key legal issues

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01

Whether the suit was properly instituted on behalf of the plaintiff company

Holding

The suit was not properly instituted: no board resolution authorizing the institution of the suit was lodged in court, and no letter of authority pursuant to which the verifying affidavit was sworn was exhibited

Reasoning

The court applied the settled principle that a suit filed for and on behalf of a company requires a company resolution. Perusing the court file, the judge found no resolution lodged and no letter of authority for the verifying affidavit. Following Assia Pharmaceuticals, Affordable Homes Africa and Philomena Ndanga Karanja, suits commenced without such authority are struck out because the company is not properly before the court.

p. 2
02

Whether PW1's locus standi was established

Holding

PW1's locus standi was not established; the claim of directorship was not proved and the verifying deponent, Hirji Karsan Patel, never testified

Reasoning

PW1 claimed to be a co-director with Hirji Patel and to have assumed directorship from his mother, but no evidence was adduced to establish these claims. The person who swore the verifying affidavit never testified. Since the point was a preliminary one of law, the court declined to descend into the merits and struck out the suit.

p. 2

Legal principles established

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  • Where a suit is instituted for and on behalf of a company, there must be a company resolution authorizing the institution of the suit
  • In the absence of a board resolution sanctioning commencement of the action, the company is not before the court and the suit must be struck out

Court orders

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  1. 1.The suit is struck out
  2. 2.No orders as to costs, since the suit was undefended

Authorities

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Cases cited (5)

  • Signon Co-operative Savings and Credit Society Limited vs. Kiriga & 3 others
    (2019) eKLR
  • Sophie Wanjiku John vs. Jane Mwihaki Kimani
    (2013) eKLR
  • Assia Pharmaceuticals vs. Nairobi Veterinary Centre Ltd
    Nairobi (Milimani) HCCC No. 391 of 2000
  • Affordable Homes Africa Limited vs Ian Henderson & 2 Others
    HCCC No. 524 of 2004
  • Philomena Ndanga Karanja & 2 Others vs Edward Kamau Maina
    ELC No. 1411 of 2014
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a claim for vacant possession, eviction and injunction relating to LR No. 4826/I/MN

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, "Asmuhar Developers Limited v Abdalla Nzaro & 50 others [2020] KEELC 1265 (KLR)", Case Analysis (2020). ELC Case No. 254 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/1265/eng@2020-09-29

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