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ELCDismissed· [2021] KEELC 248 (KLR)

Raymark Limited v John Lokorio [2021] KEELC 248 (KLR)

Environment and Land Court
16 December 2021
JMJ M Mutungi
1,533 words in judgment
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The bottom line

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A Kenyan court confirmed that a company can file its board resolution authorising a lawsuit after filing the case, so long as it is done before the hearing.

What this practically means

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Executive summary

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The defendant filed a preliminary objection dated 20th February 2021 contending that the plaintiff company did not file a board resolution at the inception of the suit authorizing its institution, the appointment of Ashitiva Advocates LLP, and Joseph Njore Karanja's swearing of the verifying affidavit, as required by Order 4 Rule 1(4) of the Civil Procedure Rules. The defendant sought striking out of the suit. The plaintiff countered that a board resolution may be filed at any time before the suit is fixed for hearing. The court found the objection raised a pure point of law satisfying the Mukisa Biscuit threshold. However, on the merits, the court noted that the plaintiff had, at filing, annexed a letter of authority under seal executed before two directors authorizing Karanja to execute documents including verifying affidavits. Relying on Leo Investments Ltd v Trident Insurance Co. Ltd and Spire Bank Ltd v Land Registrar, the court held that absence of a formal board resolution at filing is not fatal, the rule aiming only to prevent unauthorized persons litigating for companies. The plaintiff's board resolution filed on 28th September 2021, though after the objection was taken but before hearing, cured any defect. Invoking Article 159(2)(d) and section 19(1) of the Environment and Land Court Act, the court dismissed the preliminary objection with costs to the plaintiff.

Key legal issues

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01

Whether absence of a board resolution at inception invalidates a corporate plaintiff's suit under Order 4 Rule 1(4)

Holding

It does not; the resolution can be filed any time before hearing and such a defect is curable

Reasoning

Relying on Leo Investments and Spire Bank, the court held the rule's purpose is to prevent unauthorized persons instituting suits for companies, not to defeat suits on technicality. A letter of authority under seal was filed with the plaint, and the board resolution was later filed before hearing, curing any defect without prejudice to the defendant.

p. 2
02

Whether a preliminary objection under Mukisa Biscuit principles was properly raised

Holding

Yes, it raised a pure point of law under Order 4 Rule 1(4)

Reasoning

The court accepted the objection was founded on a provision of law and satisfied the Mukisa Biscuit threshold, since it required no ascertainment of facts or exercise of discretion. However, on the merits the objection failed because authorization existed and any procedural defect had been cured.

p. 1

Legal principles established

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  • A board resolution authorizing institution of a suit by a corporate plaintiff may be filed at any time before the suit is fixed for hearing; its absence at filing is not fatal
  • Order 4 rule 1(4) was not intended as a procedural technicality to strike out suits absent evidence that the officer was unauthorized

Court orders

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  1. 1.The defendant's preliminary objection dated 20th February 2021 is dismissed
  2. 2.Costs of the preliminary objection to the plaintiff

Authorities

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Legislation

  • Civil Procedure RulesOrder 4 Rule 1(4)
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Environment and Land Court Act, 2011Section 19(1)

Cases cited (9)

  • Ibacho Trading Company Limited v Samuel Aecha Ondora & 3 others
    [2017] eKLR
  • Kenya Commercial Bank Limited v Stage Coach Management Ltd
    [2014] eKLR
  • Directline Assurance Company Limited v Tomson Ondimu
    [2019] eKLR
  • Fidelity Commercial Bank Limited v Simon Maina Gachie
    [2016] eKLR
  • Republic v Registrar General & 13 others
    [2015] eKLR
  • Mukisa Biscuit Manufacturing Co. Ltd –vs- West End Distributors Ltd
    (1969) EA 696
  • Leo Investments Ltd v Trident Insurance Company Ltd
    (2014) eKLR
  • Republic vs. Registrar General and 13 Others Misc. Application No. 67 of 2005
    [2005] eKLR
  • Spire Bank Limited v Land Registrar & 2 others
    [2019] eKLR
Jurisdiction invoked
Environment and Land Court Act, 2011 (section 19(1)); Article 159(2)(d) of the Constitution

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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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, "Raymark Limited v John Lokorio [2021] KEELC 248 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/248/eng@2021-12-16

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