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ELCStruck OutNot stated in judgment· [2021] KEELC 1258 (KLR)

Golden Mile Park Management Limited v Dreyan Investment Limited [2021] KEELC 1258 (KLR)

Environment and Land Court
21 October 2021
925 words in judgment
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The bottom line

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A Kenyan company lost its entire land dispute because no board resolution authorized the lawsuit, the deponent, or its lawyers.

What this practically means

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Executive summary

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The plaintiff, Golden Mile Park Management Limited, moved the court by notice of motion dated 26th May 2021 seeking an interlocutory injunction restraining the defendant from undertaking construction work on LR No. 5990/9 pending the hearing and determination of the suit. The application was supported by an affidavit of Stephen Tutu Kariithi. The defendant responded with a preliminary objection dated 8th June 2021, contending that the suit was filed without authorization of the plaintiff company, that no resolution authorized the institution of the suit, that the deponent was not a director or authorized agent, and that no resolution appointed the firm of Kamuti Waweru & Company Advocates. The court directed that the objection be heard first, by written submissions. Relying on the CR12 produced by the defendant, the court found the plaintiff was incorporated under the Companies Act, 2015, and could only sue with the sanction of its board of directors or a resolution in general or special meeting. Applying Mukisa Biscuits Manufacturing Ltd v West End Distributors Ltd and Saraf Ltd v Augusto Ardum, the court held the objection raised pure points of law and that, absent any board resolution, both the deponent and the advocates lacked authority. Upholding the preliminary objection, the court struck out the notice of motion and the entire suit, awarding costs to the defendant.

Key legal issues

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01

Whether the suit and application were incompetent for want of authorization by the plaintiff company

Holding

Yes - the plaintiff is a company under the Companies Act, 2015; in the absence of a board resolution authorizing the suit, the deponent and the advocates lacked authority, and the preliminary objection succeeded

Reasoning

The CR12 showed the plaintiff was incorporated under the Companies Act, 2015, whose directors hold authority to act for the company. No resolution authorizing the institution of the suit, the deponent's affidavits, or the firm of advocates was annexed to the plaint. The objection raised pure points of law requiring no ascertainment of facts or exercise of discretion, and was therefore upheld, resulting in striking out the motion and the entire suit with costs.

p. 2
02

Whether the preliminary objection was properly raised as a pure point of law

Holding

Yes - following Mukisa Biscuits, the court found the objection raised pure points of law

Reasoning

Applying the classic test in Mukisa Biscuits Manufacturing Ltd v West End Distributors Ltd, the court held that an objection based on the absence of a company resolution need not ascertain any facts or exercise judicial discretion. The CR12 conclusively established incorporation under the Companies Act, 2015, and the absence of the required resolution was apparent on the face of the record, satisfying the demurrer standard.

p. 2

Legal principles established

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  • A limited liability company can only sue in its own name with the sanction of its board of directors or by a resolution in a general or special meeting
  • A preliminary objection raises a pure point of law argued on the assumption that all facts pleaded by the other side are correct

Court orders

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  1. 1.The preliminary objection is upheld
  2. 2.The Notice of Motion dated 26th May 2021 is struck out with costs to the Defendant
  3. 3.The entire suit is struck out with costs to the Defendant

Authorities

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Legislation

  • Companies Act2015
  • Sectional Properties Act2020

Cases cited (2)

  • Mukisa Biscuits Manufacturing Ltd vs West End Distributors Ltd
    [1969] EA 696
  • Saraf Ltd vs Augusto Ardum
    [2016] eKLR
Jurisdiction invoked
Original civil jurisdiction over the suit land; not expressly stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Golden Mile Park Management Limited v Dreyan Investment Limited [2021] KEELC 1258 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1258/eng@2021-10-21

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