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ELCPartially Allowed· [2021] KEELC 1311 (KLR)

Watamu Sailfish Limited v Emmanuel Charo Tinga & 2 others [2021] KEELC 1311 (KLR)

Environment and Land Court of Kenya
28 October 2021
4,283 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court ruled a company's suit survives even without a board resolution filed upfront, and froze a disputed Watamu property via status quo.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Malindi (M.A. Odeny, J) determines a notice of motion dated 2nd June 2021 by the plaintiff seeking interim injunctions restraining the defendants from making entries on, transferring or dealing with the title of L.R. No. 944 (Original Number 655/1 Watamu Township) and restraining the 1st defendant from advertising or selling the suit property. The 1st defendant, a director and member of the plaintiff company who claims to have bought the land for Kshs. 10,000,000/-, filed a preliminary objection under Order 4 Rule 1(4) of the Civil Procedure Rules arguing the suit was instituted without a board resolution and should be struck out. The court framed two issues: whether failure to file board resolutions at institution of a suit by a company is detrimental to the suit, and whether the plaintiff satisfied the conditions for an interlocutory injunction. On the first, relying on Mavuno Industries v Keroche Industries and the overriding objective under Article 159, the court held that Order 4 rule 1(4) does not require the resolution to be filed with the plaint, striking out is a draconian remedy reserved for hopeless cases, and the resolution may be filed before hearing; the preliminary objection was dismissed with costs. On the second, applying Giella v Cassman Brown, the court found a triable issue as to how land originally registered in the plaintiff's name was transferred to the 1st defendant, with conflicting accounts of developments on the land. Rather than grant the injunction, the court issued an order of status quo to preserve the substratum of the case, directed the parties to fast track the main suit, and ordered costs of the application in the cause.

Key legal issues

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01

Whether failure to file a board resolution at the institution of a suit by a company is fatal to the suit

Holding

Not fatal; the resolution may be filed any time before the suit is fixed for hearing and the preliminary objection was dismissed with costs

Reasoning

Order 4 rule 1(4) of the Civil Procedure Rules requires a verifying affidavit sworn by an authorised officer but does not state that the resolution must be filed with the plaint. Authorities establish the resolution may be filed before hearing. Striking out is draconian and reserved for hopeless cases; Article 159 of the Constitution obliges the court to do justice without undue regard to technicalities and the overriding objective favours sustaining suits.

p. 4
02

Whether the plaintiff satisfied the Giella conditions for an interlocutory injunction

Holding

The court did not grant the injunction; instead it issued an order of status quo to preserve the substratum of the case pending the hearing of the main suit

Reasoning

It is not disputed the land was once registered in the plaintiff's name and was later transferred to the 1st defendant; how that happened is a triable issue. The parties give conflicting accounts of developments on the land, and the photographs were disputed and challenged under section 106B of the Evidence Act. Given the conflict, preservation of the status quo rather than an injunction was appropriate, with the parties directed to fast track the main suit.

p. 5

Legal principles established

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  • Failure to file a board resolution with the plaint does not invalidate a suit; the resolution may be filed at any time before the suit is fixed for hearing
  • Striking out a suit is a draconian measure to be used sparingly and only in hopeless cases
  • Preliminary objections cannot be raised where what is sought is the exercise of judicial discretion
  • Temporary injunctions preserve the substratum of the case so it is not rendered nugatory

Court orders

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  1. 1.The 1st defendant's preliminary objection dated 30th June 2021 is dismissed with costs to the plaintiff.
  2. 2.An order of status quo is issued pending the hearing and determination of the main suit.
  3. 3.Parties to fast track the hearing of the main suit.
  4. 4.Costs of the application in the cause.

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 4 Rule 1(1),(2),(4),(6)
  • Civil Procedure Rules, 2010Order 40 Rule 1
  • Civil Procedure Rules, 2010Order 21 [1]
  • Constitution of Kenya, 2010Article 159
  • Constitution of Kenya, 2010Article 40
  • Land Registration Act, 2012Sections 24, 25 and 26
  • Evidence Act, Cap 80Section 106B
  • Civil Procedure ActSections 1A and 1B (overriding objective)
  • Appellate Jurisdiction ActSections 3A and 3B
  • Public Order No. 2 of 2021 and CJ circular dated 28th March 2021 (Covid-19 court operations measures)-

Cases cited (17)

  • Affordable Homes Africa Ltd v Henderson & 2 others
    [2004] eKLR
  • SHAW & SONS (SALFORD) LTD. v. SHAW
  • SALOMON & CO. LTD. v. SALOMON
    [1897] A.C. 22 H.L.
  • Leo Investments Ltd vs. Trident Insurance Co. Ltd
    (2014) eKLR
  • Republic vs. Registrar General and 13 others
    (2015) eKLR; Misc. Application No. 67 of 2005 [2005] eKLR
  • East Africa Safari Air Ltd vs. Antony Ambaka Kegodre & Another
    (2011) eKLR
  • Giella vs Cassman Brown & Company Limited
    (1973) E A 358
  • American Cyanamid v. Ethicon Limited
    [1975] AC 396
  • Mavuno Industries Limited & 2 Others Vs Keroche Industries Limited
    [2012] eKLR
  • D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another
    [1980] eKLR
  • Stephen Boro Gitiha v Family Finance Building Society & 3 others
    [2009] eKLR
  • Faith & Hope Properties Kenya Ltd v James Muchiri Waweru & another
    [2021] eKLR
  • Assia Pharmaceuticals vs. Nairobi Veterinary Centre Ltd.
    Nairobi (Milimani) HCCC No. 391 of 2000
  • Mukisa Biscuits Manufacturing Co. Ltd. v West End Distributors Limited
    (1969) EA 696, 701
  • Kenleb Cons Ltd vs New Gatitu Service Station Ltd & another
    (1990) eKLR
  • Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 others
    [2016] eKLR
  • R. J. R. Macdonald Vs. Canada (Attorney General)
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the suit land; application brought under Order 40 Rule 1 of the Civil Procedure Rules, 2010

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, "Watamu Sailfish Limited v Emmanuel Charo Tinga & 2 others [2021] KEELC 1311 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1311/eng@2021-10-28

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