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ELCDismissedNotice of Motion dated 23rd September 2020 in Nairobi HCCC No. 337 of 1998 (consolidated suit)· [2022] KEELC 1340 (KLR)

Mavoloni Company Limited v Land Registrar, Thika District & 3 others;Agricultural Finance Corporation Green Acres Vegetable & Flower & another (Interested Parties) [2022] KEELC 1340 (KLR)

Environment and Land Court
21 February 2022
1,903 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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The court refused to strike out the land dispute suit, ruling that companies sued in Kenya don't need to prove directors authorized the defence.

What this practically means

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Executive summary

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This was a ruling on the Plaintiff's Notice of Motion dated 23rd September 2020 seeking to strike out the 2nd Interested Party's suit and all its pleadings, and to compel its directors to attend court to confirm that they authorized Joseph Muisyo Nzioka to institute the suit and sign pleadings. The Plaintiff argued that Nzioka was neither the Managing Director nor authorized, rendering the pleadings scandalous, frivolous, vexatious and an abuse of process under Order 2 Rule 15(1) of the Civil Procedure Rules, 2010. The 2nd Interested Party opposed, explaining that Nzioka was its director and Managing Director and that his name had been misspelt in the CR12; it maintained that the application was a diversionary tactic to delay the main dispute. Christine Ochieng J framed a single issue: whether the 2nd Interested Party's suit against the Plaintiff should be struck out with costs. Relying on Delphis Bank v Caneland, D.T. Dobie v Muchina and Johnstone Ogada Vikiru v Nathan Kaduka, the court held that striking out is drastic and triable issues existed. Noting that the instant suit had been consolidated with Nairobi HCCC No. 337 of 1998 - in which the Plaintiff itself had sued the 2nd Interested Party as 3rd Defendant - and following Saraf Limited v Augusto Arduin, the court held that a sued company need not prove board authorization, and that consolidated suits are one. Reliance on the name discrepancy was rejected as a technicality contrary to Article 159(2)(d). The application was dismissed with costs in the cause.

Key legal issues

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01

Whether the 2nd Interested Party's suit and pleadings should be struck out under Order 2 Rule 15(1) of the Civil Procedure Rules

Holding

The application to strike out was dismissed; triable issues exist and striking out is a drastic measure

Reasoning

The court applied Order 2 Rule 15(1) and the D.T. Dobie principle that striking out powers must be exercised sparingly and without embarking on the merits. The 2nd Interested Party, joined in 2011 and confirmed as current registered proprietor of the suit land, raised triable issues. Because the suit was consolidated with HCCC No. 337 of 1998 in which the Plaintiff itself sued the 2nd Interested Party, striking out was impermissible. Reliance on a name discrepancy on the CR12 was a technicality contrary to Article 159(2)(d) of the Constitution.

p. 2
02

Whether a company must demonstrate board authorization to file or defend pleadings

Holding

No proof of board authorization is required for a sued company to defend a suit

Reasoning

Following Saraf Limited v Augusto Arduin, the court held that authorization by directors or shareholders need not be demonstrated by a company facing suit. The CR12 annexed to the Plaintiff's application confirmed that Joseph Muisyo Nzioka was a director, and the name discrepancy was corrected at the Company Registry. Any question of actual instructions was a matter of evidence for the hearing, not for a striking-out application.

p. 3
03

Effect of consolidation of the suits

Holding

Consolidated suits are one; the court could not strike out pleadings in one limb of the consolidated suit

Reasoning

Relying on Prem Lala Nahata v Chandi Prasad Sikaria on the purpose of consolidation and Johnstone Ogada Vikiru v Nathan Kaduka, the court held that the 1998 suit and the instant suit, consolidated by Justice E K Ogola on 3rd October 2014, became one cause. Since the Plaintiff itself had sued the 2nd Interested Party as 3rd Defendant in the consolidated suit, it could not seek to strike out that same suit.

p. 2

Legal principles established

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  • A limited liability company sued need not furnish proof that its Board of directors or shareholders authorized it to defend the suit
  • Once suits are consolidated they are treated as one cause or matter; a party who sued another in the consolidated suit cannot have that party's pleadings struck out in the consolidated proceedings

Court orders

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  1. 1.The Notice of Motion application dated 23rd September, 2020 is dismissed
  2. 2.Costs will be in the cause

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 2 Rule 15(1)
  • Constitution of Kenya, 2010Article 159(2)(d)

Cases cited (13)

  • Anspar Beverages Limited Vs Development Bank of Kenya Limited, East African Development Bank, International Finance Corporation, Abn Amro Bank N.V
    (2003) eKLR
  • Affordable Homes Limited Vs Ian Henderson & 2 Others
    (2004) eKLR
  • Masole Enterprises Limited & 7 Others V Shakhalaga Khwa Jirongo & Another
    (2018) eKLR
  • Saraf Limited V Augusto Arduin
    (2016) eKLR
  • DT Dobie & Company (Kenya) Limited V Joseph Mbaria Muchina & Another
    (1980) eKLR
  • GBM Kariuki V Nation Media Group Limited & 3 others
    (2012) eKLR
  • Kenya Power & Lighting Company Limited V American Life Insurance Company (K) Limited
    (2015) eKLR
  • Charo Hassan Nyange V Mwashetani Hatibu & 3 Others
    (2014) eKLR
  • Rotam Agrochemical Co. Limited V Twiga Chemical Industries Limited
    (2012) eKLR
  • Private Developers Co. Ltd V Rebecca Ngonyo & 2 others
    (2018) eKLR
  • Delphis Bank Limited v Caneland Limited
    [2014] eKLR
  • PREM LALA NAHATA & ANOTHER VS CHANDI PRASAD SIKARIA
    (2007) 2, SUPREME COURT CASES 551
  • Johnstone Ogada Vikiru V Nathan Kaduka
    [2011] eKLR
Jurisdiction invoked
Original civil jurisdiction; Civil Procedure Rules, 2010, Order 2 Rule 15(1)

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, "Mavoloni Company Limited v Land Registrar, Thika District & 3 others;Agricultural Finance Corporation Green Acres Vegetable & Flower & another (Interested Parties) [2022] KEELC 1340 (KLR)", Case Analysis (2022). Notice of Motion dated 23rd September 2020 in Nairobi HCCC No. 337 of 1998 (consolidated suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1340/eng@2022-02-21

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