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ELCPartially AllowedNot stated in judgment (plaint dated October 25, 2018, amended March 17, 2021)· [2023] KEELC 297 (KLR)

Kagwe Tea Factory Limted v Kipchoim & 84 others; Kenya Forest Service & 3 others (Interested Parties) (Environment & Land Case 58 of 2018) [2023] KEELC 297 (KLR)

Environment and Land Court
19 January 2023
2,388 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court allowed the Kenya Forest Service to join a land dispute as a second plaintiff, rejecting claims its case needed board resolutions.

What this practically means

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Executive summary

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This is a ruling of the Environment and Land Court at Nyahururu (Angima J) on a notice of motion dated December 18, 2019 by the 1st Interested Party, the Kenya Forest Service (KFS), seeking to be enjoined as 2nd Plaintiff in a suit by a Plaintiff who had contracted in 2016 to purchase 82 parcels of land from the 1st - 82nd Defendants, seeking declarations that the properties formed part of the gazetted Marmanet Forest, that the sale agreements were void for fraud and illegality, cancellation of titles and refund of the 10% deposits. The 2nd and 4th - 82nd Defendants opposed, contending the application was fatally defective for want of three company resolutions under the Companies Act, 2015 (to authorize the advocate, the deponent, and the filing), relying on KCB v Stage Coach Management and Mohamed Suleiman Shee v Suleiman Omar Chala. The court framed three issues. On the first, it held the objection misconceived: KFS is a state corporation established under the Forest Conservation and Management Act, 2016, not a company under the Companies Act, 2015; procurement of legal services is a management function governed by public procurement law; and the resolution requirement derives from Bugerere Coffee Growers v Ssebaduka, no longer good law, as confirmed in Arthi Highway Developers v West End Butchery. On the second issue, applying Order 1 rule 10(2) liberally and relying on Rubina Ahmed v Guardian Bank and JMK v MWM, the court found KFS a necessary party given its statutory mandate over gazetted forests and its interest in recovering the suit properties. Consequential leave to amend the plaint was granted. The court allowed the application, joined KFS as 2nd Plaintiff, allowed 14 days for amended pleadings, made costs costs-in-the-cause, and fixed the suit for pre-trial directions on February 28, 2023.

Key legal issues

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01

Whether the application was fatally defective for want of company resolutions

Holding

The application was not defective; KFS is a state corporation under the Forest Conservation and Management Act, 2016, not a company under the Companies Act, 2015, and the Bugerere line of authority is no longer good law.

Reasoning

The Defendants cited no specific provision of the Companies Act, 2015 allegedly violated and did not show that KFS is incorporated under that Act. KFS is a statutory corporation under the Forest Conservation and Management Act, 2016 and a state corporation. Procurement of legal services is a management function under public procurement law, and the Bugerere resolution requirement has been overruled in Uganda and rejected in Kenya.

p. 3
02

Whether KFS should be joined as 2nd Plaintiff

Holding

Yes. KFS has a legal interest and statutory mandate to conserve, protect and manage gazetted forests and to seek recovery of land it believes was illegally alienated from Marmanet Forest; its presence is necessary for effective adjudication.

Reasoning

Under Order 1 rule 10(2), a person whose presence is necessary to enable the court effectually and completely adjudicate on all questions may be added at any stage. KFS's statutory mandate to conserve and manage public forests gives it a legal interest in the suit properties, and its factual foundation was unchallenged as the objecting Defendants filed only grounds of objection.

p. 5
03

Whether leave to amend the plaint should be granted

Holding

Yes. A consequential amendment was necessary to reflect KFS as 2nd Plaintiff and enable it to plead its case for recovery of the suit properties.

Reasoning

Having found that KFS made out a case for joinder as 2nd Plaintiff, a consequential amendment of the plaint followed naturally so that the joined party could plead its case. The court thus granted leave for amendment, with liberty for the Defendants and other Interested Parties to amend their pleadings within 14 days of service.

p. 5

Legal principles established

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  • A board resolution is not required for a company to instruct counsel or institute proceedings; an authorized director may act for the company.
  • Joinder under Order 1 rule 10(2) should be interpreted liberally and widely to enable complete adjudication of all questions in the suit.

Court orders

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  1. 1.The 1st Interested Party, Kenya Forest Service, is hereby joined as a 2nd Plaintiff in the suit.
  2. 2.The Plaintiffs shall file and serve an amended plaint within 14 days from the date hereof.
  3. 3.The Defendants and the remainder of the Interested Parties shall be at liberty to amend their respective pleadings within 14 days upon service of the further amended plaint.
  4. 4.Costs of the application shall be in the cause.
  5. 5.The suit shall be mentioned on February 28, 2023 for pre-trial directions.

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 1 rule 10(2)
  • Civil Procedure Act (Cap 21)Sections 1A, 1B & 3A
  • Companies Act, 2015Not specified (relied on by Defendants)
  • Forest Conservation and Management Act, 2016Not specified (establishment of KFS)
  • State Corporations ActNot specified

Cases cited (10)

  • Kenya Commercial Bank Ltd -vs- Stage Coach Management Ltd
    [2014] eKLR
  • Mohamed Suleiman Shee & Another -vs- Suleiman Omar Chala & 2 Others
    [2018] eKLR
  • Bugerere Coffee Growers Ltd -vs- Ssebaduka and Another
    [1970] EA 147
  • Arthi Highway Developers Limited -vs- West End Butchery Limited and 6 Others
    [2015] eKLR
  • Tatu Naiga and Emporium -vs- Virjee Brothers Ltd
    Civil Appeal No 8 of 2000
  • United Assurance Co Ltd -vs- Attorney General
    SCCA No 1 of 1998
  • Rubina Ahmed and 3 Others -vs- Guardian Bank Ltd (sued in its capacity as a successor in title to First National Finance Bank Ltd)
    [2019] eKLR
  • Nderitu Wachira Receiver and Manager of Bulleys Tanneries Ltd (Under receivership) & 4 Others -vs- Saraji Enterprises Ltd and Another
    [2016] eKLR
  • JMK -vs- MWM and Another
    [2015] eKLR
  • Tang Gas Distributors Ltd -vs- Said & Others
    [2014] EA 448
Jurisdiction invoked
Order 1 rule 10 of the Civil Procedure Rules, 2010; Sections 1A, 1B & 3A of the Civil Procedure Act (Cap 21) and the inherent jurisdiction of the Court

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, "Kagwe Tea Factory Limted v Kipchoim & 84 others; Kenya Forest Service & 3 others (Interested Parties) (Environment & Land Case 58 of 2018) [2023] KEELC 297 (KLR)", Case Analysis (2023). Not stated in judgment (plaint dated October 25, 2018, amended March 17, 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/297/eng@2023-01-19

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