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ELCDismissedEnvironment & Land Case 52 of 2022· [2023] KEELC 16359 (KLR)

Solai Ruyobei Farm Ltd v Cherutich & another

Environment and Land Court
22 March 2023
2,803 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a company's lawsuit cannot be thrown out just because it forgot to file a board resolution approving the case.

What this practically means

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Executive summary

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The defendants filed a preliminary objection dated 6 December 2022 contending that the plaintiff company's suit was instituted without authority: that no valid board resolution approving the suit or appointing the firm of A. Mukira and Company Associates had been filed, and that Richardson Bundotich had no authority to swear the verifying affidavit and other documents. The defendants, claiming to be current directors per a 2018 ruling in Nakuru ELC 532 of 2013, sought striking out of the plaint with costs. The plaintiff countered that the objection was premature and that failure to file the resolution with the plaint was curable. The court framed a single issue: whether the suit should be struck out for want of a filed resolution. Applying Order 4 Rule 1(4) and following Leo Investments v Trident Insurance and Spire Bank Ltd v Land Registrar, the court held that failure to file the resolution is not fatal and the resolution may be filed before the suit is fixed for hearing. The court noted the directorship was contested but observed that the defendants were not named as directors in the more recent Registrar of Companies letter of 24 August 2021, which it took as prima facie evidence of control, treating their objection as an unsubstantiated technicality. The preliminary objection was dismissed, with the plaintiff directed to file and serve the requisite resolutions before the matter is set down for hearing, and the suit mentioned on 26 April 2023 for compliance confirmation and a hearing date.

Key legal issues

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01

Whether failure to file a company resolution authorising the suit is fatal

Holding

It is not fatal; the resolution may be filed before the suit is fixed for hearing

Reasoning

Relying on Order 4 Rule 1(4) and Leo Investments v Trident Insurance, the court held the rule does not require the authority to be filed with the plaint. Recent case law has softened the strict approach of Bugerere Coffee Growers. The preliminary objection on this ground failed as a technicality not going to the merits.

p. 3
02

Whether the suit was instituted without the plaintiff company's authority

Holding

On the material filed, the defendants were not shown to be current directors, so their claim of want of authority was unsubstantiated

Reasoning

The court compared the Registrar of Companies letters: the defendants were named in a letter dated 19/12/2017 but not in the more recent letter dated 24/8/2021. It preferred the recent letter as prima facie evidence of control and treated the defendants' objection as a defensive technicality.

p. 5

Legal principles established

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  • Failure to file a company resolution authorising the institution of a suit with the plaint does not invalidate the suit; the resolution may be filed any time before the suit is fixed for hearing
  • The requirement that only an authorised officer institute proceedings on behalf of a corporation is not to be used as a procedural technicality to strike out suits

Court orders

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  1. 1.The defendants' preliminary objection dated 6/12/2022 is dismissed
  2. 2.The plaintiff to file and serve the requisite resolutions before the matter is set down for hearing
  3. 3.Suit to be mentioned on 26/4/2023 for confirmation of compliance and Order 11 directions and issuance of a hearing date

Authorities

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Legislation

  • Civil Procedure RulesOrder 4 Rule 1(4)
  • Civil Procedure RulesOrder 11
  • Civil Procedure Actsection 27 (as cited in Leo Investments)

Cases cited (13)

  • Mukisa Biscuits Manufacturing Co. Ltd v West End Distributors Ltd
    [1969] EA 696

    Definition and requirements of a preliminary objection

  • Affordable Homes Ltd v Henderson & 2 Others
    [2004] eKLR

    Need for a board resolution for a company to institute suit

  • East African Portland Cement Ltd v The Capital Markets Authority & 5 Others
    [1970] EA 147

    Legal standing absent a board resolution

  • East African Safari Air Limited v Anthony Kegode & Another
  • Spire Bank Ltd v Land Registrar & 2 Others
    [2019] eKLR

    Authorisation requirement not a technicality to strike out suits

  • Leo Investment Ltd v Trident Insurance Company Ltd
    [2014] eKLR

    Failure to file resolution not fatal; may be filed later; ratification possible

  • Eve Company (K) Ltd v Erastus Rotich T/A Vision Express
    [2021] eKLR

    Suit as filed proper despite authority objections

  • Bugerere Coffee Growers Ltd v Seraduka & Anor
    (1970) EA 147

    Ancient authority on resolutions and personal liability of advocates for costs

  • Republic v Registrar General and 13 Others Misc. Application No. 67 of 2005
    [2005] eKLR

    Resolution may be filed anytime before suit fixed for hearing (per Kimaru J)

  • Tavuli Clearing & Forwarding Limited v Charles Kalujjee Lwanga
    Nairobi (Milimani) HCCC No. 585 of 2004

    Advocate personally liable for costs for unauthorised filing

  • Assia Pharmaceuticals v Nairobi Veterinary Centre Ltd
    Nairobi (Milimani) HCCC No. 391 of 2000

    Proceedings started without authority may be ratified

  • Anthony Edward Cumming v Queen's Hotel Civil Appeal No. 28 of 1934
    [1935] 2 EACA 25

    Court should not become an academy of law

  • Kenya Commercial Bank Limited v Stage Coach Management Ltd
    [2014] eKLR

    Suit dismissed where no ratification after preliminary objection

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution and the Environment and Land Court Act

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, "Solai Ruyobei Farm Ltd v Cherutich & another", Case Analysis (2023). Environment & Land Case 52 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16359/eng@2023-03-22

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