[2008] KEHC 246 (KLR)
The court found that the 2nd Plaintiff, a limited liability company, had not produced any board or company resolution authorizing the institution of the suit. Citing established case law, the court held that in the absence of such a resolution, the company is not properly before the court and the suit is fatally...
Source-derived case information.
- Citation
- [2008] KEHC 246 (KLR)
- Parties
- Plaintiff: Ashish Magon; Plaintiff: Trikuti Investment Ltd; Defendant: Amee Management Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 533 of 2008
- Procedural Posture
- Civil Case / Ruling on Preliminary Objection
- Outcome
- suit struck out with costs to respondent
- Legal Topics
- Company Authority to Sue, Board Resolution Requirement, Agency and Disclosed Principal
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Ashish Magon
Plaintiff
Trikuti Investment Ltd
Plaintiff
Amee Management Ltd
Defendant
Procedural Posture
Civil Case / Ruling on Preliminary Objection
Legal Issues
- 1 Whether the suit was properly instituted by the 2nd Plaintiff company without a board resolution authorizing the action.
- 2 Whether the absence of a company resolution renders the suit fatally defective.
- 3 Whether the defendant, as an agent of a disclosed principal, can be held liable in the circumstances.
Ratio Decidendi
The court found that the 2nd Plaintiff, a limited liability company, had not produced any board or company resolution authorizing the institution of the suit. Citing established case law, the court held that in the absence of such a resolution, the company is not properly before the court and the suit is fatally defective. Furthermore, the Defendant was acting as an agent of a disclosed principal and cannot be held personally liable. The lack of authority from the Plaintiffs' advocates to act on behalf of the company further compounded the defect. Consequently, the court upheld the Preliminary Objection and struck out the suit with costs to the Respondent.
Court Disposition
suit struck out with costs to respondent
Orders
- The suit is struck out for want of authority and board resolution.
- Costs awarded to the Respondent.
Full Case Text
Judgment text and source record
16 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (MILIMANI COMMERCIAL COURTS)
Civil Case 533 of 2008
ASHISH MAGON ……...........................................1ST PLAINTIFF
TRIKUTI INVESTMENT LTD…..………………2ND PLAINTIFF
VERSUS
AMEE MANAGEMENT LTD……………………. DEFENDANT
RULING
The hearing of Preliminary Objection was fixed by Court but on 21. 10. 2008 only Mr. Kamau for Respondent attended Court. He submitted on grounds of Preliminary Objection dated 23. 09. 2008. He stated that the 2nd Plaintiff is a limited liability Company as stated in the supporting affidavit. The first Defendant is a Director of the Company. It is clear no meeting was held and in absence a resolution by the Company to institute suit it was held in the case of Affordable Homes Africa Ltd. –vs- Ian Henderson & Africa Ltd, HCC No. 524/2004 that in the absence of a board resolution sanctioning the commencement of the suit the company was not in Court and for that reason the Preliminary Objection succeeds and the action must be struck out with costs. Such costs to be borne by Advocates for the Plaintiff.
The Company cannot be held liable if it has not authorized the action. In the case Friendship Container manufacturers Ltd –vs- Mitchell Cotts (k) Ltd. it was held that a person who acts for disclosed agent is not liable to a Plaintiff in respect of the particular transaction.
In the case of Warehamt/a Wareham & 2 others –vs- Kenya Post Office Sacco Bank, also discussed the issue of agents. The authority of Bugerere Coffee Growers Ltd –vs- Sebaduka. It was held that proceedings of a company must be authorized by a resolution at a company or Board of Directors meeting and recorded in the minutes.
It is clear that the Defendant is an agent of a disclosed principal. This suit is therefore fatally defective. The suit is defective for want of the Plaintiffs Advocates authority to sue/act on behalf of the company. And second Plaintiff has not exhibited any resolution authorizing the institution of suit in its name of company.
I therefore uphold the Preliminary Objection and order the suit to be struck off with costs to the Respondent.
It is so ordered.
DATED this 10th day of November 2008.
JOYCE N. KHAMINWA
JUDGE