[2018] KEELRC 718 (KLR)
The court held that the operations director is not the proper party to be sued, as the legal entity responsible is the company itself, not its officers or directors. The claimant failed to identify and sue the correct legal entity, despite being given opportunities to amend the claim. The doctrine of separate legal...
Source-derived case information.
- Citation
- [2018] KEELRC 718 (KLR)
- Parties
- Applicant: KUDHEIHA Workers; Respondent: Operations Director Mr Patrick Munene, White Rhino Hotel
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nyeri
- Jurisdiction
- Kenya
- Case Number
- Cause 272 of 2016
- Procedural Posture
- Employment Cause / Ruling on Motion to Strike Out Amended Memorandum of Claim
- Outcome
- suit struck out
- Judges
- AN Makau
- Legal Topics
- Privity of Contract, Proper Parties, Corporate Personality, Striking Out Pleadings
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
KUDHEIHA Workers
Applicant
Operations Director Mr Patrick Munene, White Rhino Hotel
Respondent
Procedural Posture
Employment Cause / Ruling on Motion to Strike Out Amended Memorandum of Claim
Legal Issues
- 1 Whether the operations director is a proper party to be sued in place of the corporate entity.
- 2 Whether there exists privity of contract between the operations director and the claimant's members.
- 3 Whether the suit should be struck out for failure to bring the correct party before the court.
Ratio Decidendi
The court held that the operations director is not the proper party to be sued, as the legal entity responsible is the company itself, not its officers or directors. The claimant failed to identify and sue the correct legal entity, despite being given opportunities to amend the claim. The doctrine of separate legal entity requires that claims be brought against the corporate entity, not individuals acting in their managerial capacity. As the claimant did not establish the identity of the appropriate entity to sue, the suit was struck out.
Court Disposition
suit struck out
Orders
- The amended memorandum of claim is struck out.
- Each party shall bear their own costs.
Full Case Text
Judgment text and source record
16 paragraphs
REPUBLIC OF KENYA
IN THE EMPLOYMENT & LABOUR RELATIONS COURT OF KENYA
AT NYERI
CAUSE NO. 272 OF 2016
KUDHEIHA WORKERS...............................................................PETITIONER
AND
OPERATIONS DIRECTOR MR PATRICK
MUNENEWHITE RHINO HOTEL...........................................RESPONDENT
RULING
1. The Respondent filed a motion seeking the amended memorandum of claim herein be struck out on the basis that the Claimant is non-suited against the Respondent as there is no capacity to sue the Operations Director. It is asserted that there no privity of contract between the operations director and the persons allegedly recruited as the Claimant’s members. The Respondent asserts that the Claimant had on two previous occasion to amend its memorandum of claim to bring the correct party to court and the Claimant had failed to do so on both occasions. The Respondent therefore seeks that the suit be struck out.
2. The Claimant is opposed and asserts that the correct party is before the court as the Claimant has been dealing with the operations director of White Rhino and the Respondent is therefore properly sued. The Claimant argues that it has sought to trace the company from the trade marks registered and upon searches at the Companies Registry at Nairobi the company is not registered. The Claimant thus asserts that the Respondent is the appropriate defendant herein.
3. The Court has in the past few months given the Claimant an option to amend the claim so as to bring the correct party to court. The enterprise known as White Rhino Hotel is a trade name for a company the Claimant is apparently keen on representing the employees thereof. The Claimant has sued the operations director and as such is bringing before court an individual who is not the corporate entity the Claimant has a grouse with. The doctrine of separate legal entity espoused in the case of Salomonv Salomon& Co Ltd [1897] AC 22 is in focus here. The Respondent sued is a manager or director of the Respondent but is distinct from the corporate persona the company bears. In as much as the Claimant has been unable to trace the correct entity to sue, the proper course would be to establish the identity of the appropriate entity to sue before mounting a suit such as the one before court. I find merit in the motion seeking to strike out the amended memorandum of claim. The suit is struck out and I order that each party bears their own costs.
It is so ordered.
Dated and delivered at Nyeri this 31st day of October 2018
Nzioki wa Makau
JUDGE