[2023] KEHC 25481 (KLR)

Wangeci t/a Schofield and Associates v Ehasni & another (Civil Suit 352 of 2016) [2023] KEHC 25481 (KLR) (Commercial & Admiralty) (17 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25481 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Admiralty

Civil Suit 352 of 2016

FG Mugambi, J

November 17, 2023

Between

Anne Wangeci T/A Schofield And Associates

Plaintiff

and

Hooman Ehasni

1st Defendant

Palm Valley Development Ltd

2nd Defendant

Ruling

1. Before the court is the defendants’ Notice of Motion application dated 17th July 2023 brought under sections 1A, 1B and 3A of the Civil Procedure Act and Article 159 of the Constitution. The application seeks an order to have the Preliminary Objection (PO) dated 12th March 2023 marked as dismissed by dint of having been overtaken by events.

2. For the avoidance of doubt the PO of 12th March 2023 was raised by the respondent on the basis that the 2nd applicant was not properly before the court as there was no Board Resolution authorizing the 1st applicant to act on behalf of the 2nd applicant. The PO further questioned the jurisdiction of this Court to hear the application by the 1st applicant before the Court of Appeal had pronounced itself on the issue of the 2nd respondent.

3. The grounds of the application of 17th July 2023 were that the court had directed that it would deliver its ruling on the respondent’s PO on 17th November 2023. The said PO was premised on the lack of authorization for the 1st applicant to act on behalf of the 2nd applicant. The 1st applicant contended that it had since then filed and served its authority to act on behalf of the 2nd applicant.

4. It was stated by the applicants that the law allows for the authorization be filed at any time before the suit is fixed for hearing. The respondent had however refused to withdraw the PO. The applicants stated that in the premises, it was only fair and in the interest of justice that the orders sought, to have the PO dismissed, be granted in order to save precious judicial time.

5. The respondent opposed the instant application through another PO dated 13th August 2023 which was buttressed by written submissions dated 22nd August 2023. The respondent argued that this court lacks the jurisdiction to determine whether the Board Resolution that gave the 1st applicant authority to act on behalf of the 2nd applicant in this suit had the effect of “eroding” the appeal raised in Appeal No. E706 of 2022 Anne Wangeci Schofield V Hooman Ehsani and Palm Valley Development and the PO dated 12th March 2023.

6. The respondent notes that the applicants failed to file the Board Resolution promptly after the Board Meeting of 14th May 2023 at which it was passed and failed to bring its existence to the court at the hearing on 25th May 2023 only to file the same after a ruling date had been reserved for the PO of 12th March 2023 on 17th November 2023.

7. The respondent further submitted that she intended to have the hearing against the 1st applicant proceed, pending the determination of the fate of the 2nd applicant by the Court of Appeal.

Analysis and Determination: 8. I have carefully considered the pleadings and submissions filed by opposing Counsel in support of their cases. I note that this court delivered a ruling on 16th February 2021 which the respondent lodged an appeal against in the Court of Appeal.

9. The respondent further sought a stay of execution of the said ruling pending determination before the appellate court in Civil Application E032 of 2022 Anne Wangeci Schofield T/A Schofield & Associates V Ehsani & Another. The Court of Appeal in determining whether or not to grant the stay of execution held at paragraph 13:“In our view the appeal is arguable. This Court will determine, inter alia, whether the trial Court erred in failing to consider and determine the fact that the 2nd respondent was a limited liability company and the 1st respondent had to file the board resolution authorizing him to prosecute the suit in accordance with the law. An arguable point is not necessarily one that must succeed, but merely one that is deserving of consideration by the Court. Without saying more lest we embarrass the bench that will be seized of the main appeal, we are satisfied that the intended appeal is arguable.”

10. Based on the above, it is clear that the issue touching on the Board Resolution and authorization filed by the 1st respondent on behalf of the 2nd respondent in this matter is a live issue before the Court of Appeal. To venture into the same would be in breach of section 6 of the Civil Procedure Act. This court cannot therefore grant the prayers sought by the applicants or delve into the substance of the issue.

Determination 11. The upshot of this is that the respondent’s PO dated 13th August 2023 is upheld in that this court lacks jurisdiction to issue the orders sought in the application of 17th July 2023. The application dated 17th July 2023 is struck out with costs to the defendant. For the avoidance of doubt, and for good order, the proceedings herein shall await the determination of Civil Application E032 of 2022 Anne Wangeci Schofield T/A Schofield & Associates V Ehsani & Another.

DATED, SIGNED AND DELIVERED IN NAIROBI THIS 17TH DAY OF* NOVEMBER,2023. F. MUGAMBIJUDGE