Automated Summary
Key Facts
The court ruled on a dispute over the validity of a Notice of Change of Advocate and Notice of Withdrawal of Suit filed on 25 September 2023 by the law firm Hamilton, Harrison & Mathews Advocates on behalf of Lake View Development Limited. The Applicant (Gad Zeevi) challenged these actions, claiming lack of authorization. The court found that directors Trophimus Kiplimo and Victoria Nthenya Muya, appointed via the 9 December 2022 AGM, had lawful authority to act for the Plaintiff. The application to set aside the withdrawal and change of advocate was dismissed as legally untenable. Costs could not be awarded against the directors or law firm due to lack of joinder in proceedings.
Issues
- What orders, if any, ought to be made
- Whether Mr. Trophimus Kiplimo and Ms. Victoria Nthenya Muya had the lawful authority and mandate to act for and on behalf of the Plaintiff company or otherwise
- Whether the Notice of Change of Advocate and the consequential Notice of Withdrawal of Suit drawn by the firm of M/s Hamilton, Harrison & Mathews Advocates were lawful or otherwise
Holdings
- The court dismissed the Applicant's request to order costs against M/s Hamilton, Harrison & Mathews Advocates, the directors, or Mr. Gad Zeevi. This was due to these parties not being formally joined in the proceedings, violating principles of natural justice. The Applicant's indemnity cost claims were also rejected as they were not part of the suit and lacked procedural validity.
- The court held that Mr. Trophimus Kiplimo and Ms. Victoria Nthenya Muya were lawfully appointed as directors of the Plaintiff company on 9th December 2022 following the annual general meeting. Their directorship remains valid unless quashed by the High Court in Milimani HCCCOM No. E488 of 2022. The court emphasized that the validity of the meeting and resolutions is a matter for the High Court, and until then, the directors are recognized as lawful agents of the Plaintiff.
- The Notice of Change of Advocate and the Notice of Withdrawal of Suit dated 25th September 2023 were found lawful. The court determined these documents were prepared based on instructions from the recognized directors of the Plaintiff, making the withdrawal of the suit valid. The Applicant's claims of illegality were rejected, citing the directors' authority under the Companies Act and the binding nature of the resolutions.
Remedies
The court dismissed the application filed by Gad Zeevi seeking to set aside the withdrawal of the suit and expunge certain notices. No costs were awarded as the application was found to be without merit.
Legal Principles
- The court emphasized that a company must act through its authorized organs (e.g., board of directors) via valid resolutions. The legality of directors' actions (e.g., changing advocates, withdrawing suits) depends on the existence of proper board resolutions, not merely on procedural form. This principle was reinforced by references to the Supreme Court's decision in Fanikiwa Limited and the case of East African Portland Cement Ltd.
- The court held that adverse orders cannot be made against unjoined parties without violating the principles of Natural Justice, including fair hearing and due process. This was supported by the Court of Appeal's ruling in Jared Odhiambo Opiyo, which underscored the impropriety of citing parties not formally part of the proceedings.
Precedent Name
- Party of Independent Candidate of Kenya & Another vs Mutula Kilonzo & 2 Others
- Judicial Service Commission v Mbalu Mutava & Another
- Philomena Ndanga Karanja & 2 Others vs Edward Kamau Maina
- Fanikiwa Limited & 3 others v Sirikwa Squatters Group & 17 others
- Benjamin Leonard Mcfoy vs United Africa Company Ltd
- Automatic Self-Cleansing Filter Syndicate v. Cuninghame
- Post Bank Credit Ltd vs Nyamangu Holdings Ltd
- East African Portland Cement vs Capital Markets Authority & 4 Others
- Dina Management Ltd vs The County Government of Mombasa & 5 Others
- Jared Odhiambo Opiyo & 5 others vs Migori County Assembly & 6 Others
- Turea Ltd T/a Dr. Mattress vs Mohammed
- Victor Kermit Kiam [ii] vs M G N Ltd
- Salama Beach Ltd vs Mario Rossi
- Morgan Air Cargo Ltd vs Everest Enterprises Ltd
- Makula International Ltd vs His Eminence Cardinal Nsumbuga & Another
- Affordable Homes Africa Limited vs Ian Henderson & 2 Others
Cited Statute
- Companies Act No. 17 of 2015
- Advocates Practice Rules
- Civil Procedure Rules 2010
- Companies Act, Chapter 486, Laws of Kenya
Judge Name
Oguttu Mboya
Passage Text
- From the foregoing, it is therefore my finding and holding that both the Notice of Change of Advocate and the Notice of Withdrawal of Suit dated the 25th September 2023, respectively were lawfully crafted and filed.
- In a nutshell, the application beforehand be and is hereby dismissed albeit with no orders as to costs.
- In a nutshell, it suffices to find and hold that indeed the suit beforehand was withdrawn by and on instruction[s] by the Plaintiff company and not otherwise.