Augusto Arduin v Saraf Limited [2014] KEHC 3123 (KLR)

IN THE HIGH COURT AT MALINDI

CIVIL SUIT NO. 30 OF  2012

AUGUSTO ARDUIN …...................................................PLAINTIFF

VERSUS

SARAF LIMITED …..................................................DEFENDANTS

RULING

The Defendant filed its defence and counterclaim (erroneously so labeled, as no counter-claim is pleaded therein) to the Plaintiff's claim for payment of the sum of Kshs. 4,400,000. 00 filed on 2. 3.12. That the defence is the subject of the Plaintiff's application brought under Order 2 Rule 15 of the Civil Procedure Rules, on grounds that the appointment of the Defendant's advocate and the Defendant's action of filing the defence are not sanctioned by a resolution of the Board of Directors of the  Defendant company.

Both the supporting affidavit and the Replying affidavit are sworn by counsels of the parties rather than the respective parties. That is undesirable. The matters in contention are both of a legal and factual nature . It is  unbecoming for the counsels to jump in to the arena of contention. While the supporting affidavit depones to facts which properly belong to the Plaintiff to depose, the replying affidavit reads exactly like the submissions filed by the Defendant's advocates. Strictly speaking it is not an affidavit in terms of Order 19 of the Civil Procedure Rules.

The Notice of Motion was disposed of by way of written submissions which I have now considered in light of the application. In my considered view, the most significant challenge raised by the Plaintiff's notice of motion is with regard to the question whether the defence filed has the blessing of the Defendant's Board of Directors and whether such sanction is necessary in this case. There is no affidavit by the alleged director of the Defendant to shore up assertions in the submissions that the defence was filed on the instructions of the director identified as Raffaella  Pochintesta. The replying affidavit is by counsel not the said director.

Whereas, I have found no authority to support the Plaintiff's contention that a defence filed by corporation without a demonstrated resolution of the Board of Directors is fatally defective in limine, I am equally unprepared, as urged by the Defendant's counsel,  to depart from the long line of authorities since Bugerere Coffee Growers Ltd v Sebaduka and Anor [1970]EA as to the mandatory requirement that a suit by a corporate body must be commenced on the authority  of the Board of Directors .And the term 'suit' is defined in the interpretation section of the Civil Procedure Act to “mean all civil proceedings commence in any manner prescribed”

Although the Defendant's defence is intituled  “defence and counter-claim”, there is no counterclaim pleaded therein. Had that been the case then the Defendant company would have been commencing a suit in terms of the above definition and would be required to comply with Order 7 Rule 5 (a) Civil Procedure Rules. Even so , the failure to attach a resolution of the Board of Directors at the time of filing such a defence and a counter-claim would not render such pleading liable to immediate striking out. In this regard I do adopt the position taken by Kimaru J in R vs Registrar General & 13 others [2005]eKLR to the effect that such authority can be filed later, or at least before the suit is set down for hearing. (See also Mavuno Industries Ltd & 2 others v Keroche Industries Ltd [2012]eKLR)

Further, the defence herein raises, on the face of serious issues including non-enforceability of the contract giving rise to the suit for fraud.

In the circumstances of this case, it would be  unjust of the court to strike out the defence on record without giving a chance to the Defendant to satisfy the court that the defence filed is an action falling within Order 9 Rule2 (c) of the Civil procedure Rules on which they have placed reliance, now that a challenge has been raised by the Plaintiff and no affidavit has been sworn by the alleged director Rafaella Pochintesta .

For these reasons I would order that a suitable authority be filed by the Defendant in compliance with Order 9 Rule2 (c) within 14 days of today's date alongside a properly intituled defence to reflect the true nature of the pleading filed by the Defendant. Costs will be in the cause.

Delivered and signed this    7th day of       July,    2014

In the presence of Mr. Kariuki h/b Mr. Michira for the Plaintiff.

C. W. Meoli

JUDGE