Mutweita v Akamba Handicraft Industries Ltd (Civil Suit No. 1711 of 1953) [1954] EACA 21 (1 January 1954)

## ORIGINAL CIVIL

Before CRAM, Ag. J.

#### NZIOKI s/o MUTWEITA, Plaintiff

### ν.

# AKAMBA HANDICRAFT INDUSTRIES LTD., Defendants

## Civil Suit No. 1711 of 1953

Civil Procedure and practice—Service on a limited company—Civil Procedure Ordinance, section 2—Special Procedure prescribed by other law—Order 28, rule 2—"Subject to any statutory provision" service to be by the rule— Companies Ordinance (Cap. 288), section 349 (1)—Statutory provision for service on limited company—Service by affixing to a door not "leaving at" registered office—Order 5, rule 14—Procedure under—Kenya and English Procedure compared—Order 9, rule 10—Application to set aside judgment by default—Costs.

The process server made a return, by affidavit, purporting to have effected service on a company incorporated under the Companies Ordinance (Cap. 288) by affixing a copy of the summons to the closed outer door of the registered office of the company. On the written application by the plaintiff and on the return, the Registrar entered judgment, by default of appearance, purporting to act in terms of Order 48, rule 2 (1) and Order 5, rule 14. The company applied to have the judgment set aside under the provisions of Order 9, rule 10 on the grounds that there had been no service.

Held (19-3-54).—(1) That by reason of section 2 of the Civil Procedure Ordinance, where a special procedure is prescribed by any other law in force, neither the Ordinance nor the rules made thereunder could limit or affect that procedure.

(2) That service on corporations was to be effected, subject to any statutory provision, in terms of Order 28, rule 2.

(3) That statutory provision for service on limited companies being provided by section 349 (1) of the Companies Ordinance (Cap. 288), that procedure must be strictly followed.

(4) The words "leaving at" the registered office of a company, must be taken to mean leaving the summons with someone in the office (although that person need not be specified in the return) or otherwise leaving the summon interpreted, in this instance, as including the limits of the office and leaving within these limits.

(5) Section 349 (1) of the Companies Ordinance did not provide for service by affixing to the outer door of the registered office and any service so attempted on a<br>limited company is invalid and no recourse could be had to Order 5, rule 14 of the Civil Procedure (Revised) Rules, 1948.

(6) The service being invalid, this was a ground for setting aside the judgment by default.

(7) That the entering of the judgment by the Registrar did not relieve the plaintiff from responsibility for seeing to it that the service was valid before applying for judgment. The service being invalid, the plaintiff being in error must pay the costs thrown away.

(8) That the applicant being at the bar for relief through the error and omissions of the plaintiff, was entitled to the costs of the application.

Judgment set aside.

Semble.-Even if service by affixing to the outer door had been valid, the Court would have exercised its discretion in favour of the defendant and set aside the judgment on being satisfied that the defendant had not seen the summons on the door, although this might have affected costs.

Cases referred to: White v. Land and Water Co., (1883) W. N. 174; Price v. Bala<br>and Festiniog Rly. Co., (1884) 50 L. T. 787; In re Fortune Copper Mining Company,<br>L. R. 10 Eq. 390; Watson v. Sheather, (1886) 2 T. L. R. 473.

Argwings Kodhek for applicant/defendant.

M. K. Bhandari for respondent/plaintiff.

RULING.—The defendant is a limited company, incorporated under the Companies Ordinance (Cap. 288) and having its registered office at Kiburi House, Nairobi. The return by the process server, which is by affidavit, is that he went on several occasions to that office; but, finding it on all occasions closed, he eventually affixed the summons to the door. On this return, the Registrar, on written application by the plaintiff, entered judgment in default of appearance, in terms of Order 48, rule 2 (1), and Order 5, rule 14.

The defendant company now applies to have that judgment set aside on the grounds that no service of the suit has been effected. The managing director of the company deposes that he was present at the office during the times when the alleged visits were made by the process server, that he found nothing affixed to the outer door and that some time after judgment had been entered he found a "Statement of Defence" (by which he presumably means the summons) in a bundle of old newspapers, after which he promptly took action by this application.

Obviously, the process server purported to serve under the provisions of. Order 5, rule 14 and the Registrar to enter judgment relying upon a good service under that section. Neither, nor indeed the plaintiff, applied their minds as to whether these sections concerned corporations. Had they done so, they would have discovered special provisions for service upon limited companies at Order 28, rule 2, which runs: $-$

> "Subject to any statutory provision regulating service of process, where the suit is against a corporation the summons may be served-

- (a) on the secretary, or any director or other principal officer of the corporation; or $\bullet$ - (b) by leaving it or sending it by post addressed to the corporation at $(b)$ the registered office; or if there is no registered office then at the place where the corporation carries on business."

The words "subject to any statutory provision" refer me to section 349 (1) of the Companies Ordinance, (Cap. 288) which is as follows: -

"A document may be served on a company by leaving it at or sending it by post to the registered office of the company in the Colony."

Then I look at section 2 of the Civil Procedure Ordinance which is as follows:-

"In the absence of any specific provision to the contrary, nothing in this Ordinance shall be deemed to limit or otherwise affect any special jurisdiction or power conferred or any special form of procedure prescribed by or under any other law for the time being in force."

I have been unable to find any specific provision to the contrary and I must, therefore, arrive at the conclusion that the Civil Procedure Ordinance (which, of course, includes the rules made under the same) must be deemed not to limit or affect the special form of procedure prescribed by the Companies Ordinance

which is, without doubt, in force. I hold that the legislature intended a special form of service where companies were concerned and that this must be followed to the exclusion of any limiting or affecting procedure laid down by the Civil Procedure Ordinance and Rules, which can only be referred to in the absence such special procedure. Even if there were no statutory procedure, I should have to fall back upon Order 28, rule 2 and should regard that as procedure intended to be followed for service instead of the procedure laid down in Order 5, rule 14.

I am supported in these views by referring to the procedure established and followed in England under the Rules of the Supreme Court and the Companies Acts which, although not authoritative here, none the less has great persuasive force, the wording of the Rules and the Act being if not identical then at least like ours, videlicet: Rules of the Supreme Court, rule 8 of Order 9, dealing with service on corporations begins: "In the absence of statutory provision ..." and, the Annual Practice, 1953 Edn., at page 74, interprets these words as in the absence of provision then service is to be by the rule where there is provision then by such provision. In White v. Land and Water Co., (1883) W. N. 174, it was held that the procedure provided by the corresponding section of the Companies Act 1862, i.e. section 62, must be strictly followed.

The next question is—does an affixing to the door amount to a "leaving at" the office of the corporation? The Annual Practice at page 75, under the heading "Proof of service" states that it is sufficient to prove that the writ was left at the registered office without showing with whom, and the affidavit of service at page 2545 supports this. The whole tenor of English practice does not seem to run to anything other than a tendering of the writ to someone in the registered office or at least leaving it within or in the office. Chitty, J., in *Price y. Balla and* Festiniog Rly. Co., (1884) 50 L. T. 787, in attempting to definite the word "at" said: "It may be sometimes equivalent to "in" or "within" but not because the word itself includes the idea of inclusion within limits but by reason that inclusion involves association or consociation. ... " The Annual Practice, again at page 75, states: "where there is no registered office and there is therefore an absence of statutory provision the practice is to require the affidavit of service to state that a copy of the writ was left with the Secretary or other head officer at the head. office or principal place of business of the company and that this practice is consistent with the rule in *In re Fortune Copper Mining Co.*, L. R. 10 Eq. 390, and *Watson v. Sheather*, 2 T. L. R. 473." In no case I have been able to find is it remotely suggested that a corporation can be served by affixing the summons to the outer door of the registered office. The whole tenor of the cases indicates that "at" in this instance, if it does not mean "within", contemplates a leaving of the writ either in the possession of some person in the office employed by the corporation or in the premises of the corporation. The words of Order 5, rule 14, do not include "at" but speak of an affixing to the door in a special circumstance, a facility which is denied plaintiffs in endeavouring to serve corporations. In my view, Order 5, rule 14 has no application to service upon corporations and the word "at" in section 349 (1) of the Companies Ordinance must be read as a leaving of the writ with someone in the registered office or, at any rate and at the lowest, leaving the writ "in" the office. "At" must be interpreted as including the limits of the office and a leaving within these limits. No enablement is provided so that writs may be fastened on the outside of the door of registered offices of corporations to effect service.

I rule, therefore, that there was no effective service upon this corporation. The writ was affixed to the outer door and not "left at" the registered office as required by the statute. The fact that it may have been found later among some old papers inside is not evidence of service, although a great deal of speculation may be indulged in as to how it might have come there. The position would have been far different had the process server deposed that he left the writ "at" the registered office. In that event, the finding of the writ inside might have provided a shallow foundation upon which to erect an argument that the service was valid. The fact that the Registrar entered judgment does not affect the issue. He acted ultra vires, in that he was empowered to enter judgment only upon a valid and effective service. That being so, then it would seem that the judgment is a nullity without legal basis, but I am not sitting in appeal on this judgment.

The application does not proceed under Order 9, rule 24, as apparently the plaintiff's advocate assumed when he argued that there was "no sufficient cause" as required by that rule, but under Order 9, rule 10, which gives the Court a wide discretion. It is true that that discretion must be exercised judicially, but there are, apart from any other considerations good grounds for the exercise of that discretion. The plaintiff has been able to allege only a weak service, by affixing to a door. This may, and sometimes, does in the discretion of the court or Registrar, enable a judgment by default to be issued, but it does not, as the learned advocate seemed to assume, entitle him to a judgment which of right cannot be set aside. The Court must first be satisfied that there are good grounds for entering judgment. The plaintiff has not been able to prove that the defendant company had notice in time of the threatened judgment and has not been able to show that the affidavit of the managing director was in any particular false. If it is true, for it does not in any way conflict with the facts adduced by the process server except as to finding the door closed from time to time, then the company did not have notice and in the absence of notice, justice demands that if the company desires to defend the suit, the judgment by default should be set aside and the suit heard and decided. The terms of the setting aside of course are a matter for the discretion of the Court. Even if, therefore, there had been no finding that the service was bad I should have exercised my discretion in favour of the defendant company.

As to costs, in this instance the service was bad ab initio. It is for the plaintiff to be satisfied that the procedure of service is in order before he elects to move for judgment and the act of the Registrar, in my mind, in no way modifies the responsibility of the plaintiff to see that what he gets is legal. The plaintiff should first have satisfied himself that the service was a good one by looking into the Companies Ordinance to see if he was abreast of the law and if he came to the conclusion that it was not—although it is perfectly apparent he never troubled himself one whit to make discovery—then he should have asked for re-service. In that event, it would be unjust to make the defendant liable for the costs thrown away. Also by the error of the plaintiff this application was rendered necessary and it would be a failure in justice to make the defendant pay these and indeed also to make him pay his own costs. He is at the Bar, to-day, because of the plaintiff's errors and omissions and I see good reason for ordering that the plaintiff pay the defendant's costs in this application. The judgment by default, such as it may be, is set aside.

In my view, the plaintiff, if he wishes to proceed, will have to serve the defendant according to law. It follows also that the execution which followed upon and is ancillary to the judgment must be raised. The defendant may follow his remedy if he considers he has one.

Order accordingly.