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JudgmentALI MOHAMED VS State Law AND GEOFFREY TENAI12 min read

ALI MOHAMED VS State Law AND GEOFFREY TENAI

High Court at Malindi High Court · · M Thande

 

  1. The facts of this case as can be gleaned from the record are that the Plaintiffs initiated the present suit by way of a plaint dated 8.3.24. The Plaintiffs seek a declaration that the transfer of 10,000 shares in the 1st Plaintiff to the 1st Defendant was unlawful, illegal and contrary to the 1st Plaintiff’s articles of association and null and void. They further seek an order directing the 2nd Respondent to rectify its records by cancelling the unlawful transfer of the shares to the 1st Defendant and revert the 1st Plaintiff’s directorship to its original.  
  2. Additionally, the Plaintiffs filed an application seeking interim and injunctive orders against the Defendants, restraining them from interfering with the 1st Plaintiff’s shares and ownership and a further order directing the 2nd defendant to reverse the fraudulent transfer of shares in question.
  3. In opposition to the plaint and application, the 1st Defendant filed a statement of defence and preliminary objection both dated 28.3.24.
  4. The objections are that:
  5. The application and suit have been brought in contravention of Order 9 Rules 1(a) and 2(a) of the Civil Procedure Rules, 2010.
  6. The suit is not in the interest of or of benefit of the Plaintiffs.
  7. The suit has been brought in contravention of Sections 238(3) and 239(1) of the Companies Act, 2015.
  8. Scarlabrini Silvana has no locus standi to institute this suit as she does not have Letters of Administration.
  9. On the 28th day of March, 2024 the Specific Power of Attorney No. 185 NPA, 17/114, 5104 to Ali Bakari Mohamed, the 1st Plaintiff herein was cancelled and rendered deleted from the Power of Attorney Register as provided for in Section 16 and 33 of the Registration of Documents Act, Cap 285 of the Laws of Kenya.
  10. It is this preliminary objection that is the subject of this ruling. Parties filed their respective submissions which I have duly considered.
  11. On the objection that the application and suit have been brought in contravention of Order 9 Rules 1(a) and 2(a) of the Civil Procedure Rules, 2010, the 1st Defendant submitted that the application was irregularly brought by the 2nd Plaintiff, a donee of a power of attorney of Scarlabrini Silvana without approval of the Court. For the Plaintiffs, it was submitted that the 2nd Plaintiff expressly donated his powers to an agent to act in the matter. Further that following the 1st Defendant’s push for cancellation of the power of attorney the Plaintiffs sought leave of the Court to amend the pleadings, which was done. The 2nd Plaintiff was replaced by Scarlabrini Silvana, a director of the 1st Plaintiff, who intends to prosecute the matter.
  12. The Civil Procedure Rules provide that a party may make an application, appear or do any act in court in person, by a recognized agent or by an advocate. Order 9 Rule 1 stipulates as follows:

Any application to or appearance or act in any court required or authorized by the law to be made or done by a party in such court may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent, or by an advocate duly appointed to act on his behalf:

  1. While the law permits a party to make an application, appear or do any act in court in person, by a recognized agent, this may only be done with the approval of the court. Order 9 Rule 2(a) provides:

The recognized agents of parties by whom such appearances, applications and acts may be made or done are—

  1. subject to approval by the court in any particular suit persons holding powers of attorney or an affidavit sworn by the party authorizing them to make such appearances and applications and do such acts on behalf of parties;
  2. In the case of Carolyne Mpenzwe Chipande v Wanje Kazungu Baya [2014] eKLR, Meoli, J. had occasion to consider the import of the above provisions and stated:

19.  The foregoing issue was not canvassed before me and there is not sufficient material to enable me draw any conclusions.  Be that as it may, the wording of Order 9 rule 1 and 2 of the Civil Procedure Rules leaves no doubt that the court has wide discretion in determining whether or not to allow an agent to appear or do any act in a suit.  That discretionary power must be invoked by way of an application and is exercised judicially.  No party should presume to act or appear before the court merely on the basis of the power of attorney without first obtaining the court’s approval, howsoever sought.  The appellant believed himself properly authorized by the power of attorney alone to act on behalf of the donor.  That was an erroneous understanding of the rules. 

  1. I fully concur with the learned Judge. The Plaintiffs herein presumed to file the present suit only on the basis of the power of attorney donated to the 2nd Plaintiff by Scarlabrini Silvana, without first obtaining the Court’s approval. The requirement to seek and obtain approval is not a procedural technicality that can be overlooked. It goes to the root of the capacity of the 2nd plaintiff as a recognized agent to bring the suit or to act on behalf of the donor of the power of attorney.  
  2. In acknowledgement of this defect in their case, the Plaintiffs sought to correct the same by filing an amended plaint. This is after they were served with the statement of defence and the notice of preliminary objection. The only challenge with this, is that the amended plaint was filed without leave of the Court and is yet to be admitted.
  3. Order 8 Rule 1(1) of the Civil Procedure Rules allows a party to amend any of his pleadings once at any time before the pleadings are closed, without leave of the court.  As to closure of pleadings, Order 2 Rule 13 provides:

The pleadings in a suit shall be closed fourteen days after service of the reply or defence to counterclaim, or, if neither is served, fourteen days after service of the defence, notwithstanding that any order or request for particulars has been made but not complied with.

  1. The Plaintiffs recognized that pleadings herein had closed and that is why they submitted that they amended the plaint with leave of the Court. However, the record does not show that they sought or obtained the leave of the Court to amend the Plaint. Accordingly, what is before the Court is the plaint dated 8.3.24.  The Plaintiffs did not contest the fact that they plaint was filed on the basis of a power of attorney but without the approval of the Court. 
  2. I now turn to the objection that the Scarlabrini Silvana has no locus standi to institute this suit as she does not have letters of administration. The 1st Defendant submitted that the cause of action in the suit does not relate to Scarlabrini Silvana in her personal capacity. His contention is that the subject matter of the suit relates to the estate of De Micheli Erminio Alberto (the deceased) who transferred shares to him. He thus submitted that without letters of administration, Scarlabrini Silvana had no locus standi to represent the estate of the deceased and that the suit is therefore null and void.
  3. The Plaintiffs countered this by submitting that the 1st Plaintiff is a company that has a separate legal existence from its members and has its own rights and obligations. Further that the documents placed before the Court shows that the 2nd Plaintiff is majority shareholder in the 1st Plaintiff with 9,000 shares while her husband, the deceased, had 1,000 shares. As such, she has the locus standi to protect the company from any illegality as that portrayed herein.
  4. A careful look at the plaint shows the Plaintiffs seek a declaration that the transfer of 10,000 shared to the 1st Defendant was unlawful. The Plaintiffs also sought rectification of the Register by the 2nd Defendant by cancellation of the unlawful transfer of the said shares. They further sought that the directorship revert to the original status.
  5. It is the Plaintiffs’ case that the documents placed before the Court include letters of administration issued in Italy is a grant of representation issued in Italy to the 2nd Plaintiff and her children as the legal administrators of the estate of the deceased. Further that the Plaintiffs’ interest in the suit is not to distribute the shares of the deceased but to rectify an illegality committed to the 1st Plaintiff by individuals unknown to the 2nd Plaintiff.
  6. It is quite clear from the prayers that the Plaintiffs seek, relate to the transfer of shares from Scarlabrini Silvana and the deceased to the 1st Defendant. The claim is personal to Scarlabrini Silvana and the deceased and has nothing to do with the interests of the 1st Plaintiff, as suggested by the Plaintiffs in their submissions. Accordingly, a competent suit ought to have been filed by Scarlabrini Silvana in person or by a recognized agent with the approval of the Court and by the personal representative of the estate of the deceased. 
  7. The Court notes that the supplementary documents which include “Succession documents/Certificate of grant from Italy” now relied on by the Plaintiffs, were filed on 3.5.24 after the 1st Defendant filed submissions. These were filed without leave of the Court and no doubt, to fill in the gaps raised in the said submissions. 
  8. Even if the grant of representation from Italy had been filed with leave of the Court, which it has not, the Plaintiffs would still have run into headwinds as that grant ought to have been sealed in Kenya, before it could be used to file the suit herein. Under the Law of Succession Act, it is only upon being sealed by a court in Kenya, that a grant issued in a foreign country can be recognized and have effect in Kenya.
  9. Section 77 of the Law of Succession Act provides:

Where a court or other authority, having jurisdiction in matters of probate or administration in any Commonwealth country or in any other foreign country designated by the Attorney-General by notice in the Gazette, has, either before or after the commencement of this Act, granted probate or letters of administration, or an equivalent thereof in respect of the estate of a deceased person, such grant may, on being produced to, and a copy thereof deposited with the High Court, be sealed with the seal of that court, and thereupon shall be of like force and effect, and have the same operation in Kenya, as if granted and confirmed by that court.

  1. Additionally, as indicated, from the prayers in the plaint, it is evident that the Plaintiffs seek redress on behalf of the estate of the deceased, to wit, cancellation of the transfer of the deceased’s shares to the 1st Defendant, which they allege was unlawful. Neither of the Plaintiffs are not holders of a grant in respect of the estate of the deceased that can be used in Kenya.
  2. It is trite law that an action on behalf of the estate of a deceased person may only be brought by a personal representative. Section 82(a) of the Law of Succession Act provides:

82.  Personal representatives shall, subject only to any limitation imposed by their grant, have the following powers—

(a)  to enforce, by suit or otherwise, all causes of action which, by virtue of any law, survive the deceased or arising out of his death for his personal representative;

  1. An action brought on behalf of a deceased person by an applicant who is not a holder of a grant of representation is incompetent and bad in law. In the case of Trouistik Union International & another v Jane Mbeyu & another [1993] eKLR, Apaloo, CJ. had this to say about who may institute actions concerning an estate of a deceased person.

To determine who may agitate by suit any cause of action vested in him at the time of his death, one must turn to Section 82 (a) of the Law of Succession Act. That Section confers that power on personal representatives and on them alone. As to who are personal representatives within the contemplation of the Act, Section 3, the interpretative Section, provides an all inclusive answer. It says “personal representative means executor or administrator of a deceased person.

  1. In the case of Juletabi African Adventure Limited & another v Christopher Michael Lockley [2017] eKLR, the Court of Appeal had this to say about locus standi:

Locus standi is defined in Black’s Law Dictionary, 9th Edition at page 1026 as-

“The right to bring an action or to be heard in a given forum”.

This Court in Alfred Njau & 5 others vs. City Council of Nairobi [1983] eKLR put it in the following terms:-

 “The term locus standi means a right to appear in Court and, conversely, as is stated in Jowitt’s Dictionary of English Law, to say that a person has no locus standi means that he has no right to appear or be heard in such and such a proceeding.”

  1. Flowing from the foregoing, it is clear that the Plaintiffs’ prayer for the protection of the deceased’s shares in the 1st Plaintiff is incompetent ab initio. In so finding, I am guided by the holding in Virginia Edith Wamboi Otieno v Joash Ochieng Ougo & another [1987] eKLR where the Court of Appeal observed:

But an administrator is not entitled to bring an action as an administrator before he has taken out letters of Administration. If he does, the action is incompetent at the date of its inception.

  1. The law on preliminary objections is well settled. A preliminary objection must be raised on a pure point of law. In the locus classicus on preliminary objections, Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696, Sir Charles Newbold rendered himself thus:

A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.

And Law, JA stated:

So far as I’m aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court, or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.

  1. The law is that for a preliminary objection to be upheld, it must raise a point a preliminary objection ought to consist of a pure point or points of law, which would completely dispose of the matter.  As a minimum the factual basis ought not to be disputed. 
  2. The claim that the suit was brought in contravention of Order 9 Rule 1 and 2 of the Civil procedure Rules and filed by parties lacking locus standi are pure points of law in respect of which a preliminary objection has been validly raised. 
  3. A preliminary objection cannot be raised where facts are to be ascertained. In this regard I am guided by the holding in the case of Aviation & Allied Workers Union Kenya vs Kenya Airways Ltd & 3 Others [2015] eKLR where the Supreme Court stated as follows:

Thus a preliminary objection may only be raised on a ‘pure question of law’. To discern such a point of law, the Court has to be satisfied that there is no proper contest as to the facts.

  1. Duly guided I find that the objection on the basis that the power of attorney donated to Ali Bakari Mohamed by Scarlabrini Silvana was cancelled, is a question of fact which requires to be ascertained. This objection thus fails.
  2. In the end and in view of the foregoing, I uphold the preliminary objection dated 28.3.24 to the extent stated, with the result that the suit herein and the application anchored thereon both dated 8.3.24 being incompetent, are hereby struck out with costs.

DATED, SIGNED and DELIVERED in MALINDI this 29th day of November 2024


    ALI MOHAMED VS State Law AND GEOFFREY TENAI ALI MOHAMED VS State Law AND GEOFFREY TENAI