P. K. Langat Andrew A. Mondoh v Raphael M. A. Juma

Applying the agency principle in Palmer's Company Law, the court held that directors are agents of the company and the company, as principal, is liable on acts done in its name. The second appellant wore two capacities - civil servant representing the Government and Chairman/director acting for MOCO - and his actions in writing the retirement letter were approved and confirmed by the Board on two occasions. Whatever decision terminated the respondent's services was made on behalf of the Board; any claim lay against MOCO, not the Chairman personally.

The memorandum and articles of association of MOCO, which fix or enable directors to fix the quorum for board meetings, were not produced, so the parties were not ad idem on what constituted a quorum. Five of the nine directors were present on 19th August 1992, none raised the issue of quorum, board decisions were made by a majority of members present, and the Board approved and confirmed the second appellant's actions on two occasions. The trial Judge therefore gravely misdirected herself in holding the meeting irregular and incapable of transacting business.

Applying the test in Hilton v Thomas Burton (Rhodes) Ltd and the passage from Salmond on Torts, the court asked whether the appellants were doing what they were employed to do. Although it did not approve of the over-zealous manner in which they executed the undisclosed orders supposedly from above, the appellants were employed to do what they did and their acts were not contrary to the express orders of their employer and were approved by the Government. Under section 4 of the Government Proceedings Act, liability in tort fell on the Government.

Since the tortious act, if any, was deemed committed by the Government through its authorised agents, the proper remedy lay against the Government under the Government Proceedings Act, which by section 4 subjects the Government to liabilities in tort for its servants or agents. The respondent's suit, which named the officers personally, ought to have complied with section 13A of the Act; failure to do so rendered it bad in law.

The proper defendants were MOCO and/or the Attorney General, since the second appellant acted on behalf of the Board of MOCO and both appellants acted as authorised agents of the Government. The first appellant had no power over MOCO and could not order it to re-employ the respondent. If aggrieved, the respondent's remedy was a breach-of-contract claim against MOCO. Continuing against the individual officers was therefore vexatious and oppressive, and the suit against them fell to be dismissed.