Bhudia Builders and Erectors v Ima Agencies Limited [2014] KECA 479 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a sole proprietorship can sue in its business name, reinstating Bhudia Builders' case and setting aside the striking-out.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether a suit instituted in the firm name of a sole proprietorship is a nullity incapable of being cured by amendment.
- 2.Whether the High Court had power under Order XXIX rule 1 (now Order 30 rule 1) of the Civil Procedure Rules to strike out a suit for having been commenced in the name of a sole proprietorship's firm.
- 3.Whether the English authorities relied on by the High Court were binding.
- 4.Whether the learned Judge erred in hearing and determining the application to strike out before the pending application for leave to amend the plaint.
- 5.Whether Article 159(2)(d) and theCivil Procedure Rules required the court to focus on substance rather than form.
Key legal issues
#Whether a suit by a sole proprietorship in its firm name is a nullity.
No. Rule 9 of Order XXIX recognises that a sole proprietorship may be sued in its firm name, and it would be against public policy to allow an entity to be sued but deny it the right to sue.
The court construed Order XXIX rule 9, which permits a person carrying on business in a name or style other than his own to be sued in that name as if it were a firm name, with the whole Order applying so far as the nature of the case permits. If the entity can be sued, it exists for procedural purposes. The court also invoked Order 1 rules 9 and 10 and Article 159(2)(d), holding that procedure should serve substance and that the parties were in no doubt about the identity of the litigant.
Whether a nullity can be cured by amendment.
The premise fails: the suit was not a nullity, so the High Court's reliance on authorities that a nullity cannot be amended was misplaced.
The High Court had held the suit incurably defective on the strength of MacFoy and related authorities. The Court of Appeal found the Judge applied the wrong principles: the authorities cited were English and only persuasive; rule 9 of Order XXIX had not been brought to the Judge's attention; and the pleadings showed the respondent knew exactly with whom it was dealing, so there was no fatal defect capable of rendering the suit a nullity.
Sequencing of striking-out and amendment applications.
An application for amendment should be heard before an application to strike out, so that the striking-out application is determined on complete pleadings and facts.
The Judge was aware of the pending application for leave to amend but determined the striking-out application first, without recorded reasons. That shut the appellant out from the judgment seat and rendered the amendment application otiose. The court held this approach offended the Civil Procedure Rules and did not advance the cause of justice, and formed part of the basis for setting the ruling aside.
Legal principles established
#- A sole proprietorship is capable of being sued in its firm name and cannot be denied the right to sue in that name; a suit filed in such a firm name is not a nullity.
- There is no power to strike out a suit merely because it was commenced in the name of a firm of a sole proprietor under Order XXIX rule 1 (now Order 30 rule 1) of the Civil Procedure Rules.
- An application for leave to amend a plaint should be heard and determined before an application to strike out the suit, so that the court acts on all facts and proper pleadings.
- English common law decisions on a point of Kenyan civil procedure are, at most, of persuasive value and not binding on Kenyan courts.
- Courts must, under Article 159(2)(d) and Order 1 rules 9 and 10, focus on substance rather than form so as to dispense substantive justice.
Court orders
#- 1.The ruling and order of the High Court (Karanja J.) dated 9th April 2009 and all consequential orders are set aside.
- 2.The appellant's suit is reinstated.
- 3.Further proceedings in the High Court to be heard before a Judge other than Karanja J.
- 4.Costs of the appeal and of the High Court awarded to the appellant.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Kisumu
- HCC No. 23 of 1993
- Jurisdiction invoked
- First appellate jurisdiction under the Constitution over appeals from the High Court (Civil Appeal No. 78 of 2011); no specific provision stated in the judgment.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
For the foregoing reasons, we allow this appeal. The ruling and order of the learned Judge of the High Court delivered on 9th April, 2009 and all consequential orders are set aside. We order that this suit be reinstated.
We further order that further proceedings in the High Court be heard before a Judge other than Karanja J. We award the costs of this appeal and of the High Court to the appellant.
It would in our view be against public policy to allow an entity to be sued but deny it the right to sue.
At the very most in our view, the decisions would only be of persuasive value. We are certain that the two decisions have no binding force on us.
Application for amendment whether filed late after application for striking out or not, should be heard first so that when application for striking out a suit is eventually heard, all facts and proper pleadings are before the court to act upon.
The above provisions are designed for the court, as far as is lawfully possible, to focus on substance rather than form in considering matters before it, the concern of the court being to dispense substantive justice to those who seek the same.
Issues in the judgment
#The judgment states the impugned decision was 'delivered on 9th March, 2009' in the opening paragraph, but elsewhere and in the orders refers to the ruling 'delivered on 9th April, 2009'.
The appellant's name appears as 'Bhudia Builders and Erectors' in the cause title and orders but as 'Budhia Builders And Erectors' in the passage quoted from the High Court ruling.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Bhudia Builders and Erectors v Ima Agencies Limited [2014] KECA 479 (KLR)", Case Analysis (2014). Civil Appeal No. 78 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/479/eng@2014-05-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.