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Court of AppealAllowedCivil Appeal No. 52 of 2018

Spire Bank Limited v Land Registrar & 2 others [2019] KECA 530 (KLR)

Court of Appeal
11 July 2019
AVAlnashir VisramMartha Karambu KoomeM. K. KoomeAMA. K. Murgor
2,866 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal reinstated Spire Bank's case, ruling that a company need not attach a board resolution upfront if its officer swears they are duly authorized.

What this practically means

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Executive summary

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This appeal arose from the ruling of the Environment and Land Court at Mombasa (Yano, J.) delivered on 30th January 2018 striking out Spire Bank Limited's judicial review application, brought against the Land Registrar to quash restrictions registered against Title No. MOMBASA/BLOCK XVII/797 following the appellant's exercise of its statutory power of sale. The suit was struck out on a preliminary objection that the verifying affidavit sworn by the appellant's Corporation Secretary, Josephine Musembi, was unsupported by a board resolution under seal, rendering the proceedings incompetent under order 4 rule 1(4) of the Civil Procedure Rules. The Court of Appeal allowed the appeal. It held that while order 4 rule 1(4) is mandatory in requiring a verifying affidavit sworn by an officer authorized under the company's seal, the provision is not intended to be used as a procedural technicality to strike out suits. Where a deponent states that she is duly authorized, it is sufficient, and the onus shifts to the disputing party to prove lack of authority by evidence. Whether an officer is authorized is a matter of evidence and cannot found a preliminary objection, which must rest on a pure point of law on facts that are not contested. Since the respondents produced no evidence that Musembi was an imposter or lacked authority, the preliminary objection ought to have failed. The Court set aside the ruling, reinstated the judicial review motion, and directed the appellant to file a resolution of authorization under seal within fifteen days, with costs to the appellant.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the learned judge rightly struck out the appellant's judicial review proceedings on the basis that they were incompetent as not supported by a properly authenticated affidavit
  2. 2.Whether the question of an officer's authority to swear a verifying affidavit on behalf of a company can be raised by way of preliminary objection

Key legal issues

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01

Whether a verifying affidavit sworn by a corporation secretary without an exhibited board resolution renders judicial review proceedings incompetent

Holding

No. It suffices for the deponent to state she is duly authorized; a party disputing authority must prove it by evidence, and absence of a resolution under seal cannot be raised as a preliminary objection.

Reasoning

The Court applied Makupa Transit Shade, holding that deponents with knowledge of the issues who state they are duly authorized suffice, and the disputing party bears the evidential onus. The provision was aimed at preventing unauthorized imposters suing for corporations, not at striking out properly instituted suits. Here the deponent deponed she was the Corporation Secretary, competent and authorized, and the respondents adduced no evidence to the contrary.

p. 4
02

Whether lack of authority of the verifying deponent is a pure point of law suitable for a preliminary objection

Holding

No. Where the objection requires ascertainment of facts or production of evidence, such as a resolution under seal, it ceases to be a preliminary objection.

Reasoning

Relying on Mukisa Biscuit Manufacturers and the Supreme Court's pronouncement, the Court reiterated that a preliminary objection must rest on a pure point of law on agreed facts. Whether an officer was authorized is a matter of evidence, as Odunga, J stated in the Presbyterian Foundation case; such a fact cannot found a preliminary objection unless admitted. The judge therefore misdirected himself in upholding the objection and striking out the suit.

p. 3

Legal principles established

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  • A preliminary objection cannot succeed where the determination of a party's authority requires the production or testing of evidence; it must be a pure point of law.
  • Order 4 rule 1(4) of the Civil Procedure Rules is not intended to be used as a procedural technicality to strike out suits; where authorization is disputed, the burden lies on the party alleging lack of authority to prove it by evidence.
  • It is sufficient for an authorized person to depone that they are duly authorized; the onus then shifts to the disputing party to demonstrate lack of authority by evidence.

Court orders

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  1. 1.Appeal allowed with costs to the appellant
  2. 2.Ruling and order of the Environment and Land Court of 30th January 2018 set aside
  3. 3.Notice of Motion dated 17th May 2017 reinstated
  4. 4.Appellant to file and serve an authorization of a duly authorized officer under the seal of the company within 15 days from the date of the judgment

The bench

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One judgment of the whole court — no separate or dissenting opinions.

AV
majority
Martha Karambu Koome
M. K. KoomeJA
Currently serving
majority
AM
majority
On appeal from
Environment and Land Court at Mombasa
ELC Judicial Review Case No. 7 of 2017
Jurisdiction invoked
First appeal from the Environment and Land Court under the Court of Appeal's appellate jurisdiction

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

we are satisfied that the appeal is merited, and is allowed with costs to the appellant. The ruling and order of the Environment and Land Court of 30th January 2018 is set aside and the Notice of Motion dated 17 th May 2017 hereby reinstated.
p. 4Disposition - appeal allowed, ruling set aside, motion reinstated
We order that the appellant do file and serve an authorization of such duly authorized officer under the seal of the company within 15 days from the date hereof.
p. 4Final orders - direction to file authorization
the provision was not intended to be utilized as a procedural technicality to strike out suits, particularly where no evidence was produced to demonstrate that the officer was unauthorized.
p. 3Purpose of order 4 rule 1(4)
Whether or not an officer is authorized to institute the proceedings is a matter of evidence, which requires to be canvassed before the court.
p. 4Authority as a question of evidence, not a preliminary objection

Issues in the judgment

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minor

The judgment is internally inconsistent as to the date of the struck-out Notice of Motion, describing it as dated 11th May 2017 in places and 17th May 2017 in others, including in the final reinstatement order.

minor

The 2nd respondent's name is inconsistently rendered in the judgment ('Saleh', 'Selah', 'Swaleh').

minor

The Supreme Court decision on preliminary objections is quoted but not named, so it cannot be exhaustively listed in casesCited.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (9)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Spire Bank Limited v Land Registrar & 2 others [2019] KECA 530 (KLR)", Case Analysis (2019). Civil Appeal No. 52 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/530/eng@2019-07-11

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.