Shah & 2 others v Shah & 2 others [1982] KECA 26 (KLR)
The bottom line
#What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether Order XXV rule 4 of the Civil Procedure Rules fetters the court's discretion under rule 1 to dispense with security for costs against a plaintiff not residing in Kenya
- 2.Whether a new ground of appeal raising that interpretation could be raised for the first time on appeal when it was not argued below
- 3.Whether Sachdeva J misdirected himself in refusing to order security for the appellants' costs
- 4.Whether the analogy with interlocutory injunctions was an appropriate test on an application for security for costs
- 5.Whether the procedure by originating summons was inappropriate in the circumstances
Key legal issues
#Whether Order XXV rule 4 ousts the discretion under rule 1 for non-resident plaintiffs
The court declined to decide the point finally, holding it was not properly before it, and decided the appeal on the agreed basis of an unfettered discretion under rule 1.
Ground 1(b) raised for the first time on appeal the contention that rule 4 removes the court's discretion except in suits on negotiable instruments or foreign judgments. Counsel had agreed below that rule 1 conferred an unfettered discretion. The court noted rule 1 was never correspondingly amended and refused to entertain the new ground, deciding the appeal on the basis left to the learned judge.
Misdirection by the learned judge in adopting the interlocutory injunction analogy
The analogy was inappropriate; the correct test is whether the defendant shows a bona fide defence, but the misdirection was not fatal because the judge was not impressed with the bona fides of the appellants' case.
Sachdeva J had held the respondents showed a prima facie case like an applicant for an interlocutory injunction. Law JA held that was the wrong test, but the judge's adverse view of the appellants' bona fides, their failure to disclose estate funds or produce a written consent, and the availability of assets in Kenya meant the discretion was properly exercised and the appeal failed.
Appropriateness of originating summons procedure
The objection was premature at the security stage; originating summons in Kenya is not limited to agreed facts and a judge may adjourn the matter into court for viva voce evidence.
Mr Khanna argued the originating summons was misconceived since the matter did not turn on agreed facts. The court held that the matter prima facie fell within rule 1 of Order XXXVI and that rule 10 of Order XXXVI empowers a judge to adjourn the hearing for evidence or arguments, so any referral to a suit could be made only at that later stage.
Legal principles established
#- On an application for security for costs, the test is not whether the plaintiff has established a prima facie case but whether the defendant has shown a bona fide defence.
- A court has a discretion, to be exercised reasonably and judicially, to refuse to order security from plaintiffs resident outside the jurisdiction.
- A ground of appeal raising an entirely new point of construction not argued in the court below should not be permitted at the appeal stage.
- A self-dealing transaction by executors or trustees of estate property is voidable at the instance of the beneficiaries.
- The practice of including judgments in other cases in a record of appeal is to be deprecated and should be discontinued.
Court orders
#- 1.Appeal dismissed with costs
- 2.The practice of including judgments in other cases in a record of appeal deprecated and should be discontinued
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Delivered the leading judgment dismissing the appeal against refusal of security for costs.
Concurred with the judgment of Law JA.
I have read in draft the judgment of Law JA in this appeal. I agree with it and that the appeal be dismissed.p. 3
Agreed with dismissal and traced the history of the security-for-costs rules in England and Kenya, preferring not to decide Order XXV rule 4 conclusively since it was not raised below.
Looking at the history of the Order, I now think that is wrong, though I prefer, for the reasons given by Law JA, not to deal with the matter finally today since it was not raised before the learned Judge in the High Court.p. 4
- On appeal from
- High Court of Kenya
- Originating summons dated November 8, 1978 (chamber summons of February 22, 1979)
- Jurisdiction invoked
- Appeal under the Probate and Administration Act and Civil Procedure Rules from the High Court ruling on security for costs
Relief refused
#Appellants' appeal against the refusal to order the respondents to furnish security for costs of Kshs 20,000
The learned judge exercised a full and unfettered discretion reasonably and judicially, having regard to the fiduciary relationship, the bona fides of the appellants' case and assets in Kenya available to satisfy costs
Costs
Appeal dismissed with costs to the respondents
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.
I would accordingly dismiss this appeal, with costs. As Miller JA and Kneller Ag JA agree, it is so ordered.
The test on an application for security, is not whether the plaintiff has established a prima facie case, but whether the defendant has shown a bonafide defence.
it cannot be said that he exercised his discretion unreasonably or unjudicially in refusing to order security.
Judgments in other cases have no place in a record of appeal.
Such a transaction is voidable at the instance of the beneficiaries, see section 91 of the Indian Probate and Administration Act, which applies to Kenya.
Issues in the judgment
#The judgment quotes Order XXV rule 4 twice with slightly differing wording - once as 'any order for security for costs shall be in the discretion of the court' and later in Kneller Ag JA's judgment as 'any order for costs shall be in the discretion of the court'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shah & 2 others v Shah & 2 others [1982] KECA 26 (KLR)", Case Analysis (1982). Civil Appeal (High Court Civil Case arising from originating summons dated November 8, 1978). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1982/26/eng@1982-08-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.