Charterhouse Bank Limited (under Statutory Management) v Frank N. Kamau [2015] KECA 655 (KLR)
The bottom line
#Kenya's Court of Appeal refused to force Charterhouse Bank to deposit extra security for appeal costs, protecting the right to appeal.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicant made out a case for further security for costs against an appellant in statutory management
The application failed because the applicant did not discharge the burden of justifying further security: costs previously awarded by the High Court had been paid by the Central Bank of Kenya, the statutory security of Kshs.6,000 had been deposited, and no deterioration in the appellant's position was demonstrated.
The court accepted that an entity under statutory management is not the same as one in liquidation. The applicant failed to distinguish between the two or to show any change since the High Court suit. Given that the Central Bank of Kenya had paid prior costs and would likely do so again, and that the initial security under the Rules had been deposited, there was no basis for a further order. The Lalji Ganji Nathoo authority on the applicant's burden was adopted.
The relationship between security for costs and the constitutional right of access to justice
An order for further security which an appellant may be unable to pay would stifle the appeal and contravene Article 48 of the Constitution and the overriding objective under Section 3A of the Appellate Jurisdiction Act.
The court held that security-for-costs orders must be measured against Article 48, which requires that any fee required for access to justice be reasonable and not impede access. Requiring an entity already under statutory management and not trading to post substantial additional security could shut it out of its right of appeal, contrary to the just, expeditious and affordable resolution of disputes that the overriding objective mandates.
Legal principles established
#- The burden lies on an applicant for an order for further security for costs to show cause why the relief should be granted; mere averment that security already deposited is inadequate or that costs ordered below have not been paid does not oblige the court to grant the application.
- A court will not order further security for costs from an appellant under statutory management where there has been no material change in circumstances and costs previously awarded have been duly paid.
- An order for security for costs that an appellant cannot meet, and which would stifle the appeal, offends Article 48 of the Constitution and the overriding objective in Section 3A of the Appellate Jurisdiction Act.
Court orders
#- 1.The Notice of Motion seeking security for costs of the appeal was dismissed
- 2.Costs of the application awarded to the appellant
- On appeal from
- High Court of Kenya at Nairobi
- Civil Suit No. 263 of 2008
- Jurisdiction invoked
- Appellate jurisdiction under the Appellate Jurisdiction Act, with the application brought under Rules 42(1), 82(1)(d) and 107(3) of the Court of Appeal Rules and Section 401 of the Companies Act (Cap 486)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Charterhouse Bank Limited (under Statutory Management) v Frank N. Kamau [2015] KECA 655 (KLR)", Case Analysis (2015). Civil Appeal No. 87 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/655/eng@2015-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.