Greenview Lodge Ltd v Harit Sheth (t/a Harit Sheth Advocates) & another [2017] KEELC 1853 (KLR)
The bottom line
#A company suing over a Kshs 1.2 billion property deal must deposit Kshs 25 million as security or its High Court case will be dismissed.
What this practically means
#Executive summary
#Key legal issues
#Whether security for costs should be ordered against the Plaintiff
Yes. The Defendants are entitled to security because the Plaintiff, alleged to be without gainful activity, produced no evidence of assets that could satisfy an adverse costs order.
Order 26 rule 1 gives the court wide latitude to order security. The Defendants asserted the Plaintiff had closed its only business and had no attachable assets. The Plaintiff claimed to own various assets but attached no documents proving them. Following Abel Moronga Ongwacho, mere assertions are insufficient, and the contested suit property cannot count toward capacity to pay costs. The court therefore found the Defendants entitled to security, though in reduced amounts.
Whether the amount of security sought by each Defendant was justified
No. The court fixed security at Kshs. 10 million for the 1st Defendant and Kshs. 15 million for the 2nd Defendant, well below the amounts sought.
The 1st Defendant sought Kshs. 20 million based on the Kshs. 1.2 billion value of the claim, and the 2nd Defendant sought Kshs. 30,887,920/- as estimated legal costs. The court, exercising the discretion under Order 26 rule 1 reasonably and judicially, awarded reduced sums to be held in joint accounts of counsel, with dismissal of the suit as the sanction for non-compliance within 45 days.
Legal principles established
#- A court has a discretion, to be exercised reasonably and judicially, whether to order security for costs, security being normally required from plaintiffs resident outside the jurisdiction
- A court must balance protecting a defendant from an impecunious plaintiff against not locking a litigant out of the seat of justice on account of poverty
- A contested suit property cannot be treated as proof of a plaintiff's capacity to meet costs, and a plaintiff asserting it owns assets must adduce evidence of them
Court orders
#- 1.The Plaintiff to deposit Kshs. 10 million in respect of the 1st Defendant's application, to be held in a joint account in the names of counsel for the Plaintiff and the 1st Defendant
- 2.The Plaintiff to deposit Kshs. 15 million in respect of the 2nd Defendant's application, to be held in a joint account in the names of counsel for the Plaintiff and the 2nd Defendant
- 3.The sums to be deposited within 45 days from delivery of the Ruling failing which the suit stands dismissed with costs to the Defendants
- Jurisdiction invoked
- Order 26 rule 1 of the Civil Procedure Rules, 2010 (security for costs in a suit)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Greenview Lodge Ltd v Harit Sheth (t/a Harit Sheth Advocates) & another [2017] KEELC 1853 (KLR)", Case Analysis (2017). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1853/eng@2017-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.