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ELCDismissedNot stated in judgment (Notice of Motion dated 29th February, 2016)· [2018] KEELC 3886 (KLR)

Pride Properties Limited v Consolidated Bank of Kenya Limited & another [2018] KEELC 3886 (KLR)

Environment and Land Court
23 February 2018
2,805 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This ruling by the Environment and Land Court at Nairobi (S. Okong'o, J) determines a Notice of Motion dated 29th February 2016 by which the 2nd defendant, the registered proprietor of LR 4858/3 purchased from the 1st defendant in exercise of a statutory power of sale, sought security for costs of Kshs.150,000,000 from the plaintiff and an order that the 1st defendant deposit the balance sale proceeds of Kshs.64,000,000 as further security, failing which the plaintiff's suit should be dismissed. The plaintiff, which challenges the sale as illegal and at gross undervalue, opposed the application, contending that the security demanded exceeded the value of the subject matter, that it had a prima facie case found in its favour in an earlier injunction ruling, and that Kshs.64 million held by the 1st defendant was available for costs. The 1st defendant also opposed, arguing the application was defective and an attempt at double enrichment. The court framed a single issue: whether security for costs should be granted. Applying Order 26 rule 1 of the Civil Procedure Rules and the principles in Gatirau Peter Munya v Dickson Mwenda Kithinji and Marco Tool & Explosives Ltd v Mamujee Brothers Ltd, the court held that the onus lay on the 2nd defendant to prove the plaintiff's inability to pay costs; no such evidence was adduced. The Kshs.64 million held by the 1st defendant sufficed, ordering security would stifle the plaintiff's access to justice, and the application was barred by laches, having been brought years after the suit. The application was dismissed with costs to the plaintiff and the 1st defendant.

Key legal issues

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Whether security for costs should be ordered against the plaintiff

Holding

The application was dismissed; the 2nd defendant adduced no evidence of the plaintiff's inability to pay costs, the Kshs.64 million held by the 1st defendant sufficed as security, and the application was brought after undue delay (laches).

Reasoning

Order 26 rule 1 confers a discretionary power which must be exercised reasonably and judiciously. The applicant bore the onus of proving inability to pay costs; it placed no evidence before the court. The plaintiff was not required to prove its own financial capacity. Given the prior finding of a prima facie case, ordering security would stifle access to justice, and the two-year delay in prosecuting the application attracted the doctrine of laches.

p. 3

Legal principles established

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  • The onus of establishing a plaintiff's inability to pay costs lies on the applicant for security for costs and must be proven, not merely alleged

Court orders

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  1. 1.The Notice of Motion dated 29th February, 2016 is dismissed
  2. 2.Costs of the application to the plaintiff and the 1st defendant

Authorities

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Legislation

  • Civil Procedure RulesOrder 26 rule 1
  • Transfer of Property Act, 1882section 68B

Cases cited (20)

  • Keary Development vs. Tarmac Construction
    [1995] 3 ALL ER 534
  • Ocean View Beach Hotel Ltd vs. Salim Sultan Mollo & 5 others
    [2012] eKLR
  • Ignazio Messina & another vs. Stallion Insurance Company Ltd.
    [2005] eKLR
  • Godfrey Otieno Onyango & 2 others vs. Crispin Oduor Obudo & 8 others
    (2014) eKLR
  • Sir Lindsay Parkinson & Company Ltd vs. Triplan Ltd.
    (1973) 2 ALL ER 273
  • Graham Vetch vs. Calvin Burges & another
    (2014) eKLR
  • Downhill Ltd vs. Harith Ali El Busaidy & another
    NRB CA No. 254 of 1999
  • Priscillah Krobought Grant vs. Kenya Commercial Finance Co. Ltd. and 2 Others
    NRB CA No. 227 of 1995
  • Maranya vs. National Bank of Kenya Ltd & another
    (1995-1998) 1 EA 177
  • Saudi Arabian Airlines Corporation vs. Sean Express Services Corporation
    NRB HCCC No. 79 of 2013
  • Shakhalaga Khwa Jirongo vs. The Board of Trustees of National Social Security Fund
    NRB HCCC No. 957 of 2000
  • Noormohamed Abdulla vs. Patel
    [1962] E.A. 447
  • Gulf Engineering (East Africa) Ltd vs. Amrik Kalsi
    [1976] KLR 277
  • Pyaralal Mhand Bheru Rajput vs. Barclays Bank & others
    HCCC 38 of 2004
  • Beta Health Care International vs. Grace Mumbi Githaiga & 2 others
    (2016) eKLR
  • Marco Tool & Explosives Ltd vs. Mamujee Brothers Ltd
    (1988) KLR 730
  • Patrick Ngeta Kimanzi vs. Marcus Mutua Mulivi & 2 others
    HC EP 8 of 2013
  • Mwadhahabu Rajabu Tayari vs. Kenya Power & Lighting Company Ltd
    (2016) eKLR
  • Gatirau Peter Munya vs. Dickson Mwenda Kithinji & 2 others
    (2014) eKLR
  • Hall vs. Snowdon Hubbard & Co. (I)
    (1899) 1 QB 593
Jurisdiction invoked
Order 26 rule 1 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Pride Properties Limited v Consolidated Bank of Kenya Limited & another [2018] KEELC 3886 (KLR)", Case Analysis (2018). Not stated in judgment (Notice of Motion dated 29th February, 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3886/eng@2018-03-13

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