Garden Hotel Machakos Ltd v Elizabeth Ngii Maingi & 2 others [2021] KEELC 693 (KLR)
The bottom line
#The court ordered the hotel company to deposit Kshs. 600,000 as security for the landlord's legal costs within 45 days, or lose its case.
What this practically means
#Executive summary
#Key legal issues
#Whether security for costs should issue against the Plaintiff
Yes, but limited to Kshs. 600,000/=. The claim on the pleadings has no prospect of success given the lapsed lease and absence of a refund agreement, and the sum fixed is reasonable and modest
The court applied Order 26 Rule 1 and the Keary Developments/Westmont guidelines, balanced against Articles 48 and 50. The lease expired on 28/02/2020 and no material established an agreement for the deceased to refund renovation costs, so the claim lacked prospects of success. However, the applicants failed to prove insolvency with material, and the counterclaim sums could not be packaged as security. A reasonable sum of Kshs. 600,000/= was fixed, payable within 45 days failing which the suit stands struck out.
Whether the Plaintiff's suit should be struck out for disclosing no reasonable cause of action
No. The pleadings raise a triable issue as to whether renovation monies are refundable
Applying D T Dobie v Muchina and Madison Insurance, the court held striking out is draconian and should be used sparingly in the clearest of cases. The Respondent pleaded expenditure of Kshs. 29,724,878/= on renovations allegedly agreed with the deceased, which the Defendants denied. That dispute over refundability of renovation costs is a triable issue warranting full trial, entitling the Respondent to be heard.
Whether summary judgment should be entered on the Defendants' counterclaim
No. The mesne profits claim of Kshs. 626,400/= per month lacks a pleaded basis and cannot be granted summarily
Summary judgment requires that the matter be plain and obvious with no defence. Mesne profits are damages that must be pleaded and proved; citing Sadru Nanji v Al Nashir Dhanji, the applicant was under a duty to explain how the monthly figure was computed, which was not done. Summary judgment therefore could not issue at that stage.
Legal principles established
#- Security for costs is discretionary but must be exercised reasonably, judiciously, and balanced against constitutional rights of access to justice and fair hearing
- The applicant for security for costs bears the onus of proving that the respondent, if unsuccessful, would be unable to pay costs
- Striking out powers should be exercised sparingly; a suit raising a triable issue should proceed to trial
- A claim for mesne profits is a claim for damages which must be pleaded and proved
Court orders
#- 1.The Plaintiff/Respondent to deposit in court Kshs. 600,000/= as security for costs within 45 days of the ruling
- 2.Failing deposit of the said Kshs. 600,000/= within 45 days, the suit shall stand struck out with costs
- 3.The claims in the counterclaim for rent arrears and mesne profits held not to be claims envisaged under Order 26 as part of security for costs and were not awarded at this stage
- 4.The second Notice of Motion seeking to strike out the Plaintiff's suit and for entry of summary judgment on the counterclaim dismissed
- 5.Costs of the second application to abide the outcome of the suit
- Jurisdiction invoked
- Order 26 Rules 1, 5 & 6, Order 2 Rule 15(a), Order 36 Rules 1, 2 & 3 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Garden Hotel Machakos Ltd v Elizabeth Ngii Maingi & 2 others [2021] KEELC 693 (KLR)", Case Analysis (2021). ELC Case of Machakos (Environment and Land Court, Machakos). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/693/eng@2021-11-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.