Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELCPartially AllowedELC Case of Machakos (Environment and Land Court, Machakos)· [2021] KEELC 693 (KLR)

Garden Hotel Machakos Ltd v Elizabeth Ngii Maingi & 2 others [2021] KEELC 693 (KLR)

Environment and Land Court
4 November 2021
7,449 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~30 min to read original · ~4 min brief

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

#
This ruling of the Environment and Land Court at Machakos (A. Nyukuri, J) determined two applications dated 3rd June 2020 filed by the Defendants, administrators of the estate of the late Laban Maingi Kitele, against the Plaintiff company which had leased their hotel premises under a lease expiring on 28th February 2020. The first application, under Order 26 of the Civil Procedure Rules, sought deposit in court of rent arrears of Kshs. 2,217,591/=, mesne profits of Kshs. 2,706,144/=, security for costs of Kshs. 2.5 million, and an undertaking in damages, on grounds that the Plaintiff was insolvent and its claim a sham. The court held that security for costs is discretionary and must be balanced against Articles 48 and 50 of the Constitution; that the applicants bore the onus of proving the Plaintiff's inability to pay, which they failed to do with material evidence; but that, as the lease had lapsed and no agreement to refund renovation costs was shown, the Plaintiff's claim had no prospect of success, making the case proper for security. The court fixed a reasonable and modest sum of Kshs. 600,000/=, payable within 45 days failing which the suit stands struck out with costs, holding that counterclaim sums for rent arrears and mesne profits are not awardable as security under Order 26. The second application sought striking out of the plaint and summary judgment on the counterclaim. The court, applying D T Dobie v Muchina and related authority, found the renovation-refund pleadings raised a triable issue warranting trial, and that the mesne profits figure lacked any pleaded basis. It dismissed that application with costs to abide the outcome of the suit.

Key legal issues

#
01

Whether security for costs should issue against the Plaintiff

Holding

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

Reasoning

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.

p. 5
02

Whether the Plaintiff's suit should be struck out for disclosing no reasonable cause of action

Holding

No. The pleadings raise a triable issue as to whether renovation monies are refundable

Reasoning

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.

p. 8
03

Whether summary judgment should be entered on the Defendants' counterclaim

Holding

No. The mesne profits claim of Kshs. 626,400/= per month lacks a pleaded basis and cannot be granted summarily

Reasoning

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.

p. 8

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. 1.The Plaintiff/Respondent to deposit in court Kshs. 600,000/= as security for costs within 45 days of the ruling
  2. 2.Failing deposit of the said Kshs. 600,000/= within 45 days, the suit shall stand struck out with costs
  3. 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. 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. 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.