Njue & another v Gulflink Enterprises Limited
The bottom line
#A Kenyan court ordered land plaintiffs to deposit KShs 20 million as security for the defendant's legal costs, or their case will be dismissed.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Applicant herein has established and demonstrated the requisite grounds to warrant the grant of an order of Security for costs.
- 2.What is the reasonable Quantum of costs; if any, to be granted by the court.
Key legal issues
#Whether grounds for security for costs were established
Yes - the applicant demonstrated a bona fide defence and that the plaintiffs had not shown means to pay costs; the plaintiffs' failure to file an affidavit of means was fatal.
The court held that security for costs does not violate Articles 48 and 50. Citing Munya and Kibiwot, it held a respondent served with such an application ought to file an affidavit of means. Since means are specially within the plaintiffs' knowledge, Section 112 of the Evidence Act shifted the evidential burden to them once the applicant's sworn allegation was made. Their silence left the applicant's averments uncontroverted, warranting the order.
Quantum of security for costs
Kshs 20,000,000 fixed as reasonable instruction fees, benchmarked against the uncontroverted valuation of the suit property at Kshs 1,450,000,000 and the Advocate Remuneration Order 2014.
The applicant filed a valuation report valuing the suit property at Kshs 1,450,000,000, which the 1st Respondent did not controvert. The court adopted that value as the yardstick, applied the Party and Party costs scheme under the Advocate Remuneration Order 2014, and adopted the Muthoka ratio on determining subject matter value from pleadings, concluding Kshs 20,000,000 was a reasonable measure of instruction fees.
Legal principles established
#- An order for security for costs does not, by itself, fetter the right to fair hearing or access to justice under Articles 48 and 50 of the Constitution.
- Once an applicant avers on oath that a respondent lacks means, the evidential burden shifts to the respondent to file an affidavit of means, the facts being specially within its knowledge under Section 112 of the Evidence Act.
- An uncontroverted valuation report may be adopted as the benchmark for ascertaining instruction fees for security for costs.
Court orders
#- 1.The Plaintiffs/Respondents be and are hereby ordered and/or directed to deposit the sum of Kshs 20,000,000/= only as security for costs that may accrue and/or arise in respect of the instant matter.
- 2.The security for costs shall be deposited in an Escrow account in the Joint name of the Advocates for the respective Parties and held pending the hearing and determination of the instant suit or further directions of the court.
- 3.The Escrow account shall be with a Reputable Financial Institution/Banking Institution agreed upon by the advocates for the Parties, with the deposit to be made within sixty (60) days from the date hereof.
- 4.In default of compliance, the Plaintiffs' suit shall automatically stand Dismissed.
- 5.Costs of the Application awarded to the Defendant/Applicant.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the suit land LR No 209/12040; interlocutory application under the court's inherent powers
Relief refused
#Security in the sum of Kshs 40,000,000 as sought
Court found Kshs 20,000,000 a reasonable measure of instruction fees based on the uncontroverted valuation of the suit property
Costs
Costs of the Application be and are hereby awarded to the Defendant/Applicant.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The Plaintiffs/Respondents be and are hereby ordered and/or directed to deposit the sum of Kshs 20, 000, 000/= only as security for costs that may accrue and/or arise in respect of the instant matter.
In default to comply with the terms of the order herein, the Plaintiffs' suit shall automatically stand Dismissed.
the grant of an order of security for costs does not by itself constitute a fetter or hindrance to the Respondent's Right to Fair Hearing and Access to Justice as espoused and entrenched in Articles 48 and 50 of the Constitution 2010.
When the Plaintiffs were served with the Application seeking that they provide security for costs, the Plaintiffs ought to have, as a matter of course, provided an affidavit of means stating that they were capable of paying the costs, if they were unsuccessful in their case.
Costs of the Application be and are hereby awarded to the Defendant/Applicant.
Issues in the judgment
#Judge's name appears as 'JO MBOYA, J' in coram but signed 'OGUTTU MBOYA JUDGE'
Munya v Kithinji attributed to Court of Appeal but described as Supreme Court holding
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njue & another v Gulflink Enterprises Limited", Case Analysis (2023). Environment & Land Case E271 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18623/eng@2023-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.