[2000] KEHC 434 (KLR)
The court found that the application for security for costs was procedurally defective as it was brought by Notice of Motion instead of Chamber Summons, contrary to Rule 12 of Order 38. More fundamentally, the grounds advanced—namely, that the plaintiff is a limited liability company and its assets could not be...
Source-derived case information.
- Citation
- [2000] KEHC 434 (KLR)
- Parties
- Plaintiff: Minar Restaurant Limited; Defendant: Avenue House Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 833 of 1997
- Procedural Posture
- Civil Case / Ruling on Application for Security for Costs
- Outcome
- application dismissed with costs to the respondent
- Judges
- JK Mulwa
- Legal Topics
- Security for Costs, Order 38 Civil Procedure Rules, Limited Liability Company, Procedure for Applications
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Minar Restaurant Limited
Plaintiff
Avenue House Limited
Defendant
Procedural Posture
Civil Case / Ruling on Application for Security for Costs
Legal Issues
- 1 Whether the application for security for costs was properly brought under Order 38 of the Civil Procedure Rules.
- 2 Whether being a limited liability company is a sufficient ground for ordering security for costs under Order 38.
- 3 Whether the application complied with the procedural requirements of Order 38.
Ratio Decidendi
The court found that the application for security for costs was procedurally defective as it was brought by Notice of Motion instead of Chamber Summons, contrary to Rule 12 of Order 38. More fundamentally, the grounds advanced—namely, that the plaintiff is a limited liability company and its assets could not be ascertained—do not fall within the grounds specified under Order 38 Rule 1 for granting security for costs. The court held that the inability to ascertain a company's assets, without more, is not a basis for such an order. Consequently, the application was misconceived and dismissed with costs to the respondent.
Court Disposition
application dismissed with costs to the respondent
Orders
- The application for security for costs is dismissed with costs to the respondent.
Full Case Text
Judgment text and source record
16 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT FO KENYA AT NAIROBI
civ case 833 of 97
MINAR RESTAURANT LIMITED…………………….PLAINTIFF
-VERSUS
AVENUE HOUSE LIMITED………………………..DEFENDANT
Background & Evidence
In this application the applicant is asking for an order that the plaintiff do deposit or provide a Banks Guarantee for a Ksh.9 million or any other sum as they Court may deem fit.
The grounds supporting the application are that the Plaintiff Company being a Limited Liability Company it has not been possible to ascertain its liabilities and that the Plaintiff has only paid a sum of Kshs.200,000/- as mere profit.
The application is opposed on the grounds that the application does not comply with the provisions of Order 38 rules 1. 2.4 and 12 of the Civil Procedure Rules and in any case the figure demanded as a deposit is arbitrary.
I have considered the contents of the affidavits in support and against. In the first instance the application is brought by way of Notice of Motion under Order 38 of the Civil Procedure Rules. Rule 12 of this Order requires that application should be made by way of Chamber Summons. While I would not under normal circumstances dismiss the application on this ground, nevertheless it is noteworthy that the Order is applicable when the conditions enumerates Rule (1) (a) (i) (ii) (iii) and (b) happen. This does not appear to be the case in this application where the applicant is complaining that the Respondent being a Limited Company, it has not been able to ascertain its asserts. This is not one of the grounds for making an application for security under the Order and I therefore find that the application to that extend is misconceived.
RULING
Based on these findings the Application is dismissed with costs to the Respondent.
Delivered at Nairobi this 10th day of February, 2000.
KASANGA MULWA
JUDGE