Kaaya L. Enterprises Limited v Commissioner of Customs & Excise, Kenya Ports Authority, Evergreen Shipping Line & Unicom Limited [2017] KEHC 789 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

COMMERCIAL SUIT NO. 193 OF 2012

KAAYA L. ENTERPRISES LIMITED.......................................PLAINTIFF

VERSUS

1.  COMMISSIONER OF CUSTOMS & EXCISE

2.  KENYA PORTS AUTHORITY

3.  EVERGREEN SHIPPING LINE

4.  UNICOM LIMITED...........................................................DEFENDANTS

R U L I N G

“The reasoning appears to be that a litigant, howeverpoor, should be permitted to bring his proceedingswithout hindrance and have his case decided.  Theletter and spirit of our constitution appears tosupport this position”[1].

Introduction and Outline of facts

1. The court is called upon to order that the plaintiff do furnish thesecurity for the whole of the costs of the 1stDefendant upto Kshs.600,000/= in this suit.  The application is supported by the affidavit of Nancy Ngetich which reiterates the grounds disclosed on the face of the application.  The said grounds can be summarized to be that; the plaintiff is a foreign juristic person incorporated in the Republic of Uganda, the Defendant/Applicant has no way of knowing the precise address or other contacts of the plaintiff and therefore has no way of tracing whether the plaintiff has any assets and means of paying the costs of this suit if the same be dismissed, that even if the same were traced and identified it would be unduly difficult for the defendant to rely on the official or legal process of Uganda to recover costs and that the defendant has abonafidadefence to the plaintiffs.  In addition the affidavit adds that the plaintiff claim is quite weak and that the grant of an order for provision of security for costs is a discretionary matter vested upon the court.  The 2ndto 4thdefendant supported the Application without filling any papers.

2. The Application was opposed by the plaintiff who filed a statementof grounds of opposition.  The Grounds of opposition by the plaintiff are that the application is abusive of the court process being tainted with bad faith in that it was brought after trial has taken place and long after the pleadings closed purely to delay the delivery of judgment whose outcome should not be predetermined.

Analysis and determination

3. The principles that govern the courts determination of anapplication for the provision for security of costs are now well settled.  They are to the effect that whether or not to grant an order for security is in the discretion of the court and further that normally security would be required from a plaintiff resident outside Kenya where the defendant has shown a bona fide defence and lastly that the application ought not be made too late or too close to the trial unless there be a reasonable explanation for failure to act with promptitude.

4. An order for provision for security for costs is a supplementalproceeding designed to bolster and further the administration of justice.  Its purpose is to secure the interests of a defendant who may be faced with the prospects of total failure to recover costs duly orders after a successful defence of a plaintiff suit.

5. Like all court orders the purpose and only intendment is to securethe justice of the case between the parties.  Accordingly, therefore no order for security ought to be ordered where the direct effect would be to stifle the right of a litigant to be heard purely on account of being impecunious or just being of a lesser economic or financial muscle as compared to the plaintiff.  With the advent of Kenyan Constitution 2010, with its entrenched bill of rights including the right to access to justice unhindered, it is clear that an iota of intention or design to delay or embarrass the hearing of a dispute or just to refrain access to justice would be a sufficient basis to decline an order to provide security for costs[2].

6. In the matter before me, it is not the 1st defendant/Applicants’ casethat the plaintiff would be unable to pay costs but rather that the applicant is a foreign entity whose assets are unknown to the defendant and that even if the same are known the process of recovering costs, if awarded, would be too tedious and tenacious.  I hold the view that the Applicant has failed on its duty to prove that the plaintiff would be unable to pay costs if the suit fails and costs are ordered[3].

7. Secondly the difficulty in recovery of costs is itself not a ground toorder security for costs.  Indeed the circumstances reigning when Farra Incorporated vs Brian John Robson[4]was decided are totally different from those of today.  In that decision the Judges expressed the perceived difficulties as presented by the facts of the case when they said:

“There may be all sorts of difficulties in obtaining execution in Tanganyika; one has no knowledge of what sort of transactions are being carried on in Tanganyika, who are employees, what are the terms of the leases, whether a business or firm is registered in Moshi and if so under what name.  Moreover, even if there was all that confirmation there is certainly no precedent under which the courts in this colony have followed court decisions under the Judicature Act, 1873, and Judgments Extensions Act, 1868.  Furthermore, in so far as the matter may be one of discretion I think this is a fit and proper case to order security for costs”.

8. I am prepared to say that the legal circumstances and even realitiesat the moment were not the same as they exist today.  Today we have the East Africa Community, an economic Block with legal instruments to not only foster integration but also encourage free and unhindered movement of good, services and people within the region.

9. In addition Kenyan Parliament has now enacted and the law hasbeen operationalized, under the provisions of Foreign Judgment (Reciprocal Enforcement) Act whose sole and core purpose is to enable enforcement of judgment given outside Kenya in countries which accord reciprocal treatment to judgment given in Kenya.  I am in no doubt that Uganda accords Kenya reciprocal treatment for I am aware and take judicial notice that we, Kenyan Courts, enforce judgments from Uganda and they definitely accord reciprocal treatment to ours.  As a country embracing international law jurisprudence, we only reciprocate to a reciprocating jurisdiction.

10. The third consideration which the cases cited to me do not seem toaddress is the fact that the expeditious disposal of court process is now a constitutional principal[5]and value as much as it is an overriding objective of the court.  It is now a genuine consideration that the conduct of a litigant should not present itself as lackluster, laidback or just indolent.  Such conduct do not sit in consonance with the ethos and objectives of expeditious dispatch of court business and must be frowned upon by the court.

12. In the context of this matter we have taken valuable time to takethe evidence of all the parties during which process the 1stdefendant consistently participated.  This matter has now attained a carrier spanning one half of a decade and the security for costs had never been sought uptill the cases were closed on 27. 4.2017.

13. After the close of the last of the rival cases, parties have attendedcourt more than twice to highlight the submissions but all that while the defendant did not deem it timely or even desirable to seek security for costs even if the same was to be acceptable after the trial had commenced proceeded and closed.  This state of affairs present the Applicant as a dilatory litigant who does not regard the need for promptitude much and a person who doesn’t deserve the discretion of the court being given in his favour.

14. Lastly, the requirement that an application for security for costs bemade timeously flows from the repercussions of the order to provide security in the events of default.  I have said that the trial is complete and submissions have been filed and what remains is highlighting and determination of the suit.  I shudder to consider what would happen if I was to Order security and the plaintiff defaults to avail the security and I am called upon to call in the operation of Order 26 Rule 5.  I would be considering whether to dismiss the suit for failure to provide security or just render a Judgment on the merits.  In all fairness a court of law would at that moment be hesitant to dismiss a suit completely heard on the merits on grounds other than the merits.  In that event an order to provide security would have been superfluous and of no practical purpose.  I am totally reluctant to venture into academic journey or just act in superfluity.

15. I have said enough that this application is belated, dilatory andcannot avoid being viewed as a design to delay or just derail the just,fair and proportionate determination of this matter.  For that reason it is not intended and cannot be seen to serve the known purposes of justice.  It is made withoutbonafidesand it cannot succeed but must fail and be ordered dismissed.  It is dismissed with costs to the plaintiff who opposed it.

Dated and delivered at Mombasa on this 7th day of December 2017.

P.J.O. OTIENO

JUDGE

[1] Bamburi Cement Co. Ltd vs Lawi Duda & 21 Others Civil Appli. No. NAI 6 OF 2013[Unreported]

[2]Bamburi Cement and Company (Supra)

[3]Parkinson & Co. Ltd vs Triplan Ltd [1973] WLR 632,648

[4][1957] E.A. 441

[5]Jared O. Okelo vs I.E.B.C & Others [2014] eKLR