1. I have considered the application dated 12th April, 2022, together with the supporting affidavit sworn on even date, the replying affidavit in opposition to the same sworn on 4th August, 2023, the rival submissions of the parties, and the applicable law.
2. The applicant seeks an order for security for costs from the Plaintiff. In support of the application, the applicant relied on Order 26, Rule1 of the Civil Procedure Rules. He submitted that the basis of the application was predicated on the judgments arising in two previous matters between the parties, namely, case numbers HCCC 577 of 2011, and HCCC 436 of 2016, in which the defendant had represented the Plaintiff. Counsel submitted that judgment was entered in the previous matters, and to date the same have not been set aside.
3. The applicant contended that the Plaintiff will not be able to pay its costs because it presently owes the defendant over Kshs 50,000,000, arising out of case number 436 of 2016. Counsel submitted that the Plaintiff’s only property is the subject of sale, and that it has no other property to satisfy the said debt.
4. Counsel submitted that the present suit is bereft of any merit, and is an attempt by the Plaintiff to frustrate the defendant from accessing the fruits of its judgment in the previous matters.
5. In opposition to the application, the respondent submitted that the present suit is based on professional negligence, and the issues ought to be ventilated. Counsel contended that the previous cases referred to by the applicant are the subject of appeal, and that this is a fact, not in dispute. He submitted that there is no proof that the applicant tried, but was unable, to recover its costs arising from previous suits between the parties.
6. Counsel submitted that the Plaintiff is a Kenyan company, registered in Kenya, and that its directors and shareholders are all citizens. Moreover, that in the said previous case of HCCC 436 of 2017, the Plaintiff had procured a bank guarantee in the sum of Kshs 5,000,000/-. Accordingly, it would once again be able to settle the Defendant’s costs, if need be. Finally, counsel submitted that the Plaintiff has never been declared insolvent to date, and there is not evidence that it would be unable to make payments if called upon to do so.
7. Having considered the above, I note that the law governing security of costs is set out under Order 26 of the Civil Procedure Rules which provides as follows: -
“
1.
In any suit the court may order that security for the whole or any part of the costs of any defendant or third or subsequent party be given by any other party.
2.
If an application for security for costs is made before a defence is filed, there shall be filed with the application an affidavit setting out defence the grounds of the defence together with a statement of the deponent’s belief in the truth of the facts alleged.
3.
Where it appears to the court that the substantial issue is which of two or more defendants is liable or what proportion of liability two or more defendants should bear no order for security for costs may be made.
4. In any suit brought by a person not residing in Kenya, if the claim is founded on a bill of exchange or other negotiable instrument or on a judgment or order of a foreign court, any order for security for costs shall be in the discretion of the court.”
8. In Patrick Ngetakimanzi vs Marcus Mutuamuluvi & 2 Others- High Court Election Petition No. 8 of 2013 it was held that: -
“Security of costs ensures that the respondent is not left without recompense for any costs or charges payable to him. The duty of the court is therefore to create a level ground for all the parties involved, in this case, the proportionality of the right of the petitioner to access to justice vis-a-vis the respondent's right to have security for any costs that may be owed to him and not to have vexatious proceedings brought against him.”
9. Further in Gatirau Peter Munya vs Dickson Mwenda Githinji & 2 Others, CA No. 38 of 2013 [2014] eKLR, the Supreme Court emphasized that: -
“In an application for security for costs, the Applicant ought to establish that the Respondent, if unsuccessful in the proceedings, would be unable to pay costs due to poverty. It is not enough to allege that a Respondent will be unable to pay costs in the event that he is unsuccessful. And the onus is on the Applicant to prove such inability or lack of good faith that would make an order for security reasonable.”
10. In Shah vs Shah [1982] KLR 95 it was held that: -
“The general rule is that security is normally required from Plaintiff’s resident outside the jurisdiction, but as was agreed in the court below, a court has discretion, to be exercised reasonably and judicially, to refuse to order that security be given” (emphasis mine).
11. In Kibiwott & 4 others vs The Registered Trustees of Monastery of Victory Nakuru, HCCC No 146 of 2004 the court observed that an applicant for security of costs has to prove that the opposing party will not be able to pay the costs to be awarded in the event of the suit filed by such a party being unsuccessful. (emphasis mine)
12. In balancing the interest of both parties, I find that the applicant has not proved, on balance, that the Plaintiff will be unable to pay its costs, in the event the suit is dismissed. Further, given that the Plaintiff is not a foreign entity; and no evidence has been placed before the court to show that it failed to pay costs in the previous proceedings between the parties, I am not persuaded that there is a material risk in the present matter.
13. I am of the view that in the present circumstances an order for security would be an undue burden or impediment to the Plaintiffs right to access justice.
14. Based on the reasons put forward by counsel and the reasons set out above, I therefore find that the application is without merit. The same is dismissed with costs.