Westmont Holdings SDN. BHD v Central Bank of Kenya [2017] KECA 108 (KLR)
The bottom line
#The Court of Appeal ordered a wound-up company appealing CBK's judgment to deposit Kshs 20 million in security for costs within 45 days or lose the appeal.
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 appellant should be ordered to provide security for costs in the sum of Kshs 87,620,000 and whether the appeal should be stayed or struck out pending such deposit
- 2.Whether Westmont, having been wound up, lacks capacity to pursue the appeal and whether that justifies security for costs
- 3.Whether the identity and means of Jasmin See, the alleged attorney of Westmont, raise sufficient concerns to warrant an order for security
- 4.Whether the application was brought after undue delay or as an abuse of process to scuttle the hearing of the appeal
Key legal issues
#Whether a wound-up company pursuing an appeal can be ordered to provide security for costs
Yes. Where it is common ground that the appellant company was wound up and does not exist in law, the court may order security for costs to protect the respondent's ability to recover costs if the appeal fails
The court held the application was not predicated on mere impecuniosity but on the appellant's lack of legal existence. The winding-up was undisputed and uncontroverted by any replying affidavit, lending credence to CBK's anxiety about recovering costs. The court declined to determine the merits of the substitution by Lynwood Developers Ltd, reserving that for the appeal, but found the state of affairs sufficient for security.
The legal framework for ordering security for costs on appeal
Rule 107(3) confers an unfettered judicial discretion, guided by the principles in Sir Lindsay Parkinson v Triplan and Keary Developments v Tarmac, and tempered by Articles 48, 50 and 159 of the Constitution on access to justice and fair hearing
The court adopted the guidelines from Mama Ngina Kenyatta v Mahira Housing Company, which approved Lord Denning MR's parameters in Sir Lindsay Parkinson v Triplan, and the Keary Developments guidelines including balancing injustice to both sides, prospects of success, lateness of the application, and the risk of stifling a genuine claim.
Whether the application was brought late or abusively to scuttle the appeal
No. Given the flurry of activity since the appeal was filed, including a supplementary record of appeal, the court was not persuaded the application was brought after undue delay or to abuse the process
The court noted the appeal was filed on 10 February 2017 and the application on 17 October 2017, and that CBK had questioned the expedition of the appeal. However, it declined to enter that controversy and observed ongoing activity in the file, concluding the application was not an abuse of process.
The status and liability of Jasmin See as attorney of the appellant
The identity, place of abode and ability to pay costs of Jasmin See remained questionable and uncontroverted, supporting the order that she too be required to deposit security
No replying deposition was filed, only grounds of opposition. The uncontroverted affidavit evidence showed varying addresses, two nationalities and multiple passports. The court found her identity and ability to guarantee costs questionable, making her a proper subject of the security order.
Legal principles established
#- The power to order security for costs under Rule 107 of the Court of Appeal Rules is discretionary, and the applicant bears the onus of proving inability to pay costs rather than merely alleging it
- An appeal filed in the name of a company that has been wound up, together with an agent whose identity, abode and ability to pay costs are unverified and uncontroverted, justifies an order for security for costs
Court orders
#- 1.The appellant, be it Westmont or Jasmin See, to deposit security for the costs of the appeal in the sum of Kenya Shillings twenty million (Ksh 20,000,000/)
- 2.The said sum be deposited in Court as security for costs within 45 days of the ruling, failing which the appeal will stand struck out with costs to CBK
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi (Milimani)
- HCC No. 642 of 1998
- Jurisdiction invoked
- Rules 27, 42 and 107(3) of the Court of Appeal Rules, 2010
Relief refused
#Security for costs in the sum of Kshs 87,620,000 as sought by CBK
The court, having considered the amount in dispute, the High Court costs already ordered against the appellant and the likely costs of defending the appeal, fixed security at Kshs 20,000,000 instead
Immediate striking out of the appeal with costs
The court gave the appellant 45 days to deposit security before the striking-out sanction takes effect
Costs
Costs in the event of default: the appeal will stand struck out with costs to CBK; no costs order made on the application itself
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.
Accordingly, we order the said sum be deposited in Court as security for costs in this appeal within 45 days of this ruling, failing which the appeal will stand struck out with costs to CBK.
we are satisfied this is a suitable case to order the appellant, be it Westmont or Jasmin See, to deposit security to guarantee the costs of the appeal in the sum of Kenya Shillings twentyMillion (Ksh 20,000,000/)
As the cases show the Court has unfettered judicial discretion to order or refuse security.
in an application for further 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.
we are not persuaded the instant application was brought after undue delay or to abuse the court process by scuttling the hearing.
it is undisputed that Westmont was wound up and in our view this state of affairs lends credence to CBK’s anxiety regarding its ability to recover costs in the event that the appeal was unsuccessful.
Issues in the judgment
#The judgment states the appeal was filed in January 2017 in submissions but later records the filing date as 10th February 2017; the application date is also given as both 13th October 2017 and 17th October 2017
The citation for Sir Lindsay Parkinson v Triplan is given as '[1973] 2 WRR' which appears to be a typographical error for a standard law report citation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Westmont Holdings SDN. BHD v Central Bank of Kenya [2017] KECA 108 (KLR)", Case Analysis (2017). Civil Appeal (Application) No. 37 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/108/eng@2017-12-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.