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Court of AppealPartially AllowedCivil Appeal (Narok HCCC No 17 of 2014 as consolidated with Narok HCCC No 18 of 2017 appeal)

Narok County Government v Kibiniko Enterprises Ltd (Civil Appeal 10 of 2019) [2023] KECA 1102 (KLR)

Court of Appeal
22 September 2023
2,328 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal struck down a Kshs. 12 million deposit requirement imposed on Narok County before a default judgment could be set aside.

What this practically means

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Executive summary

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This is an interlocutory appeal by the Narok County Government against a ruling of J.M. Bwonwonga, J dated May 17, 2018, which discharged a default judgment entered against the appellant on condition that the appellant deposit Kshs. 12,177,481.00 in a joint interest-earning account with the respondent within 40 days, failing which the discharge would lapse. The Court of Appeal (Sichale, Ochieng and Korir, JJ.A) confined itself to the security condition, holding that the discretion under order 10 of the Civil Procedure Rules is discretionary and can only be disturbed on appeal if exercised wrongly in principle or perversely. Relying on CMC Holdings Ltd v James Mumo Nzioki and the Supreme Court's decision in Westmont Holdings SDN BHD v Central Bank of Kenya on security for costs, the court found that a security-type condition must be explained and rationalised. The impugned ruling gave no reason for the quantum, which almost exactly matched the claimed amount, giving the impression the judge had pre-judged the merits. The condition was held to stifle the appellant's right of access to justice. The appeal was allowed only to the extent that the security condition was set aside; grounds touching the merits were dismissed as premature, and each party was directed to bear its own costs of the appeal given the litigation still ahead.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the trial Judge can be faulted for imposing a condition on the order setting aside the default judgment entered against the appellant

Key legal issues

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01

Whether the High Court could lawfully impose a condition of depositing security as a condition precedent to setting aside a default judgment

Holding

The discretion under order 10 must be exercised judiciously and upon reasons; imposing security equivalent to the full claimed amount without any explanation was wrong in principle and an impediment to access to justice, warranting appellate interference.

Reasoning

The court adopted the CMC Holdings test for interference with discretion and the Supreme Court's Westmont Holdings framework on security for costs, which is a relevant analogue. The trial judge gave no explanation for the quantum of the security, which almost exactly matched the claimed amount, suggesting a predetermined view of liability. Such a hurdle stifle and impedes access to justice, so the condition was set aside.

p. 4

Legal principles established

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  • An appellate court will not interfere with a trial judge's discretion unless it was exercised wrongly in principle, perversely, or on wrong considerations
  • A condition precedent to setting aside a default judgment must be rationalised by reasons; an unexplained condition, especially one matching the claimed amount, is an erroneous exercise of discretion
  • A security-type condition that impedes access to justice without evidential basis will be set aside

Court orders

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  1. 1.Appeal allowed to the extent that the condition requiring the appellant to deposit Kshs. 12,177,481.00 as security is set aside
  2. 2.Other grounds of appeal touching on the merits of the case dismissed as they should be canvassed before the trial court
  3. 3.Each party to meet own costs of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court
Narok HCCC No 17 of 2014 as consolidated with Narok HCCC No 18 of 2017
Jurisdiction invoked
Appellate jurisdiction of the Court of Appeal over an interlocutory appeal from the High Court (Civil Procedure Act)

Relief refused

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Appeal on grounds going to the merits of the case

Issues belong before the trial court and may return on appeal later

p. 5

Costs

Each party to meet own costs of the appeal

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Once a judgment is set aside, parties are restored to their original positions as prevailed prior to the recording of the judgment.
p. 4Effect of setting aside default judgment
Such exercise of discretion stifles and impedes the appellant’s right to access justice by subjecting it to such a hardship not backed or rationalized by any evidence.
Security condition and access to justice
The upshot of the foregoing is that we hereby allow the appeal to the extent that the condition that the appellant deposit Kshs. 12,177,481.00 as security is hereby set aside.
p. 5Final orders
As such, we direct each party to meet own costs of the appeal.
p. 5Costs order

Issues in the judgment

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minor

Internal inconsistency in figures: the security ordered (Kshs. 12,177,481.00) is stated to exceed the claimed amount (Kshs.12,177,451.30) by Kshs. 29.70, but the quoted figures differ by Kshs. 29.70 only if the figures are read as stated; the arithmetic as printed is correct but the claimed amount differs from the security amount by 29.70 as the court notes - no actual contradiction, minor typographical risk in the claimed amount figure

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Narok County Government v Kibiniko Enterprises Ltd (Civil Appeal 10 of 2019) [2023] KECA 1102 (KLR)", Case Analysis (2023). Civil Appeal (Narok HCCC No 17 of 2014 as consolidated with Narok HCCC No 18 of 2017 appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1102/eng@2023-09-22

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.