City Panel Beaters & Painters Ltd v Lila Vadgama [2011] KECA 288 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that courts cannot deny a winning party their legal costs without giving a reason, and reinstated the company's defence and counterclaim.
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, as the successful party before the High Court, was wrongfully deprived of its costs without any reason being assigned
- 2.Whether the striking out of paragraphs of the defence, set-off and counterclaim was proper, or whether the issues raised therein ought to be determined at the full hearing
Key legal issues
#Whether the successful party in an interlocutory application may be denied costs without recorded reasons
The appellant was wrongfully deprived of its costs as the successful party because no reason was assigned for the order that each party bear its own costs, contrary to the proviso to section 27(1) of the Civil Procedure Act that costs shall follow the event unless the court for good reasons otherwise orders.
Section 27(1) of the Civil Procedure Act gives the court discretion over costs, but the proviso establishes the default rule that costs follow the event unless the court orders otherwise for good reasons. The High Court struck out the counterclaim to counterclaim in the appellant's favour yet ordered each party to bear its own costs without recording any reason. On appeal, unopposed, the Court found the deprivation of the successful party's costs wrongful and reversed that order, directing instead that costs await the outcome of the suit.
Whether the defence, set-off and counterclaim struck out by the High Court should be reinstated
The appeal was allowed and the struck-out paragraphs and subparagraphs of the defence, set-off and counterclaim were reinstated, with all issues to be determined at the full hearing before the superior court.
The Court agreed with counsel that the issues of illegality or imputation of criminal conduct could only be determined at the full hearing of the suit. Because Vadgama had responded to the set-off and counterclaim and joined issue with the appellant, the two respective claims were intertwined and ought to be heard and determined together on the merits. The Court accordingly reinstated the struck-out pleadings and remitted the matter for hearing, making the costs of the appeal contingent on the final result.
Legal principles established
#- A successful party may not be deprived of costs without the court assigning a reason, since costs follow the event unless the court for good reasons otherwise orders
- Where a plaintiff's claim and a defendant's set-off and counterclaim are intertwined and the plaintiff has joined issue with them, the issues raised should be determined at the full hearing rather than struck out on interlocutory application
Court orders
#- 1.The appeal is allowed and the orders sought by the appellant are granted
- 2.The various paragraphs and subparagraphs of the 'defence, set-off and counterclaim' struck out by the superior court are reinstated
- 3.The issues arising from the pleadings shall be determined by the superior court on merits upon hearing the parties
- 4.The costs of this appeal shall abide the result of the hearing before the superior court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1073 of 2001
- Jurisdiction invoked
- First appeal to the Court of Appeal against a ruling and order of the High Court in a civil suit (unspecified statutory basis in the judgment)
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.
In the result we allow this appeal and grant the orders sought by the appellant with the result that the various paragraphs and subparagraphs of the “defence, set-off and counterclaim” which were struck out by the superior court are hereby reinstated.
We further order that the costs of this appeal shall abide the result of the hearing before the superior court.
The appellant, as correctly submitted by Mr. Mogeni, was wrongfully deprived of its costs as the successful party without any reason being assigned for such order.
We also think the issues raised in the “set off and counterclaim” which the respondent responded to and joined issue with the appellants ought to be determined at the full hearing as the two respective claims are intertwined.
Issues in the judgment
#The judgment dates Vadgama's 'counterclaim to counterclaim' inconsistently - the quoted ruling of the High Court refers to filing on 25.1.2002 while the narrative says it was filed on 23rd January, 2002
The appellant's memorandum of appeal is quoted as seeking allowance of an application dated 6th February, 2001, but the narrative records the appellant's striking-out application as a motion taken out on 14th February, 2002
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "City Panel Beaters & Painters Ltd v Lila Vadgama [2011] KECA 288 (KLR)", Case Analysis (2011). Civil Appeal No. 248 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2011/288/eng@2011-04-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.