Mbaluka t/a Mmawo v Sidian Bank Limited & another (Civil Case E110 of 2023) [2025] KEMC 306 (KLR)

that bit of the submissions. The plaintifi argued that it is the defendants who should be condemned to pay costs as it was their illegal actions that led to the filing of the suit. That the plaintifi also incurred costs in instituting and prosecuting the matter, and as such, it would be unfair to condemn her to pay costs to the defendants. The plaintifi urged the court to order that costs be in the cause. I believe the plaintifi meant to say that each party should bear their own costs. The plaintifi relied on the authority of Cecilia Karuru Ngayu v Barclays Bank of Kenya & another [2016] eKLR. The Defendants’ Submissions 4. The defendants submitted that they filed a defence in response to the suit and that at the time of filing suit, the loan was still in arrears. That the defendants have incurred costs in the suit and are therefore entitled to compensation. The defendants contended that it is trite law that costs follow the event and this principle is not meant to penalize the losing party but to compensate the successful party for the trouble taken in prosecuting or defending the case. The defendants argued that the plaintifi dragged them to court for more than two years only to eventually settle the loan and withdraw the matter. That the defendants are therefore entitled to costs incurred in defending the suit. The defendants urged the court to award them costs. They relied on the authorities of Pacis Insurance Company Ltd V Francis Njeru Njoka [2018] eKLR and Party of Independent Candidate of Kenya & another v Mutula Kilonzo & 2 others [2014] eKLR. Analysis And Determination 5. I have considered the submissions by the parties as well as the applicable law. Section 27 of the Civil Procedure Act provides: “ (1) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction to try the suit shall be no bar to the exercise of those powers: Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order. (2) 6. 7. The court or judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.” From the foregoing, two principles emerge: 1. The court retains the discretion on whether or not to award costs and by whom and to what extent such costs are to be paid; 2. Costs follow the event unless the court orders otherwise, for good reason. While interpreting section 27 of the Civil Procedure Act, Odunga J (as he then was) in the case of Joseph Oduor Anode v Kenya Red Cross Society [2012] eKLR, held: Whereas this Court has the discretion when awarding costs, that discretion must, as usual, be exercised judicially. The first point of reference, with respect to the exercise of discretion is the guiding principles provided under the law. In matters of costs, the general rule https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/306/eng@2025-12-10 2

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as adumbrated in the aforesaid statute [the Civil Procedure Act] is that costs follow the event unless the Court is satisfied otherwise. That satisfaction must, however, be patent on record. In other words, where the Court decides not to follow the general principle, the Court is enjoined to give reasons for not doing so. In my view, it is the failure to follow the general principle without reasons that would amount to arbitrary exercise of discretion ...” [emphasis supplied]. 8. In Halsbury’s Laws of England, 4th edition Re-Issue (2010), Vol 10, para 16, it is stated that: The Court has discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are to be paid. Where costs are in the discretion of the court, a party has no right to costs unless and until the court awards them to him, and the court has an absolute and unfettered discretion to award or not award them. This discretion must be exercised judicially; it must not be exercised arbitrarily but in accordance with reason and justice” [emphasis supplied]. 9. In Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR), the Supreme Court held that: So the basic rule on attribution of costs is: costs follow the event. But it is well recognized that this principle is not to be used to penalize the losing party; rather, it is for compensating the successful party for the trouble taken in prosecuting or defending the suit. In Justice Kuloba’s words [Judicial Hints on Civil Procedure, at p 94]: ‘[T]he object of ordering a party to pay costs is to reimburse the successful party for amounts expended on the case. It must not be made merely as a penal measure.. .Costs are a means by which a successful litigant is recouped for expenses to which he has been put in fighting an action.” 10. The Supreme Court further observed that the award of costs would normally be guided by the principle that “costs follow the event”: the efiect being that the party who calls forth the event by instituting suit, will bear the costs if the suit fails; but if this party shows legitimate occasion, by successful suit, then the defendant or respondent will bear the costs. However, the vital factor in setting the preference, is the judiciously-exercised discretion of the Court, accommodating the special circumstances of the case, while being guided by ends of justice. That the claims of the public interest will be a relevant factor, in the exercise of such discretion, as will also be the motivations and conduct of the parties, prior-to, during, and subsequent-to the actual process of litigation. 11. The Supreme Court in the same case further held: Although there is eminent good sense in the basic rule of costs - that costs follow the event- it is not an invariable rule and, indeed, the ultimate factor on award or non-award of costs is the judicial discretion. It follows, therefore, that costs do not, in law, constitute an unchanging consequence of legal proceedings - a position well illustrated by the considered opinions of this Court in other cases.” 12. This matter was not heard on merit. It cannot therefore be said that there is a successful party in the strict sense of the phrase. Although the plaintifi cleverly used the phrase, “marked as settled”, the efiect https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/306/eng@2025-12-10 3

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was a withdrawal of the suit as the plaintifi had serviced the loan in full and her motor vehicle had been returned to her years ago. Order 25 rule 3 of the Civil Procedure Rules provides: Upon request in writing by any defendant the registrar shall sign judgment for the costs of a suit which has been wholly discontinued, and any defendant may apply at the hearing for the costs of any part of the claim against him which has been withdrawn.” 13. It is the plaintifi who dragged the defendants to court. It is not in doubt that the defendants incurred costs in engaging counsel and in court fees. It is also agreed that the plaintifi had not serviced the loan fully when he instituted the suit. The suit has been in court for over two years. The motor vehicle which was the subject of the suit was released to the plaintifi at an ex parte stage even before the defendants were served. The plaintifi obtained temporary orders of injunction against the defendants. She dragged the matter in court and I suspect it was for purposes of buying time to clear the loan balance. 14. Had the plaintifi serviced the loan as was required, we would not be here right now. In all fairness, I see no reason as to why the defendants should be denied costs of the suit. I have no grounds not to follow the general rule that costs follow the event. In the authority of Pacis Insurance (supra), the court held: A party having been caused by the other to participate in a suit, is entitled to costs incurred in the event the party instituting the suit decides to withdraw it unless parties agree otherwise or Court on exercising its discretion decide otherwise after giving the parties opportunity to submit on costs. In the instant case, the suit was withdrawn after hearing date was set. Defendant had engaged an Advocate to defend the suit. Defendant is therefore expected to have incurred expenses and is entitled to costs expended.” Disposition 15. In view of the foregoing, I award costs to the defendants. The same shall be borne by the plaintifi. Parties are at liberty to agree on the costs payable and if there is no agreement, the defendants shall follow the procedure laid down under Order 21 rule 9A through to 9D of the Civil Procedure Rules. DATED, SIGNED AND DELIVERED IN OPEN COURT AT MAKINDU THIS 10TH DAY OF DECEMBER, 2025. Y.A SHIKANDA SENIOR PRINCIPAL MAGISTRATE. https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/306/eng@2025-12-10 4

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