1. The defendant, being a chargee failed to issue and serve a valid statutory notice within timelines prescribed under the Act prior to purporting to exercise its statutory power under the Land Act. In so doing, the defendant issued the impugned Notice of Appointment of a Receiver pursuant to Sections 90(2) and 90(3) of the Land Act.
2. The plaintiff herein proceeded to institute this suit by way of plaint dated 16 th November 2023 challenging the procedural propriety of the said notice, seeking inter alia, a permanent injection against the defendants and an order to preserve the suit properties pending the hearing and determination of the suit.
3. The plaintiff’s application was canvassed by way of written submissions, and the court ruled in favour of the plaintiff, and granted an order of injection in favour of the plaintiff.
4. The matter was then set down for pretrial directions, and the plaintiff fully complied with the provisions of Order 11 of the Civil Procedure Rules, thereby rendering the suit ready for hearing. On the date scheduled for hearing on 10 th July 2025, the plaintiffs having travelled from Nairobi to Eldoret for the hearing, the defendant opted to withdraw the impugned Statutory Notice.
5. However, despite the consent to withdraw the instant claim, parties were unable to agree on the issue of cost. Whereas the defendants proposed that the claim be withdrawn with no orders as to costs, the plaintiffs on the other hand applied to be awarded costs.
Plaintiff’s submissions.
6. The plaintiffs submitted that the withdrawal of the impugned notice subsequent to the institution of the suit and the grant of interim injunctive relief, amounts to a tacit admission of procedural defects that formed the foundation of this action.
7. That it is evident that the present proceedings were necessitated solely by the defendant’s unlawful conduct, and that the plaintiffs were justified in approaching the honourable court for protection.
Defendant’s submissions.
8. The defendant urged the court not award costs to the plaintiff. They placed reliance on Section 27 of the Civil Procedure Act which grants the High Court discretionary power in the award of cost, which ordinarily follow the event unless the court for good reasons ordered otherwise.
9. The defendants further submitted that in the instant case, the genesis of the of the instant claim arose from a debt owed by the plaintiffs to the defendant, and that it is in the exercise of its legal right in recovery of the debt owed that the plaintiff moved tis honorable court, challenging the manner the said exercise was being undertaken. That the plaintiff in their pleadings had admitted their indebtness to the defendant herein even at the time of lodging this claim. That the only issue , to which the defendant attributes to as a technicality, is then manner of service of the Notice of Intention to Appoint a Receiver Manager over the plaintiffs suit parcels of land.
10. The defendant’s position is that the instant proceedings before this court are as a result of the plaintiffs default in servicing its loan with the defendant herein, and if granted costs, it would amount to a miscarriage of justice and would allow the plaintiffs to profit from their own fault. As such, assuming that the defendant was at fault for failing to properly issue a notice of appointment of a Receiver Manager, the plaintiff herein are also to blame for failing to service their loan facility with the defendant as agreed.
Determination.
11. I have considered the submissions filed by both parties, and the authorities is support of the respective submission. It is not in dispute that the plaintiff had taken out a facility with the defendant in this case. It is also not in dispute that the defendant issued the impugned notice to the plaintiff. It is the said notice that led the plaintiff to institute the instant suit against the defendant. It is also not disputed that the application dated 21 st November 2023 was heard and determined in favour of the plaintiff, and consequently, the case set down for hearing after confirming compliance on the part of the parties. The defendant admits that they withdrew the impugned notice, hence leading to the suit being compromised. The fact that the plaintiff incurred costs in the entire process is not in dispute
12. I have looked at the plaint dated 16 th November 2023, and the prayer by the plaintiff was for a permanent injunction restraining the defendant by itself and its agents and/ or servants from exercising its chargee’s power under Section 90 of the Land Act 2021 as set out in the defendant’s letter dated 17 th October 2023. The other prayer is for costs.
13. The defendant’s statement of defence dated 27 th May 2024 is noted and at paragraph 5, the defendant admits that it issued the plaintiff with a Notice of Intention to appoint a Receiver Manager over their parcel of land. The defendant did not file a counterclaim.
14. The issue of costs is governed by Section 27 of the Civil Procedure Act , which provides as follows:
(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)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.
15. Costs are generally discretionary. However, the discretion is not arbitrary. The Court of Appeal in the case of Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR) had this to say:
“It is our finding that the position in law is that costs are at the discretion of the court seized up of the matter with the usual caveat being that such discretion should be exercised judiciously meaning without caprice or whim and on sound reasoning secondly that a court can only withhold costs either partially or wholly from a successful party for good cause to be shown.”
16. The Supreme Court set forth guiding principles applicable in the exercise of that discretion in the case of Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR), as follows:
18. It emerges that the award of costs would normally be guided by the principle that “costs follow the event”: the effect 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. 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.
22. 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. The relevant question in this particular matter must be, whether or not the circumstances merit an award of costs to the Applicant.”
17. In the circumstances, I find that it is as a result of the actions of the defendant that the plaintiff instituted the instant suit. The defendant in his submissions stated that the plaintiff was indebted to the defendant. However, the issue of indebtness, and if the plaintiff was in default was not the subject of litigation in this case.
18. The plaintiffs claim against the defendant was in respect specifically to the impugned that was withdrawn by the defendant. Though the defendant submitted that this was an issue that could be termed as technical in nature, the court notes that the nature of the technicality was so central and material to the transactions between the plaintiff and the defendant, to the extent that the plaintiff sought the intervention of the court to safeguard its rights.
19. The claim by the plaintiff was not frivolous neither was it an abuse of court process. The withdrawal of the notice was filed at an advanced stage of trial, after the case had been certified ready and confirmed for hearing. The proposal by the defendant that each party bears their own costs cannot stand and is dismissed. No good cause has been shown why the plaintiff should be denied costs.
20. The upshot of the foregoing is that I do find and hold that the plaintiff is entitled to costs. The defendant shall bear the costs and interest of this suit.
DELIVERED, DATED AND SIGNED AT ELDORET ON THIS 18 TH DAY OF SEPTEMBER, 2026.
RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.
MARTHA MUTUKU.
JUDGE
In the presence of: -
Miss Kabailla h/b for Mr. Mutiso for the plaintiffs.
Mr. Muriithi for the defendants..
Court Assistant – Miss Lydia.
ELDORET COMMERCIAL CASE NO. E005 OF 20232
2. The plaintiff herein proceeded to institute this suit by way of plaint dated 16 th November 2023 challenging the procedural propriety of the said notice, seeking inter alia, a permanent injection against the defendants and an order to preserve the suit properties pending the hearing and determination of the suit.
3. The plaintiff’s application was canvassed by way of written submissions, and the court ruled in favour of the plaintiff, and granted an order of injection in favour of the plaintiff.
4. The matter was then set down for pretrial directions, and the plaintiff fully complied with the provisions of Order 11 of the Civil Procedure Rules, thereby rendering the suit ready for hearing. On the date scheduled for hearing on 10 th July 2025, the plaintiffs having travelled from Nairobi to Eldoret for the hearing, the defendant opted to withdraw the impugned Statutory Notice.
5. However, despite the consent to withdraw the instant claim, parties were unable to agree on the issue of cost. Whereas the defendants proposed that the claim be withdrawn with no orders as to costs, the plaintiffs on the other hand applied to be awarded costs.
Plaintiff’s submissions.
6. The plaintiffs submitted that the withdrawal of the impugned notice subsequent to the institution of the suit and the grant of interim injunctive relief, amounts to a tacit admission of procedural defects that formed the foundation of this action.
7. That it is evident that the present proceedings were necessitated solely by the defendant’s unlawful conduct, and that the plaintiffs were justified in approaching the honourable court for protection.
Defendant’s submissions.
8. The defendant urged the court not award costs to the plaintiff. They placed reliance on Section 27 of the Civil Procedure Act which grants the High Court discretionary power in the award of cost, which ordinarily follow the event unless the court for good reasons ordered otherwise.
9. The defendants further submitted that in the instant case, the genesis of the of the instant claim arose from a debt owed by the plaintiffs to the defendant, and that it is in the exercise of its legal right in recovery of the debt owed that the plaintiff moved tis honorable court, challenging the manner the said exercise was being undertaken. That the plaintiff in their pleadings had admitted their indebtness to the defendant herein even at the time of lodging this claim. That the only issue , to which the defendant attributes to as a technicality, is then manner of service of the Notice of Intention to Appoint a Receiver Manager over the plaintiffs suit parcels of land.
10. The defendant’s position is that the instant proceedings before this court are as a result of the plaintiffs default in servicing its loan with the defendant herein, and if granted costs, it would amount to a miscarriage of justice and would allow the plaintiffs to profit from their own fault. As such, assuming that the defendant was at fault for failing to properly issue a notice of appointment of a Receiver Manager, the plaintiff herein are also to blame for failing to service their loan facility with the defendant as agreed.
Determination.
11. I have considered the submissions filed by both parties, and the authorities is support of the respective submission. It is not in dispute that the plaintiff had taken out a facility with the defendant in this case. It is also not in dispute that the defendant issued the impugned notice to the plaintiff. It is the said notice that led the plaintiff to institute the instant suit against the defendant. It is also not disputed that the application dated 21 st November 2023 was heard and determined in favour of the plaintiff, and consequently, the case set down for hearing after confirming compliance on the part of the parties. The defendant admits that they withdrew the impugned notice, hence leading to the suit being compromised. The fact that the plaintiff incurred costs in the entire process is not in dispute
12. I have looked at the plaint dated 16 th November 2023, and the prayer by the plaintiff was for a permanent injunction restraining the defendant by itself and its agents and/ or servants from exercising its chargee’s power under Section 90 of the Land Act 2021 as set out in the defendant’s letter dated 17 th October 2023. The other prayer is for costs.
13. The defendant’s statement of defence dated 27 th May 2024 is noted and at paragraph 5, the defendant admits that it issued the plaintiff with a Notice of Intention to appoint a Receiver Manager over their parcel of land. The defendant did not file a counterclaim.
14. The issue of costs is governed by Section 27 of the Civil Procedure Act , which provides as follows:
(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)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.
15. Costs are generally discretionary. However, the discretion is not arbitrary. The Court of Appeal in the case of Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR) had this to say:
“It is our finding that the position in law is that costs are at the discretion of the court seized up of the matter with the usual caveat being that such discretion should be exercised judiciously meaning without caprice or whim and on sound reasoning secondly that a court can only withhold costs either partially or wholly from a successful party for good cause to be shown.”
16. The Supreme Court set forth guiding principles applicable in the exercise of that discretion in the case of Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR), as follows:
18. It emerges that the award of costs would normally be guided by the principle that “costs follow the event”: the effect 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. 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.
22. 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. The relevant question in this particular matter must be, whether or not the circumstances merit an award of costs to the Applicant.”
17. In the circumstances, I find that it is as a result of the actions of the defendant that the plaintiff instituted the instant suit. The defendant in his submissions stated that the plaintiff was indebted to the defendant. However, the issue of indebtness, and if the plaintiff was in default was not the subject of litigation in this case.
18. The plaintiffs claim against the defendant was in respect specifically to the impugned that was withdrawn by the defendant. Though the defendant submitted that this was an issue that could be termed as technical in nature, the court notes that the nature of the technicality was so central and material to the transactions between the plaintiff and the defendant, to the extent that the plaintiff sought the intervention of the court to safeguard its rights.
19. The claim by the plaintiff was not frivolous neither was it an abuse of court process. The withdrawal of the notice was filed at an advanced stage of trial, after the case had been certified ready and confirmed for hearing. The proposal by the defendant that each party bears their own costs cannot stand and is dismissed. No good cause has been shown why the plaintiff should be denied costs.
20. The upshot of the foregoing is that I do find and hold that the plaintiff is entitled to costs. The defendant shall bear the costs and interest of this suit.
DELIVERED, DATED AND SIGNED AT ELDORET ON THIS 18 TH DAY OF SEPTEMBER, 2026.
RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.
MARTHA MUTUKU.
JUDGE
In the presence of: -
Miss Kabailla h/b for Mr. Mutiso for the plaintiffs.
Mr. Muriithi for the defendants..
Court Assistant – Miss Lydia.
ELDORET COMMERCIAL CASE NO. E005 OF 20232