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ELCOtherNot stated in the excerpt· [2021] KEELC 2200 (KLR)

Hussein Isaak Hassan & another v Muguga Investment Company Limited & another [2021] KEELC 2200 (KLR)

Environment and Land Court
22 July 2021
KBK. BOR
994 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nairobi court made a landlord pay tenants' legal costs even though the case was withdrawn, because the landlord's conduct caused the dispute.

What this practically means

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Executive summary

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The Plaintiffs sued on 18/12/2014 to restrain the Defendants from interfering with their quiet possession and leases of shops on L.R. No. 36/VII/499, Eastleigh. The 1st Defendant, owner of the land, had granted the 1st Plaintiff and later the 2nd Plaintiff six-year leases over several shops. During the currency of those leases, the 1st Defendant granted the 2nd Defendant a 15-year lease over the entire property, with an agreement that the 2nd Defendant would demolish the building housing the Plaintiffs' shops. Interlocutory judgment was entered against the Defendants on 19/3/2015 for failure to file defences. Leadership wrangles within the 1st Defendant led to HCCC No. 126 of 2015, decided by Tuiyott J. on 17/4/2020, after which the Defendants demolished the suit property in May 2020, extinguishing the substratum of this suit. The parties agreed the suit was overtaken by events but disputed costs. The court found the only issue was who should bear the costs of the withdrawn suit. The Plaintiffs, relying on Morgan Air Cargo and Peter Muriuki Ngure, sought indemnification, citing the Defendants' breach and destruction of the property; the 1st Defendant relied on Jasbir Singh Rai and Section 27 of the Civil Procedure Act, contending no special circumstances justified denying it costs. The court, considering the 1st Defendant's conduct in dealing with premises it had leased to the Plaintiffs, awarded the Plaintiffs the costs of the suit, to be borne solely by the 1st Defendant as the common denominator in both sets of leases.

Key legal issues

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01

Whether costs should be awarded to the Plaintiffs in a withdrawn suit overtaken by events

Holding

Costs were awarded to the Plaintiffs on account of the 1st Defendant's conduct in leasing the premises to the 2nd Defendant with rights of demolition that extinguished the Plaintiffs' leases

Reasoning

The suit did not proceed to a full hearing because the 1st Defendant granted the 2nd Defendant a 15-year lease permitting demolition, which subsumed the Plaintiffs' leases and led to the shops being demolished. Although the suit was not heard on its merits, the court held the 1st Defendant's conduct in dealing with premises it had leased to the Plaintiffs justified indemnifying the Plaintiffs with costs, borne by the 1st Defendant as the common denominator in both sets of leases.

p. 2
02

Who among the Defendants should bear the costs

Holding

Only the 1st Defendant, being the common denominator in both sets of leases

Reasoning

The 1st Defendant was the lessor under both the Plaintiffs' short-term leases and the 2nd Defendant's long-term lease. The decision to grant the long-term lease that permitted demolition was the 1st Defendant's. The court therefore confined liability for costs to the 1st Defendant, excluding the 2nd Defendant.

Legal principles established

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  • In the absence of a consent on costs, the award of costs is a matter of judicial discretion guided by established legal principles and the circumstances of each case
  • Costs serve to indemnify the successful party for expenses incurred in enforcing or defending legal rights
  • Where a suit is not heard on its merits, the conduct of the parties may justify an award of costs against the party whose conduct caused the suit

Court orders

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  1. 1.The Plaintiffs are awarded the costs of the withdrawn suit
  2. 2.Those costs to be borne by the 1st Defendant

Authorities

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Legislation

  • Civil Procedure ActSection 27

Cases cited (3)

  • Morgan Air Cargo Limited v Evrest Enterprises Limited
    [2014] eKLR
  • Peter Muriuki Ngure v Equity Bank (K) Limited
    [2018] eKLR
  • Jasbir Singh Rai & 3 Others v Tarlochan Singh Rai & 4 Others
    [2014] eKLR
Jurisdiction invoked
Original civil jurisdiction over a land and lease dispute; costs discretion under Section 27 of the Civil Procedure Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Hussein Isaak Hassan & another v Muguga Investment Company Limited & another [2021] KEELC 2200 (KLR)", Case Analysis (2021). Not stated in the excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2200/eng@2021-07-22

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