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ELCPartially AllowedRuiru SPM L & E Case No. 58 of 2019 (appeal)· [2025] KEELC 3040 (KLR)

Njiri & another v Muchiri (Environment and Land Appeal E020 of 2021) [2025] KEELC 3040 (KLR)

High Court of Kenya
1 April 2025
1,873 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's High Court ruled a defaulter must pay both costs and interest, even after the parties settled by consent.

What this practically means

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Executive summary

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This first appeal arose from a Ruiru magistrates' court suit for breach of a land sale agreement under which the Appellants (registered owners of L.R No. 28318/25/534 I.R No. 150169) agreed to sell the suit property to the Respondent for Kshs. 2,500,000. The Respondent paid Kshs. 1,800,000, leaving a balance of Kshs. 700,000. On 8th December 2020 the parties recorded a consent entering judgment for the undisputed sum and directing release of completion documents, leaving costs and interest for the trial court. By judgment of 29th January 2021 the trial magistrate declined both costs and interest, finding no outright successful party. On appeal, the High Court (J. M Onyango, J) framed two issues: whether costs and interest should have been awarded, and whether damages for breach were payable. Applying section 27(1) of the Civil Procedure Act and authority that costs follow the event, the court held that the Respondent's prolonged default in paying the balance - over a year past the contractual due date - forced the Appellants to litigate, so the refusal of costs was not a judicial exercise of discretion. Invoking the interest provisions and compensation principle, the court awarded interest at 14% per annum on Kshs. 700,000 from 23.8.2018 (when the completion notice took effect) to 22.10.2020 (when the balance was paid). Damages and rescission were refused, the suit having been compromised by consent. The appeal succeeded; the trial judgment was set aside/varied only as to costs and interest, with the defendants bearing the suit costs and the Respondent the costs of the appeal.

Key legal issues

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01

Whether the trial magistrate erred in refusing to award costs

Holding

Yes - the refusal was not a judicial exercise of discretion; the Appellants, having instituted suit due to the Respondent's default and having procured the consent, were entitled to costs

Reasoning

Section 27(1) of the Civil Procedure Act makes costs discretionary but costs follow the event absent good reason. The trial magistrate found no outright successful party, yet the Respondent's failure to pay the balance over a year past the due date forced the Appellants to litigate. Given the circumstances leading to suit, the applications, court attendances and delayed settlement, the discretion was wrongly exercised and costs should have followed the event.

p. 4
02

Whether the Appellants were entitled to interest on the decretal sum

Holding

Yes - interest at 14% per annum from 23.8.2018 (when the completion notice took effect) to 22.10.2020 (when the balance was paid under the consent)

Reasoning

Under the Civil Procedure Rules provision on interest, the court may order reasonable interest on the principal sum for the period before suit. The agreement required payment of the balance by 28.5.2018; a completion notice issued on 9.8.2018 took effect on 23.8.2018, and the balance was only paid on 22.10.2020. The Respondent's prolonged default justified an award of interest at 14% for that period.

p. 4
03

Whether damages for breach or rescission could still be granted

Holding

No - the suit having been compromised by consent, the court could not make such findings

Reasoning

The parties recorded a consent on 8.12.2020 settling the suit, under which judgment was entered for the undisputed sum and completion documents were to be released. Re-opening the claims for damages or rescission would contradict the spirit of that consent, which bound the parties and defined the limits of the court's subsequent determinations.

p. 4

Legal principles established

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  • Costs follow the event unless the court for good reason otherwise orders, and the discretion on costs must be exercised judicially in the circumstances of each case
  • Interest on an adjudged principal sum compensates the plaintiff for deprivation of money through the defendant's wrongful act
  • The fact that an unsuccessful party did not contest the case is not in itself a ground for refusal of costs

Court orders

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  1. 1.The judgment dated 29th January 2021 is set aside or varied only to the extent that it relates to costs and interest
  2. 2.The costs of the suit shall be borne by the defendants
  3. 3.The defendant shall pay interest on the sum of Kshs.700,000/= at 14% per annum from 23.8.2018 until 20.10.2020
  4. 4.The Respondent shall bear the costs of this appeal

Authorities

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Legislation

  • Civil Procedure ActSection 27(1)
  • Civil Procedure RulesSection 26(1)
  • Constitution of KenyaArticle 159(2)(c)

Cases cited (5)

  • Republic v Rosemary Wairimu Munene Ex-parte Applicant v Ihururu Dairy Farmers C-operative Society Ltd
    Judicial Review Application No. 16 of 2014
  • Cecilia Karuru Nagayu v Barclays Bank of Kenya & Another
    (2016) eKLR
  • Premlata Musa V Peter Mbiyu
    (1965) E.A 592
  • Madison Insurance Company Limited v Mung'ot
    (Civil Appeal No. 215 of 2020) [2022] KEHC 9800 KLR
  • Emmanuel Kuria Wa Gathoni v Commissioner of Police and Another
    (2018) eKLR
On appeal from
Ruiru Principal Magistrate's Court
SPM L & E Case No. 58 of 2019
Jurisdiction invoked
First appeal from the trial magistrate's judgment on costs and interest under the Civil Procedure Act (section 27(1)) and Civil Procedure Rules (section 26(1))

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, "Njiri & another v Muchiri (Environment and Land Appeal E020 of 2021) [2025] KEELC 3040 (KLR)", Case Analysis (2025). Ruiru SPM L & E Case No. 58 of 2019 (appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/3040/eng@2025-04-01

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