Al-hussein Motors Limited v Francis Otieno Omer

4. The appeal was canvassed by way of written submissions. The Appellant filed its submissions dated 30th May 2024, whilst the Respondent did not file any submissions despite being duly served. The Court has therefore considered the appeal solely on the basis of the record and the Appellant’s submissions. Appellant’s Submissions 5. Counsel for the Appellant submitted that although the award of costs is a matter of discretion, that discretion must be exercised judicially, not capriciously. It was contended that a successful litigant is entitled, as of right, to the costs of the suit unless the Court provides good reasons for ordering otherwise. 6. The Appellant relied on Section 27(1) of the Civil Procedure Act, which provides that costs shall follow the event unless the Court, for good reason, otherwise orders. It was urged that since the trial magistrate gave no reasons at all for denying costs, the order cannot stand. 7. Counsel further relied on Mbogo & Another v Shah [1968] EA 93, where the Court of Appeal held that an appellate court may interfere with the exercise of discretion by a lower court where such discretion has been exercised upon wrong principles, misdirection, or without consideration of relevant matters. 8. The Appellant cited Supermarine Handling Services Ltd v Kenya Revenue Authority [2006] eKLR, where the Court of Appeal emphasized that while discretion on costs rests with the trial court, the appellate court will interfere if the discretion is exercised unjudicially or without good reason. 9. Reference was also made to Party of Independent Candidates of Kenya v Mutula Kilonzo & 2 Others [2013] eKLR, where the High Court held that the general rule that costs follow the event should not be departed from without demonstration of sound grounds for doing so. 10. Similarly, in James Koskei Chirchir v Chairman, Board of Governors, Eldoret Polytechnic [2011] eKLR, the Court of Appeal faulted a trial court for denying costs without explanation, holding that such omission constituted an error in law. 11. Finally, reliance was placed on Southern Star Sacco Ltd v Vanancio Ntwiga [2021] eKLR, where Gitari J. reiterated that a successful party is entitled to the fruits of litigation, one of which is an award of costs, and that denial of costs without stated reasons amounts to a misdirection. 12. It was submitted that the trial magistrate failed to comply with Order 21 Rule 4 of the Civil Procedure Rules, 2010, which mandates that every judgment in a defended suit must contain the points for determination, the decision thereon, and the reasons for such decision. The learned magistrate, it was argued, abdicated this duty by failing to state his reasons for denying costs of the counter-claim. 13. Reliance was placed on South Nyanza Sugar Co. Ltd v Omwando Omwando [2011] eKLR, where the court observed that a judgment that does not meet the requirements of Order 21 Rule 4 may be expunged. 14. Accordingly, the Appellant prayed that this Court set aside that portion of the judgment denying costs of the counter-claim and substitute it with an order awarding such costs to the Appellant. Analysis and Determination 15. From the record and the Appellant’s submissions, the sole issue for determination is: Whether the learned trial magistrate erred in law and in fact by declining to award costs of the counter-claim to the successful Appellant without assigning reasons. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16514/eng@2025-10-23 2

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16. Section 27(1) of the Civil Procedure Act confers upon the Court discretion to determine by whom and to what extent costs are to be paid, but this discretion is guided by the proviso that “costs shall follow the event unless the court or judge shall for good reason otherwise order.” 17. The phrase “for good reason” is not a mere formality. It implies that a judicial officer must demonstrate, within the judgment, the basis upon which the general rule is being departed from. As the Court of Appeal held in Supermarine Handling Services Ltd v Kenya Revenue Authority (supra), the discretion on costs must be exercised on sound factual and legal grounds; otherwise, the appellate court is entitled to interfere. The Court stated that: “ Thus, where a trial court has exercised its discretion on costs, an appellate court should not interfere unless the discretion has been exercised unjudicially or on wrong principles. Where it gives no reason for its decision the Appellate Court will interfere if it is satisfied that the order is wrong. It will also interfere where reasons are given if it considers that those reasons do not constitute “good reason” within the meaning of the rule. In the appeal now before us, the learned Judge gave no reasons whatsoever for his decision to deprive the successful plaintiff of its costs and yet it was shown that the defendant had been guilty of some misconduct which led to litigation. In our view the learned Judge’s order was wrong.” 18. Similarly, in Mbogo & Another v Shah (supra), it was stated that an appellate court may interfere with the exercise of discretion where the lower court misdirected itself or failed to consider relevant factors. 19. In the instant case, the trial magistrate found entirely in favour of the Appellant on her counter-claim but summarily denied her the costs of that counter-claim. No reasons were assigned for that departure from the established principle. Indeed, the impugned judgment does not disclose any basis—whether in fact, in conduct of the parties, or in equity—to justify withholding costs. 20. In my view, that omission was not a mere procedural lapse but a substantive misdirection. Judicial discretion must be accompanied by an explanation, however brief, to show that it has been exercised upon consideration of relevant factors. Where, as here, no reasons are given, the presumption is that discretion was exercised arbitrarily and, therefore, unjudicially. 21. This position finds support in James Koskei Chirchir v Chairman, Board of Governors, Eldoret Polytechnic (supra) and Southern Star Sacco Ltd v Vanancio Ntwiga (supra), both of which held that the denial of costs without reasons amounts to an error in law warranting appellate interference. 22. Accordingly, I am satisfied that the learned trial magistrate failed to exercise his discretion judiciously and thereby arrived at a wrong conclusion. This Court is therefore entitled to interfere with that exercise of discretion. Disposition 23. The upshot of the foregoing is that I find merit in the appeal. I accordingly make the following orders: i. The appeal is allowed. ii. The part of the judgment and decree of the trial court dated 13th October 2022 stating that there shall be “no orders as to costs” in respect of the counter-claim is set aside, and is hereby substituted with an order that the Appellant shall have the costs of the counter-claim in the trial court. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16514/eng@2025-10-23 3

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iii. 24. The Appellant shall also have the costs of this appeal. It is so ordered. SIGNED, DATED, AND DELIVERED IN VIRTUAL COURT THIS 23RD OCTOBER 2025 ADO MOSES JUDGE In the presence of: C/A – Moses …………..,,,,,,,,for the Applellant ……….…..... for the Respondents https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16514/eng@2025-10-23 4

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