https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3872

Colfax Holdings Ltd v Kenya Railways Corporation (Environment and Land Case E048 of 2024) [2026] KEELC 3872 (KLR) (17 June 2026) (Ruling) Neutral citation: [2026] KEELC 3872 (KLR) Republic of Kenya In the Environment and Land Court at Kwale Environment and Land Case E048 of 2024 LL Naikuni, J June 17, 2026 Between Colfax Holdings Limited Plaintiff and Kenya Railways Corporation Defendant Ruling I. Introduction 1.The Ruling by this Honourable Court is on the determination of the Notice of Motion application dated 12th February, 2026. It was instituted by the Kenya Railways Corporation/Defendant/Applicant herein against Colfax Holdings Limited, the Plaintiff/Respondent. 2.Upon service, the application was vigorously opposed by the Plaintiff/Respondent through a Replying Affidavit sworn by Harji Govind Ruda on 18th February 2026. Subsequently, a supplementary affidavit dated 26th February, 2026 was filed by the Applicant in response to the averments raised in the replies and which was yet again countered by a further affidavit by the Respondent dated 6th March, 2026. The court will highlight the contents of all the affidavits later in this ruling. II. The case by the Defendant/Applicant 3.The Defendant/Applicant sought for the following orders:-a.This Honourable court be pleased to award the Defendant costs of the suit.b.Costs of this application be provided for 4.The application was premised on the grounds, testimonial facts and the averments made under the Supporting Affidavit by STANLEY GITARI who averred as follows that:-a.He was the General Manager, Legal Services & Corporation Secretary Legal Services and Board's Secretariat Department of the Defendant.b.He was aware that the Plaintiff instituted the present suit vide the Plaint dated 8th July, 2024 seeking for a sum of Kenya Shillings Five Million Nine Twenty Eight Thousand (Kshs. 5,928,000/=) as mesne profits plus punitive damages for alleged encroachment of the Plaintiff's parcel of land known as Plot No. 29437/133 Kwale.c.The Defendant defended the suit by filing a Statement of Defence dated 14th August, 2024. At paragraph 8 of the Statement of Defence, the Defendant raised an objection to the jurisdiction of the Court to hear and determine the suit because the Plaintiff had failed to serve the Defendant Corporation with mandatory notice of claim contrary to the provision of Section 86 of the Kenya Railways Corporation Act.d.The objection to the jurisdiction of the Court by the Defendant necessitated the Plaintiff to file an Application dated 26th May, 2025 seeking leave to serve the statutory notice of claim after filing the suit.e.The Defendant opposed the Application by filing several documents as listed in the grounds in support of the application and which triggered the Plaintiff to withdraw the claim against the Defendant through a Notice of Withdrawal of the suit dated 11th November, 2025.f.Accordingly, the Defendant was entitled to costs of the suit because:-i.Under the provision of Section 27 of the Civil Procedure Act, Cap. 21 was that costs follow the event unless the court or Judge shall for good reason otherwise order.ii.The Supreme Court in the case of “Rai & 3 others – Versus - Rai & 4 others (2014) eKLR” affirmed the law that costs follow the event, the effect being that the party that instates a suit will bear the costs if the suit fails.iii.The event in the present case was that the Plaintiff suit had failed as a result of the Plaintiff's withdrawal, thus making the Defendant the successful party.iv.There was no any or any good reason for the court to deny the successful Defendant costs.g).The Defendant spent substantial time, effort and resources to defend the suit and therefore was entitled to costs. III. The responses by Plaintiff/Respondents 5.In opposing the application, as indicated, the Plaintiff/Respondent filed a Replying Affidavit sworn by Harji Govind Ruda on 18th February 2026. He averred that as follows:-a.He was the Director/Authorised Officer of the Plaintiff/Respondent, Colfax Holdings Limited.b.The deponent averred that the Defendant/Applicant's application was misconceived, misleading, and an abuse of the Court process, as it deliberately misrepresents the true reason why the suit was withdrawn and seeks to convert a good faith settlement outcome into a costs windfall.c.It was deposed that the Plaintiff instituted this suit on 8th July, 2024 on the basis of alleged encroachment and trespass on its land known as Plot No. 29437/133, Kwale. Subsequently, and in the course of the proceedings, the Defendant's own survey team carried out a survey amendment on or about 25th September, 2025, which clarified the boundary position and removed the alleged encroachment.d.The deponent annexed a copy of the survey sketch/plan indicating the amended line and expressly noting that there is no more encroachment following the said amendment by the Railway survey team.e.The deponent stated that once the said boundary Issue was clarified and the substratum of the dispute ceased to exist, the Plaintiff, in good faith and in the interest of saving judicial time, opted to withdraw the suit.f.Accordingly, the Plaintiff filed a Notice of Withdrawal dated 11th November, 2025, and also informed the Court that the cause of action had been resolved and that the matter should be marked as settled with no orders as to costs.g.Further, and in the same spirit of amicable and proportionate resolution, the Plaintiff proposed a consent to withdraw the suit with each party bearing its own costs.h.Therefore, the suit was therefore not withdrawn because it was frivolous, incompetent, or had failed, but because the factual dispute giving rise to it had been resolved and overtaken by events.i.The Defendant's assertion that the Plaintiff withdrew the suit because of the Defendant's jurisdictional objection was false and misleading, because:i.The said objection was never heard and never determined by this Honourable Court;ii.There was no ruling or finding that the suit was incompetent; andiii.The Defendant could not convert an undetermined objection into a "success" for purposes of costs.h).The deponent stated that it was untrue that the Defendant is the "successful party" in this matter, there having been no determination on the merits and no adjudication in its favour. That under Section 27 of the Civil Procedure Act, costs are discretionary, and the Court is expressly empowered to order otherwise for good reason.i).It was averred that in the instant case there existed good reason as:-i.The dispute was resolved by the Defendant's own survey amendment;ii.The Plaintiff acted responsibly and in good faith by withdrawing the suit;iii.The withdrawal saved judicial time and resources; andiv.There is no successful or unsuccessful party in the true sense.j).It was further deposed that the Plaintiff withdrew this suit in good faith and solely because the purpose of the litigation had been achieved and the dispute giving rise to the suit had been resolved, and the Plaintiff did so to save this Honourable Court's time and judicial resources.l).The deponent stated that the Defendant's reliance on the case of “Rai & 3 Others v Rai & 4 Others (2014) eKLR (Supra) was misplaced and distinguishable, as that case concerned a situation where there was a clear successful party after determination, which was not the position in the present case as both parties incurred costs in the litigation process, and no party could fairly claim to have "won" the case, the matter having ended purely because the factual basis of the dispute was resolved.m).The Defendant's application was therefore opportunistic, punitive in intent, and devoid of merit, and the just and equitable order in the circumstances is that each party bears its own costs. IV. The Supplementary Affidavit by Defendant. 6.In response to the Plaintiff’s replying affidavit sworn by Harji Govind Ruda on 18th February, 2026 in response to the Defendant's Application dated 12th February, 2026 for costs, the Defendant/Applicant filed a supplementary affidavit sworn by Stanley Gitari the General Manager, Legal Services & Corporation Secretary Legal Services and Board's Secretariat Department of the Defendant Corporation. 7.He stated that the allegation alleging that the Defendant's survey team allegedly carried out a survey amendment, clarified the boundary position and removed the alleged encroachment was not true because:-a.As the Defendant's General Manager (Legal), he was aware that there was no any or any authorized official, agent, officer or servant of the Defendant who carried out any survey amendment, boundary clarification or encroachment removal on 25th September, 2025 as alleged by the Plaintiff or at all.b.The Defendant never removed the alleged encroachment on 25th September, 2025 as alleged or at all, especially given the fact the Defendant did not encroach on the property of the Plaintiff in the first place and to date denies the allegation of encroaching. 8.The document purported to be a copy of a sketch/ plan apparently arising from the alleged survey exercise of 25th September, 2024 was not authentic, reliable and/ or credible evidence as the same did not emanate from the office of the Defendant Corporation since the document was not authored, designed, produced and/ or approved by any or any authorized official, agent, officer or servant of the Defendant. 9.The document was not placed in the official letterhead of the Defendant, contrary to the standard practice of the Defendant's office of placing documents emanating from the Defendant in the official letterhead of the Defendant Corporation. 10.Also that the document did not contain any signature of any official, agent, officer or servant, and/ or any stamp of the Defendant, contrary to the standard practice of the Defendant's office of affixing signatures and/ or stamps on documents from its office. The document does not contain the name, position and/ or designation of the official, agent, officer or servant of the Defendant who purportedly authored, designed, produced and/ or approved the said document such as to bind the Defendant. 11.The allegation that the Defendant's team carried out a survey amendment, boundary clarification and/ or encroachment removal and the annexed document do not have any probative value because,a.Firstly, the Plaintiff had not filed/ produced in Court the survey report, if any, resulting from the alleged survey exercise allegedly conducted on 25th September, 2025 and from which the document purported to be a sketch map emanated.b.Secondly, the Defendant expressly denied the allegation that the Defendant encroached the suit property as alleged in the Plaint dated 8th July, 2024 or at all. The denial was at Paragraph 5 of the Defendant's Statement of Defence dated 14th August, 2024 produced at page 10 of his Supporting Affidavit sworn on 12th February, 2026.c.Thirdly, the Defendant had not since withdrawn the Statement of Defence dated 14th August, 2024 and/ or the said paragraph 5 denying the alleged encroachment.d.Fourthly, the defendant has not since otherwise admitted the alleged encroachment and/ or entered into any consent admitting the allegation or any part of the Plaintiff's claim in the Plaint dated 8th July, 2024. 12.Accordingly, the alleged removal of the alleged encroachment and the document purported to be a sketch map were matters that go to the root of the Issues that were to be tried at the full hearing of the main suit and determined in a Judgment, which has not occurred because of the Plaintiff s withdrawal of the suit. 13.The Defendant was willing and ready to proceed with the suit and defend the allegation of encroachment at full trial. That owing to its confidence in successfully defeating the allegation of encroachment at full trial, the Defendant did not enter into any consent to compromise the suit, despite the Plaintiff's proposals. 14.Based on the foregoing, the deponent believed that the Plaintiff had failed to satisfactorily establish any good reason for departing from the general rule that costs follow the event and/ or denying the successful Defendant costs of defending the suit. V. The further Affidavit by the Plaintiff/Respondent 15.The Plaintiff/Respondent filed a further affidavit dated 6th March, 2026 in response to the supplementary affidavit by the Applicant. It was sworn by KARIMA MWAKIMWAGA, he averred as follows that:-a.He was a Land Surveyor engaged by the Plaintiff in relation to the boundary verification and inspection of the suit property which forms the subject matter of these proceedings.b.The deponent stated that the dispute between the parties arose from an alleged encroachment of a perimeter fence into the railway corridor, which Issue led to the filing of the present suit.c.He had been informed by a representative of the Plaintiff that officers associated with the Kenya Railways team together with their survey personnel visited the site to verify the alignment of the fence and the railway corridor boundary.d.During the said site verification exercise, that certain fence posts which had been positioned within the railway corridor were removed and repositioned along the correct alignment of the corridor boundary.e.It was deposed that following the said site exercise, the deponent personally visited the site to inspect the boundary alignment and verify the position of the fence in relation to the railway corridor.f.Upon the deponent’s inspection of the site and verification of the boundary alignment, he observed that the fence had been positioned along the boundary line presently marked on the ground.g.The deponent stated that the present position of the fence corresponds with the corridor boundary alignment as presently marked on the ground as per the photographs taken at the site showing the position of the fence posts and the fence alignment on the ground.h.In the course of his inspection and verification of the boundary alignment, he prepared survey drawings illustrating the SGR acquisition corridor, the alignment of the boundary and the encroachment analysis, which drawings were annexed o the affidavit.i.The said drawings demonstrate the relationship between the railway corridor boundary and the position of the fence, and assist in illustrating the boundary alignment as presently observed on the ground.j.It was upon confirmation that the fence alignment corresponded with the corridor boundary on the ground that the Plaintiff elected to withdraw the suit in good faith, since the Issue that had triggered the dispute had effectively been addressed.k.It was stated that the withdrawal of the suit was therefore not an admission that the Plaintiffs claim lacked merit, but rather a practical step taken after the underlying boundary concern had been clarified through the site verification and subsequent inspection.l.The Defendant's supplementary affidavit suggests that no such clarification or correction of the fence alignment occurred, which does not reflect the position as observed upon the deponent’s inspection of the site and verification of the boundary alignment. VI. Submissions 16.On 5th February, 2026, the Court directed that the application for costs be dispensed by way of written submissions. 17.Subsequently the parties herein complied as summarised here below and the court Issued 17th June, 2026 as the date for its ruling on the Issue of costs. A). The Written Submissions by the Defendant/Applicant 18.The Defendant/Applicant filed its written submissions through the Law firm of Messrs. Ndegwa Sitonik and Karina Advocates it was dated 25th February, 2026. Mr. Kongere Advocate The applicant identified three ( 3 ) Issues for determination:-a.Whether the Defendant was the successful party as a result of the Plaintiff’s withdrawal of the suit?b.Whether as a successful party the Defendant was entitled to costs of the suitc.Whether the unsuccessful Plaintiff had established any good reason for denying the successful Defendant the costs of the suit? 19.On the first Issue for determination. The Learned Counsel as submitted that the Defendant/Applicant was the successful party as a result of the withdrawal of suit by the Plaintiff. The Learned Counsel for the Applicant stated that the law was that a party against whom a suit was withdrawn is the successful party, and a Plaintiff who withdraws their suit is the unsuccessful party. To support their case, reference was made to several authorities including:- “Postel Housing Co - operative Society Limited & another – Versus - Telcom Kenya Limited & another; Attorney General (Interested Party) [2020] KEELC 2396 (KLR), Phillip Shongwe – Versus - Diesel Services Limited (1941/2011) [2013] SZHC 109”. 20.On the second Issue for determination was an emphasis from the Applicant that as the successful party in the litigation, he was entitled to costs. The Learned Counsel also submitted on the third Issue by stating that the Respondent had not availed to the court any substantive Issue as to why the Applicant would be denied the costs of the withdrawn suit. that the alleged removal of the encroachment and the annexed sketch map do not amount to good reason as purported by the Applicant. The court had duly noted the myriad of authorities relied upon by the Applicant. 21.The Applicant maintained that the allegations that the encroachment was removed were infact false and the court was urged not to entertain it and to allow the application for costs as sought. B. The Written Submissions by the Plaintiff/Respondent 22.While opposing the application, the Law firm of Messrs. Borona & Associates Advocates filed submissions on behalf of the Plaintiff/Respondent. It was dated 4th March, 2026. Mr. Borona Advocate for the Respondent identified two ( 2 ) Issues for determination:-a.Whether the Defendant could properly be considered the successful party merely because the Plaintiff withdrew the suitb.Whether the Plaintiff had demonstrated good reason for the court to decline awarding costs to the Defendant. 23.The Learned Counsel made reference to the provisions of Section 27 of the Civil Procedure Act, Cap. 21 on the principles established for award of costs. The same are costs follow an event and that the court retains the discretion to order otherwise for good reason. According to the Respondent, the withdrawal of the suit does not automatically make the Applicant the successful party. 24.The suit was withdrawn after clarification of the boundary Issue with regards to an alleged encroachment. That the withdrawal was made in good faith and in a bid to save judicial time and as such the Respondent should not be penalised for the same. 25.The Respondent maintained that awarding costs to the Applicant would amount to penalising a party that acted reasonably and in good faith which would be contrary to the interest of justice. 26.At paragraph 7 of the submissions, the Learned Counsel cited several authorities on the Issue of costs. In summary, it was highlighted one Issue and which is that the discretion of the court to award costs should be according to the circumstance of each case. On the Issue of the alleged encroachment, it was submitted that the Issue had been abandoned upon withdrawal of the suit and as such the court could not make a finding on the same at this particular point. 27.Lastly, it was submitted that no compelling reasons had been given for the award of costs to the Applicant and as such the court was urged to let each party bear its own costs. VII. Analysis and Determination 28.I have considered the application as filed by the Applicant herein, the responses and the authorities relied upon by the parties in their respective submissions, the relevant provision of the Constitution of Kenya, 2010 and the statures. 29.For the Honourable Court to reach an informed, reasonable and fair decision, it condensed the subject matter into the following three ( 3 ) Issues for its determination:-a.Whether the Notice of Motion application dated 12th February, 2026 by the Defendant/Applicant has any merit.b.Which party is entitled to the costs of the withdrawn suit.c.Who bears the costs of the Notice of Motion application dated 12th February, 2026. Issue No. a. Whether the Notice of Motion application dated 12th February, 2026 by the Defendant/Applicant has any merit. 30.Under this sub – heading, the Honourable Court will be critically examining whether the application was meritorious or not. The main substratum here is on the Issue of awarding Costs or not. The invariable rule is that costs follow an event, this is the provision under Section 27 of the Civil Procedure Act, Cap. 21 which is instructive and therefore necessary to reproduce as hereunder; -Section 27 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.” 31.The Courts have overtime emphasized that costs are not automatic and must be awarded based on the circumstances of each case. It is at the discretion of the Court. The controversial Issue with regards to the instant application is whether the circumstances that led to the withdrawal of the suit warrant awarding costs to the opposing party. 32.The stage at which proceedings are withdrawn is a relevant factor in the exercise of discretion on costs. A plethora of decisions have been made over this subject matter. Hence, this Court will not be re – inventing the wheel. For instance, in the case of:- “Cecilia Karuru Ngayu – Versus - Barclays Bank of Kenya & Another [2016] eKLR”, the Court outlined factors to consider in awarding costs, including: “the court is entitled to look at inter alia”:-i.the conduct of the parties,ii.the subject of litigation,iii.the circumstances which led to the institution of the proceedings,iv.the events which eventually led to their termination,v.the stage at which the proceedings were terminated,vi.the manner in which they were terminated,vii.the relationship between the parties andviii.the need to promote reconciliation amongst the disputing parties pursuant to Article 159 (2) (c) of the Constitution.In other words, the court may not only consider the conduct of the party in the actual litigation, but the matters which led to the litigation, the eventual termination thereof and the likely consequences of the order for costs.” 33.I have considered the circumstances leading to the withdrawal of this suit. It is imperative of this court to give brief history of the suit at this point. On 8th July, 2024, the Plaintiff instituted this suit through a Plaint of even date alleging encroached on the suit property which was its land known as Plot No. 29437/133 Kwale and sought for mesne profits of a sum of Kenya Shillings Five Million Nine Twenty Eight Thousand (Kshs. 5,928,000/=) plus punitive damages. 34.Upon service with Summons to Enter appearance, the suit was defended vide a Statement of Defence dated 14th August, 2024 where the Defendant objected to the jurisdiction of the court to hear and determine the suit, on the ground that the Plaintiff had failed to serve the Defendant Corporation with the notice of claim mandatorily required by the provision of Section 86 of the Kenya Railways Corporation Act. As a result of the Defendant's objection, the Plaintiff on 26th May ,2025 filed an application seeking leave to serve the notice of claim after filing the suit. 35.The application was opposed by a Replying Affidavit, Grounds of opposition and owing to the Defendant's objection to jurisdiction and opposition of the Plaintiff's Application, the Plaintiff on 11th November, 2025 withdrew the suit by filing a Notice of Withdrawal dated 11th November, 2025. The withdrawal was endorsed by the court on 29th January, 2026, and the matter for a mention on 9th February, 2026 to settle the Issue of costs. 36.The court on the said date directed the Defendant to file a formal application seeking costs of the suit. Accordingly, the Defendant filed the instant Application dated seeking costs. 37.From the record, five appearances were made before the court. I have perused the affidavits by the Respondent indicating the reasons for withdrawal of the suit. It is noteworthy that efforts to file and serve a notice of claim after institution of the suit were made as per the application dated 26th May, 2025. From the same, the court is confident of the fact that the Plaintiff was intentional of pursuing the claim as indicated in the Plaint. It is also noted from the supplementary affidavit and further affidavit filed before court by the parties herein, the Issue of encroachment is highly contested and the Applicant denies that there was ever an encroachment or a re-survey of the area to rectify the alleged encroachment. 38.Indeed, I have not come across any survey report leading to confirmation of the exercise. However, I have perused the survey drawings of the alleged encroachment as prepared by Karima Mwakimwaga a surveyor engaged by the Plaintiff. However, looking keenly at the affidavit opposing the application and the plaint, it is alleged that what had been put up was a temporary fence that was later removed. This was also confirmed by the Land Surveyor who made reference to several photos which have been disputed by the Defendant/Applicant. I am not very certain as to the necessity of a report in removing a temporary fence given that there was already an electric fence put up and which was automatically the main boundary. 39.For these reason, I hold that the withdrawal of the suit under the provision of Order 25 ( 1 ) & ( 2 ) of the Rules was appropriate, reasonable and fair decision to take at this early stage of the proceedings. Issue No. b). Which party is entitled to the costs of the withdrawn suit 40.Be it as it may, the Issue of encroachment is no longer present. The Plaintiff being satisfied that their parcel is intact have opted to withdraw the claim for trespass and compensation. The withdrawal was before the suit was set down for hearing. I am of the opinion that removal of a temporary fence after demand of its removal has been made does not necessitate a survey report, costs being a discretion of the court, my view is that the circumstances of this case do not warrant grant of costs. 41.I am in agreement with the dictum in the case of:- “Devram Dattan – Versus - Dawda [1949] EACA 35” where it was stated:- “It is well established that when the decision of such a matter as the right of a successful litigant to recover his costs is left to the discretion of the Judge who tried the case, that discretion is a judicial discretion, and if it be so its exercise must be based on facts. If however, there be in fact , some ground to support the exercise by the trial Judge of the discretion he purports to exercise, the question of the sufficiency of those grounds for this purpose is entirely a matter for the Judge himself to decide, and the Court of Appeal will not interfere with his discretion in that instance.” 42.It would serve no purpose for a litigant to pursue a claim that is futile. Parties should therefore not be made apprehensive of withdrawing a claim that is doomed at inception or before commencement of hearing based on change in circumstances. The fundamental mandate of the court is to administer justice impartially; punitive measures that create an arena of fear for pursuit of justice can therefore never be an option before the court. 43.I will pen off by making reference to an excerpt in the case of:- “Kirugi – Versus - Jan Japan (K) Limited & another (Civil Appeal E011 of 2023) [2026] KEHC 4486 (KLR)”“The event of a withdrawal of moot proceedings must be considered differently from the event of a successful appeal where the merits of the parties’ respective case are finally determined by the Court. In addition, award of Costs must not be used in manner to discourage parties from seeking remedy in the constitutionally ordained process of the Court in its various levels”. Issue No. c). Who will bear the costs of the Notice of Motion application dated 12th February, 2026 44.I believe the court has sufficiently expressed it self on the matter. There will be no need to belabour the point whatsoever. VIII. Conclusions & findings 45.Consequently, upon causing an indepth analysis of the framed Issues, the Honourable Court specifically orders as follows:-a.That the Notice of Motion application dated 12th February, 2026 be and is hereby found to lack merit and thus be dismissed outrightly.b.That each party to bear their own costs on the Notice of Motion application dated 12th February, 2026. It isOrdered Accordingly. RULING DELIVERED THROUGH THE MICRO – SOFT TEAMS VIRTUAL MEANS, SIGNED AND DATED AT KWALE THIS 17TH DAY OF JUNE 2026………………………………HON. MR. JUSTICE L.L NAIKUNI,ENVIRONMENT & LAND COURT AT KWALE.Ruling delivered in the presence of: -a. Mr. Daniel Disii, the Court Assistant.b. Mr. Borona Advocate for the Plaintiff.c. Mr. Kongere Tom Advocate holding brief for Mr. Karina Advocate the Defendant.