https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11863

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NYERI** **CIVIL SUIT NO. E004 OF 2020** **PETER MBOGO GIATHI** **(Suing as Administrator of the Estate of** **Giathi Giita) .......................................................................................................PLAINTIFF** **VERSUS** **CAROLINE WANJIRU KAMARU ............................................................... 1ST DEFENDANT** **UMOJA SERVICES STATIONS LIMITED ....................................................2ND DEFENDANT** **JUDGMENT** This suit was instituted by way of a plaint dated 17th September, 2020 and based on fraud to the effect that the 2nd Defendant illegally transferred 631 shares in the name of the Deceased to the 1st Defendant. The Plaintiff seeks the following reliefs; 1. A declaration that 631 shares in the name of the Deceased, Giathi Giita were unlawfully and illegally registered in favour of the 1st Defendant by the 2nd Defendant. 2. A permanent injunction restraining the 2nd Defendant from interfering with the 631 shares in the name of the Deceased. 3. An order directing the 2nd Defendant to recall and cancel the share certificate issued to the 1st Defendant in respect of the 631 shares in the name of the Deceased and that the same be reinstated in his name. Upon referral to mediation, a partial agreement settlement was arrived at on 16th September, 2011. It was agreed that the plaintiff was to refund the 1st Defendant Kenya shillings six hundred and thirty-one thousand (Ksh. 631,000) in exchange of shares at Umoja Services Station Limited and that the 2nd Defendant was to deposit Ksh. 72,000 (seventy-two thousand) being the dividends of the Deceased for the last six (6) years, to the 1st Defendant account on or before 16th March, 2022. Parties agreed that the issue of costs and interest payable would be determined by the court. Plaintiffs Submissions Reliance is placed on section 27 of the Civil Procedure Act and the case of *Rugus Njuguna Miringu & Another vs. Martha Muriithi & 2 Others* (2012) eKLR. That it is the successful party that is normally awarded costs. But it is submitted that in the present case, the parties settled the matter by consent. That the consent cannot be interpreted to mean that one party has succeeded in the suit and as such each party should bear their own costs. That the plaintiff remains as a shareholder of the 2nd Defendant and that there will be constant interaction in the course of business. That imposing costs to either party will further strain their relationship and beat the purpose of mediation. It is further submitted that it has not been demonstrated that the plaintiff conduct prior or during the course of the suit led to the litigation. 1st Defendants Submissions The 1st Defendant relies on section 27 of the Civil Procedure Act. She has tabulated her costs as below; 1. initial amount paid Ksh. 631,000. 2. interest Ksh. 2,005,851.37. 3. legal fees Ksh. 200,000. 4. court representation Ksh. 90,000. 5. Transport disbursement Ksh. 44,688. She relies on the case of *Foreth Limited vs. Kigano & Associates Civil Appeal* *No. 66 of 1999* (2002) EA 92. That she is the successful litigant and ought to be re-imbursed for the costs incurred during the litigation. That the court ought to rely on the audit report for purposes of taxation. The plaintiff contends that the Deceased was the registered owner of shares in the 2nd Defendant company and died on 18th April, 1984. 631 shares were transferred to the 1st Defendant on 1st September, 2011 yet the letters of administration were confirmed on 20th February, 2021. It is the plaintiff’s contention that any transaction that took place prior to confirmation of letters of administration was void ab initio and amounted to intermeddling with the Deceased Estate. Hence, there was an illegality and neither party should benefit from such. As it would amount to unjust enrichment and ratification of an invalid transaction. The court is called upon not take into consideration the audit report which was introduced at the stage of submissions. That the issue of interest payable on the principle was never raised in the 1st Defendants pleadings. Issue for Determination Whether the court should award costs and interest to either of the parties Section 27 of the Civil Procedure Act 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. 2) The Court or Judge may give interest on costs at any rate not exceeding fourteen percent per annum and such interest shall be ordered to the costs and shall be recoverable as such. In the case of *Jasbir Singh Rai & Others vs. Tarlochan Rai & Others* (2022) eKLR, The Court observed; ‘‘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 discretion, as will also be the motivations and conduct of the parties, prior to during and subsequent to the actual process of litigation’’. In the case of *Cecilia Kavuvu vs. Barclays bank of Kenya & Another* (2016) eKLR, the factors to consider the award of costs were determined thus; 1. The conduct of the parties. 2. The subject of litigation. 3. The circumstances which led to the institution of the proceedings. 4. The events which led to their termination. 5. The stage at which the proceedings were terminated. 6. The manner in which they were terminated. 7. The relationship between the parties. 8. The need to provide reconciliation amongst the disputing parties pursuant to article 159(2) (c) of the constitution. In the present suit, it is the plaintiff who filed it against the two Defendants on the strength that the 2nd Defendant fraudulently and illegally transferred 631 shares to the 1st Defendant and that the illegal transfer of the shares was done on 1st September, 2011 whereas the Deceased who was his father passed away on 15th April, 1984 and letters of administration were obtained on 19th May, 2020 and hence there was intermeddling with the Deceased Estate. The 1st Defendant maintains that it is the plaintiff who sold her the shares to willfully offset his debt. That the plaintiff deceived her that the shares belonged to him while knowing that he had not obtained letters of administration for the Estate of the Deceased. Further that the plaintiff filed the suit with unclean hands while knowing that he had sold 631 shares to the 1st Defendant which amounted to intermeddling with his father’s Estate. On 16th September, 2021 parties entered into a partial mediation settlement in which the plaintiff agreed to refund the 1st Defendant Ksh. 631,000 in exchange of shares at Umoja Service Station Ltd. I have noted that it was not adopted. I accordingly adopt the partial mediation settlement as Judgment of the Court. What remains is the issue of costs and interest payable. It has come out clearly that the plaintiff being the one who filed and instituted this suit against the two Defendants did so while knowing that he had no capacity to transfer shares which belonged to his father who was deceased. He had not obtained letters of administration hence he was guilty of intermeddling with the Estate of his deceased father. He is the one who dragged the Defendants to court and they did incur costs. He did not succeed in the suit. Costs follow the event. Judgment has been entered against the plaintiff as per the partial mediation settlement. Plaintiff to pay costs of this suit plus interest at court rates. This court is not the taxing master. Taxation of costs to follow the normal procedure. **RULING, SIGNED** and **DELIVERED** virtually this 12th day of May, 2026. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **MARTIN M. MUYA** **JUDGE** **In the Presence of:** Mr. Muchiri wa Gathoni – For the 2nd Defendant Court assistant – Kinyua