https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9757

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT MALINDI** **CIVI SUIT NO. E119 OF 2024** ***Being an Appeal from Ruling and Order of the Chief Magistrate’s Court at Malindi (Hon. J. Ongondo) in CMCC No. 311 of 2022) Dated 14th August 2024*** **JIWANJEE INDUSTRIAL HARDWARE LIMITED….……… APPELLANT** **VERSUS** **CONTINENTAL HOMES LIMITED ..…….......................... RESPONDENT** **JUDGMENT** 1. This is an Appeal against the Ruling and Order of the **Chief Magistrate’s Court at Malindi (Hon. James Ongondo)** dated 14/8/2024). It arises out of Malindi **CMCC No. 311 of 2022***.* **Background Facts** 2. The Appellant sued the Defendant for a sum of **Kshs 593,180.00** on account of goods sold and delivered. The claim was that the amount remained unsettled, despite delivery of the goods purchased. The Defendant denied the claim and filed a defence to that effect. The initial claim was filed at the Mombasa Chief Magistrate’s Court. 3. The Respondent successfully applied to the High Court for a transfer of the suit. Though it is said that the Appellant opposed the prayer, the High Court allowed the transfer of the suit to the Chief Magistrate’s Court at Malindi. 4. Thereafter, the parties entered into a consent whereby the Defendant admitted and settled the Appellant’s claim in its entirety. The parties could not agree on the issue of who was liable for costs. They left it to the Trial Court to determine the outcome hereof. Parties filed their respective submissions in support of their rival positions on the prayers for costs and interest in the suit. 5. The Court in a brief Ruling declined to award costs and directed that each party to bear its own costs. 6. Aggrieved by this Ruling, the Appellant has preferred this appeal. **Issues for Determination** 7. The Court has considered the pleadings filed by the parties, the consent recorded, the Memorandum of Appeal, the Record of Appeal and the respective submissions by the parties. 8. The Court frames **two (2) issues** for determination. 1. *Whether the Trial Court erred in declining to award interest in the suit to the Plaintiff.* 2. *Whether the Trial Court erred in declining to award costs of the suit to the Plaintiff.* **Analysis** 9. This is a first appeal and the mandate of the Court was set out in ***Selle -v- Associated Boat Co. of Kenya & Others [1968] EA123*** where it was stated; ***“an appeal from the High Court is by way of retrial and the Court of Appeal is not bound to follow the trial judge’s findings of fact if it appears either that he failed to take account of particular circumstances or probabilities or if the impression or the demeanor of witness is inconsistent with evidence generally.”*** 10. An appeal to this Court from the Trial Court is by way of a retrial. The principles upon which this Court acts in such an appeal are well settled. Briefly put, this Court must reconsider the evidence, evaluate it, and draw its own conclusions. IN doing so, the Court should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. 1. ***Whether the Trial Court erred in declining to award interest in the suit to the Plaintiff.*** 11. Awarding of interest in a suit is guided by the Provisions of **Section 26 of the Civil Procedure Act** which states as follows: ***26. Interests*** ***(1) Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court*** ***deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.*** 12. The Appellant submits that in as much as the Decree was for money, the Court had a discretion to award interest. It cites the cases of **Kitale Maize Millers Ltd vs Agricultural Development Corporation (2015) eKLR** and **Supermarine Handling Services Ltd vs Kenya Revenue Authority (2010) eKLR.** 13. The Respondent submits that the Court should not interfere with the Trial Courts exercise of its discretion in declining to award interest. It refers the Court to ***Supermarine Handling Services Ltd vs Kenya Revenue Authority (2010)*** and ***Amondi & Co Advocates vs County Government of Kisumu (2021) KEHC 2024 (KLR).*** 14. The Court has considered that indeed the parties recorded a consent on **5/6/2024** as follows; *“We wish to record consent.* *By consent* 1. *The Plaintiff acknowledges receipt of Principal amount of Kshs 593,180/-* 2. *The issue of costs and interest to be determined by the Court.”* 15. In its Ruling delivered on 14/8/2024, the Trial Court held as follows; *“I have considered cited authorities which I have taken into account in this brief finding.* *It is trite law that costs follow the event and that the Plaintiff being the successful party should ordinary be awarded costs.* *“Unless the conduct of the Plaintiff is such that it would be denied the costs or the issue was not attracting costs (see Orin OLK Limited vs Paul Kabeu & 2 Others (2014) eKLR.* *In this case, the Plaintiff wrongly filed the suit in Mombasa when the Defendant ordinarily carried a business in Kilifi County where it is situated.* *When the Defendant applied to have the suit transferred to Malindi, the Plaintiff strenuously opposed the application but the same was allowed.* *In the circumstances, it is my humble view that the Plaintiff’s conduct does not entitle it to any costs. The same is declined. Each party to bear its own costs.”* 16. The first question to be answered by the Court is whether the Trial Court ever considered the question of interest? 17. In this Ruling referred to above it is clear that the Trail Court did not address itself to the issue of interest, much as the parties had by consent left this issue for determination by the Trial Court. 18. The second question to be answered is whether having failed to exercise its discretion, it was open to this Court to interfere? 19. The short answer is that if the Trial Court did not consider or determine the issue, it then did not exercise its discretion. This then becomes an appealable issue and this Court is entitled to interfere. This invites the Appellate Court to interfere with a decision where discretion ought to have been exercised been exercised but it was not. 20. The third question would be in which circumstances would the Trial Court award a party interest in a money claim? 21. Once more the short answer would be that in a money claim arising out of a commercial transaction, the default position would be that interest would be awarded, except in exceptional circumstances. 22. The last question is should the Court award interest and if so, for which period? 23. The Court is persuaded that this was a commercial transaction. The Defendant having been supplied with goods, it was entitled to pay for them. It could not order and then turn around and seek to keep the goods for free. That would be conversion. Having failed to pay, leading to the filing of a suit, the Plaintiff was entitled to be compensated by way of an award of interest. This would cater for the loss of the value of money and opportunities in terms of inflation and incidence of time. If Courts failed to award interest, what would be the motivation for debtors to settle their claims on time? A debtor could receive a supply of goods of 20 million and hold out on paying. This is knowing too well that even if sued, they would end up paying the same 20 million six (6 ) years down the road. This would not augur well for the business communities and the environment they require to thrive in. This business environment and the realities of modern business require and deserve the protection of this Court. **(b)** ***Whether the Trial Court erred in declining to award costs on the suit to the Plaintiff.*** 24. Awarding of costs is governed by **Section 22 of the Civil Procedure Act** which states as follows; ***27. Costs*** ***(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 per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.*** 25. The Appellant refers the Court *to* ***Richard Kuloba’s Judicial Hints on Civil Procedure 2nd Edition, pages 94 and 95***. That a party who succeeds in a suit should be awarded costs. 26. The Defendant relied on ***Orix Oil (Kenya) Ltd vs Paul Kabeu & 2 Others (2014) KEHC 5086 (KLR)*** and ***Cecelia Karuru Ngayu vs Barclays Bank of Kenya Limited & Another (2016) eKLR.*** 27. The Court notes that the Trial Court had the discretion to award or decline to award costs. However, their discretion had to be exercised judiciously and not capriciously. 28. The Appellant maintains that it was the successful party. It was entitled to bring this claim. Indeed, it was only paid after bringing the action to recover the claim. 29. To this Court, that the suit was initially filed at Mombasa is neither here nor there when it comes to awarding the costs of the suit. The Respondent successfully applied for a transfer of the suit. The High Court in exercise of its jurisdiction considered the application for transfer of suit. It allowed it. It is said that the costs of the application for transfer were awarded to the successful party who is the Respondent. It would then appear that the High Court conclusively dealt with the issues of the application for transfer, including the issue of the costs of that application. 30. It was therefore not open to the Respondent to raise the same issue before the Trial Court. It was also punitive for the Trial Court to punish the Appellant for having filed the suit at Mombasa. He had already been penalised by the High Court by being condemned to pay costs. The Court had to balance two issues. One, whether as a successful party, the Appellant was entitled to costs. This it was entitled to in the ordinary cause of events as a successful party. The second issue is whether the Appellant had erred in filing the suit at Mombasa instead of Malindi. Clearly this was an issue for consideration by the High Court and not the Trial Magistrate. It was not a live issue before the Trial Court. 31. This Court has said enough to determine that the Trial Court erred in exercise of its discretion, by punishing the Appellant in declining to award interest and costs. 32. On the exercise of discretion to award costs to a successful party, the Court follows the decision of the Court of Appeal in **Punchlines Limited v Joseph Mugo Kibaria,Boniface Kilonzo Kisilu,Moses Muinde John,Henry Muoki Kitila,Jackson Muteti Mwongo,Benson Wabwile Onyisio,Linus Omenta Gesicha,George Antony Kabue,Moses Kikwau David,Henry Muhanji Lugano & Jamen Ichuliza Chadaka [2018] KECA 217 (KLR).** 33. On the issue of interest, the Court refers to **Prem Lata vs. Mbiyu [1965] EA 592** where the Court said: - *“In such a case it is clearly right that the party who has been deprived of the use of goods or money to which he is entitled should be compensated by such deprivation by an award of interest.”* 34. In **Mukisa Biscuits Manufacturing Ltd. vs. Westend Distributors [1970] EA 469** the Court of Appeal stated as follows on awarding of interest; *“The principle that envisages is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing suit***.”** 35. To this Court, the Trial Court clearly erred and precedent does not support the manner in which discretion was exercised. This Court is entitled to interfere and does interfere. 36. On costs of the Appeal, the same lie at the discretion of the Court. The same are awarded to the Appellant together with interest until payment in full. **Determination** 37. This Appeal succeeds and is allowed in the following terms; 1. *The Appeal is allowed in its entirety.* 2. *The Ruling and Orders of the Chief Magistrate in CMCC No. 311 of 202) dated 14th August, 2024 is HEREBY quashed and set aside.* 3. *It is instead replaced with a Ruling and Order allowing interest on the decretal sum at Court rates from the date of filing suit until the date when the sum of Kshs. 593,180/= was repaid.* 4. *The costs of the suit before the Lower Court are also awarded to the Plaintiff/Appellant together with interest at Court rates from the date of Judgement of the Lower Court until payment in full.* 5. *The costs of this Appeal are also awarded to the Appellant together with interest at Court rates from the date of this Judgement until payment in full.* 38. It is so ordered. **DATED, SIGNED AND DELIVERED AT MALINDI THIS 2ND DAY OF JULY, 2026** **NJOROGE BENJAMIN K.** **JUDGE** **In the presence of:** Miss Mulongo for the Appellant. Mr. Malik for the Respondent Mr. John Paul - Court Assistant