https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3695

Lois Holding Ltd v Kimbui (Environment and Land Case E012 of 2025) [2026] KEELC 3695 (KLR) (17 June 2026) (Ruling) Neutral citation: [2026] KEELC 3695 (KLR) Republic of Kenya In the Environment and Land Court at Kitale Environment and Land Case E012 of 2025 CK Nzili, J June 17, 2026 Between Lois Holding Limited Plaintiff and Douglas Gituma Kimbui Defendant Ruling 1.The general rule is that costs follow the events under section 27 of the Civil Procedure Act. In this suit, the applicant, by a notice dated 17/4/2026, withdrew the suit filed by a plaint dated 18/3/2025. The defendant, while not opposed to the withdrawal, urges the court to grant him costs since he filed a statement of defence dated 25/10/2025. 2.The respondent relies on written submissions dated 27/4/2026. He urges the court to find the withdrawal of the suit under order 25 of the Civil Procedure Rules, as read together with section 27 of the Civil Procedure Act, automatically entitles him to costs, since there is no good reason to deny them. Reliance is placed on Rai & Others -vs- Rai & Others Petition No. 4 of 2012 [2014] KESC 31 [KLR] and Njuguna -vs- Mbugua & Others [2024] KEELC 243 [KLR]. 3.The respondent submits that the statement of defence clearly shows that this suit was filed to circumvent that which had already been heard in the Nairobi High Court, P&A Cause No. 16 of 2018. 4.The applicant, on the other hand, relies on written submissions dated 27/4/2026 to say that awarding costs is at the court’s discretion, based on reasons and the specific circumstances of each case. The applicant submits that the mere filing of pleadings does not in itself entitle the respondent to costs as a matter of right. 5.The applicant submits that order 25 rule (1) of the Civil Procedure Rules allows it to withdraw the suit, and in this case, it was done in good faith following the successful settlement of a concurrent succession matter involving the parties. 6.Further, the applicant submits that it is a private company in which the mother of the defendant is a director and that this litigation was fundamentally an offshoot of underlying family dynamics. 7.The applicant submits that, having successfully resolved the succession dispute through a formal consent which encompasses the resolution of the issues that necessitated the filing of the suit, treating the withdrawal as a trigger for punitive costs against it would be counter-productive by reigniting dormant family wrangles and undermining the spirit of the settlement that has already been achieved. 8.The applicant submits that it is a well-settled principle of equity that courts should be slow to order costs in family-related disputes, where parties have taken affirmative steps towards reconciliation. It is submitted that the respondent, who is privy to the same family structure, now wants to extract costs from an already settled matter at the family level. 9.The applicant, guided by Rai & Others -vs- Rai & Others [2013] KESC 30 [KLR], order 25 rule (3) of the Civil Procedure Rules and section 27(1) of the Civil Procedure Act, submit that judicial powers must be exercised in a manner that safeguards fairness between the parties, ensures due process and preserves public confidence in the administration of justice. 10.In this application, the applicant submits that costs as a principle are compensatory but not punitive in nature, must avoid a rigid application of the general rule that costs follow the event, particularly when a matter has been withdrawn for strategic or practical reasons before reaching the trial. 11.The applicant submits that, consistent with the overriding objective under sections 1A and 1B of the Civil Procedure Act, the court should consider the stage of the proceedings, the actual prejudice, if any, suffered by the defendant, and, in this case, where the withdrawal occurred at an early stage, it serves to conserve judicial time and minimize litigation expense. 12.The applicant submits that it reflects a responsible and efficient conduct, rather than bad faith or abuse of the court process. The applicant further submits that the respondent has been unable to demonstrate that if he incurred exceptional, necessary, or substantial expenses beyond routine pleadings, to be entitled to a standard costs order. 13.The applicant invites the court to depart from the default rule and exercise its discretion to ensure a just outcome. The applicant submits that the withdrawal was prompted by successful negotiations, conduct that is neither vexatious nor oppressive, punitive, and therefore a full costs order would be disproportionate. 14.Further, the applicant submits that the court should make no order as to costs or, in the alternative, direct that each party bears its own costs, by ensuring that any award granted is strictly limited to the minimal and necessary steps taken on the matter. 15.The applicant approached this court by a plaint dated 18/3/2025. Alongside the suit was an application of the same seeking interim orders of injunction. By an order dated 20/3/2025, the court objected that there was in existence a similar matter, namely Kitale ELC No. E010 of 2025. 16.When the matter came up for interpartes hearing on 1/4/2024, learned counsel for the applicant told the court that the matter involved family members regarding assets held by the family company and who were negotiating the issue with a view to settling the same. 17.The matter was scheduled for mention on 2/4/2025, 9/4/2025, 16/6/2025, and 13/8/2025. It is only on 17/9/2025 that the respondent appeared through the firm of M/s. Nyamu & Co. Advocates. The court, by the time the said law firm appeared and filed a defence, had been told by the applicant on 16/6/2025, that the parties were finalizing a formal consent on the two files. 18.Mr. Nyamu, advocate, on 2/10/2025, confirmed that he was aware of the Milimani P &A Succession Cause No. 16 of 2018, where there was a likelihood of resolution of all the issues in this matter, and that indeed parties had been directed to a mediation process. 19.Parties agreed to mention the matter on 16/12/2025, where they appeared and sought 30 more days. During the next mention, SC Jan Mohamed appeared before the court and concurred with Mr. Nyamu that there had been a settlement of the dispute between the parties and that there was a need to withdraw the suit. Mr. Nyamu, advocate, confirmed that the statement of defence was accompanied by documents in relation to the succession matter settling the issue, through the rectified grant, indicated by SC Jan Mohamed, which was yet to be availed to this court. 20.A mention date was taken for 5/3/2026, when the court was told of a follow-up meeting and a mediation settlement agreement. The suit was eventually marked as withdrawn on 21/4/2026 under order 25 rule (1) of the Civil Procedure Rules, with no objection, save for the issue of costs, which the parties were unable to agree on. 21.Whereas parties have extensively addressed the court to consider the circumstances leading to the withdrawal, the mediation agreement, and the rectified grant are yet to be availed before the court. That notwithstanding, paragraphs 4-8 of the plaint dated 18/3/2025 describe the family relationship between the parties. The said facts are admitted in paragraphs 5-11 of the defence dated 1/10/2025. 22.Paragraphs 12-14 of the statement of defence go on to confirm the existence of the Succession Cause No 16 of 2018 in the Nairobi High Court, an application dated 3/4/2025, and attempts to seek a mediation process to settle all the issues in this matter. 23.In Rai -vs- Rai (supra), the court held that under section 27(1) of the Civil Procedure Act, it had an open-ended mandate to ensure the ends of justice are met, by exercising the discretion to award or not to award costs judiciously, unless satisfied otherwise, based on good reasons in diverting from the general rule that costs follow the event. 24.The court cited Halsbury’s Laws of England 4th Edition Re-issue 2010, vol 10 para 16, that to award or not to award costs is a discretion of the court exercisable in accordance with reason and justice. The court held that the basic rule on attribution of costs is that costs follow the event and should not be used to penalize a losing party, but rather to compensate a successful party for the trouble taken in prosecuting or defending the suit. 25.The court held that costs are a means by which a successful party is recouped for expenses to which it has been put in fighting an action. The court observed that good reasons to justify a court’s departure are to be applied on a case-by-case basis, and may include public interest litigation, as held in Harun Mwau & Others -vs- Attorney General [2012] eKLR, Raila Odinga & Others -vs- Electoral and Boundaries Commission SC. Petition No. 5 of 2013, and in Samuel Kamau Macharia & Another -vs- Kenya Commercial Bank & Others [2013] eKLR. 26.The court said that the costs follow the events, meaning that a party who calls forth the event by instituting a suit will bear the costs if the suit fails, but if this party shows a legitimate occasion, then the defendant will bear the costs. The court said that special circumstances of a case, while being guided by the ends of justice, may justify a departure from the general rule. Further, the court said that other factors to consider may include the motivation and conduct of the parties prior to, during, and subsequent to the actual process of litigation. 27.Applying the foregoing binding principles and case law to this case, the history of this matter since inception as alluded to in the ruling, indicates that learned counsel for the plaintiff Mr. Akude Jura, disclosed to the court at the very earliest opportunity the nature of the dispute and the circumstances leading to the filing of the suit and efforts his client was making to have the matter resolved. Eventually, those efforts were confirmed by the defendant, who filed the defence while aware of the mediation process. 28.The applicant was not described in the statement of defence as filing the suit in a vexatious, abusive, or frivolous manner. On the contrary, the respondent admitted that there was a pending dispute where the plaintiff holds the suit parcel of land as family property. The parties eventually resolved the matter amicably, which this court appreciates. 29.The respondent has not demonstrated any exceptional costs or expenses over and above ordinary expenses in defending the suit. Both parties have been beneficiaries of the medication settlement agreement. The court, in the circumstances, finds legitimate reasons to depart from the general rule that costs follow the event. None of the parties has been prejudiced in the withdrawal of the suit that was necessitated by a settlement in the Nairobi High Court P&A Succession Matter. 30.The court therefore orders that each party bears their own costs in this matter. 31.Orders accordingly. RULING DATED AND SIGNED, VIA MICROSOFT TEAMS/OPEN COURT AT KITALE ON THIS 17TH DAY OF JUNE 2026.HON. C. K. NZILIJUDGEELC KITALERuling delivered via Microsoft Teams/Open Court at Kitale on this 17th day of June 2026.In the presence of:Court Assistant - Matui/Nancy.Ms Imata for Nyamu for the defendant/respondent.N/A for the plaintiff/applicant.HON. G. M. GITONGAJUDGEELC KITALE