[2021] KECPT 518 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.542 OF 2019

ALPHONCE LEMUNKE TIGES......................….............…….............CLAIMANT

VERSUS

METROPOLITAN NATIONAL SACCO LIMITED .................... RESPONDENT

RULING

Vide the Application dated 15. 11. 2019, the Respondent has moved this Tribunal seeking for Orders inter alia:

1. That due to the urgency of this application, service thereof be dispensed with, the same be certified urgent and heard ex-parte in the first instance.

2. That pending interparties hearing of this application, an Order be and is hereby issued staying the judgment in default and staying any issuance of warrants in this matter.

3. That the interlocutory judgment entered as against the Respondent for default of appearance and defence, together with all consequential orders be and are hereby set aside and the Respondent/Applicant be allowed to file its defence.

4. That an order be and is hereby issued to the process serve who allegedly served the summons to enter appearance to be cross examined on his affidavit during the interparties hearing of this Application.

5. That costs of this Application be provided for.

The Application is supported by the grounds on its face and the Affidavit sworn by Collins Amimo on 15. 11. 2019. The Respondent has opposed the Application vide the Replying Affidavit sworn by himself on 22. 1.2020. The Respondent has also filed a further Affidavit sworn by David Muhoro on 20. 8.2020.

Respondent’s Contention

Vide the instant Application, the Respondent has sought for the default judgment entered on 13. 11. 19 to be set aside on grounds that none of its principal officers were served with summons to enter appearance. That it had since 8. 11. 2019 been trying to file their Notice of Appointment and Defence to no avail. That when it eventually filed the said Notice the same was not placed in the respective file because of frivolous and unfounded reasons advanced by the registry staff which led to the judgment in default being entered.

That it has a good defence as it operated the Claimants’ accounts diligently and in accordance with the customs and practices of banking as provided by law. That as per the Respondent’s 2019 Annual General Meeting resolutions, members agreed to schedule refunds on a first come first serve basis and therefore the Claimant’s refunds is scheduled to be paid in November, 2021.

Claimant’s Case

It is the Claimant’s case that summons to enter Appearance was duly served upon the Respondent by leaving it at the Registered Office of the Respondent. That upon receipt of the said summons, the Respondent deliberately avoided to enter Appearance and file a Defence. That he gave the Respondent the mandatory 60 days’ Notice of withdrawal from membership.

That the draft Defence does not raise triable issues as the draft defence contain mere denials and that no useful purpose would be served by setting aside judgment. That the Application should therefore be dismissed with costs.

Issues for determination

The Respondent’s Application dated 15. 11. 2019 has presented the following issues for determination:

a. Whether the Respondent has established a proper basis to warrant the setting aside of the default judgment entered on 13. 11. 2019.

b. What Orders are available in the circumstances.

Setting aside of default Judgment

We have jurisdiction to set aside a default judgment by dint of Order 10 Rule 11 of the Civil Procedure Rules. The Rule provides thus:

“ Where judgment has been entered under this Order, the court may set aside or vary such judgment and any consequential Decree or Order upon such terms as are just.”

In the case of Patel – vs- East Africa Cargo Service Limited (1974)EA 75, the Court underscored this provision in the following terms:

“ The main concern of the court is to do justice to the parties and the court will not impose conditions on itself to fetter the wide discretion given to it by the Rules.”

Before we can exercise our jurisdiction under Order 10 Rule 11 above, we firstly have to ascertain whether the default judgment is a regular or irregular one. If the Judgment is an irregular one, then we will set it aside ex debito justiciae.

This was the holding in the case of K- Rep Bank Limited -vs- Segment Distributors Limited [2017] eKLR.

The court in the case of Fidelity Commercial Bank Limited – vs- Owen Amos Ndungu & Another, HCC.NO. 241/1998 gave a distinction between a regular and irregular judgment as follows:

“ A distinction is drawn between regular and irregular judgments. Where summons to enter Appearance has been served and there is default in entry of Appearance the ex parte judgment entered in default is regular. But where the exparte judgment sought to be set aside is obtained either because there was no proper service or any service at all, of the summons to enter Appearance, such judgment is irregular and the affected Defendant is entitled to have it set aside as of right”

Where the default judgment is regular, then the Tribunal has to consider if the draft Defence filed with the Application raises triable issues. This was the holding in the case of James Kanyiita Nderitu & Another - vs- Marios Philotas Ghikes & Another [2016]eKLR. In the pertinent part, the court held thus:

“ In a regular default judgment, the Defendant will have been duly served with summons to enter appearance, but for one reason or another, he failed to enter appearance or to file a Defence, resulting in default judgment. Such a Defendant is entitled under Order 10 Rule 11 of the Civil Procedure Rules to move to court to set aside the default judgment and to grant him leave to defend the suit. In such a scenario, the court has unfettered discretion in determining whether or not to set aside the default judgment and will take into account such factors as to the reason as for the failure of the Defendant to file his memorandum of Appearance, or defence, as the case may be, the length of time that has elapsed since the default judgment was entered; whether the intended Defence raises triable issues, the respective prejudice each party is likely to suffer whether on the whole, it is in the interests of justice to set aside the default judgment.”

Determination

We have perused the Respondent’s Notice of Appointment dated 31. 10. 2019. We note that the same was filed on the date when the default judgment was entered. In the interest of justice and fair play, we deem it fit to set aside the default judgment and allow the Respondent participate in the proceedings. We however note that the claim herein revolve around withdrawal of a member from a Co-operative society and demand for refund of savings. In order to expeditiously dispose of the claim, we give the following directions.

a. The Respondent to file and serve a Statement of Defence alongside Witness Statements and list and bundle of documents within 7 days herein.

b. The Claimant to file a Reply to Defence as well as Supplementary list and bundle of documents as well as witness statements within 14 days of service.

c. That the Witness Statements and documents filed by the parties to be deemed as their evidence in the matter.

d. The Claimant to file and serve final submissions alongside Reply to Defence and Supplementary bundle of documents .

e. The Respondent to file and serve final submissions within 14 days of receipt of Claimant’s submissions.

f. Mention to confirm compliance and fixing a judgment date on 3. 3.2021.

Ruling signed, dated and delivered virtually this 28th day of January, 2021.

Hon. B. Kimemia Chairperson Signed 28. 1.2021

Mr. B. Akusala Member Signed 28. 1.2021

Mr. R. Mwambura Member Signed 28. 1.2021

Mutemi holding brief for Thimba for Respondent/Applicant: Present

Miss Kagoi for Claimant/Respondent : Present

Hon. B. Kimemia Chairperson Signed 28. 1.2021