[2021] KECPT 562 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 464 OF 2017

ATTANUS MUTINDA MULWA.....................................................CLAIMANT

VERSUS

EASTLANDS BIASHARA SACCO LIMITED.......................RESPONDENT

RULING

Vide the Application dated 4. 11. 2019, the Respondent has moved this Tribunal seeking for Orders inter alia:

a. That there be a stay of the decree issued on 23. 10. 2019;

b. That the default judgment entered on 31. 8.2017 be set aside;

c. That Respondent be granted unconditional leave to defend the suit; and

d. Costs.

The Application is supported by the grounds on its face and the Affidavit sworn by James Mecha on 4. 11. 2019. The Claimant has opposed the Application by filing a Replying Affidavit sworn by himself on 4. 2.2020.

Vide the directions given on 29. 7.2020, the Application was canvassed by way of written submissions. The Respondent filed its submissions on 21. 9.2020 while the Claimant did so on 17. 11. 2020.

Respondent’s Case

It is the Respondent’s case that the Claimant did not effect service of summons to enter Appearance before requesting for the default judgment. That it has a good defence and set off to the claim as the Claimant has a loan which he is yet to fully repay.

Claimant’s contention

The Claimant contend that upon filing this claim on 19. 7.2017, and duly served the Respondent who never entered Appearance or filed a Defence. That the instant Application is a ploy to deny him the fruits of his litigation.

Issues for determination

We have framed the following issues for determination

a. Whether the Respondent has laid a proper basis to warrant the setting aside of the default judgment entered on 23. 8.2017;

b. Who should meet the costs of the Application?

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.”

Reason for failure to enter Appearance

The Respondent contends that it was not served with summons to enter Appearance. We have perused the Affidavit of service sworn by Peter Njau on 22. 8.2017. It is apparent that the Respondent was duly served with summons to enter Appearance on 4. 8.2017. The judgment on record is thus a regular one.

Length of time lapsed since default judgment was entered

The default judgment was entered on 23. 8.2017. The instant Application was filed on 5. 11. 2019. This is a period of over 2 years since the default judgment was entered. We thus find that there was inordinate delay in originating this Application.

Draft Defence

We have perused the draft Defence dated 4. 11. 2019. We note that the Respondent seeks to set off the instant claim with a sum of kshs.154,500/=. It alleges the Claimant owes it in form of loan. What this means is that an issue arises as to whether the Claimant had loans with the Respondent and if so, whether the same can be set off with the claim herein. This is a triable issue which can only be determined upon taking of evidence. We are thus satisfied that the draft Defence raises triable issues.

Conclusion

The upshot of the foregoing is that we find merit in the instant Application. However, taking into account the inordinate delay in originating the instant Application, we condemn the Respondent to pay the Claimant throw away costs to be assessed below.

Final Orders

These upshot of the foregoing is that we allow the Respondent’s Application dated 4. 11. 2019 based on the following terms:

a. The Respondent is granted leave of 14 days to file and serve a statement of Response as well as list and bundle of documents and witness statements within 14 days herein.

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

c. Mention to confirm compliance and fixing a hearing date on 3. 3.2021.

d. In the meantime, the Respondent is ordered to pay the Claimant thrown away costs of kshs.15,000/= to be paid on or before 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

Miss. Buriri for Respondent/Applicant :- Present

Miss Thungu for Claimant/Respondent : Present

Hon. B. Kimemia Chairperson Signed 28. 1.2021