https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10000

Auto Industries Ltd v CN (Minor Suing through next friend and mother of AWN) & another (Civil Appeal E209 of 2024) [2026] KEHC 10000 (KLR) (2 July 2026) (Judgment) Neutral citation: [2026] KEHC 10000 (KLR) Republic of Kenya In the High Court at Thika Civil Appeal E209 of 2024 TW Ouya, J July 2, 2026 Between Auto Industries Limited Appellant and CN (Minor Suing Through Next Friend And Mother Of AWN) 1st Respondent Dennis Gikera Githinya 2nd Respondent (Being an appeal arising from the ruling of Hon. Sylvia A. Wayodi in Thika SCCC No. E838 of 2023 delivered on 18th July 2024) Judgment 1.The Appeal arose from an application by Auto Industries Limited, the Appellant, seeking to set aside the judgment entered against it on 22nd February 2024. The application was brought by way of Notice of Motion dated 9th April 2024 under various provisions of the Civil Procedure Rules and Act. The applicant prayed for urgent certification, stay of execution, leave for its advocates to come on record, setting aside of the judgment, hearing of the suit de novo, leave to file a response, and joinder of Foresight Motors Limited as a third party. 2.The motion was supported by grounds that auctioneers had proclaimed goods worth millions of shillings to satisfy a decree of Kshs. 584,791/=. The applicant contended it was unaware of the suit until the proclamation, had never been served with pleadings, and had not instructed Irungu Kang’ata & Co. Advocates who appeared in the matter. It argued that its crucial evidence was omitted, namely that it was not the owner of motorcycle registration number KMFY 916M at the time of the accident, having sold it to Foresight Motors Limited in January 2022. The applicant maintained that condemning it without hearing was unjust and that its draft response raised triable issues. 3.The application was supported by the supporting affidavit of one Samuel Waweru, the Appellant’s Assistant Finance Manager. He reiterated that the company was a stranger to the proceedings, had never instructed counsel, and that the motorcycle had been sold and delivered to Foresight Motors Limited over a year before the accident. He annexed the sale agreement, tax invoice, bank statement, delivery note, and logbook discharge manifest to demonstrate transfer of ownership. He emphasized that the applicant had not been given an opportunity to be heard and that its draft response raised triable issues warranting a full trial. 4.The trial magistrate, after hearing the application, dismissed it reasoning that the case had already been heard on its merits before judgment was entered. The court noted that Irungu Kang’ata & Co. Advocates had appeared for both Respondents in the proceedings before it, filed a response to the claim, and participated in the proceedings. The application to cease acting was filed only after judgment had been delivered and was never prosecuted. The magistrate held that the Appellant was duly represented, ownership was proved through NTSA records showing the Appellant as registered owner, and the claimant had discharged her burden on a balance of probabilities. The court thus found no sufficient basis to set aside the judgment. 5.Being dissatisfied with the ruling the Appellant moved this Court vide this instant appeal. 6.The Appellant’s grounds of appeal were set out as follows:i.The Learned Magistrate erred in fact and law by failing to find that personal service of the Claimant’s pleadings had not been effected upon the Appellant before the matter was set down for hearing.ii.The Learned Magistrate erred in fact and law by failing to find that service of the Claimant’s pleadings had been effected upon Occidental Insurance Company Limited instead of the Appellant.iii.The Learned Magistrate erred in fact and law by failing to find that service of the Claimant’s pleadings upon Occidental Insurance Company Limited instead of the Appellant did not amount to proper service upon the Appellant.iv.The Learned Magistrate erred in fact and law by disregarding the overwhelming evidence that the Appellant did not have actual ownership, management, possession, custody and/or control of Motorcycle Registration No. KMFY 916M as at the date of the alleged road accident which yielded the suit. The appeal was canvassed by way of written submissions. 7.The Appellant sought the following prayers:i.That the appeal be allowed.ii.That the ruling delivered on 18th July 2024 in Thika SCCC No. E838 of 2023 be set aside.iii.That the Respondent do pay the costs of this appeal. 8.The Appeal was canvassed by way of written submissions. 9.The Appellant in its submissions argued that service was never effected upon it, and service on Occidental Insurance was irregular and did not confer jurisdiction. It relied on authorities emphasizing strict proof of service and the principle that insurers are not agents for service. On ownership, the Appellant contended that although NTSA records reflected it as registered owner, beneficial and actual ownership had passed to Foresight Motors Limited upon sale and delivery in January 2022. It cited case law recognizing rebuttal of registered ownership under Section 8 of the Traffic Act and urged that liability should fall on the party in possession and control at the time of the accident. 10.The Respondent countered that the appeal was devoid of merit and a calculated attempt to deny the minor the fruits of judgment. It submitted that the Appellant was duly represented by counsel who filed pleadings and participated in trial, thereby waiving any defect in service. On ownership, the Respondent relied on Section 8 of the Traffic Act and authorities affirming that NTSA records are the best proof of ownership. It stressed the principle of finality in litigation, arguing that the Appellant had its day in court and the appeal was a smokescreen to frustrate enforcement. 11.Having looked at the record of appeal and the parties’ submissions the following in my view are the issues for determination:a.Whether proper service of the 1st Respondent’s pleadings was effected upon the Appellant before the matter was set down for hearing.b.Whether service of the Claimant’s pleadings upon Occidental Insurance Company Limited amounted to proper service upon the Appellant.c.Whether the Learned Magistrate erred in disregarding evidence showing that the Appellant did not have ownership, management, possession, custody and/or control of Motorcycle Registration No. KMFY 916M at the material time of the alleged accident. 12.Section 7 of the Small Claims Court Rules 2019 provides:7. Service of Statement of claim(1)The claimant shall serve a copy of the Statement of Claim on each of the Respondents named in the Statement in the manner prescribed under rule 35. 13.Rule 35 provides:35.Mode of service(1)Service of any document under these Rules shall be made by delivering a copy thereof personally to the party upon whom it is to be served and, where there are more than one party to be served, on each of them.(2)Wherever it is practicable, service shall be made on each party in person unless they have an agent authorized to accept service, in which case service on the agent personally shall be sufficient.(3)The person served under this rule is required to endorse an acknowledgment of service on the original document:Provided that, if the Court is satisfied that the party or such agent or other person has refused so to endorse, the Court may declare the document to have been duly served, and a Certificate of Service shall be sufficient proof of service.(4)Where it is not practicable to effect personal service of a document on a party in accordance with this rule, service may be effected by mail addressed to the party's last known postal address, and a certificate of posting in that regard shall be attached to the Certificate of Service.(5)Where the Respondent is a corporation, the claimant may—(a)send by registered mail a copy of the document to the registered office of the corporation, and obtain a certificate of posting; or(b)deliver a copy of the document—(i)at the registered office of the corporation;(ii)at the principal place of business of the corporation; or(iii)to a director, chief officer, manager, Receiver or Liquidator, or Receiver Manager, of the corporation.(6)The person served pursuant to subrule (6) (b) is required to sign and affix a stamp or seal of the corporation on the original document in acknowledgment of service.(7)….. 14.In the instant case, the Appellant disputed service. The judgment entered against it is therefore irregular. In the case of James Kanyiita Nderitu & another v Marios Philotas Ghikas & another [2016] KECA 470 (KLR) the Court elaborated on what an irregular judgment and had this to say:“In an irregular default judgment, on the other hand, judgment will have been entered against a defendant who has not been served or properly served with summons to enter appearance. In such a situation, the default judgment is set aside ex debito justitiae, as a matter of right. The court does not even have to be moved by a party once it comes to its notice that the judgment is irregular; it can set aside the default judgment on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue or whether there has been inordinate delay in applying to set aside the irregular judgment. The reason why such judgment is set aside as of right, and not as a matter of discretion, is because the party against whom it is entered has been condemned without notice of the allegations against him or an opportunity to be heard in response to those allegations. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system. (See Onyango Oloo v. Attorney General [1986-1989] EA 456). The Supreme Court of India forcefully underlined the importance of the right to be heard as follows in Sangram Singh v. Election Tribunal, Koteh, AIR 1955 SC 664, at 711:“There must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them.” 15.Upon perusal of the record of appeal and the lower court file I did not find an affidavit of service to support the finding that the Appellant was served and was aware of the proceedings but failed to enter appearance and defend the suit. Rule 7 and 35 of the Small Claims Court Rules are very clear on service of the statement of claim and the mode of service none of which seem to have been complied with in the instant case. Though an Advocate entered appearance for both Defendants service on each defendant ought to have been proved. In the absence of this it can only be concluded that appearance on behalf of the Appellant was in error. There is also nothing on the record proving that the Appellant did indeed instruct the firm of Irungu Kangata to act on its behalf. Service on the insurance company is not envisaged under rule 7 and 35 of the Rules. 16.In light of the foregoing analysis, I am of the considered view that the judgment entered against the Appellant was irregular for want of proper service. The Appellant was condemned unheard, contrary to the principles of natural justice and the mandatory provisions of the Small Claims Court Rules. Guided by the authority of James Kanyiita Nderitu & another v Marios Philotas Ghikas & another [2016] KECA 470 (KLR), such a judgment cannot stand and must be set aside ex- debito justitiae. In light of this there is no need to delve into issue no. 3 with regard to the merits and demerits of the Appellant’s defence. 17.Accordingly, I find that the appeal should succeed and I hereby issue the following orders:i.The appeal is allowed.ii.The ruling delivered on 18th July 2024 in Thika SCCC No. E838 of 2023 is hereby set aside.iii.The matter is remitted back to the Small Claims Court at Thika for hearing de novo before a different magistrate.iv.The Respondents shall bear the costs of this appeal. DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 2ND DAY OF JULY, 2026.HON. T. W. OUYA, OGWJUDGEIn the presence of:Ms. Njuguna for RespondentNganga for AppellantNyabuto – Court Assistant