https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1894

REPUBLIC OF KENYA IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI ELRC APPEAL NO.E197 OF 2025 CALE INFRASTRUCTURE CONSTRUCTION CO. LTD …………………………... APPPELLANT -VERSUS- FRANCIS ONYANGO OYIENGO. . ……………………………………………..1ST RESPONDENT BЕТАВASE AUCTIONEERS……………………………………………….……2ND RESPONDENT *(Being an Appeal from the ruling and order delivered by Honorable Lucy Ambasi, Chief Magistrate, dated 10th June 2025 with respect to a Notice of Motion Application dated 15th April 2025 in Nairobi (Milimani) Magistrates Employment and Labour Relations Court Case No. MCELRC/E334/2023)* CORAM Before Lady Justice Jemimah Keli C/A Otieno JUDGMNET 1. The Appellant, CALE INFRASTRUCTURE CONSTRUCTION CO. LTD, being dissatisfied with the whole of the Ruling delivered by Honorable Lucy Ambasi, Chief Magistrate, dated 10th June 2025 with respect to a Notice of Motion Application dated 15th April 2025 in Nairobi (Milimani) Magistrates Employment and Labour Relations Court Case No. MCELRC/E334/20231 appealed VIDE MEMORANDUM OF APPEAL DATED 16TH JUNE 2025 to this Honourable Court against the whole of the said ruling AND SOUGHT FOR THE FOLLOWING ORDERS- a)This Appeal be allowed; b) The Ruling of the Magistrate's Court dated 10th June 2025 be set aside and it be substituted with an order allowing the Notice of Motion Application dated 15th April 2025; c) The interlocutory judgment entered on 1st October 2024 and all consequential orders thereto be set aside: d) The Appellant's Memorandum of Appearance and Statement of Defense dated 15th April 2025 be deemed as duly filed and properly on record; e) The Matter be mentioned before the Chief Magistrate's Court for purpose of taking pretrial directions on priority basis; f) Costs be provided for. g) Any further or other relief that this Honourable Court may deem just and fit to grant to the Appellant in the circumstances of this appeal. GROUNDS OF THE APPEAL 1. THAT the Learned Trial Magistrate erred in law and in fact by failing to have due regard, take into account and appreciate the substantive issues of law and fact raised by the Appellant in its Application, submissions, list of authorities and other documents on record. 2. THAT the Learned Trial Magistrate erred in law and fact in finding that the Appellant's Application dated 15th April 2025 lacked merit and proceeded to dismiss the same with costs. 3. THAT the Learned Trial Magistrate erred in law and fact by failing to take into account that the Appellants Statement of Defense raises triable issues and a plausible defense that require adjudication by trial. 4. THAT the Learned Trial Magistrate erred in law and fact by not giving the Appellant a chance to defend the suit against it and thus breaching the Appellant's right to a fair trial. 5. THAT the Learned Trial Magistrate erred in law and in fact by failing to set aside the interlocutory judgement entered on 1st October 2024 whilst evidence on record shows that failure by the Appellant to file its documents within the stipulated timelines was due to the fact that summons and/or any other suit documents were never served upon them and consequentially, the Appellant's only became aware of this suit once they were proclaimed by an auctioneer. 6. THAT the Learned Trial Magistrate erred in law and fact by holding that there was proper service on the Appellant. 7. THAT in all the circumstances of the case, the Learned Trial Magistrate failed to render justice to the Appellant. BACKGROUND OF THE APPEAL 1. The 1st Respondent herein has a judgement in his favour against the Appellant herein pursuant to an interlocutory judgement entered on 1s October 2024 by the trial Magistrate. That the judgment was entered after the Appellant failed to enter an appearance and/or file their defence within the stipulated timelines. The 1st Respondent applied for and extracted warrants of attachment of movable property and caused the same to be served upon the Appellant herein, through BETABASE AUCTIONEERS, named herein as the 2nd Respondents. 2. The appellant submitted that it was on that basis that the Appellant herein moved the Honourable Magistrate's Court vide an application dated 15th April 2025 seeking the following orders: a. That this application be certified as extremely urgent and be heard ex-parte in the first instance and service thereof be dispensed with in the first instance as the object of this application will be defeated should the Respondents/Applicant's assets be sold off. b. That this Honourable Court be pleased to set aside and/or stay execution of the Proclamation Notice dated 10th April 2025 and the warrants of attachment pending the hearing and determination of this Application. c. That the Honourable Court be pleased to set aside the judgement entered on the 1st of October 2024 and all other consequential orders thereto pending the hearing and determination of this application. d. That upon the grant of prayer 2 & 3 above, leave be granted to the Respondent/Applicant to file its statement of defense annexed herein and the same be deemed as duly filed. e. That the Honourable Court be pleased to make and/or issue such other orders as it may deem fit to grant. f. That the cost of this application be provided for. 1. The appellant asserted that t the failure by the Appellant to comply was occasioned by the fact that summons and/or any other suit documents in this matter were never served upon the Appellant. 2. The Honourable Magistrate's Court pronounced itself on the application dated 15th April 2025 vide a ruling dated 10th June 2025 by dismissing the Appellant's Application for want of merit with costs to the Respondent DETERMINATION 1. The court directed that the application be canvassed by way of written submissions. Only the appellant complied. Issue for determination 1. The court discerned the issue for determination was whether the appeal was merited. WHETHER THE APPELLANT'S APPEAL IS MERITED 1. The grounds of appeal are as follows- 2. THAT the Learned Trial Magistrate erred in law and in fact by failing to have due regard, take into account and appreciate the substantive issues of law and fact raised by the Appellant in its Application, submissions, list of authorities and other documents on record. 3. THAT the Learned Trial Magistrate erred in law and fact in finding that the Appellant's Application dated 15th April 2025 lacked merit and proceeded to dismiss the same with costs. 4. THAT the Learned Trial Magistrate erred in law and fact by failing to take into account that the Appellants Statement of Defense raises triable issues and a plausible defense that require adjudication by trial. 5. THAT the Learned Trial Magistrate erred in law and fact by not giving the Appellant a chance to defend the suit against it and thus breaching the Appellant's right to a fair trial. 6. THAT the Learned Trial Magistrate erred in law and in fact by failing to set aside the interlocutory judgement entered on 1st October 2024 whilst evidence on record shows that failure by the Appellant to file its documents within the stipulated timelines was due to the fact that summons and/or any other suit documents were never served upon them and consequentially, the Appellant's only became aware of this suit once they were proclaimed by an auctioneer. 7. THAT the Learned Trial Magistrate erred in law and fact by holding that there was proper service on the Appellant. 8. THAT in all the circumstances of the case, the Learned Trial Magistrate failed to render justice to the Appellant. 9. The appellant relied on the decision in Lintons Place Limited v Kamau & 2 others (Appeal E064 of 2022) [2023] KEELRC 2901 (KLR) (6 November 2023) (Judgment) where the court held as follows: "The Appellant is correct in their surmise that an appellate court such as this one, has a duty to reconsider the evidence adduced before the trial court and re-evaluate it so as to draw its own conclusions.." The appellant urged the court to be guided by the provisions of Article 159(2)(d) of the Constitution of Kenya, 2010 and Section 1A and 1B of the Civil Procedure Act read together with Order 10 Rule 11 of the Civil Procedure Rules, 2010 administering justice, the focus being on substantive justice, rather than procedural technicalities, and the just, efficient and expeditious disposal of cases. Moreover, in the case of Aldermen Limited v Shah & 3 others (Civil Appeal E004 of 2021) [2022] KEELC 2311 (KLR) (27 April 2022) (Judgment) the Learned Judge endorsed the well-established principles of setting aside interlocutory judgments as were laid out in the case of Patel v East Africa Cargo Handling Services Ltd(1974) EA 75 as per Duffus P. who stated as follows: "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. 10. The respondent did not file submissions. 11. This being a first appellate court, it was held in Selle v Associated Motor Boat Co. [1968] EA 123 that:- *“The appellate court is not bound necessarily to accept the findings of fact by the court below. An appeal to the Court of Appeal from a trial by the High Court is by way of a retrial and the principles upon which the Court of Appeal acts are that the court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular the court is not bound necessarily to follow the trial Judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”* 12. Further the guiding principles for appeal decisions were stated in Mbogo V Shah [1968] EA Page 93 where De Lestang V.P (As He Then Was) observed At Page 94: *“I think it is well settled that this court will not interfere with the exercise of its discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.’’* 1. I agreed with the submissions by the appellant that where there exists a regular judgment, as is the case here, the court will not usually set aside the judgment unless it is satisfied that there is a defence on the merits. In this respect, defence on merits does not mean, in my view, a defence that must succeed; it means, as Sheridan J(supra) put it, "a triable issue", that is, an issue which raises a prima facie defence and which should go to trial for adjudication. The said position was further reaffirmed by Justice Francis Rayola in Muthui Katenge (Civil Appeal 075 of 2021) [2023] КЕНС 2162 (KLR) (23 March 2023) (Judgment) by holding that: "The Court's power to set aside a judgment is exercised with a view of doing justice between the parties. Reliance is placed on the case of, Philip Kiptoo Chemwolo and Mumias Sugar Company Ltd -v Augustine Kubede (1982-1988) KAR, where the Court held: "The Court has unlimited discretion to set aside or vary a judgment entered in default of appearance upon such terms as are just in the light of all facts and circumstances both prior and subsequent and of the respective merits of the parties" In the case of, Kimani -v- MC Conmell (1966) EA 545, the Court held that where a regular judgment has been entered the court will not usually set aside the judgment unless it is satisfied that the defence raises triable issues. In the case of Patel -v- EA Cargo Handling Services Ltd (1974) EA, the Court stated that the main concern of the court is to do justice to the parties, and it will not impose conditions on itself to fetter the wide discretion given to it by the Rules.’’ 2. The appellant submitted that the failure to file its documents on time was solely because summons and other suit documents were never served upon the appellant. The purported physical and email addresses used by the Respondent to serve the summons and other suit documents do not belong to the appellant. For clarity, the correct address of service for the Respondent/Applicant is Swaminarayan Street, along Southern bypass, P.O Box 28110-00100, Nairobi, and the email address is Calesection2legal@gmail.com / kavoilegal@gmail.com. 3. The appellant contended that the Respondent deliberately served the suit documents to the wrong address, but during execution, with the assistance of auctioneers, they served the documents at the correct address. The Respondent's advocate has filed numerous cases in the Magistrate's court against the appellant and is therefore fully aware of the proper address. Furthermore, the defence annexed raises triable issues, as the Respondent was employed by the appellant as a casual labourer and knew this would remain until the completion of the project. It would be misleading for the Respondent to claim unfair termination while fully aware that his employment would end once the project concluded. In any event, if the defence is allowed and parties are given the opportunity to be heard and tried on the merits, no prejudice will be caused to the Respondent, as the Court’s primary objective is to deliver justice. The appellant urged this Honourable Court to find that the explanation given for the delay in filing the defence is reasonable and credible, and that the defence raises triable issues, warranting adjudication. The appellant therefore requests this Court to allow the appeal and set aside the interlocutory judgment entered by the trial court. 4. The trial court held that the appellant was served with a summons and that the judgment on record was valid. The affidavit supporting the application, dated 15th April 2025, was sworn by Doreen Kavoi, who contested the service as follows: ‘the purported physical address and email address used by the plaintiff to serve the summons or any other suit document to the defendant do not belong to the defendant. The address of the defendant is Swaminaryan Street along Southern bypass, P.O. Box 28110-00100 Nairobi, and the email address is kavoilegal@gmail.com’ (page 35 of ROA). 5. The affidavit of service by the claimant/respondent was annexed (page 40 of ROA), and it indicated that service was carried out at Kangemi area opposite Kabete Police Station and at another office on Hatheru Road off Gitanga Road near Eden Suite Lodge. Service was also effected via email obtained from the CR12 at caleinfrastruture@gamil.com. 6. At page 127 of the Record of Appeal, was an affidavit of Wu Qubing, who stated he was the Manager of the appellant, filed in CMELRC NO. E366 of 2023 where at paragraph 7, he denied they had an office at Kangemi Opposite Kabete Police Station. He stated their offices are situated at Lavington estate at Hatheru Road as shown by the search produced by the claimant. He also stated that email caleinfrastruture@gmail.com was only used at the registration of the company. The court found that the address at Lavington is the same one in the CR12(page 117 of ROA) 7. On re-evaluation of the evidence before the trial court, I find that the service at Hatheru Road, Lavington, was proved on the balance of probabilities. The court agreed with the trial court that this was a regular judgment. 8. On whether the trial court erred in failing to set aside the judgment. In the case of Aldermen Limited v Shah & 3 others (Civil Appeal E004 of 2021) [2022] KEELC 2311 (KLR) (27 April 2022) (Judgment) the Learned Judge endorsed the well-established principles of setting aside interlocutory judgments as were laid out in the case of Patel v East Africa Cargo Handling Services Ltd(1974) EA 75 as per Duffus P. who stated as follows: "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. I agree that where it is regular judgement as is the case here the court will not usually set aside the judgement unless it is satisfied that there is a defence on the merits. In this respect defence on merits, does not mean in my view, a defence that must succeed, it means as Sheridan J, put it "a triable issue" that is an issue which raises a prima facie defence and which should go to trial for adjudication." In the case of Kimani Kigano and Company Advocates v Jimba Credit Corporation Limited Justice Bosire (as he then was) summarized the powers of the court to set aside ex-parte orders as follows:- 1.The power to set aside is discretionary; 2.The discretion is unlimited provided it is properly exercised; 3.It being a judicial discretion must be exercised on the basis of evidence and sound legal principles; 4."The court has power under order 14A rule 10 of the [*Civil Procedure Rules*](http://kenyalaw.org:8181/exist/kenyalex/sublegview.xql?subleg=CAP.%2021) to set aside on terms as are just; 5.The court is obliged to look at the defense the Applicant Defendant may be having to the claim; 6.If a party establishes that he has a reasonable defense and which appears on the face of the pleadings to contain considerable merit, the court ought to be inclined towards setting aside.(Cited in Ouma v Ondieki [2024] KEHC 7093 (KLR)). 1. The trial court held that the defence was a mere denial. What is the defence? The defence was to the effect that the claimant was employed as a casual labourer for a specific project. The appellant conducts projects for a specific period, employing persons for each project. That the respondent’s tenure of employment lapsed with the project, and the respondent was aware that the project had lapsed. That he was notified and paid up. The court opines that the defence raised triable issues. (see page 61 to 62 of ROA). 2. The court holds that the trial court erred in holding the defence as a mere denial, yet it raised triable issues. The court is inclined to fault the trial court for that reason and further to afford an opportunity to the appellant to defend the claim before the trial court. 3. In the upshot, I find justified reason to interfere with the discretion of the learned trial Magistrate for failing to set aside the regular default Judgment. The Appeal is allowed. The decision of the trial court is set aside and substituted with an order allowing the application dated 15th April 2025. The appellant is to pay the respondent the throw-away costs of Kshs. 100,000/= and half costs in the appeal. 4. The matter is remitted to the Chief Magistrate Milimani Commercial courts, under ELRC jurisdiction, for fresh hearing directions. 5. It is so Ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 3RD DAY OF JULY, 2026. JEMIMAH KELI, JUDGE. IN THE PRESENCE OF: Court Assistant: Otieno Appellant –Kagendo h/b Gitonga Respondent – Absent.