[2020] KECPT 4 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. 524 OF 2019

CATHERINE MINIKA MUKHWANA.........………......…….........................CLAIMANT

VERSUS

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

RULING

What is before us for consideration and determination is the Respondent’s Application dated 31. 12. 2019. It seeks, for Orders Inter alia.

1. That interlocutory judgment entered as against the Respondent together with all Consequential Orders be set aside and the Respondent allowed to file a Defence; and

2. That the costs of this Application be provided for.

The Application is supported by the grounds on its face and the Affidavit sworn by DavidMuhoro, its head of credit on 31. 12. 2019. The Claimant has opposed the Application vide the Replying Affidavit sworn by herself on 20. 11. 2020. Vide the directions given on 27. 8.2020; the Application was canvassed by way of written submissions. The Respondent filed its submissions on 12. 10. 2020 while the Claimant did so on 13. 10. 2020.

Respondent’s Contention

Vide the instant Application, the Respondent seek for the default judgment entered on 15. 11. 2019 to be set aside on grounds that despite entering Appearance in good time, it inadequately failed to file a Defence within the time stimulated by the rules. That failure to file a defence was occasioned by lack of receipt of sufficient instructions on the part of the Respondent’s Advocates on record as the relevant officer was out of the Country. That the Respondent has a good Defence in that the Claimant did not serve it with a withdrawal Notice as prescribed by law.

Claimant’s Contention Case

Vide the Replying Affidavit filed in-ordinately late by the Claimant, the Claimant contend that the instant Application is a mere sham as the Respondent Draft Defence annexed to the Instant Application contains an admission for the amounts pleaded in the main claim. That this (admission) means that this Tribunal will have no issue to try if the main claim is heard on merits.

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 21. 11. 2019;

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 exdebito 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:

“Adistinction 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.”

From the foregoing, it is apparent that a regular judgment can only be set aside upon the following terms:

a. Giving of reason for failure to file a Defence;

b. The length of time that has lapsed since entry of default judgment;

c. Whether the intended Defence raises triable issues;

d. Prejudice likely to be suffered by any of the parties; and

e. Whether on the whole, it is in the interests of justice to set aside the default judgment.

A question abound as to whether this instant Application has satisfied these principles to deprave this question, we will consider the Principles thematically as follows:

Reasons for failure to file a Defence

The Respondent contends that it did not file a Defence in good time as its head of credit Mr. David Muhoro was on sick leave. He has to deponed to this as much in his Replying Affidavit sworn on 31. 12. 2019. We find this explanation justifiable in the circumstances.

Length of time taken to originate the Application for setting aside

The default judgment was entered on 21. 11. 2019 while the Instant Application was filed on 6. 1.2020. We find that the Instant Application was originated within reasonable time.

Draft Defence

A question abounds as to whether the Draft Defence raises triable issues. We have perused the said defence. The Respondent admits that the Claimant is its member No. 12205 and that he had made contributions to the tune of Kshs.354,600/=. That the Claimant did not serve the requisite Notice before she withdrew from the Respondent. That by failing to do so, the Claimant contravened its by-laws.

We have perused the handwritten letter attached to the Claimant’s list and bundle of documents dated 13. 9.2020. The same is addressed to the Respondent and in the pertinent part, the letter reads:

“ I hereby do wish to request for a refund of my Sacco shares of Kshs.354, 600. I do believe with this Notice, of sixty (60) days you will be able to facilitate my payment.”

From the said handwritten letter, it is apparent that the Claimant issued the Respondent with the requisite Notice of withdrawal from the Sacco. We thus pause and ask ourselves whether there is any real issue remaining to be tried. Our view is that as long as a member has expressed desire to withdraw from a Sacco and has even gone further to convert the said intention into some form of standard communication, then the Tribunal is left with nothing to determine were it to admit the claim for hearing.

The import of the foregoing reasoning to the Application before us is that the draft Defence annexed to the Application raises no triable issues. The Claimant has expressed interest to withdraw and have went ahead to issue appropriate Notice. There is thus nothing remaining to be determined in trial.

Conclusion

With the above finding in mind, we find that the Respondent’s Application dated 31. 12. 2019 is unmerited and hereby dismiss it with costs to the Claimant. Orders accordingly.

Ruling signed, dated and delivered virtually this 3rdday of December, 2020.

Hon. B. Kimemia Chairperson ...........................

Hon. F. Terer Deputy Chairman ............................

Mr. P. Gichuki Member ..............................