[2021] KECPT 616 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.541 OF 2019

DAVID MAYIANI 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. Spent;

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 server who allegedly served the summons to enter appearance to be cross examined on his affidavit during the interparties hearing of this application;

5. 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 10. 11. 2019. The Claimant has opposed the Application by filing a Replying Affidavit sworn by himself on 22. 1.2020.

Vide the directions given on 6. 2.2020, the Application was canvassed by way of written submissions. The Respondent filed its submissions on 9. 11. 2020 while the Claimant did so on 8. 10. 2020.

Respondent’s Contention

It is the Respondent’s case that the Claimant has obtained a default judgment without serving summons to enter Appearance and other Court documents upon it. That the Respondent has since 8. 11. 19 been trying to file Notice of Appointment and defence to no avail. That when it eventually filed the Notice of appointment, the same was not placed in the court file thus prompting the default judgment to be entered against it. That the Respondent has a good defence in that it operates members accounts diligently and in accordance with the customs and practices of banking and that in the Respondent’s Annual General Meeting of 2019, members resolved to schedule refunds on first come first serve basis. That therefore, the Claimant’s refund is forthcoming and is scheduled to be in May, 2021. That the Claimant is well aware about this fact.

Issues for determination

This Application 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.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.”

Reasons for failure to enter Appearance or file Defence

The Claimant’s borne of contention is that it has been trying to enter Appearance as from 8. 11. 2019, but could not manage to do so until 13. 11. 2019, when it eventually filed it. That this was the day when interlocutory judgment was entered.

We have perused the annextures to the supporting Affidavit sworn by Collins Amimo on 10. 11. 2019. We note that the Respondent was desirous to defend the claim as of 8. 11. 2013. The Notice of Appointment shows that the same was received by our Registry on 13. 11. 2019.

We are thus satisfied in the Respondent’s reason for failure to enter Appearance in good time.

In light of our finding above, we allow the Application on the following terms:

a. The Respondent to file and serve a statement of Response as well as witness statements and list and bundle of documents within 7 days herein;

b. The witness statements and bundle of documents to be deemed as the respective evidence of the parties in the claim;

c. The Claimant to file a Response to Defence as well as supplementary list and bundle of documents and witness statements alongside final written submissions within 14 days of receipt of the statement of Defence.

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

e. Mention to confirm compliance and fixing a judgment date on 19. 4.2021.

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 Advocate holding brief for Thimba for Respondent/Applicant: Present

Miss Kagoi for Claimant/Respondent: Present

Hon. B. Kimemia Chairperson Signed 28. 1.2021