[2021] KECPT 489 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.287 OF 2020

DAVID MUEMA MUVELA........................................................................CLAIMANT

VERSUS

NATIONAL HOSPITAL INSURANCE

FUND SACCO SOCIETY.....................................................................RESPONDENT

RULING

1. Matter for determination is a Notice of Motion Application dated 21. 1.2021filed on 25. 1.2021 seeking the following prayers:

1. That the Application herein be certified urgent and be heard ex-parte in the first instance and service thereof be dispensed with.

2. That this Honorable court be pleased to order a stay of execution of the judgment of 21st December 2020, Decree and or any other consequential orders herein pending the hearing and determination of this application.

3. That this Honorable court be pleased to set aside the ex parte judgment entered against the defendant on 21st December 2020 and all consequential orders.

4. That the Respondent be granted leave to defend the suit herein.

5. That costs of this application be provided for.

Based on the grounds of the face of the Application supported by the Affidavit of Sophie Otiu deponed on 21. 1.2021 and filed on 25. 1.2021.

2. The same is opposed vide Replying Affidavit of the Claimant deponed on 12. 2.2021 and filed on 18. 2.2021.

The Applicant filed a Further Affidavit on 8. 3.2021 and the Application was ordered to be dispensed by way of written submissions.

The Respondent filed their written submissions on 13. 4.2021.

3. The gist of the Application is that the Respondent was never served with any summons, that the service of summons to a body cooperate was not proper as it was not done to the principal office of the Respondent.

The Respondent only found out about the judgment on 21. 12. 2020 when they were served with a notice of entry of judgment. That immediately they notified the advocates who informed them that she had also received the letter through her email address

4. That they have a good Defence which raises triable issues therefore should be given opportunity to defend the suit or they will suffer irreparable damage.

The Claimant in the Affidavit state they relied on the Affidavit of service by process server as proof of service.

That the Respondents and advocates on record were duly served and there are no triable issues raised in the Defence.

5. Issue

(i) Service of summons

(ii) Triable issues

(iii) Costs

Issue one:

SERVICE OF SUMMONS

The Applicants submitted that they never received summons to enable them enter appearance and file a Defence.

We note that despite several follow ups to the Claimant to file written submissions the last one being 17. 5.2021, via email, none had been filed at the time of recording this Ruling. However, we rely on the Replying Affidavit in the circumstances. The Claimant as earlier stated confirmed having served the Respondent and their Advocates Ms Purity Makori personally through email respectively as deponed in the Affidavit of Service.

We have noted the Affidavit of service deponed and filed on 16. 11. 2020 attached to the request for judgment and in the Paragraph 2 the Process Server confirmed service on 19. 6.2020 to the Secretary one Mr. Vincent located at NHIF’s Sacco office in NSSF Block A Eastern Wing, 14th floor Bishop’s Road.

That the said Mr. Vincent received the summons and the statement of claim but refused to sign and advised that service be done to their lawyers the firm of Mogeni and Company Advocate.

That on 23. 10. 2020 he served by email Ms. Purity Kemunto Makori of Mogeni & company Advocates through her email address purity@mogeni. Com.

6. The Applicant avers that the summons were not served at the principal office of the Respondent but they have not challenged the process server on Affidavit of Service filed which indicates that the Defendant was served and directed the process server to their advocates.

We also note that the said Purity Makori Advocate deponed the further Affidavit as the advocate for the Respondent and a copy of the email is attached to the Affidavit of service.

The question that begs to be answered is how the process server knew who the Advocates of the Respondent were, if not directed by the said Mr. Vincent?

The 2nd Question -why they did not call to cross examine the process server if the Affidavit of service deponed is not a true statement of fact?

It is trite law that one is disputing service of summons a prayer is made in the application for cross-examination of the process server.

Issue two:

7. TRIABLE ISSUES

The Applicants attached a draft Defence which denies the claimants shares amount to Kshs.521, 000/= since they made a refund on 22. 10. 2020 of Kshs.50,000/= and that there was non-refundable share capital of Kshs.20,500/= which has not been factored in the claim.

That the Respondent has not pursued or exhausted the by-laws of the Sacco regarding withdrawal.

The Claimant confirms having received Kshs.50,000/= but was not informed about it but he is willing to credit their account now that he is aware.

That it is not true the non-refundable amount is Kshs.25,000/= as claimed.

8. We note that the Applicant did not attach the said by-laws in their application and or written submissions despite filing a statement of account which indicates:

Registration fees – Kshs500

Share capital – Kshs.20,000/=

Total Kshs.25,00/= as non-refundable leaving a balance of Kshs.500,500. 00/= less 1st payment 28. 10. 2019 Kshs.50,000/=

Net due Kshs.450,500/=

We note that the Claimant has no attaching liabilities in the form of unpaid loans or guarantorship.

In the case of Mbogo &Another -vs- Shah (1968) EA 1993

“ ….the court’s discretion to set aside an ex parte judgment is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but not to assist a person who has deliberately sought (whether by evasion or otherwise) to obstruct or delay the cause of justice.”

And In David Kamau Gakuru - vs- National Industrial credit bank CA 84 of 2001(unreported)

It was held that:

“……then a distinction has always existed between a default judgment that is regularly entered and one that is irregularly entered. In a regular Default judgment the defendant will have been duly served with summons to enter Appearance or for one reason or another failed to enter appearance or Defence resulting in Default Judgment such a Defence is entered under order 10 Rule 11 to make the court to set aside the default judgment granted leave to defend the suit.”

9. In such a scenario the court has unfettered discretion in determining to set aside Default judgment will take into account such factors as the case may be length of time that has elapsed and whether the intended Defence raises triable issues.

In an irregular default judgment on the other hand judgment will have been entered against the Defendant who has not been served or properly served with summons to enter Appearance.

In such a scenario the default judgment is set aside ex debito justiciae, as a matter of right.

10. In the circumstances of this case as earlier discussed the Respondent was properly served but failed to enter appearance and therefore there is a regular default judgment on record.

It is therefore a matter of unfettered discretion to factor the reasons of failure to enter Appearance or file a Defence.

11. We find there was no reason or explanation by the Applicants why they did not enter appearance or file Defence with the stipulated statutory period.

The Respondent have therefore not been condemned without notice.

As per the citation above the circumstances of this case does not compel us to go to the triable issues raised by the defence.

12. However, under Rule 3 and 4 Co-operative Tribunal Practice and Procedure 2004 the Tribunal is not bound by technicalities. For expeditious disposal of the matter and for justice to be done. We have considered the statement of account filed by the applicant and note the amounts due to the Claimant who has also confirmed receipt of an initial payment of Ksh.50,000/=.

To avoid further delay in the matter we find that the issues raised by Respondent are clear that Kshs.50,000/= is acknowledged and due to nature of Co-operatives, share capital is never refundable.

In light of the above for expeditious disposal of the matter and to do justice to both parties.

We issue the following orders:

(i) Judgment for Kshs.521, 000/= is hereby set aside and in its place judgment is entered in favour of the Claimant against the Respondent for Kshs.450,000/=. ( for the amount of Kshs.500,500/= less initial payment.)Kshs.(50,000) paid on 28. 10. 2019. )

(ii) Plus costs and interest in the suit.

Ruling signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia Chairperson Signed 27. 5.2021

Hon. J. Mwatsama Deputy Chairperson Signed 27. 5.2021

Mr. P. Gichuki Member Signed 27. 5.2021

Tribunal Clerk Leweri

Omangi Gichana holding brief for Miss Makori for Respondent

No appearance for Claimant.

Hon. B. Kimemia Chairperson Signed 27. 5.2021