[2020] KECPT 10 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.490 OF 2019

EMMANUEL MWANGI MATANO & LUCY WANGARI GATHEGA......CLAIMANTS

VERSUS

URITHI HOUSING CO-OPERATIVE SOCIETY LIMITED....................RESPONDENT

RULING

What is before us for consideration and determination is the Respondent’s Application dated 10. 3.2020. It seeks in the main, for the following Orders:

1. Spent;

2. Spent;

3. That this Honourable Tribunal be pleased to set aside the judgment and decree issued on 22nd November, 2019 and all the consequential orders;

4. That this Honourable Tribunal be pleased to grant leave to the Respondent to defend this suit and that the annexed draft defence be deemed as duly filed and served; and

5. That costs of this Application be provided for.

The Application is supported by the grounds on its face and the following Affidavits:

a. Supporting Affidavit sworn by Samuel Ngundo Maina on even date (10. 3.2020. )

b. Supplementary Affidavit sworn by the said Samuel Ngundo Maina on 24. 8.2020

The Claimant has opposed the Application by filing a Replying Affidavit sworn by himself on 10. 10. 2020.

Respondent’s Contention

Vide the instant Application, the Respondent contend that the Claimant has obtained an irregular judgment and decree. That it was not served with summons to enter Appearance and Statement of Claim. That it has a valid Defence which raises triable issues.

Claimant’s Contention

Vide his Replying Affidavit the Claimant oppose the Application on the ground that the Respondent was duly served with summons to enter Appearance. That the Respondent acknowledged receipt of summons by stamping on the counterpart copy.

That as regards the issue of whether the Defence raises triable issues, the Claimant contend that the same does not do so because of the following reasons:

a. That contrary to the contention that the Claimant did not pay the decretal amount, the receipts on record confirm otherwise; and

b. That as an acknowledgement of debt, counsel on record for the Respondent wrote to Counsel on record for the Claimant unequivocally confirming readiness to do a refund cheque. That the said correspondence was by way of email dated 12. 6.19.

That as a consequence of the Respondents actions, the Claimant has suffered immensely and that any further delay in execution will cause more harm to him.

Respondent’s Supplementary Affidavit sworn on 24. 8.2020

Vide this Affidavit, the Respondent controverts the averment made the Claimant vide his Replying Affidavit above as follows:

a. That the deponent Replying Affidavit is inadmissible as the deponent being a lawyer, has waded into contentions matters of fact, which she cannot substantiate;

b. That any judgment entered on basis of improper service is irregular and should be set aside;

c. That the fundamental principles of natural justice frowns upon condemnation of parties without being heard; and

d. That the Claimant only paid non-refundable membership fees.

Disposal of the Application

Vide the directions given on 27. 7.2020, the Application was canvassed by way of written submissions. The Respondent filed its submissions on 26. 8.2020 while the Claimant did so on 17. 9.2020. We will consider the same whilst determining the issues in controversy in the Application.

Issues for determination

The Application has presented 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 17. 10. 19.

b. Who should meet the costs of the Application?

Setting aside of exparte 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 justiae.

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.”

In view of the foregoing, a question begs as to whether the Respondent has satisfied the above conditions for setting aside a default judgment. We will consider the said principles thematically as follows:

Reasons for failure to enter Appearance

The Respondent contend that it did not enter Appearance because it was not properly served with summons to enter Appearance.

That summons to enter appearance and the Statement of Claim were served upon the receptionist. That the alleged service is not proper is not proper service as envisaged by the provisions of Order 5 Rules of the Civil Procedure Rules.

On his part, the Claimant contend that service of summons to enter Appearance was properly served upon the Respondent as the same was duly acknowledged by way of Rubber stamping on 5. 9.2019.

We have perused the said summons to enter Appearance. We not that the same is stamped with the Respondent’s official stamp both in front and at the back. We therefore find that there was proper service of the same upon the Respondent. This therefore qualifies the judgment entered on 17. 10. 19 to be regular.

Draft Defence

Having found that the judgment on record is regular the question begs as to whether the draft statement of Defence annexed to the instant Application raises triable issues. We have perused the said draft Defence. The Respondent acknowledges that the Claimant was one of its members. It further goes ahead to state that the Respondent had agreed to sell to the Claimant a plot in Ruiru Ridges Estate LR.NO.117,plot No. 40. That the said plot was to be transferred to the Claimant upon payment of full purchase price. That the Claimant has not deposited any monies with the Respondent towards purchase of the said plots.

The claim herein is for a refund of Kshs.616,000/=. We have perused the Claimants list and bundle of documents dated 6. 8.2019. Documents 3 reads:

“ Payment receipts for registration fees and New Share contribution dated 19. 2.2018. ”

We have perused the said documents. The payment receipt for registration is for Kshs.2000/= whilst the receipt for New Share contribution is for Kshs.24,000/=.

We have not seen any other receipt, both in the documents accompanying the statement of claim and the instant Application evidencing payment of the Kshs.616,000/= claimed. If the Claimant insist on payment of the said amount, then the only forum to ascertain it is by way of full hearing.

On this basis alone, we are satisfied that the draft Defence raises triable issues.

Conclusion

In view of our finding that the draft Defence raises triable issues, the Respondents Application dated 10. 3.2020 succeeds based on the following conditions:

a. That the Respondent to file and serve a statement of Response alongside witness statements and list and bundle of documents within 21 days herein;

b. The Claimant to file and serve a Reply to the Response as well as supplementary witness statement (if need be) and supplementary bundle of documents within 21 days of service;

c. Respondent to pay the Claimant thrown away costs of Ksh.10,000/= to be paid on or before the next mention date;

d. Mention for pre- trial on 1. 3.2021.

RULING SIGNED, DATED AND DELIVERED IN NAIROBI THIS 29TH DAY OF OCTOBER, 2020.

Hon. B. Kimemia Chairperson Signed 29. 10. 2020

Hon. F. Terer Deputy Chairman Signed 29. 10. 2020

Mr. P.Gichuki Member Signed 29. 10. 2020

Miss Gitari holding brief for Mwangi for Respondent

Miss Njoki holding brief for Miss Kinui for Claimant

Court Assistant C. Maina

Hon. F. Terer Deputy Chairman Signed 29. 10. 2020