[2021] KECPT 588 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 193 OF 2020

JOHN KARIUKI...........................................................................................CLAIMANT

VERSUS

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

RULING

Vide the Application dated 9. 10. 2020,as amended on 14. 10. 2020, the Claimant has moved this Tribunal seeking for the following Orders:

1. That this application be certified urgent and heard exparte in the first instance;

2. That pending the hearing and determination of this Application, this Honourable Tribunal be pleased to stay execution of the judgment and decree entered on 4th September, 2020;

3. That this Honourable Tribunal be pleased to set aside the judgment and decree entered on 4. 9.2020 and all consequential ordersex debito justiae;

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;

5. That there be a stay of execution and further proceedings until the Claimant herein pays to the Respondent the costs awarded in SPMCC.NO.112 of 2020 John Kariuki- vs- Urithi Housing Cooperative Society Limited;

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

The Application is supported by the grounds on its face and the supporting Affidavit sworn by its Chairman, Samuel Ngundo Maina on 14. 10. 2020. The Claimant has opposed the Application vide the Replying Affidavit sworn by himself on 6. 11. 2020.

Vide the directions given on 12. 10. 2020, and further on 13. 11. 2020, the Application was canvassed by way of written submissions. The Respondent filed their written submissions on 19. 10. 2020 while the Claimant did so on 1. 12. 2020.

Respondent contention

Vide the instant Application, the Respondent prays for the default judgment entered on 4. 9.2020 to be set aside on grounds that the Claimant did not effect proper service of summons to enter Appearance. That the Claimant proceeded to obtain judgment whilst knowing very well that the Respondent had an Advocate.

That the Respondent has a valid Defence which raises triable issues.

Claimant’s Case

The Claimant has opposed the Application on grounds that the Respondent was duly served with summons to enter Appearance and other pleadings. That service was effected at their registered office in Thika on 27. 7.2020. That the Respondent duly acknowledged receipt of the court papers by way of stamping on the counterpart copies.

That the draft Defence does not raise triable issues. That the same consist of mere denial. That in the circumstances, the Application should be dismissed with costs.

Issues for determination

The instant Application has presented the following issues for determination:

a. Whether the Respondent has laid a proper basis to warrant the settling aside of the default judgment entered on 4. 9.2020;

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.”

We examine the foregoing principles in light of this Application as follows:

Reason for failure to enter Appearance or file Defence

The Respondent contend that the Claimant did not effect proper service of summons to enter Appearance upon it.

We have perused the Affidavit of Service sworn byOpere Bernard Peter Swao on 10. 8.2020. He depones that he effected service of summons to enter Appearance as well as the Memorandum of claim upon the Respondent at its Thika officer located at Thika West Building on 5. 8.2020. That the Respondent acknowledged service by way of stamping of the counterpart copies.

We are satisfied with service of summons to enter Appearance upon the Respondent on two fronts. Firstly, the Affidavit of Service of Bernard Opere has not been contested in the usual manner, that is, by way of cross examination of the deponent. As such, it is deemed that the contents of the same are uncontroverted.

Secondly, we have perused a copy of the summons to enter Appearance annexed to the said Affidavit the same bears the stamp of the Respondent. This is proof that the Respondent was served with summons to enter Appearance.

With the foregoing in mind, we are not satisfied by the reasons advanced by the Respondent for not entering Appearance.

Draft Defence

The Respondent avers that the draft Defence raises triable issues worthy of consideration during trial.

We have perused the said Defence. While acknowledging that Claimant bought a plot of land from the Respondent, contend avers that the Claimant was well aware of the model employed by the Respondent to facilitate the sale of the said land to the Claimant and other purchasers. That the model entailed:

a. Purchase of a big chuck of land;

b. Inviting members to make bookings of plots by paying deposits;

c. After full payment of the plots, the land would be sub-divided into plots which would eventually be transferred to individual members.

That as regards the claim before court, the Claimant is yet to make any payment in regard to the suit property.

That in the alternative, if any funds were received from the Claimant then the same has been sunk into the project and thus there is nothing to refund.

We have perused the list of documents accompanying the claim dated 17. 7.2020. Documents 3-5 are slips evidencing payment of funds. Documents 3 is an Application for transfer of Kshs.1,500,000/= from the Claimant’s account. This document alone extinguisher the Respondent’s contention at paragraph 4 of the draft Defence that the Respondent did not receive any consideration towards the purchase of the suit property. In effect, the deposit slip renders the contention a mere denial.

The totality of the foregoing is that we find that the draft defence does not raise any triable issues.

Conclusion

The upshot of the foregoing is that we do not find merit in the Claimant’s Application dated 9. 10. 2020 as amended on 14. 10. 2020 and hereby dismiss it with costs to the Claimant. Accordingly, we discharge the Orders issued on 1. 12. 2020.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 4TH DAY OF MARCH, 2021.

HON. B. KIMEMIA CHAIRPERSON SIGNED 4. 3.2021

MR. P. GICHUKI MEMBER SIGNED 4. 3.2021

MR. B. AKUSALA MEMBER SIGNED 4. 3.2021

MISS GITAU FOR RESPONDENT

No appearance for Claimant

Miss Gitau for Respondent:We pray for 30 days stay of execution .

Order:30 days stay of execution granted.

HON. B. KIMEMIA CHAIRPERSON SIGNED 4. 3.2021