[2021] KECPT 623 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.490 OF 2018

JOSEPH NGUGI KIMANI..........CLAIMANT

VERSUS

EKEZA SACCO LIMITED....RESPONDENT

RULING

Vide the Application dated 30. 4.2019, the Respondent has moved this Tribunal seeking for the following Orders:

a. Spent;

b. Spent;

c. That the Honourable Tribunal be pleased to set aside and/or vary the judgment in default therein and any other Orders issued subsequently as against the Applicant in this matter pending the hearing and determination of the main suit in the matter;

d. That this Honourable Tribunal be pleased to grant leave to the Applicant to file its Defence and accompanying documents;

e. That this Honourable Tribunal be pleased to issue temporary stay of execution of the decree issued against the Applicant pending the hearing and determination of the main suit in the matter.

f. That the warrant of attachment and sale issued as against the Applicant on the 3rd day of April, 2019 be lifted, set aside and/or vacated pending the hearing and determination of the main suit in the matter; and

g. Costs of this Application be borne by the Plaintiff/Respondent herein.

The Application is supported by the grounds on its face and the Supporting Affidavit sworn by Stephen Ndung’u Thuo on 3. 7.2019. The Claimant has opposed the Application vide the Replying Affidavit sworn by himself on 3. 7.2019.

Vide the directions given on 30. 7.2019, the Application was canvassed by way of written submissions. The Claimant filed his submissions on 23. 8.2019 while the Respondent did not do so despite Notice.

Respondent’s Contention

Vide the instant Application, the Respondent seeks for the default judgment entered on 23. 11. 18 to be set aside principally on the grounds that it was not served with summons to enter Appearance. That on the strength of the said default judgment, the Claimant has gone ahead to instruct auctioneers who have irregularly proceeded to attach its properties. That the said properties are its tools of trade.

Claimant’s Case

The Claimant has opposed the Application principally on the ground that the Respondent was served with summons to enter Appearance before a request for default judgment was made. That the said summons was served alongside statement of claim and other court documents on 19. 10. 2018at their offices at Koinange street. That the Respondent acknowledged service by receiving the said summons by way of stamping on the counterpart copies.

That upon receipt of the said summons, the Respondent wrote to his Advocates seeking an amicable settlement.

That in the circumstances, the judgment on record is regular.

That the Respondent has no defence with triable issues and therefore, the instant Application should be dismissed with costs.

Issues for determination

This Application has presented the following issues for determination:-

a. Whether the Respondent has established a proper basis for setting aside a default judgment.

b. What Orders are available in the circumstances?

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.”

It follows therefore that before a default judgment can be set aside, the following factors must be taken into account:

a. Reason for failure to file a Memorandum of Appearance or defence;

b. The length of time that has elapsed since the default judgment was entered;

c. Whether the intended Defence raises triable issues;

d. Prejudice likely to be suffered by the parties;

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

We look at these factors (individually) in light of the circumstances of this Application as follows:

Reasons for failure to enter Appearance

The Respondent has advanced the argument that it has not entered appearance or filed a Defence because it was not served with summons to enter Appearance. We have however perused the annextures annexed to the Replying Affidavit sworn by the Claimant on 3. 7.2019. Annexture JNK-3 is a copy of the summons to enter Appearance. The same bears the stamp of the Respondent. Annexture JNK- 2 is the Affidavit of service sworn by Francis Nyakeoga Ongati on 20. 11. 2018. The said process server confirms service of the summons to enter Appearance upon the Respondent on 19. 10. 2018.

We are thus at a loss as to the veracity of the Respondent’s denial of service yet the documents on record speak otherwise.

We thus find that the Respondent has not given any reason as to why it did not enter Appearance in good time.

Defence

We have perused the instant Application and note that the Respondent did not annex a draft Defence. In the absence of the same, we are unable to ascertain whether or not the Respondent has a good defence. The absence of the said draft defence is fatal to the instant Application.

Conclusion

The upshot of the foregoing is that we do not find merit to the instant Application and hereby dismiss it with costs to the Claimant.

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

No appearance for parties

Orders to apply to CTC.NO. 491/2018

Hon. B. Kimemia Chairperson Signed 28. 1.2021