[2021] KECPT 6 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NYERI

TRIBUNAL CASE NO. 418 OF 2020

KENYA QATAR DIASPORA SACCO LTD....................................................................CLAIMANT

VERSUS

REV. HABAKKUK H.O. WAMUDUDA...................................................................RESPONDENT

RULING

1. The Respondent has filed A Notice of Motion Application dated 16th March 2021, seeking leave to file his defence out of time. The basis of such leave sought is, the Respondent alleges to never have been served with the entire bundle of pleadings. The Respondent admits that he was served with the Summons to Enter Appearance and the Statement of Claim, the same were not accompanied with witness statements and documents as listed in the List of Documents. This, they argue, is the reason why the Respondent entered appearance but failed to file a Statement of Defence in time.

2. In response, the Claimant filed a Replying Affidavit dated 17th June 2021, contending that the Respondent cannot possibly seek to file a Defence when there is a judgment, and that the first step would have been to seek to set aside the judgment. The Claimant underscores that the Respondent’s Application has not sought a prayer to set aside the Judgment. The Application to file a defence, according to the Claimant, is incapable of being given as it is overtaken by events.

3. Further, the Claimant adduces evidence to show that the Respondent opted to take the route of Judicial Review purposing to quash a surcharge order, through an Application dated 9th October 2020. This Judicial Review Application was later dismissed on 4th February 2021. The Claimant disabuses the allegations of the Respondent, by demonstrating that the delay to file a Defence was not due to non-service of the Pleadings, but due to the act of injudiciousness by the Respondent.

4. ANALYSIS OF THE LAW

In the instance Claim, Judgment on liability of the Respondent was already given on 22nd February 2021. What was remaining was for verification of figures by way of Formal Proof, which was slated for 18th March 2021.

5. Interlocutory Judgment

A interlocutory judgment is a proper judgment on apportionment of liability under Order 10 Rule (4), and (6) of the Civil Procedure Rules 2010 in cases of a liquidated demand. A liquidated demand is a debt or other specific sum of money due and payable in defined and ascertained sums. In the case of Samson S. Maitai & Another -vs- African Safari Club Ltd & Another [2010] eKLR, the High Court in trying to defining Formal Proof stated thus:

“……. I have not seen judicial definition of the phrase "Formal Proof". "Formal" in its ordinary Dictionary meanings - refers to being "methodical" according to rules (of evidence). On the other hand according to Halsbury's Laws of England, Vol. 15, para, 260, "proof" is that which leads to a conviction as to the truth or falsity of alleged facts which are the subject of inquiry. Proof refers to evidence which satisfies the court as to the truth or falsity of a fact. Generally, as we well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”

6. In agreement with the foregoing, the latter case of Rosaline Mary Kahumbu -vs- National Bank of Kenya Ltd[2014] eKLR held that at a formal proof hearing, the party with the onus of adducing evidence has to satisfy the truth threshold.

7. Formal Proof

Formal Proof usually sets in for purposes of verification of facts and allocation of quantum. As has been highlighted hereinabove, an interlocutory Judgment can be issued in cases of a liquidated claim and/or judgment upon a liquidated demand. In this present case, Paragraphs 6, 7, 8 and 9 of the Statement of Claim are in the nature of a liquidated demand, and can thus cand and should enjoy the provisions of Order 10 Rule (4) and (6). The need for formal proof, if any, does not obscure a regularly entered interlocutory judgment/ judgment upon a liquidated demand. This judgment can only be set aside, reviewed, or appealed to a higher court.

8. Having said that, we find that in this case, there was no need for formal proof, as this is a case on recovery of surcharge under Section 75 of the Co-operative Societies Act No. 12 of 1997, which provides as follows:

Subject to Section 74, an order made pursuant to Section 73 for any moneys to be repaid or contributed to a Co-operative Society shall be filed with the Tribunal and shall, without prejudice to any other mode of recovery, be a civil debt recoverable summarily

Once Judgment was entered, the only process following would be an appeal on the said Judgment, or execution thereof.

9. Setting Aside an Interlocutory Judgment/ Judgment on a Liquidated Demand

Order 10 Rule 11 provides that where an Interlocutory Judgment/ Judgment on a Liquidated Demand has been entered, the court [or Tribunal in this case] may set aside or vary such judgment and any consequential decree or order upon such terms as are just. The court has to be moved by way of an Application.

10. A SYNTHESIS OF FACTS AND LAW APPLICABLE

The Respondent has stated that he was served with Summons to Enter Appearance and the Pleadings, but documents and Witness Statements were missing. Service of Summons to Enter Appearance and Pleadings is an imperative cog in the constitutionally enshrined right to a fair trial. Summons play the role of inviting the other party to state their case, in line with the principle of natural justice, audi alteram partem. It is therefore absolutely necessary that a party be served within the direction of Order 5 of the Civil Procedure Rules. Anything short of that is a miscarriage of justice.

11. Once a party has been served, they ought to enter appearance and file a defence. Again, absent of this would invite the court to make the necessary assumption that the defaulting party is disinterested in the case, and it must proceed without their presence. In this case, there is not complaint on Summons to Enter Appearance and the Statement of Claim.

12. The Respondent, however, defaulted to put in a Defence within the requisite time, but instead pursued frolics of his own in different forums. By the time the said Respondent was finding his way, there was proof of service of Summons to Enter Appearance and the Statement of Claim, and Judgment had already been entered in default of filing a Defence. Now, the Respondent is seeking to file a defence out of time, citing a myriad of reasons.

13. From the Onset, this Tribunal affirms that there is a regular interlocutory Judgment rendered on 22nd February 2021, in line with Order 10 Rule (4) and (6) of the Civil Procedure Rules 2010. In the reading of the Application, none of the prayers challenge the Judgment. We agree with the Claimant that the entry point for the Respondent would have been to challenge the interlocutory judgment under Order 10 Rule 11 of the Rules, and thereafter seek to put in a defence out of time, if the Tribunal would agree with him and indeed set the judgment aside.

14. The Civil Procedure Rules give two incidents where a Judgment in Default of Appearance may be tampered with:

(a) Irregular Judgment - Where service of Summons to Enter Appearance was inadequate; and

(b) Regular Judgment – Where service of Summons was effected, but there is an arguable Defence, and compelling reasons proffered as to why the same was not filed in time.

In James Kanyiita Nderitu & Another -vs- Marios Philotas Ghikas & Another [2016]eKLR, the Court of Appeal stated that;

“From the outset, it cannot be gain-said that a distinction has always existed between a default judgement that is regularly entered and one which is irregularly entered. In a regular default judgment, the defendant will have been duly served with summons to enter appearance or to file defence, resulting in default judgment. Such a defendant is entitled, under order 10 Rule 11 of the Civil Procedure Rules, to move the 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 default judgment, and will take into account such factors as the reason for 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 and whether on the whole it is in the interest of justice to set aside the default judgment, among others….”

The prayers sought in the Application are thus incapable of being granted by this Tribunal, as they have no feet to stand on as long as the judgment still stands. Aye, as long as there is a judgment whose regularity or otherwise has not been challenged, there is no window for filing a Defence as there is no time to expand. Essentially, time for filing the defence has run out. In these circumstances, not even equity can clothe this Tribunal with powers to do as the Respondent prays, as it would be a transgression against the positive provisions of the Law and procedures anchored in statute.

In Ecobank Kenya Limited vs Minolta Limited & 2 Others [2018]eKLR, Justice Sewe notes at paragraph 19 of the Court’s Judgment by echoing the sentiments of Kiaga J.;

“I am not in the least persuaded that Article 159 of the Constitution and the Oxygen Principles…. were ever meant to aid in the overthrow of destruction of rules of procedure and to create an anarchical free for all in the administration of justice…”

15. On the issue of Formal Proof, this Tribunal finds that the same is superfluous, and does suo motoreview its directions relating thereto, to dispense with the need thereof, on the strength of Section 75(1) of the Co-operative Societies Act No. 12 of 1997.

16. CONCLUSION:

It is our considered view that the Application dated 16th March 2021 is not competent, as this Tribunal has not been invited to tamper with its Judgment in order to open a window for filing a Defence by the Respondent. As such, we hold that the Application – and its appurtenant prayers - must fail, and we so order.

ORDERS

We therefore Order as follows:

(a)The Respondents’ Applications dated 16th March 2021 be and is hereby dismissed with costs;

(b)The directions of this Tribunal dated 22nd February 2021 in terms of Formal Proof be and are hereby reviewed to dispense with Formal Proof.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 19TH DAY OF NOVEMBER, 2021.

Hon. B. Kimemia Chairperson Signed 19. 11. 2021

Hon. J. Mwatsama Deputy Chairperson Signed 19. 11. 2021

Mr. Gitonga Kamiti Member Signed 19. 11. 2021

Mr. B. Akusala Member Signed 19. 11. 2021

Mr. P. Gichuki Member Signed 19. 11. 2021

Tribunal Clerk R. Leweri

Macharia holding brief for Mbuthia for the claimant

No appearance by Respondent.

Hon. J. Mwatsama Deputy Chairperson Signed 19. 11. 2021

Later at 10. 57 a.m

Ms Kamau for the Applicant.

Hon. J. Mwatsama Deputy Chairperson Signed 19. 11. 2021