[2021] KECPT 597 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.292 OF 2019

MARY NYAMBURA MAINGI....................................................................CLAIMANT

VERSUS

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

RULING

Vide the Application dated 26. 2.2020, the Respondent has moved this Tribunal seeking for the following Orders:

1. That this Application be certified urgent and heard ex-parte in the first instance;

2. That pending hearing and determination of this Application, this Honourable Tribunal be pleased to stay execution of the judgment and decree issued on 17. 10. 2019;

3. That this Honourable Tribunal be pleased to set aside the judgment and decree issued on 17. 10. 2019 and all the 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; and

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

The Application is supported by the grounds on its face and the Affidavit sworn by Samuel Ngundo Maina on even date.

The Claimant has opposed the Application by filing a Replying Affidavit sworn by herself on 26. 8.2020.

Vide the directions given on 6. 8.2020, the Application was canvassed by way of written submissions. The Respondent filed its initial set of submissions on 26. 8.2020, and supplementary ones on 9. 11. 2020. The Claimant filed her submissions on 27. 10. 2020.

Respondent’s Contention

Vide the instant Application, the Respondent contend that the Claimant has obtained an irregular judgment and is in the process of executing it. That prior to the entry of the said judgment, it was not served with summons to enter Appearance. That it therefore follows that the matter proceeded without the Respondent being afforded an opportunity to be heard. That it has a strong defence which raises triable issues.

Claimant’s Case

The Claimant has opposed the Application on grounds that the summons to enter Appearance were duly served upon it. That the Respondent acknowledged service by stamping on the counter part copy. That a return of service to that effect was filed.

That the draft defence does not raise triable issues as the Respondent and herself executed two sale agreements for the purchase of two (2) plots being plot 203 & 204 of the rate of Kshs.59,000/= each. That the said sale agreements were executed on 17. 5.2017.

That as regards plot 203, she paid the full purchase price and a receipt issued.

As regards plot 204, she paid in two tranches of Kshs.275, 000/= and Kshs.320,000/= was to be paid on installments.

That the plots were to be excised from LR. NO. 10823/8.

Issues for determination

The Respondent’s Application has presented the following issues for determination:

a. Whether the Respondent has laid a proper basis for the setting aside of the default judgment entered on 17. 10. 2019.

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.”

A question arises as to whether the current Application has satisfied the foregoing conditions. We will look at the said conditions individually as follows:

Reasons for failure to enter Appearance

The Respondent’s borne of contention is that it was not served with summons to enter Appearance. As such, it did not enter Appearance prior to entry of the default judgment. We have however, perused the Affidavit of service sworn by Josphat Karanja on 3. 10. 2019. It is Apparent that the Respondent was dully served with summons to enter Appearance on 7. 8.2019. The Respondent confirmed this fact by stamping on the counterpart copy of the summons. It cannot be heard therefore to dispute service of the same. It is our finding that the Respondent was duly served with summons to enter Appearance on 7. 8.2019.

Whether proposed Defence raises triable issue

We have perused the draft Defence annexed to the supporting Affidavit of Samuel Ngundo Maina and marked as SNM-2. We note that the Respondent confirm having entered into an agreement for sale of the two plots (plots 203 and 204) to the Claimant. That the said plots were to be transferred upon the Claimant complying with the terms laid down in the agreements. That from the onset, the Claimant was aware of the model employed by the Respondent which entailed the purchase of a big chunk of land, invite members to make bookings by way of purchase of plots. That upon payment for the plots, the property would be sub-divided and transferred to them.

That the Claimant is yet to complete payments of the purchase price as well as conveyancing fees to enable the Respondent transfer the property to her. That the issue of refund does not occur since the amount paid by the Claimant went into payment of deposits for owners of the land as well as meeting surveyors expenses.

We have perused the Claimant’s list and bundle of documents dated 22. 5.2019. Documents 3 and 4 are receipts for Kshs.595,000/= while documents 5 is a receipt for Kshs.275,000/=. They are both dated 15. 3.2017.

Documents 1 and 2 are the two sale agreements. Document 6 is a demand letter dated 14. 3. 2020.

Upon appreciation of the sale Agreements, it is apparent that the Claimant made full purchase price for plot 203 and a sum of Kshs.275,000/= towards plot Nos. 204 receipts were issued on 15. 3.2017.

As was legitimately expected, the Respondent did not avail title documents to facilitate transfer of the said plots into her name. This prompted the Claimant to issue demands which were not honored or acted upon thus precipitating the instant claim.

In the instant claim, the Claimant prays for a refund of the said purchase price. This is a liquidated claim supported by receipts.

We thus find that having failed to avail title documents to facilitate transfer of the suit plots to the Claimant, the Respondents defence is a sham and does not raise triable issues.

Conclusion

The upshot of the foregoing is that we do not find merit in the Respondent’s Application dated 26. 2. 2020 and hereby dismiss it with costs to the Claimant.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 7TH DAY OF JANUARY, 2021.

HON. F. TERER DEPUTY CHAIRMAN SIGNED 7. 1.2021

MR. P. GICHUKI MEMBER SIGNED 7. 1.2021

MR. B. AKUSALA MEMBER SIGNED 7. 1.2021

In the presence of Ms. Gitau holding brief for Mr. Mwangi for Respondent

Mr. Githumbi holding for Mr. Manyala for Respondent

Court clerk Maina

HON. F. TERER DEPUTY CHAIRMAN SIGNED 7. 1.2021

Miss Gitau- praying for 30 days stays of execution.

Tribunal- 30 days stay of execution granted.

HON. F. TERER DEPUTY CHAIRMAN SIGNED 7. 1.2021