https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1949

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT & LABOUR RELATIONS COURT** **AT NAIROBI** **ELRC CAUSE NO. E338 OF 2025** ***(Before Hon. Lady Justice Hellen Wasilwa, J)*** **WINNIE GESARE MOGAKA......…………………...............CLAIMANT** **VS** **URBAN ART HOUSEHOLD &** **ANTIQUES LIMITED………………………………….1ST RESPONDENT** **WILFRED KINYUA WAWERU alias** **DANIEL WAWERU..............................................2ND RESPONDENT** **RULING** 1. The Respondents/ Applicants filed a Notice of Motion application dated 16th March 2026 seeking orders: - 2. *Spent* 3. *THAT pending the hearing and determination of this Application inter partes, this Honourable Court be pleased to stay execution of the Judgment passed on 27th February 2026 and the Decree issued consequent thereto against the Respondents/Applicants.* 4. *THAT the Judgment entered against the Respondents/Applicants on 27th February 2026 and the Decree issued thereon, together with all consequential orders made pursuant thereto, be set aside.* 5. *THAT the 2nd Respondent, Wilfred Kinyua Waweru alias Daniel Waweru, be struck out as a party to this suit, the Statement of Claim having failed to disclose any reasonable cause of action against him in his personal capacity.* 6. *THAT the Respondents/Applicants be granted leave to file and serve their Response to the Statement of Claim in the form of the Draft Response annexed hereto, upon payment of the requisite court filing fees, within such time as this Honourable Court may direct.* 7. *THAT the costs of and incidental to this Application be borne by the Claimant/Respondent.* **Respondents/Applicants’ Case** 1. The Applicants aver that judgment was entered against them on 27th February 2026 for Kshs. 600,000 following proceedings conducted in their absence. They aver that they only came to learn of the suit upon being served with the ten days' Notice of Entry of Judgment dated 3rd March 2026. 2. The Applicants aver that they were never served with the Summons to Enter Appearance, the Statement of Claim, any Hearing Notices, Mention Notices, or the Decree, thus, they were condemned unheard in violation of the rules of natural justice and Article 50(1) of the Constitution. 3. It is the Respondents/ Applicants’ case that the 1st Respondent does not employ, and has never employed, a human resource manager, and that the person alleged to have been served is entirely unknown to the sole director, Wilfred Kinyua Waweru. 4. They further state that no stamp or signature of any authorised officer of the 1st Respondent appears on the copy of Summons and that the purported stamp is not the official stamp of the 1st Respondent. 5. The Respondents/Applicants state that the messages were sent to telephone number +254721880176, addressed to a contact saved as "Daniel Waweru," who is the brother of the 2nd Respondent; he is not a director, secretary, or principal officer of the 1st Respondent. The Applicants assert that the said messages were never brought to the 2nd Respondent's attention. 6. Relying on Order 5 Rule 3 of the Civil Procedure Rules, 2010, it was stated that service upon an alleged human resource manager who does not exist is a nullity, and that service upon Daniel Waweru, a non-director and non-principal officer, is equally invalid. Consequently, they assert that the 1st Respondent was never properly served. 7. It is the Applicants’ case that the Summons in the original suit were directed to "Urban Art Household and Antiques Limited" only, and no separate summons was ever issued or served upon Wilfred Kinyua Waweru as an individual. 8. They contend that the WhatsApp messages sent to "Daniel Waweru" cannot constitute personal service upon the 2nd Respondent, therefore, the default judgment entered against him is irregular for want of service and ought to be set aside as of right, without the need to demonstrate a defence on the merits. 9. The Applicants aver that the Statement of Claim discloses no reasonable cause of action against him in his personal capacity. 10. They state that the 1st Respondent is a duly incorporated limited liability company with full legal capacity to sue and be sued in its own name, thus, the personal liability of its director cannot be imputed in the absence of any allegation of fraud, illegality, or other circumstances warranting the lifting of the corporate veil. 11. They further state that no fraudulent conduct or improper design has been pleaded or alleged, hence the 2nd Respondent's joinder is frivolous, vexatious, and an abuse of court process. 12. The Applicants aver that the 1st Respondent has a good and bona fide defence to the Claimant's claim as disclosed in the Draft Statement of Response. The defence raises triable issues, including the voluntary nature of the Claimant's resignation during her probationary period, her failure to work the full period claimed, her unauthorised retention of the 1st Respondent's golf equipment causing loss of hire income, and the inapplicability of statutory remedies for unfair termination to a claimant who resigned voluntarily. 13. It is the Applicants’ case that this application was filed promptly upon learning of the judgment and that no inordinate or unexplained delay has occurred. **Claimant/Respondent’s Case** 1. In opposition to the application, the Claimant/Respondent filed a replying affidavit dated 14th April 2026. 2. The Claimant/Respondent maintains that service upon the Respondents was duly effected and the default judgment entered on 27th February 2026 is regular. 3. She avers that on 30th April 2025, Euniter Wairimu, an Advocate of the High Court of Kenya, served the 1st Respondent with physical copies of the court summons and other court documents at their offices, and the 1st Respondent affixed its stamp and indicated "received" on both the Summons to Enter Appearance and the Statement of Claim. 4. The Respondent further avers that on 23rd May 2025, the same process server transmitted the Summons to Enter Appearance, Statement of Claim, Verifying Affidavit, List of Witnesses, and other documents to telephone number +254721880176 via WhatsApp, being the number listed as the company's registered phone number in the CR12 filed by the Respondents themselves, and which is the same number belonging to the 2nd Respondent as sole director and shareholder. 5. It is the Respondent’s case that the Respondents/Applicants were at all material times aware of the existence of the suit. Therefore, their failure to file a response within the requisite timelines was wilful, prompting the court to direct that the matter proceed for formal proof hearing. 6. The Respondent contends that the Applicants have not met the threshold for setting it aside. She states that a perusal of the draft defence contains admissions that there existed an employer-employee relationship between the parties; the 1st Respondent did not pay the Claimant's salary as and when it fell due for the month of November 2024 and for days worked in December 2024; the Claimant tendered her resignation on 10th January 2025; following her resignation the 1st Respondent constantly assured her that payment would be made at the earliest; and the Claimant returned all company assets and golf kit on 16th February 2025, yet the Respondents still failed to pay her terminal dues. 7. She avers that the claim for loss of income on account of her retention of the golf kit is an afterthought calculated to deprive her of the fruits of her judgment. In any event, any such claim for special damages is properly ventilated separately and cannot form a basis for setting aside the judgment. 8. The Respondent asserts that the doctrine of corporate separation does not apply in labour relations matters, relying on [***Daniel Mutisya Masesi V Romy Madan & Another [2013] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/450/eng%402013-04-12), where the court held that the Employment Act 2007 does not bar directors and their companies from being joined in the same claim filed by their employees, and that the court looks at the whole economic enterprise rather than the legal and business personalities behind it. 9. She avers that the 2nd Respondent, as the human face of the 1st Respondent, was personally served via WhatsApp on the number appearing in the 1st Respondent's own CR12, yet has offered no explanation for his failure to enter appearance either on behalf of the 1st Respondent or in his personal capacity. 10. The Respondent contends that the equitable discretion of the court cannot be invoked in favour of an indolent applicant who slept on his rights for over one year; and urges the court to dismiss the application with costs. **Respondents/Applicants’ Submissions** 1. The Respondent submitted on five issues: whether the default judgment entered on 27th February 2026 is irregular for want of proper service upon the 1st and 2nd Respondents; whether the 2nd Respondent was lawfully joined as a party to these proceedings; whether the Respondents/Applicants have raised triable issues in their draft Defence warranting the setting aside of the judgment; whether the Respondents/Applicants are entitled to have the default judgment set aside and be granted leave to defend the suit; and who should bear the costs of this Application. 2. On applicable law, the Applicants submitted that the jurisdiction of the court to set aside a default judgment is founded on Order 10 Rule 11 of the Civil Procedure Rules, 2010, which provides that where judgment has been entered under that Order, the court may set aside or vary such judgment and any consequential decree or order upon such terms as are just. 3. They relied on ***Patel v EA Cargo Handling Services Ltd [1974] EA 75***, where the court held that there are no limits or restrictions on the judge's discretion except that if he does vary the judgment, he does so on such terms as may be just, and that the main concern of the court is to do justice to the parties. They further relied on ***Shah v Mbogo & Another [1967] EA 116*** and ***Mbogo & Another v Shah (1968) 1 EA 93*** for the proposition that judicial discretion under this provision is to be exercised to cure injustice or hardship occasioned by accident, inadvertence, or excusable mistake, but not to aid deliberate obstruction of the course of justice. 4. On the first issue, the Applicants submitted that the default judgment entered on 27th February 2026 is irregular and ought to be set aside as of right, without the necessity of demonstrating a defence on the merits, on the ground that neither the 1st nor the 2nd Respondent was ever lawfully served with the Summons to Enter Appearance and Statement of Claim. 5. They submitted that the Affidavit of Service sworn on 23rd May 2025 avers that service was effected upon a human resource manager at the 1st Respondent's premises, which is false, as the 1st Respondent has never employed such person, and the alleged recipient is entirely unknown to the 1st Respondent. 6. The Applicants argued that Order 5 Rule 3 of the Civil Procedure Rules, 2010 is unambiguous that service of summons upon a corporation must be effected on a director, secretary, or other principal officer and that service upon any other employee, including one whose role and identity cannot be verified, is a legal nullity. 7. In support thereof, they relied on [***James Kanyiita Nderitu & another v Marios Philotas Ghikas & another [2016] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keca/2016/470/eng%402016-06-17), where the Court of Appeal drew a clear distinction between regular and irregular default judgments and held that where judgment has been entered without proper service, it is irregular and the court must set it aside as a matter of right without inquiry into the merits of the defence. They further relied on [***Zamzam Yusuf v Abdillahi Igge & another [2020] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/kehc/2020/2746/eng%402020-10-05), where Gikonyo J. reaffirmed that an irregular judgment entered against a party who was never properly served must be set aside as of right. 8. It is the Applicants’ submission that the irregularity as against the 2nd Respondent is even more glaring, in that the Summons to Enter Appearance in the original suit was directed solely to "Urban Art Household and Antiques Limited" and no summons was ever issued or served upon Wilfred Kinyua Waweru in his personal capacity. 9. They argued that the purported service by WhatsApp upon "Daniel Waweru" at telephone number +254 721 880 176 cannot in law or in fact constitute service upon the 2nd Respondent, as Daniel Waweru is the 2nd Respondent's brother, holds no office as director, secretary, or principal officer of the 1st Respondent, and never communicated those messages to the 2nd Respondent, who remained entirely unaware of the proceedings until service of the ten days' Notice. 10. On the second issue, the Applicants submitted that the joinder of the 2nd Respondent in his personal capacity is legally untenable and ought to be struck out. The 1st Respondent is a duly incorporated private limited company under the Companies Act, 2015, a distinct legal entity with full capacity to sue and be sued in its own name, and that the principle of separate corporate personality established in ***Salomon v Salomon & Co Ltd [1897] AC 22*** insulates directors and shareholders from personal liability for the obligations of the company. 11. Citing [***Gachoka v Protocol Solutions Limited [2022] KEELRC 12713 (KLR)***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/12713/eng%402022-05-12), where it was held that the corporate veil may only be lifted where there is evidence of wrongful trading, fraud, evasion of legal duty, or other exceptional conduct, and that absent such conduct, a director cannot be held personally liable for the company's employment obligations. They submitted that the Claimant's Statement of Claim contains no allegation of fraud, illegality, or any other ground capable of justifying the piercing of the corporate veil, and that the bare description of the 2nd Respondent as a director affords no basis in law for imposing personal liability upon him. 12. The Applicants distinguished [***Daniel Mutisya Masesi v Romy Madan & another [2013] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/554/eng%402013-06-19), relied upon by the Claimant/Respondent, submitting that that case turned on an expansive reading of the definition of employer under Section 2 of the Employment Act, 2007, and that the better-reasoned position, consistent with the corporate law principles affirmed in [***Gachoka (Supra)***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/12713/eng%402022-05-12), is that the statutory definition does not of itself impose personal liability on a director acting in the ordinary discharge of his duties on behalf of a corporate employer. 13. It is the Applicants’ submission that the joinder of the 2nd Respondent/Applicant is accordingly frivolous, vexatious, and an abuse of the process of the court. 14. On the third issue, the Applicants submitted that without prejudice to their earlier submissions, and even on the assumption that the judgment is regular, the 1st Respondent has a meritorious defence raising genuine triable issues warranting a full trial. 15. They submitted that the governing principles for setting aside a regular default judgment were authoritatively restated by the Court of Appeal in[***Philip Kiptoo Chemwolo and Mumias Sugar Company Ltd -v- Augustine Kubede***](https://new.kenyalaw.org/akn/ke/judgment/keca/1986/87)***(1982-1988) KAR***, where the Court of Appeal held: *“The court has unlimited discretion to set aside or vary a judgment entered in default of appearance upon such terms as are just in the light of all facts and circumstances both prior and subsequent and of the respective merits of the parties.”* 16. They further relied on [***Jelimar Developers Limited V Wilson Waithaka Gitau [2012] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/kehc/2012/817/eng%402012-11-21)where Njagi J. reiterated that the overriding principle is to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake, and that where a draft defence discloses triable issues, the default judgment should be set aside to allow the matter to be determined on its merits. 17. It is the Applicants’ submission that the 1st Respondent's Draft Statement of Response raises the following triable issues: that the Claimant resigned of her own volition by letter dated 10th January 2025 and was neither dismissed nor constructively dismissed; that at the date of resignation the Claimant was serving her probationary period under a fixed-term contract, rendering the remedies for unfair termination under Section 49 of the Employment Act, 2007 unavailable to her; that the Claimant worked for only 19 days from 11th to 29th November 2024 and not the full period claimed; and that the Claimant retained the 1st Respondent's golf equipment without authority for 61 days from 18th December 2024 to 16th February 2025, causing loss of hire income of Kshs. 122,000 at Kshs. 2,000 per day, a sum exceeding any salary properly due of Kshs. 95,000, leaving a net balance of Kshs. 27,000 owed by the Claimant to the 1st Respondent. 18. On the final issue, the Applicants submitted that they acted with all due expedition upon learning of the default judgment, having filed the Application dated 16th March 2026 immediately after service of the Ten Days' Notice of Entry of Judgment dated 3rd March 2026, and that any delay in the proceedings is entirely attributable to the Claimant's failure to effect proper service. 19. In support thereof, they cited [***Seo & Sons Limited v Kenya Airports Authority [2020] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/kehc/2020/10231/eng%402020-10-14) for the proposition that promptness in bringing an application to set aside is itself a factor that weighs in favour of granting the relief. 20. They further submitted, relying on ***Thorn PLC v Macdonald [1999] CPLR 660***, that setting aside the default judgment will occasion no prejudice to the Claimant that cannot be fully remedied by an award of costs, and that the absence of irreparable prejudice is a weighty consideration in the exercise of the court's discretion. **Claimant/Respondent’s Submissions** 1. The Claimant/Respondent submitted on two issues: whether the Applicants/ Respondents have met the threshold for setting aside the ex parte judgment to warrant the court to exercise its discretion and set aside the judgment; and who should bear the costs of the application. 2. On the first issue, the Claimant submitted that Order 10 rule 11 of the Civil Procedure Rules, 2010 gives the Court unfettered discretion to set aside an ex-parte judgment that was entered in default of appearance and defence. 3. The Claimant/Respondent submitted that the guiding principles in exercise of the Court’s discretion is set out in ***Thorn PLC v Macdonald (1999) CPLR***, as cited in [***David Kiptanui Yego & 134 others v Benjamin Rono & 3 others [2021] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/kehc/2021/8485/eng%402021-03-09): *“(i) while the length of any delay by the defendant must be taken into account, any pre-action delay is irrelevant; (ii) any failure by the defendant to provide a good explanation for the delay is a factor to be taken into account, but is not always a reason to refuse to set aside; (iii) the primary considerations are whether there is a defence with a real prospect of success, and that justice should be done; and (iv) prejudice (or the absence of it) to the claimant also has to be taken into account.”* 4. It is the Claimant's submission that as a matter of principle, courts do not act *suo moto*. 5. The Claimant/Respondent submitted that the court record bears witness that the issue of service was raised before the learned Deputy Registrar on 17th July 2025 and before the learned Judge on 28th July 2025. After considering the record, the learned Judge was satisfied that the Respondents had been properly served and directed that the matter proceed by way of formal proof as an undefended cause. 6. She submitted that the proceedings of 18th November 2025 where the matter proceeded undefended resulted in the impugned decision of 27th February 2026, and in order to successfully assail that decision, it was necessary to first dismantle its foundation set on 28th July 2025. She contended that the prayers sought by the Applicants seek only to set aside the decision of 27th February 2026 without seeking to set aside the order certifying the matter to proceed as an undefended cause, and consequently setting aside the judgment alone will serve no purpose as the Respondents will not be in a position to file a defence. Reliance was placed on [***Ndibo & 2 others v Rezial Limited [2024] KEELRC 2407 (KLR)***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2407/eng%402024-10-03)***,*** where Manani J., faced with similar circumstances, dismissed the application. 7. The Claimant submitted that the grounds advanced by the Applicants are three: that the summons to enter appearance and pleadings were not served upon them; that the draft defence raises triable issues; and that there is an improper joinder of the 2nd Respondent. 8. On the issue of service, she submitted that whereas the Applicants concede that the CR-12 records are correct, they allege that the phone number +254 721 880 176 registered in those company records belongs to Daniel Waweru, who allegedly has never held office at the 1st Respondent. She contended that nothing has been tabled before the court to demonstrate that Daniel Waweru and Wilfred Kinyua Waweru are two separate persons, nor has any explanation been offered as to why an alleged brother's contact appears as the company's registered number at the Business Registration Services. 9. The Claimant/Respondent further submitted that the WhatsApp correspondence filed her list of documents at pages 7 to 14, which the Applicants/ Respondents confirm constantly assured the Claimant of payment were between herself and phone number +254721880176 which names on Mpesa reveal the names Daniel Waweru. Additionally, this is the same contact that made payment of her salary arrears is concerned. 10. She submitted that the allegations that the Respondents were not served despite the CR12 demonstrating the last known address and contact number of the 1st Respondent, and the arguments about Daniel Waweru being a different person, are only meant to mislead the court. 11. It is the Claimant/Respondent’s submission that the allegation that no human resource manager exists at the 1st Respondent is meant to mislead the court, as the email correspondence at page 26 of her list of documents, which assured the Claimant of payment, demonstrates that there exists a human resource team at the 1st Respondent company. 12. The Claimant/Respondent submitted that there is no dispute as to the physical address of the 1st Respondent as per the affidavit of service, being the same address where the Claimant reported to work during her tenure of employment, and the 1st Respondent's affixing of its stamp to the court summons and pleadings is evidence of due service. 13. She relied on Order 5 Rules 15 and 16 of the Civil Procedure Rules, 2010, which require service of summons to be proved by an affidavit of service that, unless successfully impugned, constitutes prima facie evidence of proper service, and submitted that the Applicants have not successfully impugned the affidavit of service filed in this matter. 14. On the joinder of the 2nd Respondent, the Claimant submitted that joinder of a party is not one of the grounds for consideration when setting aside a judgment. 15. Nonetheless the 2nd Respondent relying on [***Daniel Mutisya Masesi v Romy Madan & another [2013] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/554/eng%402013-06-19)*,* submitted that the principle of legal separation does not apply in labour relations cases. 16. The Claimant/Respondent submitted that she has not applied to execute against the 2nd Respondent personally, which would be the stage requiring lifting of the corporate veil, and urged the court to find that the 2nd Respondent as the human face of the company slept on his right to respond to the suit since he was served with the summons to enter appearance and statement of claim on his WhatsApp number as indicated in the CR12, and has offered no explanation for his failure to enter appearance on his own behalf or that of the 1st Respondent. 17. On whether the draft defence raises triable issues, the Claimant/Respondent submitted that the Court in ***International Finance Corporation -v- Utexafrica sprl [2001] CLC 1361,*** stated that the test of a defence having a real prospect of success means that the prospects must be better than merely arguable. 18. It is the Claimant/Respondent’s submissions that the Applicants have admitted owing the Claimant salary arrears for November 2024 and December 2024 and that she tendered her resignation on 10th January 2025 on account of her inability to sustain herself. Therefore, the argument that she was serving a probationary contract and she not entitled to terminal dues is not only contrary to the dictates of the Employment Act, 2007 but an affront to fair labour practices, leaving no prospect whatsoever of an arguable defence. 19. The Claimant/Respondent submitted that the counterclaim for loss of income on use of the golf kit which purports to be a pleading independent of a defence given that they have admitted the claim and that ail factors considered the Respondents have not established a good case for setting aside the default judgment. She cited [***William Koross (Legal personal Representative of Elijah C.A. Koross) v Hezekiah Kiptoo Komen & 4 others [2015] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keca/2015/906/eng%402015-03-06): *“…….we need to state that there cannot properly be two judgments, and contradictory ones at that, in the same suit. The presence of a counterclaim in a suit, while essentially amounting to a cross-suit, does not give rise to a separate, stand-alone second judgment. A counterclaim never stands on its own and cannot be a pleading independent of a defence.”* 20. The Claimant submitted that the jurisdiction under Order 10 rule 11 of the Civil Procedure Rules is discretionary and the rule empowers the court to set aside or vary a default judgment upon such terms as are just. 21. Relying on ***Shah v Mbogo (1967) EA 166***, the Claimant/Respondent submitted that the exercise of such discretion exists to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake and is not intended to assist a party who has deliberately sought to obstruct or delay the course of justice. She further relied on [***CMC Holdings Ltd v James Mumo Nzioki [2004] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keca/2004/143/eng%402004-03-12), where the Court of Appeal held: *“The law is now well settled that in an application for setting aside ex parte judgment, the Court must consider not only reasons why the defence was not filed or for that matter why the applicant failed to turn up for hearing on the hearing date but also whether the applicant has reasonable defence which is usually referred as whether the defence if filed already or if a draft defence is annexed to the application, raises triable issues.”* 22. On costs, the Claimant/Respondent placed reliance on ***Reid, Hewitt & Co v Joseph, AIR 1918 Cal 717*** and ***Myres v Defries (1880) 5 Ex D 180*** the house of Lords noted that:*“The expression ‘costs shall follow the event’ means that the party, who, on the whole, succeeds in the action gets the general costs of the action, but where the action involves separate issues, whether arising under different causes of action or under one cause of action, the word ‘event’ should be read distributive and the costs of any particular issue should go to the party who succeeds upon it.”* 23. I have examined all the evidence and submissions of the parties herein. From the record, the 1st respondents herein Urban Household & Antiques Ltd were served with the claim and summons to enter appearance on 30/4/25. 24. There is alsoevidence of service upon the 2nd respondent by way of whatsapp through no 0721880176 which the 2nd respondent has not denied is his number. Despite the service, the respondents did not enter appearance and this court directed the matter to proceedfor formal proof on 18/11/25. 25. The averment by the applicant that there was no service upon them is found to be untruthful and the request to set aside the judgment cannot stand. 26. The 2nd respondent also sought to be struck out of the proceedings. The 2nd respondent was served and he chose not to present his case or file an application to strike him out of the proceedings. The applicant is now coming in way too late after a valid judgment of this court and the application cannot stand at this point in time. 27. I find the application thus not merited and is dismissed accordingly with costs. **Dated, Signed and Delivered virtually at Nairobi this 9th Day of July 2026.** **HELLEN WASILWA** **JUDGE**