[2025] KECPT 311 (KLR)

Muranguri v St. Mary’s Transport Sacco Limited (Tribunal Case 419 of 2020) [2025] KECPT 311 (KLR) (12 June 2025) (Ruling)

Neutral citation: [2025] KECPT 311 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 419 of 2020

Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

June 12, 2025

Between

Nicholas Mwai Muranguri

Claimant

and

St. Mary’s Transport Sacco Limited

Respondent

Ruling

1. The Notice of Motion application dated 22nd August, 2023 is brought under Rule 11, 17 & 79(4) of the Co-operative Tribunal (Practice and Procedure) Rules, 2009, Order 22 rule 6 and Order 36 Rule 4 of the Civil Procedure Rules and all other enabling provisions of law seeking among others:1. Spent2. That the default judgment entered herein be set aside and the applicants be allowed to enter appearance and file Defence,3. That the Claimant being guilty of failing to disclose to the Tribunal that the Respondents fully paid his dues in January, 2016 is guilty of an offence under section 79(4) of the CooperativeSocieties Act and is liable to pay damages to the Respondents,4. That pending hearing and determination of this application execution be stayed by lifting warrants of arrest against the executive officials of the respondents,5. That the costs of the application be borne by the Respondent for non-service of pleadings and failure to serve Notice of Entry of Judgment.

2. The Application was based on the Affidavit of Joseph Mathenge Kabiru on the grounds:i.That there are major flaws in the return of service affidavit which cast aspersions on whether pleading were actually servedii.That the Claimant is a member who was engaged in financial anomalies, to wit; -(a)Acted as a guarantor, yet he wants to leave the Respondent Sacco without fulfilling his obligations as a guarantor, and(b)Took a 25-seater bus belonging to the Sacco without any payment and without the consent and/or knowledge of the respondents.iii.That the Claimant on 11th January, 2016 applied to withdraw his savings of Kshs 593,827/= and the same were given to him leaving his account at niliv.That the claimant cannot exit the Sacco as he is a guarantor of three members with loans.v.That if the Sacco would have been aware of this case, not only would they have filed a Defence, but they would have also filed a counter-claim for the Claimant to settle his dues as a guarantor and to refund to the Sacco the money equivalent to the bus he gave himself in collusion with the then officials of the Sacco.vi.That the Tribunal should see through the Claimant’s charade and allow the Respondent to call him out for who he is in a full trial, despite illegally benefiting enormously from the Sacco.

3. This Tribunal on 25th August, 2023 gave directions for the Application to be served, with the Claimant given 14 days to file a Replying Affidavit.

4. The Claimant filed a Notice of Preliminary Objection dated 7th November, 2023 stating:a.That the Court`s jurisdiction is expressly barred for reasons that the instant application offends Section 6 of the Civil Procedure Act Cap 21 laws of Kenya;b.That the matter in issue in the instant application is also directly and substantially in issue in E662 of 2023And as such the Application should be dismissed.

5. This Tribunal on 4th December 2024 gave further orders for the Application to be canvassed by way of written submissions.

6. The Claimant did not file his submissions. The Respondent filed their submissions dated 10th February, 2025 stating among others:i.That the default judgment entered in favour of the Claimant should be set aside and damages awarded against the Claimant for willfully and knowingly misleading the Tribunal, an offence under section 79(4) of the Co-operative Societies Act,ii.That the Affidavit of Service by Benjamin Mwongela Munguti sworn on 22nd January, 2021 suffers from the following defects; -(a)The process server served a document that does not exist(b)The process server has not indicated where the offices of the Respondent are located.(c)The process server served a Manager without a name, and(d)The process server claims copies of the pleadings were signed by the nameless Manager – no signed documents were attached to the Affidavit.iii.That the Claimant withdrew from the Respondents and his account stood at nil. There is nothing for him to be paid.iv.That the Claimant did not file any document to show that he had the money he is claiming.v.That the Claimant is a guarantor to 2 members Samuel Kiptanui and Peter Ngundo, and as such he can not exit the Respondent Sacco as he is encumbered.vi.That an extract from an Inquiry Report, shows that the Claimant procured a bus from the Respondent which he has never paid.

7. We have considered the Application and the response and submissions filed, and the only question remaining for determination is as to whether the Respondent has satisfied the grounds for setting aside a default judgement.

8. Has the Respondent satisfied the grounds for setting aside a default judgement?

9. It is important to note that courts and tribunals have unfettered discretion in setting aside default judgments. However, that unfettered discretion must be exercised in accordance with the law, and the Court of Appeal in CMC Holdings Ltd v Nzioki [2004] KLR 173 stated that:"In an application for setting aside ex parte judgement, the Court exercises its discretion in allowing or rejecting the same. That discretion must be exercised upon reasons and must be exercised judiciously…In law the discretion that a court of law has, in deciding whether or not to set aside ex parte order was meant to ensure that a litigant does not suffer injustice or hardship as a result of amongst other an excusable mistake or error. It would not be proper use of such discretion if the Court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error. Such an exercise of discretion would be wrong principle…….. The law is now well settled that in an application for setting aside ex-parte judgement, the Court must consider not only the reasons why the Defence was not filed or for that matter why the applicant failed to turn up for the 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 draft Defence is annexed to the application, raises triable issues. The Court has wide discretion in such cases to set aside ex-parte judgment.”

10. In this particular case, we are persuaded that the Respondent has raised some triable issues (whether the Claimant had money to be paid when he withdrew, the guarantors who the Claimant had guaranteed and defaulted on their loans, and the counter-claim issue raised).

11. Final orders:i.The Notice of Motion Application dated 22nd August, 2023 succeeds is found to be with merit and allowed.ii.Leave granted for the Respondent to enter appearance and file a Defence and counter-claim 21 days from todayiii.Costs in the cause.iv.Mention for Pre-trial directions on 14. 10. 2025. Notice to issue.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 12TH DAY OF JUNE, 2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 12. 6.2025HON. BEATRICE SAWE - MEMBER SIGNED 12. 6.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 12. 6.2025HON. PHILIP GICHUKI - MEMBER SIGNED 12. 6.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 12. 6.2025HON. P. AOL - MEMBER SIGNED 12. 6.2025Tribunal Clerk MutaiMburu advocate holding brief for Opiyo advocate for the ClaimantSt. Mary’s Sacco- No appearanceMbuthia advocate for the Respondent – no appearanceHON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 12. 6.2025