[2024] KECPT 1690 (KLR)

Njeri v Orient Sacco Society Limited & another (Tribunal Case 276/E417 of 2023) [2024] KECPT 1690 (KLR) (3 October 2024) (Ruling)

Neutral citation: [2024] KECPT 1690 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 276/E417 of 2023

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

October 3, 2024

Between

Kamau Teresia Njeri

Claimant

and

Orient Sacco Society Limited

1st Respondent

Freeman Auctioneers

2nd Respondent

(Coram: Hon. B. Kimemia- chairperson, Hon. J. Mwatsama- Deputy chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon.P. Gichuki- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)

Ruling

1. Before this Tribunal for determination is a Notice of Motion Application dated 16th October 2023 filed by the Respondent/Applicant under a Certificate of Urgency seeking for following orders:a.Spentb.That this Tribunal to grant unconditional stay of execution of exparte judgment and decree and all consequential orders entered in the matter on 19th September 2023 against the Respondent/Applicant pending hearing and determination of this suit.c.That this Tribunal set aside the judgment and decree entered in the matter on 19th September, 2023 together with all other Consequential orders pending hearing and determination of this application.d.That the Memorandum of Response and accompanying documents filed therein be allowed into record and the matter be set for hearing.e.That a stay for the sale of office goods listed in the notice of proclamation be granted pending hearing and determination of this application.f.That the cost of the application be provided for.

2. To back up these prayers, the Respondent/Applicant raised nine(9) grounds as to why the prayers should be allowed. These grounds are equally reiterated by the Chairperson of the Sacco in a Supporting Affidavit dated 16. 10. 2023. Further, other documents that the Respondent/Applicant attached include the Chairperson’s authority to plead dated 12. 10. 2023, copies of Warrants of Attachment dated 11. 10. 2022, Proclamation of Attachment dated 11. 10. 2023, copy of email to the Claimant regarding Memorandum of Response to her claim.

3. This suit originated from a Statement of Claim dated 17th May 2023 which was filed on the same day in the Tribunal. The Claimant sought for:a.Refund of her shares contribution totaling Kshs. 526,300/=b.Costs of the suit.c.Any other relief so deemed appropriate by the Tribunal.

4. Copies of summons to enter appearance and the Statement of Claim were served upon the Respondent/Applicant on 19. 5.2023 and Affidavit of Service was filed in the Tribunal on 2. 6.2023.

5. When the service of the summons did not elicit response from the Respondent/Applicant the claimant filed an Application dated 19. 6.2023 to request for summary judgment.On 28. 8.2023, the Tribunal entered judgment and ordered thus:“Summary judgment is entered in favour of the Claimant against the Respondent for Kshs.526,300/= plus costs and interest. “Thereafter the Claimant extracted a decree on 19th September, 2023 and filed for Warrants of Execution.

6. After reading through the documents on record filed by the Claimant/Respondent and the Respondent/Applicant, the Tribunal is persuaded that there is an existence of a dispute between the two parties. To resolve the dispute, we have isolated the following three (3) issues for determination.Issues For Determinationi.Whether the summary judgment issued and delivered on 28. 8.2023 can be set aside?ii.Whether the execution of the summary judgment and all other Consequential orders can be stayed?iii.Who will bear the costs?Issue 1Whether the summary judgment issued and delivered on 28. 8.2023 can be set aside?

7. It is not in dispute that the claimant filed a statement of claim on 17. 5.2023, served the summons and annextures on 20. 5.2023 and request for summary judgment on 19th June 2023 which request was granted by the Tribunal.

8. Ordinarily upon receipt of the judgment, the Claimant should have issued notice and serve the Respondent. This seems not to have been procedurally followed by the Claimant raising the Respondent’s concern under paragraph 12 of its written submissions.“Further the rules of procedure state that upon entry of an exparte judgment, the claimant must serve a notice of entry of judgment to the adverse party.”

9. The Respondent’s/Applicant concern is buttressed by paragraph 2 of Order 22 Rule 6 of the Civil Procedure Rules which provide as follows:“Provided that where judgment in default of appearance or Defence has been entered against a defendant, no execution by payment attachment or eviction shall issue unless not less than ten (10) days notice of the entry of judgment has been given to him either at his address for service or served on him personally a copy of that notice shall be filed with the first application for execution.”The Claimant did not deny that she served the Respondent with the notice of judgment as provided above. Similarly in the E-filing of the Tribunal, it confirms the concern of the respondent that there has been no activity in the system which indicated the dates of mentions or hearings. On this note we note that the Respondent was put on a black out while the Claimant was actively engaged with the suit.

10. We have read the Respondent’s Memorandum of Defence in our records dated 27th July, 2023 and noted that the Respondent state that the shares amount is Kshs.453,302. 96/= and not Kshs.526,300/= as claimed. It is also indicated that both parties had negotiated on how the value of Claimant’s shares could be settled. In the meetings held, the Respondent’s gave an offer to pay a sum of Kshs.40,000/= per month beginning from November until payment is made in full.

11. None of the parties has come out to say whether the out come of the negotiation was in the negative or affirmative. However, the Claimant in her written submissions asked whether the Respondent is ready and willing to pay out the amounts claimed and/or has any proposal to clear the decretal sum. Further, the Memorandum of Defence raised an issue of improper payment of dividends to the Claimant among other issues that raises triable issues.

12. In the interest of impartiality and the promotion of justice it is our finding that we invoke the provisions of Order 10 Rule 11 of the Civil Procedure Rules 2010 which provide..“Where judgment has been entered under this order, the court my set aside or vary such judgment any other consequential decree or order upon such terms as are just.”

13. The above Order 10 Rule 11 is discretionary and is supposed to be exercised by the court to avoid injustice or hardship to a party. Truth be said, there are several court pronouncements on this reasoning but for purposes of this suit, the Tribunal choose to rely on the case of Tree Shade Motor Limited versus D.T.Dobbie Company Limited in which the court held that:“Even when exparte judgment was lawfully entered, the court should look at the draft Defence to see if it contained a valid or reasonable Defence”

14. We have equally considered the period of delay by the Respondent file the notice of motion application dated 16. 10. 2023 and find it to be reasonable. Further we consider that the Claimant shall not be prejudice hence we find that it is in order to set aside the summary judgment dated 28. 8.2023. Issue TwoWhether the execution of the summary judgment and all other Consequential orders can be stayed?

15. The Claimant obtained warrants of attachment dated 11th October 2022 against the Respondent/Applicant and proclamation was done by Freeman Auctioneers on all the office furniture and the other assets worth Kshs. 600,000/= as indicated in the proclamation form. This is more or less paralyzing the business of the Respondent which will have a ripple effect on the employees and the membership of the Sacco.

16. Based on this reasoning this Tribunal ordered for a stay of execution of the orders granted on 16th October 2023 pending the hearing of the Notice of Motion dated 16. 10. 2023 on 7th November 2023. These orders were similarly extended when the parties agreed to canvass the issues raised in the Notice of Motion through written submissions.

17. The proclamation of attachment/repossession/distraint of moveable property form of Freeman Auctioneers state that:“At the expiry of seven (7) days from proclamation, the goods will be removed to the auctioneers premises and sold by public auction.”This was stayed by an order of this tribunal and now that we have set aside the summary judgment and all other consequential orders we find that it is in order to stay the execution of those orders.

18. In totality , we find that the Notice of Motion Application dated 16. 10. 2023 has merits and is hereby allowed.

Ordersa.Spentb.Spentc.That execution of the summary judgment entered on 28. 8.2023, the decree and all consequential orders dated 19. 9.2023 are hereby stayed pending hearing and determination.d.Spente.That a stay for the sale of office goods listed in the notice of proclamation is granted pending hearing and determination of this application.f.Prayer 6 is granted and granted 14 days after delivery of the ruling to file Defence and all accompanying documents.g.Spenth.Prayer 8- Costs in the cause.i.Pre-trial directions on 3. 2.2025. notice to issue.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF OCTOBER, 2024. Hon. B. Kimemia Chairperson Signed 3. 10. 2024Hon. J. Mwatsama Deputy Chairperson Signed 3. 10. 2024Hon. Beatrice Sawe Member Signed 3. 10. 2024Hon. Fridah Lotuiya Member Signed 3. 10. 2024Hon. Philip Gichuki Member Signed 3. 10. 2024Hon. Michael Chesikaw Member Signed 3. 10. 2024Hon. Paul Aol Member Signed 3. 10. 2024Tribunal Clerk MutaiNo appearance by partiesRuling delivered in absence of parties.Hon. J. Mwatsama Deputy Chairperson Signed 3. 10. 2024