https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9850

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KILIFI** **MALINDI LAW COURTS** **APPEAL NO. HCCSCA E001 OF 2025** **STANBIC BANK OF KENYA LTD ………….........…………… APPELLANT** **VERSUS** **MIRIAM JEROP CHUMO ………...............………… 1ST RESPONDENT** **JAMES M. MBELE ................................................... 2ND RESPONDENT** *(Being an Appeal against the Ruling of the Hon. Nkurrunah Namunyak (Adjudicator) in Malindi SCCCOMM/E080 0f 2024 delivered on 2nd April, 2025)* **(AS CONSOLIDATED WITH)** **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT MALINDI** **MALINDI LAW COURTS** **APPEAL NO. HCCOMMA E002 OF 2025** **JAMES M. MBELE …………………………......................…… APPELLANT** **VERSUS** **MIRIAM JEROP CHUMO ...........................................1ST RESPONDENT STANBIC BANK OF KENYA LTD ............................. 2ND RESPONDENT** *(Being an Appeal against the Ruling of the Hon. Nkurrunah Namunyak, (Adjudicator) in Malindi SCCCOMM/E080 of 2024 delivered on 31st January, 2025)* **JUDGMENT** 1. This consolidated Appeal arises out of two interrelated decisions of the Small Claims Court delivered on 2nd April, 2025 and 31st January, 2025 respectively. It invites this Court to consider the intersection between the statutory timelines governing the Small Claims Court and the core constitutional dictates of the right to a fair hearing. **Background Facts** 2. On 16th September, 2025 **Hon. Lady Justice Mugure Thande** made the following orders on consolidation; *“This file is consolidated with High Court Civil Small Claims Appeal No. E001 of 2025. Civil Appeal No. E001 of 2025 will be lead file.”* 3. The appeal arises from two separate but structurally connected Rulings delivered by the **Hon. Nkurrunah Namunyak (Adjudicator)** in **Malindi SCCCOMM E080 of 2024**. The first in time is an appeal by **James M. Mbele** (the 2nd Respondent in the lead appeal). This is against the Ruling dated 31st January, 2025, which refused to set aside an *ex-parte* default judgment of Ksh. 725,000 entered against him. The second is an appeal by **Stanbic Bank of Kenya Limited** (the Garnishee Bank in the Court below). This is against the Ruling dated 2nd April, 2025, which reversed a prior order and dismissed the Bank’s application to set aside a Garnishee Order Absolute. 4. Both appeals are strongly opposed by the 1st Respondent, **Miriam** **Jerop Chumo** (the Claimant below). 5. The Record of Appeal reveals that on 20th August, 2024, **Miriam Jerop Chumo** filed a Statement of Claim in **the Small Claims Court** against **James M. Mbele**. Her claim was for the recovery of Ksh 725,000. She asserted that she had entered into a verbal agreement with **James M. Mbele** on 18th Februar, 2023. That he allegedly "duped" her into an investment project that failed to materialize. Service of the claim was effected on **James M. Mbele** via *WhatsApp* messaging to the telephone number 0743090967. **James M. Mbele** failed to enter an appearance or file a response within the prescribed timelines. Consequently, on 3rd October, 2024, the Trial Court entered an *ex-parte* default judgment and issued a decree for Ksh 755,000 inclusive of costs. 6. On 7th October, 2024, **Miriam Jerop Chumo** moved to execute the decree by filing a Garnishee Application. A Garnishee Order Nisi was issued on 19th November, 2024, attaching **James M. Mbele** bank accounts at Stanbic Bank. The order was served on the Bank's Mombasa branch on 29th November, 2024, with a hearing date set for 3rd December, 2024. Due to an internal administrative oversight, the Bank inadvertently diarized the hearing date as 13th December, 2024 and hence failed to attend Court. In their absence, on 3rd December 2024, the Adjudicator made the Garnishee Order Absolute. 7. This triggered a wave of applications. On 13th December, 2024, the Bank filed an application to set aside the Garnishee Order Absolute. It pleaded and demonstrated that **James M. Mbele** accounts contained either nil or negligible balances. That his primary account was strictly applied to service active loan liabilities to the Bank. On 20th January, 2025, **James M. Mbele** also appeared and filed an urgent application to set aside the *ex-parte* default judgment. He deponed that service via *WhatsApp* was defective because it was sent to his secondary, inactive line 0743090967 rather than his active business line 0116330665. **James M. Mbele** annexed a draft defence raising substantive triable issues. He asserted that the Claimant had voluntarily purchased Bitcoins from him to participate in an independent cryptocurrency platform known as *"NovaTech Cryptocurrency Investment Programme"*, which subsequently collapsed through no fault of his. 8. By a ruling delivered on 31st January, 2025, the Learned Adjudicator dismissed **James M. Mbele’s** application to set aside the *ex-parte* judgment. The Learned Adjudicator held that service via *WhatsApp* to a registered secondary line was proper. Crucially, the Learned Adjudicator declined to evaluate the merits of the draft defence, and whether it raised triable issues. The Learned Adjudicator opined that setting aside the *ex-parte* judgement would lead to an extension of time contrary to **Section 34(1) of the Small Claims Court Act.** The Sectionmandates the **Small Claim Court** to resolve disputes within 60 days. The Learned Adjudicator concluded that the interest of justice was better served by upholding the finality of the *ex-parte* judgment to respect statutory timelines. 9. Conversely, on 28th February, 2025, the Learned Adjudicator delivered a ruling allowing the Bank’s application. The Learned Adjudicator set aside the Garnishee Order Absolute and granted the Bank leave to file its response within 7 days. The Bank duly complied and filed its Replying Affidavit on 6th March, 2025. The parties then took directions and exchanged written submissions on the merits of the main Garnishee Application. 10. However, on 2nd April, 2025, when the matter came up for a Ruling on the main Garnishee Application, the Learned Adjudicator delivered a Ruling that has triggered this Appeal. Instead of determining the Garnishee Application on its merits, the Learned Adjudicator revisited the Bank's application dated 13th December, 2024. Despite the fact that the Learned Adjudicator had already heard and allowed the same on 28th February, 202, the Court proceeded to dismiss it. The Learned Adjudicator claimed the Trial Court was *functus officio* on account of **James M. Mbele’s** pending appeal at the High Court. The Trial Court hence advised the Bank to seek relief in the appellate forum. 11. **Stanbic Bank** has filed a Memorandum of Appeal that raises the following grounds; * 1. *That the Learned trial Magistrate erred in law and fact by unilaterally and without any invitation by the parties dismissed the Appellant's application dated 13th December, 2024 for the reasons that it is functus officio and that there is a pending appeal by the 2nd Respondent Number HCCOMMA/E002 of 2025 at the High Court wherein the Appellant could seek any further orders. This was a serious misdirection on the part of the Learned trial Magistrate as the aforesaid pending appeal had been filed by the 2nd Respondent as against the 1st Respondent and not the Appellant.* 2. *That further to the preceding paragraph, the Learned trial Magistrate had already delivered her ruling on the Appellant's application dated 13th December, 2024 vide her ruling of 28th February, 2025 when the 2nd Respondent's appeal was filed.* 3. *That the Learned trial Magistrate erred in law and fact by unilaterally and unprocedurally dismissing the Appellant's application dated 13th December. 2024 yet it had previously allowed that application vide the ruling the Learned trial Magistrate delivered on 28th February, 2025. The Learned trial magistrate had in the aforesaid ruling set aside the decree order absolute issued on 3rd December, 2024 and granted the Appellant leave to file its response to the garnishee application dated 7th October, 2024 within 7 days. The dismissal of the Appellant's application dated 13th December, 2024 was therefore unfathomable, unconscionable and a serious misdirection in law and fact on the part of the trial court.* 4. *That the Learned trial Magistrate in her ruling dated 2nd April, 2025 at the title styled 'Background' deliberately omitted to mention that the Learned trial Magistrate had previously already heard and determined the application dated 13th December, 2024 vide the Learned trial Magistrate ruling dated 28th February. 2025.* 5. *That the Learned trial Magistrate erred in law and fact by unilaterally dismissing the Appellant's application dated 13th December, 2024 vide its ruling dated 2nd April, 2025 yet it did not give the parties the opportunity to be heard.* 6. *That the Learned trial Magistrate erred in law and fact by unilaterally, undesirably and without the input nor invitation of the parties converted the hearing of the application dated 7th October, 2024 to a hearing of the application dated 13th December, 2024 which application had already been heard and determined. In effect the Learned trial Magistrate at her own invitation descended into the arena of litigation by crafting an appeal of her ruling dated 28th February, 2024, raising the issue to be determined and then proceeded to hear and render her ruling dated 2nd April, 2025.* 7. *That the Learned trial Magistrate erred in law and fact by failing to deal with the application dated 7th October, 2024 despite the parties taking hearing directions from the court on 18th March, 2025 on the disposal of that application which directions culminated with the fixing of that application for ruling yet the Learned trial Magistrate decided to unprocedurally, unpleasantly and misguidedly convert the hearing of the application dated 7th October, 2024 to an appeal of the Learned trial Magistrate's ruling dated 28th February, 2025.* 8. *That the Learned trial Magistrate erred in law and fact by failing to deal with the application dated 7th October, 2024 yet there was no stay of proceedings barring the Learned trial Magistrate continued activity in the matter.* 12. The Bank seeks the following reliefs in this Appeal; * + 1. *The Appeal be allowed and the finding by the Hon. Nkurrunah Namunyak RM in the ruling that she delivered on 2nd April, 2025 in Malindi SCCCOMM No. E080 of 2024 dismissing the Appellant's application dated 13th December, 2024 be set aside.* 2. *That this Honourable Court be pleased to affirm and uphold the ruling of the Learned trial Magistrate that was delivered on 28th February, 2025 which allowed the Appellant's application dated 13th December, 2024.* 3. *That this Honourable Court be pleased to allow the Appellant's application dated 13th December, 2024 as prayed therein.* 4. *The Appellant be awarded the costs of the Appeal and the costs in the subordinate Court.* 13. On the other hand, **James M. Mbele** relies on the following grounds in the consolidated Appeal; * 1. *THAT the Adjudicator erred in law by failing to set aside the ex parte Judgment after only considering the question of whether service was proper.* 2. *THAT the Adjudicator erred in law by failing to consider whether the draft Defence raises triable issues warranting setting aside of the ex parte Judgment.* 3. *THAT the Adjudicator erred in law by confining herself to the set timelines of determining suits in the Small Claims Court at the expense of considering the issues raised in the draft Defence.* 4. *THAT the Adjudicator erred in law by failing to exercise its discretion to set aside the ex parte Judgment on wrong principles of the Law.* 5. *THAT the Adjudicator's decision occasioned a manifest miscarriage of Justice.* 14. The following reliefs were sought in that Appeal; * + - 1. *THAT the Appeal be allowed;* 2. *THAT the Ruling of the Honourable Nkurrunah Namunyak (Adjudicator) in Malindi Small Claims Court Commercial Case No. SCCCOMM/E080 of 2024 delivered on 31st January 2025 be set aside and/or varied, and all the consequential Orders made thereon be vacated and replaced with the Orders of this Honourable Court;* 3. *THAT this Honourable Court be pleased to set aside and/or vacate the ex parte Judgment dated 3rd October 2024, the subsequent Decree and any consequential Orders therefrom;* 4. *THAT the Appellant be allowed to Defend the Claimant's suit and the same be determined on merit;* 5. *THAT the Appellant be granted Leave to file its Defence out of time;* 6. *THAT the Claimant's case be re-opened for Cross-Examination of the Claimant and her witnesses;* 7. *THAT the typed proceedings of the Formal Proof Hearing of 1st October 2024 be availed to the Appellant;* 8. *THAT costs of this Appeal be awarded to the Appellant.* **Issues For Determination** 15. The Court has taken note of the Memoranda of Appeals, the Record of Appeal, as well as the submissions by Counsel. The Court frames the following issues for determination; (a) *Whether the statutory 60-day timeline under* ***Section 34(1) of the Small Claims Court Act*** *strips the Trial Court of its judicial discretion to set aside a default ex-parte judgment or Garnishee order absolute.* *(b) Whether the Trial Court erred in law by failing to evaluate the presence of triable issues in the draft Response to Statement of Claim when deciding an application to set aside a default judgment.* *(c) Whether a Trial Court can revisit, reverse, and dismiss a civil application that has already been heard and determined by a previous ruling of the same Court.* **Analysis** 16. This Court notes that pursuant to **Section 38 of the Small Claims Court Act**, an appeal to the **High Court** from a **Small Claims Court** can only be maintained on points of law and not on matters of fact. Guided by this strict statutory boundary, and having fresh regard to the consolidated record, this Court proceeds to consider the issues distilled for determination. ***(a) Whether the statutory 60-day timeline under Section 34(1) of the Small Claims Court Act strips the Trial Court of its judicial discretion to set aside a default ex-parte judgment or Garnishee order absolute.*** 17. In the Ruling dated 31st January, 2025, the Learned Adjudicator adopted a blunt, unyielding approach to the law. The Trial Court held that because **Section 34(1) of the Small Claims Court Act** requires all matters to be heard and determined within 60 days, it would be a violation of the law to set aside an *ex-parte* judgment after that window has elapsed. It opined that doing so would cause an impermissible delay. 18. With tremendous respect to the Learned Adjudicator, this is an erroneous interpretation of the law. **Section 34(1) of the Act** is an administrative and procedural directive designed to promote the expeditious disposal of cases. In the considered opinion of this Court, it was never intended to serve as a guillotine to butcher the fundamental right to a fair hearing enshrined under **Article 50(1) of the Constitution**. If that were to be the case, this Court would be bound by the very same Constitution to strike it down. Any provision of law that runs foul of the Constitution would face a Constitutional guillotine. It cannot be allowed to stand for reasons that it would be null and void to that extent. 19. Equity, fairness and natural justice dictate that statutory timelines cannot be used to lock out a party who steps forward with an excusable explanation for delay and begs to be heard on the merits of a claim. The power of a Trial Court to set aside its own default or *ex-parte* decisions is a residual, inherent power codified under **Section 43 of the Small Claims Court Act**. It is an exercise of judicial discretion that cannot be fettered by automated timelines. **Section 43 of the Act** states as follows; **“43. Setting aside of orders** **The Court may on the application of any party to the proceedings set aside any of its orders and make such further orders as it thinks just.”** 20. Where an Adjudicator finds that a matter cannot practically or fairly be concluded within the strict 60-day window due to the necessity of setting aside a default judgment, the correct position in law is not to slam the door of justice in the face of the applicant. The High Court has grappled with this issue with some Judges leaning towards enforcing the strict timelines, thus divesting the Trial Court of Jurisdiction. This Court adopts a flexible, more practical and purposive approach. That the Trial Court cannot purport to deny, wish away or restrict a right and or a relief to setting aside donated by the law. **Section 43** is very clear that a party can approach the Court for a setting aside order. The Trial Court cannot harm string itself on the grounds of the strict interpretation of the 60 days timelines. That would lead to an injustice. What if even on the face of it, the Applicant was not served, because he was out of the Country. Is the Learned Adjudicator precluded from setting aside the exparte Judgement *ex debito justitiae?* This would lead to a legal absurdity where a Court uses the very same law to deny a party a right or a relief granted by the very same law. Going even further, what if a Claimant mischievously and or maliciously served air pleadings upon a Respondent and obtains an exparte judgement? Would the Trial Court allow such a Judgement to stand merely on the grounds that 60 days have lapsed? What message would the Court be sending to parties? Would not the Court be seen to be aiding or abetting an illegality yet a Court of law is mandated to do justice at all times? 21. The Court of law has to navigate between the provisions of **Section 34** and **43** in such a manner that it gives purposiveness and real meaning to the law. The law has to serve the people. It is not for the people to serve the law. Afterall the law was made by man for man. The law did not create itself to be its own master. As long as such situations arise, it falls upon the High Court to make sense and give real meaning to the law. This Court lends its voice to that of other Judges of similar persuasion as seen in the cases of **[Crown Beverages Limited v MFI Document Solutions Limited [2023] KEHC 58 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/kehc/2023/58/eng%402023-01-17);** [**SGA Guarding Kenya Limited alias SGA Kenya Limited v Manipal International Printing Press Limited [2025] KEHC 13830 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/13830/eng%402025-10-03); [**Maghanga v Alias [2025] KEHC 19207 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19207/eng%402025-12-01)and [**Biosystems Consultants v Nyali Links Arcade [2023] KEHC 21068 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/kehc/2023/21068/eng%402023-07-31)**.** 22. This Court is of the considered opinion and holds that the Trial Court erred by misdirecting itself and by holding that the 60-day timeline barred it from entertaining the merits of the application to set aside. ***(b) Whether the Trial Court erred in law by failing to evaluate the presence of triable issues in the draft Response to Statement of Claim when deciding an application to set aside a default judgment.*** 23. In dealing with **James M. Mbele’s** application to set aside the *ex-parte* judgment, the Trial Court confined its attention entirely to whether the initial service via **WhatsApp** was technically regular. Finding that it was regular, it ended its inquiry there. 24. This is a reversible error of law. Our jurisprudence establishes that even where an *ex-parte* default judgment is perfectly regular, the Court has a secondary and independent duty to look at the draft Response to Statement of Claim presented by the Applicant. The Court must look inside the defence to see if it raises *"triable issues"*, meaning a *prima facie* defence that deserves a day in Court for full adjudication. 25. In ***Tree Shade Motors Limited v D.T. Dobie And Company (K) Limited & Another [1998] KECA 40 (KLR)***, the Court of Appeal held that a Trial Court is obliged to consider the draft defence to see if it raises a reasonable response to the claim. If it does, the Defendant must be granted leave to defend so that justice can thrive on merit rather than default. 26. The draft Response to Statement of Claim on the face of it raises bonafide triable issues. **James M.Mbele** pointed out that the claim did not describe the specific terms of the purported verbal contract or how a breach arose. More importantly, he demonstrated that the Claimant had voluntarily entered into a volatile cryptocurrency investment platform *(“NovaTech Cryptocurrency Investment Programme")* and purchased Bitcoins through him. He raised a prima facie argument that the subsequent loss was caused by the global collapse of that corporate platform and not through any fraudulent misrepresentation on his part. 27. By completely failing to look at this the draft Response to Statement of Claim, and by refusing to apply the timeless principles in ***Patel vs. E.A Cargo Handling Services Ltd (1974) E.A*** and **Maina vs Mugiria (1983) KLR** the Trial Court exercised its judicial discretion on wrong principles of law. It therefore occasioned a manifest miscarriage of justice. **James M. Mbele** was condemned to lose a substantial sum of Ksh 725,000 purely on a procedural default without the Trial Court looking at his side of the story. This cannot be condoned. ***(c) Whether a Trial Court can revisit, reverse, and dismiss a civil application that has already been heard and determined by a previous ruling of the same Court.*** 28. **Stanbic Bank’s** appeal targets the Ruling delivered on 2nd April, 2025. The record shows that the Learned Adjudicator allowed the Bank’s application on 28th February, 2025, setting aside the Garnishee Order Absolute. Yet, on 2nd April, 2025, the same Learned Adjudicator delivered a second ruling on the exact same application and dismissed it. 29. This is a fatal legal misdirection. The doctrine of ***functus officio*** is a foundational principle of finality in our legal tradition. It dictates that once a Court has heard an application and rendered its final, formal decision, its adjudicative authority over that specific problem is fully spent and exhausted. The decision-maker cannot review, vary, or reverse their own decision unless a formal application for review is moved by the parties under Section 80 of the Civil Procedure Act. 30. The Court of Appeal in the case of ***[Telkom Kenya Ltd v Ochanda (Suing on His Own Behalf and on Behalf of 996 Former Employees of Telkom Kenya Ltd) [2014] KECA 600 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/keca/2014/600/eng%402014-05-09)*** stated with absolute clarity that a merit-based decisional re-engagement with a case or application that has already been determined is a complete nullity. By crafting what was effectively an uninvited appellate review of the Trial Court’s own ruling of 28th February, 2025, the Learned Adjudicator acted entirely outside the Court’s statutory mandate. The Ruling of 2nd April, 2025 is bad in law, is an absolute nullity, and must be quashed. 31. The Small Claims Court was established to achieve speed and accessibility, but speed must never become the enemy of substantive justice. Automated adherence to timelines must yield when it directly threatens a party’s right to be heard on merit. In this consolidated matter, the Trial Court fell into profound legal errors by abdicating its duty to evaluate triable issues and by unprocedurally reversing its own determined Ruling. Both appeals are highly meritorious and must succeed. 32. Having set aside the exparte Judgement in the Court below, it means that the parties have to start all over again. This removes the Garnishee Bank from the proceedings in the meantime. It is only fair that suit proceeds in the Court below before another Learned Adjudicator other than the one who initially heard this matter. 33. As to costs, the same lie at the discretion of this Court and ordinarily follow the event unless otherwise stated. This Court taking into consideration that the errors arose from misdirection on procedure and exercise of discretion does not condemn any party to bear any costs. **Determination** 34. The consolidated Appeals are allowed in the following terms; * + - 1. *THAT the Ruling of the Honourable Nkurrunah Namunyak (Adjudicator) in Malindi Small Claims Court Commercial Case No. SCCCOMM/E080 of 2024 delivered on 31st January, 2025 be and is HEREBY set aside and/or varied, and all the consequential Orders made thereon be and are HEREBY vacated and replaced with the Orders of this Honourable Court as follows;* 2. *THAT this Honourable Court HEREBY sets aside and or vacates the ex parte Judgment dated 3rd October, 2024, the subsequent Decree and any consequential Orders therefrom;* 3. *THAT the Appellant be and is HEREBY allowed to defend the Claimant's suit and the same be determined on merit;* 4. *THAT the Appellant* ***James M. Mbele*** *be and is HEREBY granted leave to file his Response to Statement of Claim out of time and the Response to Statement of Claim be filed and served within the next Seven (7) days from the date of this Judgement;* 5. *THAT the Claimant's case be re-opened for Cross-Examination of the Claimant and her witnesses;* 6. *THAT the finding by the* ***Hon. Nkurrunah Namunyak RM*** *in the Ruling delivered on 2nd April, 2025 in Malindi SCCCOMM No. E080 of 2024 dismissing the Appellant's application dated 13th December, 2024 is HEREBY quashed, vacated and set aside.* 7. *THAT this Honourable Court HEREBY affirms and upholds the Ruling of the Learned Trial Magistrate that was delivered on 28th February, 2025 which allowed the Appellant's application dated 13th December, 2024.* 8. *THAT as the exparte Judgement has been set aside, the garnishee Order Absolute made on 3rd December, 2024 is HEREBY set aside and vacated.* 9. *THAT the Garnishee* ***Bank Stanbic Bank of Kenya Limited*** *is HEREBY excused from further proceedings in* ***Malindi SCCCOMM No. E080 of 2024*** *pending further hearing and determination of that Claim.* 10. *THAT each party to bear its or his/her own costs of this Appeal.* 35. It is so ordered. **DATED, SIGNED AND DELIVERED AT MALINDI THIS 2ND DAY OF JULY, 2026** **NJOROGE BENJAMIN K.** **JUDGE** **In the presence of:** Mr. Wafula P.S. for the Appellant. N/A for Mr. Ragira for the 1st Respondent. Miss Karuga holding brief for Mr. Wainaina for the 2nd Respondent. Mr. John Paul - Court Assistant