https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/238

Stima DT Sacco Society Limited v Kamau (Tribunal Case E401 of 2023) [2026] KECOPT 238 (KLR) (28 May 2026) (Ruling) Neutral citation: [2026] KECOPT 238 (KLR) Republic of Kenya In the Cooperative Tribunal Tribunal Case E401 of 2023 J Mwatsama, Ag Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members May 28, 2026 Between Stima DT Sacco Society Limited Claimant and Christine Wanjiru Kamau Respondent Ruling 1.The Notice of Motion Application dated 2nd April, 2025 is brought under Article 159 of the Constitution of Kenya 2010, Sections 1A, 1B and 3A of the Civil Procedure Act Cap. 21 Laws of Kenya seeking among others:1.Spent2.That pending hearing and determination of the application inter-partes, the Honourable Tribunal be pleased to stay the execution of the Judgement delivered on 27th February 2025 and any other consequential orders or actions taken thereof.3.That the Honourable Tribunal be pleased to set aside in entirety the Judgement delivered on 27th February 2025 and other consequential orders made thereto in the matter.4.That the Honourable Tribunal be pleased to grant leave to the Applicant to file a Defence and Counter Claim in response to the Statement of Claim dated 3rd May 2023. 2.The Application was supported by the Affidavit of the Defendant on the grounds that:i.The Honourable Tribunal is clothed with wide and unfettered discretion to issue the orders sought.ii.On 13th March 2025, the Applicant came to be aware of a Notice of Entry of Judgement dated 12th March 2025 to the effect that a Judgement dated 27th February 2025 had been entered against her at the Co-operative Tribunal.iii.As per the Notice, Judgement has been entered against the Respondent/ Applicant for a sum of Kshs. 4,278,081.00 together with costs of the claim and interest at Tribunal rates from the date of filing the claim.iv.Unfortunately, the Respondent/ Applicant was not aware of the existence and pendency of the suit until she received the Notice of Entry of Judgement.v.As per the affidavits of service filed in the matter as proof of service of the Statement of Claim and the other documents, the Claimant contends that service was effected on the Respondent/Applicant via email. However, due to technological challenges and her email being full, the Applicant did not receive those emails since her email had issues and was not functional at the time.vi.The failure to enter a defence and participate in the proceedings was therefore not deliberate but was occasioned by technological challenges which were beyond the Applicant's control.vii.It is against the principle of natural justice and the right to a fair hearing as espoused under the Constitution for a party to be condemned unheard.viii.The Respondent/Applicant is highly aggrieved by the Tribunal's decision and intends to file a Defence and counterclaim against the Claim on its merits to enable the Tribunal appreciate her version of events before making a determination on the claim.ix.The Applicant therefore seeks that the default Judgement be set aside and she be granted leave to file her defence so that she can get an opportunity to be heard on the merits of the case.x.To also prevent a miscarriage of justice in the form of execution of the Judgement for which the Respondent/ Applicant did not participate in, the Respondent/ Applicant also seeks that the Judgement and all consequential orders and actions arising therefrom if any be stayed. pending hearing and determination of the application.xi.Noting the entry of Judgement against the Respondent/ Applicant, there is a high likelihood of imminent execution of the said Court Decree against her and she stands to suffer an irreparable injury and substantial loss rendering her Application nugatory unless the orders sought are granted.xii.The Application has been brought timeously and without inordinate delay after the Applicant through her advocates on record established the position of the matter at the Honourable Tribunal.xiii.The Claimant will not suffer any unfair prejudice if the orders sought are granted since it shall have an opportunity to respond to the pleadings filed by the Applicant and effectively litigate the matter with the participation of all the parties.xiv.The balance of convenience favors the granting of the orders sought to facilitate the exercise of the right to a fair trial and prevent miscarriage of justice. 3.This Tribunal on 7th April,2025 gave directions for the Application to be served, with the Claimant given 14 days to file a response. The Claimant through their Credit Officer filed a Replying Affidavit dated 16th July, 2025 stating among others:1.That they are strongly opposed to the Respondent’s Application as it is fatally defective, and an abuse of the Court process and does not meet the required threshold for granting of the orders sought.2.That the Application by the Respondent was filed in bad faith with a clear intention of curtailing and frustrating the Claimant's right of realizing the fruits of their Judgment.3.That the Respondent was properly served and she failed to enter appearance and or file a response within the timelines stipulated.4.That the Respondent had more than 30 days to enter appearance and file a Defence and she failed, and due to that failure, the Claimant requested for judgement 220 days later5.That the notice of entry of judgement was filed through the same email the Respondent was served with the Statement of Claim (chriswatenga@gmail.com)6.That the Respondent/Applicant has not provided sufficient grounds to warrant the grant of the orders sought and has therefore not met the threshold for granting the orders sought in her application.7.That the Respondent has not disowned the email address chriswatenga@gmail.com used by the Claimants to serve her with the pleadings in this matter which clearly means that the Claimant was properly served by the Respondent with all the documents filed before the Honourable Tribunal in accordance with the law.8.That the Respondent's application is an abuse of the Court process and is clearly meant to delay the Claimant from accessing the fruits of their successful judgment. This tribunal should not delay the Claimant any further.9.That the Claimant stands to suffer great prejudice if the application is to be allowed by this Honourable Court because the amount the Claimant seeks to recover in this matter is a product of a loan taken by the Respondent sometime on or about 23rd of March 2018 and allowing the application will further delay the same to the detriment of the Claimant. 4.The Respondent later filed a Further Affidavit dated 3rd March, 2026 stating among others:1.That his Application dated 2nd April 2025 was not filed in bad faith and neither is the intention to curtail and frustrate the Claimant, but rather, the Application was meant to ensure achievement of the right to a fair hearing as espoused by the provisions of Article 50 of the Constitution and the rules of natural justice.2.That the Claimant completely ignored in serving the Respondent with the crucial notices which would have perhaps brought the issue to her attention so that she could prepare and file her defence in the matter.3.That the true position of the matter is that the Claimant previously took steps to recover the purported outstanding sums from including selling the property that was charged to secure the payment of the loan and recovering all the account balance in the Respondent’s account, and if granted leave by the Honourable Tribunal to file a defence in response to the claim, the Respondent shall have the opportunity to demonstrate to the Court why the Claim is unmerited, as the Claimant has recovered the outstanding loan balance through other means. 5.The Respondent also filed a Draft Statement of Defence stating among others that the property offered as security was not sold to the highest bidder and was grossly undervalued, and if the property were to fetch its true market value, the Claimant would have recouped the loan with an additional balance to be refunded to the Respondent. Submissions 6.The Applicant filed his submissions dated 6th March, 2026 stating among others:I.That the technological challenges were beyond the Respondent's control at the time and were not deliberate since the Respondent could not have known that there were documents sent to her on email. That the Claimant had other contact details of the Respondent including her phone number and Post Office Box, but they did not make any effort to use of any of those other means of contacting the Respondent even after establishing that the email has not been acknowledged or responded to.II.That the annexed Statement of Defence raises triable issues which are worthy of consideration by the Honourable Tribunal, like questions on the filing of the present claim in spite of the loan agreement providing for provision of a security which was grossly undervalued and sold out. 7.The Claimant filed their submissions dated 31st March, 2026 stating among others:a.That the Application by the Respondent lacks merit, is incompetent and fatally defective, and an abuse of the Court process and does not meet the required threshold for granting the orders sought.b.That the Application by the Respondent was clearly filed in bad faith with a clear intention of curtailing and frustrating the Claimant’s right of realizing the fruits of their successful judgment.c.That none of the reasons advanced by the Respondent warrant the setting aside of the Judgment in this matter, that the reasons advanced by the Respondent point to an indolent and negligent litigant who only chose to enter appearance once she could no longer hide from justice. The Application by the Respondent is clearly aimed at frustrating the Claimant’s right to the fruits of their judgment. 8.We have considered the Application, the Replying Affidavit, Further Affidavit and annexed draft Statement of Defence filed and the Written Submissions of both parties, and the main question remaining for determination is as to whether the annexed draft Defence raises triable issues to persuade this Tribunal to set aside in entirety the Judgement delivered on 27th February 2025 and other consequential orders made thereto Whether the annexed draft Defence raises triable issues to persuade this Tribunal to set aside in entirety the Judgement delivered on 27th February 2025 and other consequential orders made thereto? 9.It is important to state for the record that under the Civil Procedure Rules (Order 5, Rules 22B and 22C), service of court documents via email is a legally recognized and accepted practice and not an alternative form of service. This in essence mean that it is immaterial whether a party knows the postal address of another party or their physical location of where they live or work, once a party is served on email and there is proof of delivery of that email, that service is proper and the subsequent judgement is regular. As such, we are not persuaded by the argument that the Claimant had the obligation to serve the Respondent physically, because they had served the Respondent physically before. 10.Be as it may, even if the judgement is regular, still in determining whether to set aside an ex-parte judgment or not, a Tribunal is additionally required to consider whether a party has annexed a defence, and whether that annexed defence raises triable issues. The High Court in the case of Tree Shade Motors Ltd v D.T. Dobie & Another (1995-1998) 1 EA 324 made it clear that:“Even if service of summons is valid, the judgment will be set aside if the defence raises triable issues. Where a draft defence was tendered together with an application to set aside a default judgment, the court hearing the application was obliged to consider if it raised a reasonable defence to the plaintiff's claim. Where the defendant showed a reasonable defence on the merits, the court could set the ex-parte judgment aside.” 11.Several Court decisions define triable issues as those issues which raise a prima facie defence and which naturally should go to trial for adjudication. In this particular case, the Respondent has raised as triable issue:i.The issue of the claim being unmerited, as the Claimant has recovered the outstanding loan balance through other means.ii.The issue of the security sold being undervalued and not being sold competitively to attract the right price 12.We are advised by the Court of Appeal in Olympic Escort International Co. Ltd. & 2 Others vs Parminder Singh Sandhu & Another [2009] eKLR, as follows on what to look for once triable issue(s) are raised;“It is trite that, a triable issue is not necessarily one that the defendant would ultimately succeed on. It need only be bona fide.” 13.We are persuaded that the two issues raised concerning recovery of the loan through other means and the sale of the security are worth looking at in a trial, and given that setting aside a regular judgement is an act of discretion, we have considered everything including the conduct of both the Claimant and the Respondent and it is our considered decision to exercise discretion to allow the matter be heard on merit. 14.Final Ordersi.The Notice of Motion Application dated 2nd April, 2025 succeeds.ii.The Judgement entered against the Respondent on 27th February, 2025 is set aside and leave is granted to the Respondent to defend the suit.iii.The Claimant is awarded throw away costs of Kshs. 30,000/= to be paid before pre-trial.iv.Respondent to file and serve Statement of Defence and Witness Statement 21 days from today.v.Mention for pre-trial on 29.7.2026. Notice to issue. RULING DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 28TH DAY OF MAY, 2026.HON. J. MWATSAMA AG. CHAIRPERSON SIGNED 28.5.2026HON. BEATRICE SAWE MEMBER SIGNED 28.5.2026HON. FRIDAH LOTUIYA MEMBER SIGNED 28.5.2026HON. MICHAEL CHESIKAW MEMBER SIGNED 28.5.2026HON. P. AOL MEMBER SIGNED 28.5.2026Mutai Court AssistantMachogu Advocate for the ClaimantAmwai & Raingo Advocate for the Respondent- No AppearanceHON. J. MWATSAMA AG. CHAIRPERSON SIGNED 28.5.2026Machogu:We request for copies of the ruling and certified copies of proceedings.Tribunal Orders:1. Claimant to make formal request of proceedings.2. Leave to appeal granted.HON. J. MWATSAMA AG. CHAIRPERSON SIGNED 28.5.2026