[2021] KECPT 551 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.651 OF 2018

WAKANDERA SACCO LIMITED...................................CLAIMANT

VERSUS

GEOFFREY NJUNGE WAKABU.................................RESPONDENT

RULING

Vide the Application dated 29. 10. 2019, the Respondent has moved this Tribunal seeking for Orders inter alia:

a. That the interlocutory judgment entered on 11. 4.2019 and the consequential proceedings be set aside and the Respondent granted leave to file a Defence; and

b. Costs be provided for.

The Application is based on the grounds on its face and the Supporting Affidavit sworn by Respondent on even date( 29. 10. 2019).The Claimant has opposed the Application vide the Replying Affidavit sworn by Joseph Kamau Mungai, its Chairman on 10. 3.2020.

Vide the directions given on 24. 8.2020, the Application was canvassed by way of written submissions. The Respondent filed his submissions on 1. 2.2021 while the Claimant did not file its submissions.

RESPONDENT’S CASE

Vide the instant Application, the Respondent has sought for the default judgment entered on 10. 4.2019 to be set aside on the grounds that he was never served with Summons to enter Appearance. That the Affidavit purporting to confirm service of the said summons is false and that its deponent should be cross-examined. That he has a defence which raises triable issues.

CLAIMANT’S CASE

On its part, the Claimant has opposed the application on the ground that the Respondent was duly served with Summons to enter Appearance. That further, the Respondent engaged the Claimant on negotiations whilst knowing that this suit had been instituted.

ISSUES FOR DETERMINATION

We have framed the following issues for determination:

a. Whether the Respondent has established a proper basis to warrant the setting aside of the default judgment entered on 10. 4.2019;

b. Who should meet the cost of the Application?

SETTING ASIDE OF DEFAULT JUDGMENT

We have jurisdiction to set aside a default judgment by dint of Order 10 Rule 11 of the Civil Procedure Rules. The Rule provides thus:

“ Where judgment has been entered under this Order, the court may set aside or vary such judgment and any consequential Decree or Order upon such terms as are just.”

In the case of Patel – vs- East Africa Cargo Service Limited (1974)EA 75, the Court underscored this provision in the following terms:

“ The main concern of the court is to do justice to the parties and the court will not impose conditions on itself to fetter the wide discretion given to it by the Rules.”

Before we can exercise our jurisdiction under Order 10 Rule 11 above, we firstly have to ascertain whether the default judgment is a regular or irregular one. If the Judgment is an irregular one, then we will set it aside ex debito justiciae.

This was the holding in the case of K- Rep Bank Limited -vs- Segment Distributors Limited [2017] eKLR.

The court in the case of Fidelity Commercial Bank Limited – vs- Owen Amos Ndungu & Another, HCC.NO. 241/1998 gave a distinction between a regular and irregular judgment as follows:

“ A distinction is drawn between regular and irregular judgments. Where summons to enter Appearance has been served and there is default in entry of Appearance the ex parte judgment entered in default is regular. But where the exparte judgment sought to be set aside is obtained either because there was no proper service or any service at all, of the summons to enter Appearance, such judgment is irregular and the affected Defendant is entitled to have it set aside as of right”

Where the default judgment is regular, then the Tribunal has to consider if the draft Defence filed with the Application raises triable issues. This was the holding in the case of James Kanyiita Nderitu & Another - vs- Marios Philotas Ghikes & Another [2016]eKLR. In the pertinent part, the court held thus:

“ In a regular default judgment, the Defendant will have been duly served with summons to enter appearance, but for one reason or another, he failed to enter appearance or to file a Defence, resulting in default judgment. Such a Defendant is entitled under Order 10 Rule 11 of the Civil Procedure Rules to move to court to set aside the default judgment and to grant him leave to defend the suit. In such a scenario, the court has unfettered discretion in determining whether or not to set aside the default judgment and will take into account such factors as to the reason as for the failure of the Defendant to file his memorandum of Appearance, or defence, as the case may be, the length of time that has elapsed since the default judgment was entered; whether the intended Defence raises triable issues, the respective prejudice each party is likely to suffer whether on the whole, it is in the interests of justice to set aside the default judgment.”

We look as and/or examine the foregoing principles thematically as follows:

REASONS FOR FAILURE TO FILE A MEMORANDUMOF APPEARANCE OR DEFENCE.

It is the Respondent’s case that he was not served with Summons to enter Appearance. That the Affidavit of Service sworn by Leonard Mbatha Makau is full of falsehoods and therefore seeks leave to cross-examine him on the contents of the said Affidavit.

The Claimant did not make any specific response on this contention. It however accuses the Respondent of originating the instant Application whilst actively engaging them on negotiation regarding the mode of settling the loan.

We have perused the Affidavit of service sworn by Leonard Mbatha Makau on 28. 3.2019. Much as the Respondent denies service of Summons to enter Appearance, we are convinced that he was personally served with Summons to enter Appearance and therefore there is no need for an order for cross examination of the deponent of the said Affidavit.

DRAFT DEFENCE

We have perused the Respondent’s Statement of Defence particularly paragraph 5 thereof. The Respondent denies default in repaying the loan. He contends that by the time the Claimant filed this claim, he had paid a sum of Kshs.95,800/=. That the Claimant has failed to disclose this amount. What we discern from this assertion is that the Respondent denies even defaulting in repayment of the loan. The question that abounds is whether the Respondent is indebted to the Claimant. This is an issue which can only be determined upon adduction of evidence during trial.

To this end and on this basis alone, we find that the Draft Statement of Defence raises triable issues.

CONCLUSION

The upshot of the foregoing is that we find merit in the Respondent’s Application dated 29. 10. 2019 and hereby allow it based on the following terms:

a. That he Respondent to file and serve a statement of Defence, witness statement and list and bundle of documents within 14 days herein;

b. The Claimant to file a Reply to Defence, supplementary witness statements and documents within 14 days of service,

c. Mention to confirm compliance and fixing a hearing date on ...................................

d. Costs in the cause.

Ruling signed, dated and delivered virtually this 6th day of May, 2021.

Hon. B. Kimemia Chairperson ...................................

Hon. J. Mwatsama Deputy Chairperson ....................................

Mr. P. Gichuki Member ....................................

Tribunal Clerk .............................