A.C.K Cura Parish Sacco Society Limited v Lawrence Kariuki Muchene [2020] KECPT 119 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 12 OF 2019

A.C.K CURA PARISH SACCO

SOCIETY LIMITED.......................................................CLAIMANT

VERSUS

LAWRENCE KARIUKI MUCHENE.....................RESPONDENT

RULING

What is before us for consideration and determination is the Respondent‘s Application dated 31. 7.2019. It seeks, in the main, the following orders;

1. That this application be certified urgent, service be dispensed with and heard exparte in the 1st instance.

2. That pending the hearing and determination of this application inter-parties and pending the hearing of this suit, there be a temporary stay of the judgment and decree issued on 25th April, 2019, and all consequential orders thereof.

3. That the Honorable Court be pleased to aside the judgment and decree issued on 25th April, 2019 against the Respondent/Applicant and the Respondent be allowed to defend this suit.

4. That costs be provided for.

The Application is supported by the grounds on its face and the affidavit of Lawrence Kariuki Muchene sworn on even date that is 31. 7.19.

It is the Respondent’s case that the Claimant served him with the Statement of Claim and Summons yet it has not refunded him his shares. That he joined the Claimant and applied for a loan of Kshs.50,000/=. That he repaid the said loan until February, 2015 when stalled and that he did not know its whereabouts. That it came into operation again and they called him in November , 2016 where he resumed repaying his loan until November, 2017 when it closed down again.

The Respondent has opposed the Application by filing a Replying Affidavit sworn by Joseph O.N.Wanjau on 30. 8.2019. Vide this Affidavit, the Claimant contend that the Judgment entered against the Respondent is a regular one as the Tribunal was duly satisfied that the Respondent was duly served with summons to enter appearance and even file a Defence.

That contrary to the assertion that it ceased operations, the Claimant contend that it has been up and running since its inception in the year, 2003. It has produced its bank statements to confirm this contention and marked as “J.O.N.W.2”.

That the Respondent is a member of A.C.K St. Stephens Church, Cura where the Sacco office is located and all members of the Sacco are bonafide members of the Church hence the issue of not remitting contribution does not arise. That the Respondent has always known the bank to deposit the contribution but is feigning ignorance of the same. That at the Annual General Meeting held on 7. 6.2015, the Respondent is well aware that a Resolution was passed to the effect that NO member was allowed to offset the loan with his/her shares. That the Respondent has not annexed a draft Defence.

Written Submissions

The Respondent has filed written submissions dated 3. 3.2020. The submissions of the Claimant are not on record as at the time of writing of this Ruling. We will consider the submissions on record whilst determining the issues raised in the Application.

Issues of Determination

We have framed the following issues for determination.

(a) Whether the Respondent has laid a proper basis to warrant the Tribunal set aside the judgment entered on 27. 5.19; and

(b) Who should meet the costs of the Application.

Setting aside of Judgment

This Tribunal has jurisdiction to set aside an exparte judgment by dint of order 10 Rule 11 of the Civil Procedure Rules. The Rule provide thus:

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

It thus follow that the Tribunal’s jurisdiction to set aside a judgment is a discretionary one and that the main concern is to do justice to the parties. This position was underscored by the court in the case of Patel –Vs - East Africa Cargo Services Limited (1974) EA 75 as follows:

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

Before the Tribunal can exercise the above discretion, it is incumbent upon it to first ascertain if the judgment sought to be set aside is a regular one. This was the Holding in the case of K.Rep Bank Limited Versus Segment Distributors Limited [2017] eKLR

In the case of Fidelity Commercial Bank -Versus – Owen Amos Ndungu & Another , Hcc.No.241 of 1998, the court gave the following distinction between a regular and irregular judgment.

“ A distinction is drawn between a regular and irregular judgments. Where summons to enter appearance has been served, and there is default in entry of appearance, the exparte judgment 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.”

The court of Appeal in the case of James Kanyiita Nderitu and Another Versus Marious Philatos Ghikas and another [2016] eKLR set out the Principles for setting aside a Regular judgment as follows:

“………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 the reason for the failure of the Defendant to file his Memorandum of Appearance, or defence,……. 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 will suffer; whether on the whole, it is in the interests of justice to set aside the default judgment……”.

From the foregoing, it is trite that for a regular judgment to be set aside, the following conditions must be met:

(a) Reason for failure to file a Memorandum of Appearance or defence;

(b) The length of time that has elapsed since the default judgment was entered;

(d) The prejudice likely to be suffered by the parties;

(e) Whether, on the whole, it is in the interests of justice to set aside the default judgment.

Looking at the above principles in light to the instant Application, we find as follows:

(a) That the judgment entered on 27. 5.2019 is a regular one. The Respondent has conceded having been served with summons to enter appearance and the statement of claim;

(b) That the Respondent took approximately two(2) months after entry of judgment to file the instant Application; and

Further, we have considered the grounds in support of the Application and note that the Respondent has not made any attempt to explain his failure to file a Memorandum of Appearance or Defence. All he avers is that he has been paying his loan religiously until sometimes in February, 2015, when the claimant ceased its operations. That this happened again in November, 2017 when it closed its operations completely.

On its part, the Claimant has denied even closing operations. We have perused the statement accounts annexed to its Replying Affidavit and note that it was transacting business during the time the Respondent alleges it was closed.

What we deduce from the above contentions is that the Respondent is not candid on its justification for not repaying the loan. Nothing prevented him from depositing money to the bank accounts details provided by the claimant.

Conclusion

The upshot of the foregoing is that the Respondent ‘s Application dated 3. 7.2019 is unmerited and hereby proceed to dismiss it with costs.

Read and delivered this 9th day of April 2020.

Prepared by Hon. B.Kimemia Chairman, Hon. F. Terer Deputy Chairman, P. Gichuki Member.

With consent of the parties, the final orders to be delivered by email, as accordance to the prevailing measures during the covid-19.

Hon. B. Kimemia Chairman Signed 9. 4.2020

Hon. F. Terer Deputy Chairman Signed 9. 4.2020

P. Gichuki Member Signed 9. 4.2020