Alphonce Lemunke Tiges v Metropolitan National Sacco Limited [2021] KECPT 518 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL  CASE NO.542 OF 2019

ALPHONCE LEMUNKE  TIGES......................….............…….............CLAIMANT

VERSUS

METROPOLITAN NATIONAL  SACCO  LIMITED .................... RESPONDENT

RULING

Vide the Application  dated 15. 11. 2019,  the Respondent has moved  this Tribunal  seeking  for Orders  inter alia:

1. That  due  to the urgency  of this application,  service thereof  be dispensed  with,  the same be certified  urgent  and heard  ex-parte  in the first  instance.

2. That pending  interparties  hearing of this application, an Order be  and is hereby  issued  staying the judgment  in default and staying any issuance of warrants in  this matter.

3. That the interlocutory  judgment  entered  as against the Respondent  for default  of appearance  and defence,  together  with all consequential orders be and are hereby set aside and the Respondent/Applicant  be allowed  to  file its defence.

4. That an order  be and is hereby  issued  to the process  serve who  allegedly  served  the summons  to enter  appearance  to be cross examined  on his affidavit  during the interparties  hearing  of this Application.

5. That costs of this  Application  be provided for.

The Application is supported by the grounds on its face and the Affidavit sworn  by Collins  Amimo  on  15. 11. 2019. The Respondent has  opposed  the Application  vide the Replying  Affidavit  sworn by himself  on  22. 1.2020. The Respondent  has also filed  a further  Affidavit  sworn by  David  Muhoro  on  20. 8.2020.

Respondent’s  Contention

Vide  the instant  Application,  the Respondent  has sought for the  default  judgment  entered  on  13. 11. 19 to be  set aside on  grounds  that  none of  its principal  officers  were served  with summons  to enter appearance. That it had since 8. 11. 2019 been trying  to file their Notice  of Appointment and Defence  to no avail.  That when  it eventually filed the said Notice the same was  not placed  in the respective  file because  of frivolous and unfounded  reasons  advanced  by the registry staff which  led to the  judgment  in default  being entered.

That  it has a good defence  as it  operated   the Claimants’ accounts  diligently and  in accordance with the customs  and practices  of  banking  as provided  by law. That  as per the  Respondent’s  2019 Annual  General  Meeting  resolutions,  members  agreed  to schedule  refunds on a first come  first serve  basis  and therefore the Claimant’s  refunds  is scheduled  to be paid  in November, 2021.

Claimant’s  Case

It is the Claimant’s  case that summons  to enter Appearance  was duly served  upon  the Respondent by leaving  it at the  Registered  Office  of the Respondent.  That  upon receipt of the said summons, the  Respondent  deliberately  avoided  to enter Appearance and  file a Defence. That  he gave the Respondent  the mandatory  60 days’ Notice  of withdrawal from membership.

That the  draft Defence  does not  raise  triable  issues as the draft  defence  contain mere denials  and that no useful  purpose  would be served  by  setting aside judgment.  That the Application  should  therefore be dismissed  with costs.

Issues  for determination

The  Respondent’s  Application  dated 15. 11. 2019 has presented  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  13. 11. 2019.

b. What Orders are available  in the circumstances.

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.”

Determination

We have perused  the Respondent’s Notice  of Appointment  dated 31. 10. 2019.  We note that the same  was filed on  the date  when the default  judgment was  entered. In the  interest  of justice  and fair play, we deem  it fit to set aside the default  judgment  and allow the Respondent  participate  in the proceedings. We  however note that  the claim herein  revolve  around  withdrawal  of a  member from a  Co-operative  society and demand for refund  of savings. In order  to expeditiously  dispose  of the claim,  we give  the following directions.

a. The Respondent to file  and serve a  Statement  of Defence  alongside  Witness Statements  and list and bundle  of documents within  7 days  herein.

b. The Claimant  to file  a Reply  to  Defence  as well as Supplementary  list  and bundle  of documents  as well as witness statements  within  14 days  of  service.

c. That the Witness  Statements  and documents  filed by the parties to be  deemed  as their evidence  in the matter.

d. The Claimant  to file and serve  final submissions  alongside  Reply  to Defence  and Supplementary  bundle  of documents .

e. The Respondent to file and serve final submissions within 14 days of receipt of Claimant’s submissions.

f. Mention to confirm compliance and fixing a judgment date on 3. 3.2021.

Ruling signed, dated and delivered virtually this  28th day of  January,  2021.

Hon. B. Kimemia   Chairperson  Signed 28. 1.2021

Mr. B. Akusala   Member    Signed  28. 1.2021

Mr. R. Mwambura   Member   Signed  28. 1.2021

Mutemi  holding brief  for  Thimba for  Respondent/Applicant: Present

Miss Kagoi for Claimant/Respondent :  Present

Hon. B. Kimemia   Chairperson  Signed  28. 1.2021