Amica Savings and Credit Co-operative Society Limited v Kamande [2023] KECPT 731 (KLR)

Amica Savings and Credit Co-operative Society Limited v Kamande (Tribunal Case 640 (E303) of 2021) [2023] KECPT 731 (KLR) (Civ) (26 October 2023) (Ruling)

Neutral citation: [2023] KECPT 731 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 640 (E303) of 2021

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

October 26, 2023

Between

Amica Savings And Credit Co-Operative Society Limited

Claimant

and

Francic Kimani Kamande

Respondent

Ruling

Claimant’s Case 1. On 28/7/2015, the Respondent applied for asset finance loan from the Claimant Sacco of Kshs 4,400,000/= to purchase a tractor and executed a Chatters Mortgage under the Chatters Transfer Act Cap 28. Further on 15/12/2017 he applied for additional loan of Kshs 4,917,995/= to purchase another tractor.

2. According to paragraph 8 of the Claimant’s Statement of Claim, the total loan advanced to the Respondent totaled Kshs. 9,400,989/= which was to be paid in 60 months in 60 installments at a rate of 14% interest.

3. When the Respondent failed to service the loan, the Claimant filed a Statement of Claim on 12/4/22 and attached Claimant’s Witness Statement dated 26/10/2022, Verifying Affidavit sworn by Pius Hiira, Claimants List of Documents and List of Witnesses all dated 26/10/2022

4. A Court Process Server named Mathew Musotsi filed an Affidavit of Service dated 24/5/2022 and confirmed that he received copies of the Summons to enter appearance dated 13/4/2022 and other documents from the Advocates of the Claimants and served them upon the Respondent.

5. When this did not elicit any Response from the Respondent, the Claimants through and Application dated 18/5/2022, filed on 24/5/2022 requested the Tribunal to enter a Summary Judgement against the Respondent.The Tribunal considered the Claimant’s request and entered a Summary Judgement as follows;“in absence of Statement of Defence by the Respondent despite Satisfactory service, Summary judgement is entered in favour of the Claimant against the Respondent for Kshs. 19,257,992. 79 plus costs and interests”

6. A Decree and Certificate of Costs dated 7/12/2022 was extracted and Warrants of Attachment of moveable property dated 9/12/2022 was issued to Mamalo Auctioneers.

7. On the strengths of this warrants the auctioneers proclaimed a motor vehicle registration no. KBT 557 G and indicated the estimate value as Kshs. 400,000/= as per the proclamation notice.

8. The Claimant stated in paragraph 11 that Kshs. 56,806/= was the last repayment of the loan by the Respondent on 4/3/2021

Respondent’s Case. 9. Noticing the turn of events, the Respondent through a Certificate of Urgency filed a notice of motion dated 18/5/2023 and filed on 22/5/2023 praying for the following orders;a.Spentb.That this Honourable Tribunal be pleased to grant the Respondent/Applicant an order of temporary stay of execution of the decree and judgement issued on 7/12/2022 and all consequential orders thereto pending interparties hearing of this Application and until further orders of this Honourable court.c.That this Honourable Court be pleased to issue an order compelling the Applicant by itself, its servants, its agents to release motor vehicle registration number KBT 557 G Isuzu double cab to the Applicant forthwith pending interparties hearing of this Application and/or until the hearing and determination of this suitd.That this Honourable Tribunal be pleased to set aside the Interlocutory Judgement entered against the Respondent and grant him unconditional leave to file his reply to the Statement of Claim in terms of the draft reply hereto attached.e.That this Honourable Tribunal be pleased to order the Process Server Mathew Musotsi to appear in the Tribunal to be cross-examined by the Respondent on the contents of the undated Affidavit of Service filed herewithf.Costs to be provided for.

10. That in support of the Respondent’s application a statement of Defence, Supporting Affidavit, Witness Statement and list of Witnesses dated 22/5/2023 and filed on 23/5/2023 and a copy of the Auctioneers Proclamation notice were attached.

11. That the Respondent raised the following grounds to support his Application to set aside the Summary Judgement;i.On paragraph 5 of the Statement of Defence the Respondent state that before he was granted the loan, he was advised to make a deposit of Kshs 800,000/= which amount has not been accounted for to date.ii.That the additional loan facility was granted to Samuel Muiruri Kinyanjui and it was transferred to him on understanding and with his acceptance.iii.On paragraph 9 of the Supporting Affidavit, the Respondent state “… that I have never at any time or at all received any court document in relation to this matter which in any event I was not aware that it existed”iv.On paragraph 10 and 11 of the Supporting Affidavit, the Respondent avers that he did not meet the Process Server in Thika Kenol Petrol Station at Kenol Centre, and that he does not know where Kenol Centre is in Thika town.v.The Respondent denies that the Claimant has not disclosed to him the amount repaid by his towards the offsetting of the loan facility including the amount recovered after the sale of the attached tractors.vi.Further, the Respondent states that the Claimant’s Statement of Claim is highly exaggerated and erroneous as it is contrary to the in duplum rule.vii.That the Respondent/Applicant is in desirous of defending the suit on merit.

12. On the mention date of 10/8/2022 the parties were ordered by the Tribunal to Canvas the Respondent’s Application by way of Written Submissions and more so the Parties were encouraged to negotiate over the contents of this Application.

13. Upto the time of writing of this ruling, the Parties have compiled with the order of Written Submissions and there is nothing on record to show that they negotiated.

Determination. 14. We have considered the contents of the Application, the Witness statements, the Supporting Affidavits, the Replying Affidavits and the Written Submissions of both parties and isolate the issues for determination as follows;i.Whether the summons to enter appearance, the Claimant’s Statement of Claim, the witness statement and other annextures were served on the Respondents.ii.Whether the Respondent’s Defence raise Triable issues.iii.Whether this Tribunal can set aside the Summary Judgement dated 6/7/2022.

Analysis. 15. The Respondent submitted that he was not served by the Court Process Server yet there is an Affidavit of Service in the Court records. With the denial and the affirmation by either of the parties, the Tribunal would wish to stand in the side of justice. In order to have a balanced view on the matter, the Tribunal find on a scale of probability in favour of the Respondent hence it is in the interest of justice that this issue be heard by having a process server attend to be cross-examined by the Defendant.This view is guided by the decision of the court in the case of Shadrack Arap Boiywo v Bodi Bach KSM CA 1986 in which the court explained that “… where a filed Affidavit of Service by a process server is denied by the party who was to receive the documents, it is desirable that the Process Server should be put in a Witness box for Cross-examination by the party who deny the service”

Issue no. 2 16. On whether the Respondent’s Defence Raises triable issues, we have considered the various grounds stated by the Applicant/Respondent to oppose the Summary Judgement, our conclusion is that some of the issues raised are triable especially on computation of interest charged and whether the sum computed goes against the Principle of indiplum rule.

17. In addition, the issue of the amount on deposit of Kshs. 800,000/= which the Respondent stated that he paid before he was granted the loan need to be established and accounted for. In any case, the statement of loan account no. 1 was not filed on evidence and that it is not in the Tribunal’s file. We therefore consider this as a triable issue.

18. Further, the Respondent state that the additional loan of Kshs 4,470,399. 75/= was granted to Samuel Muiruri Kinyanjui and it was to transferred to him. The question is how and on what basis or terms was this done?Nevertheless, we do not consider this as a triable issue unless provided otherwise because a copy of the Statement of account no. 2 in the Tribunal’s file is in the name of the Respondent/Applicant.

Issue no.3 19. On whether the Tribunal can set aside the Summary Judgement dated 6/7/2022?Order 10 rule II of the Civil Procedure Rule 2010 provide that an ex-parte/ interlocutory judgement in default of appearance or Defence may be set aside. “… where judgment has been entered under this order, the court may set aside or vary such judgement and any consequential decree or order upon such terms as are just.”This, in our view is applied where there is/was regular judgement or irregular judgement. A distinction has always existed between a regularly entered judgement in which a Respondent/Applicant has been duly served with summons to enter appearance of to file Defence but neglected, declined or refused to do so, and Irregularly entered judgement where summons to enter appearance or to file a Defence was not served on the Respondent/Applicant yet the Respondent/Applicant have an arguable Defence.

20. Given that the Claimants state that the Respondent was served with the Summons to enter appearance and/or file a Defence and the Respondent has denied, in the interest of justice this Tribunal must exercise its discretion in order to balance the two opposing sides by holding in abeyance the determination of issue no. 3 until issue no. 1 is dispensed. It is apparent from plain reading of the parties’ Submissions that the issue of service has a bearing on the Applicant’s Respondent’s prayers no (a) – (d)Under the circumstance, we make the following orders;a.Spentb.That this Honourable Tribunal is pleased to grant the Respondent/Applicant an order of temporary stay of execution of the decree and judgement issued on 7/12/2022 and all consequential orders thereto pending interparties hearing of this Application and until further orders of this Honourable court.c.That this Honourable Court is pleased to issue an order compelling the Applicant by itself, its servants, its agents to release motor vehicle registration number KBT 557 G Isuzu double cab to the Applicant forthwith pending interparties hearing of this Application and/or until the hearing and determination of this suitd.That this Honourable Tribunal is pleased to set aside the Interlocutory Judgement entered against the Respondent and grant him unconditional leave to file his reply to the Statement of Claim in terms of the draft reply hereto attached.e.That this Honourable Tribunal be pleased to order the process server Mathew Musotsi to appear in the Tribunal on ………….. to be cross-examined by the Respondent on the contents of the undated Affidavit of Service filed herewithf.We further order the Applicant/Respondent to attend the Tribunal on the same date to test the Contents of the Affidavit of service.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF OCTOBER, 2023. HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 26. 10. 2023HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 10. 2023HON. BEATRICE SAWE - MEMBER SIGNED 26. 10. 2023HON. FRIDAH LOTUIYA - MEMBER SIGNED 26. 10. 2023HON. PHILIP GICHUKI - MEMBER SIGNED 26. 10. 2023HON. MICHAEL CHESIKAW - MEMBER SIGNED 26. 10. 2023HON. PAUL AOL - MEMBER SIGNED 26. 10. 2023TRIBUNAL CLERK JONAHHON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 10. 2023