Attanus Mutinda Mulwa v Eastlands Biashara Sacco Limited [2021] KECPT 562 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 464 OF 2017

ATTANUS  MUTINDA  MULWA.....................................................CLAIMANT

VERSUS

EASTLANDS  BIASHARA  SACCO  LIMITED.......................RESPONDENT

RULING

Vide the Application  dated 4. 11. 2019,  the Respondent has moved  this Tribunal  seeking  for Orders  inter alia:

a. That  there be  a stay  of  the decree  issued  on  23. 10. 2019;

b. That the default  judgment  entered  on  31. 8.2017 be set aside;

c. That Respondent  be granted  unconditional  leave  to defend  the suit; and

d. Costs.

The Application is supported by the grounds on its face and the Affidavit sworn  by James  Mecha  on  4. 11. 2019. The Claimant has  opposed  the Application  by filing a  Replying  Affidavit  sworn by himself  on 4. 2.2020.

Vide  the  directions  given  on  29. 7.2020,  the Application  was canvassed  by way of  written submissions.  The Respondent  filed  its submissions  on  21. 9.2020 while the Claimant  did so on 17. 11. 2020.

Respondent’s Case

It is  the Respondent’s case  that the Claimant  did  not  effect  service   of summons  to enter  Appearance  before  requesting  for the default  judgment.  That  it has a good defence   and set off to the claim  as the Claimant  has a loan  which  he is  yet to fully  repay.

Claimant’s  contention

The Claimant  contend  that upon  filing  this claim  on 19. 7.2017,  and duly served  the  Respondent  who never  entered  Appearance or filed a  Defence. That  the instant Application  is a ploy  to  deny him  the fruits  of his litigation.

Issues  for determination

We have  framed  the following  issues  for determination

a. Whether  the Respondent  has laid  a proper basis  to warrant  the setting  aside of  the default  judgment  entered  on 23. 8.2017;

b. Who  should  meet  the costs  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.”

Reason  for failure  to enter Appearance

The Respondent  contends  that it was  not served  with summons  to enter  Appearance. We have  perused  the Affidavit  of service sworn  by Peter  Njau  on 22. 8.2017. It is apparent  that the Respondent  was duly  served  with summons  to enter  Appearance on  4. 8.2017. The judgment  on  record  is thus  a regular  one.

Length of time lapsed  since  default  judgment  was entered

The default  judgment  was entered  on  23. 8.2017. The instant Application  was filed  on  5. 11. 2019. This is a period of over 2 years since  the default judgment  was entered.  We thus find  that  there was  inordinate  delay  in originating  this Application.

Draft  Defence

We have  perused  the draft  Defence dated  4. 11. 2019.  We note  that  the Respondent  seeks  to set off  the instant claim  with a sum of kshs.154,500/=.  It alleges  the Claimant  owes  it in form of loan.  What this means  is that an issue  arises  as to whether  the Claimant  had  loans  with the Respondent  and if so, whether  the same  can be set  off  with   the claim herein.  This  is  a triable  issue which  can only  be determined  upon taking  of  evidence. We  are thus  satisfied  that the draft  Defence  raises  triable  issues.

Conclusion

The upshot  of the foregoing  is that  we find  merit  in  the instant  Application. However,  taking  into account  the inordinate  delay  in originating  the  instant Application, we condemn  the Respondent  to pay  the Claimant  throw away  costs to be assessed below.

Final Orders

These upshot  of the foregoing  is that we  allow  the Respondent’s Application  dated 4. 11. 2019 based  on the following terms:

a. The Respondent  is granted  leave  of 14 days  to file  and serve a statement  of Response  as well as  list and bundle of  documents  and witness  statements  within  14 days  herein.

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

c. Mention  to confirm  compliance  and fixing  a hearing  date on 3. 3.2021.

d. In the meantime,  the Respondent  is ordered  to pay the Claimant  thrown away  costs of  kshs.15,000/= to be paid  on or before  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

Miss. Buriri for Respondent/Applicant :- Present

Miss Thungu  for Claimant/Respondent : Present

Hon. B. Kimemia                  Chairperson                Signed      28. 1.2021