Catherine Minika Mukhwana v Metropolitan National Sacco Limited [2020] KECPT 4 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. 524 OF 2019

CATHERINE MINIKA MUKHWANA.........………......…….........................CLAIMANT

VERSUS

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

RULING

What is before us for consideration and determination is the Respondent’s Application dated 31. 12. 2019.  It seeks, for Orders Inter alia.

1. That  interlocutory  judgment  entered  as against  the Respondent  together  with all Consequential  Orders  be set aside  and  the Respondent  allowed to file a Defence; and

2. That the costs of this Application be provided for.

The Application is supported by the grounds on its face and the   Affidavit sworn by DavidMuhoro, its head of credit on 31. 12. 2019. The Claimant has opposed the Application vide the Replying Affidavit sworn by herself on 20. 11. 2020.  Vide the directions given on 27. 8.2020; the Application was canvassed by way of written submissions. The Respondent filed its submissions on 12. 10. 2020 while the Claimant did so on 13. 10. 2020.

Respondent’s Contention

Vide the instant Application, the Respondent seek  for the default  judgment  entered  on  15. 11. 2019 to be set  aside  on grounds  that  despite  entering  Appearance in good time,  it  inadequately  failed to file  a Defence within the time stimulated  by the  rules.  That  failure  to file  a defence  was occasioned  by  lack of receipt  of sufficient instructions  on the  part of the Respondent’s  Advocates on record as the  relevant  officer was  out of  the Country.  That the Respondent  has a good  Defence in that the Claimant  did not  serve  it  with a withdrawal  Notice  as  prescribed  by law.

Claimant’s Contention Case

Vide  the Replying  Affidavit  filed  in-ordinately  late  by  the Claimant, the Claimant contend  that the instant Application  is a mere  sham as the Respondent  Draft  Defence annexed  to the  Instant Application  contains  an admission  for  the amounts  pleaded  in the main  claim.  That this (admission) means that this Tribunal will have no issue to try if the main claim is heard on merits.

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  21. 11. 2019;

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 exdebito 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:

“Adistinction 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.”

From the foregoing, it is apparent that a regular judgment can only be set aside upon the following terms:

a. Giving  of reason for failure  to file a Defence;

b. The length  of time  that has lapsed  since entry of default  judgment;

c. Whether  the intended  Defence raises  triable  issues;

d. Prejudice  likely  to be suffered by any  of  the parties;  and

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

A question abound as to whether this instant Application has satisfied these principles to deprave this question, we will consider the Principles thematically as follows:

Reasons for failure to file a Defence

The Respondent contends that it did not file a Defence in good time as its head of credit Mr. David Muhoro was on sick leave.  He has  to  deponed  to this as  much  in his Replying  Affidavit  sworn  on  31. 12. 2019. We find this explanation justifiable in the circumstances.

Length of time taken to originate the Application for setting aside

The default judgment was entered on 21. 11. 2019 while the Instant Application was filed on 6. 1.2020. We find that the Instant Application was originated within reasonable time.

Draft Defence

A question abounds as to whether the Draft Defence raises triable issues. We have perused the said defence. The Respondent  admits  that the Claimant  is its member  No. 12205 and that  he had made  contributions to the tune  of  Kshs.354,600/=. That the Claimant did not serve the requisite Notice before she withdrew from the Respondent. That by failing to do so, the Claimant contravened its by-laws.

We have perused the handwritten letter attached to the Claimant’s list and bundle of documents dated 13. 9.2020.  The same is addressed to the Respondent and in the pertinent part, the letter reads:

“ I hereby do wish to request for a refund of my Sacco shares of Kshs.354, 600. I do believe with this Notice, of sixty (60) days you will be able to facilitate my payment.”

From the said handwritten letter, it is apparent that the Claimant issued the Respondent with the requisite Notice of withdrawal from the Sacco. We thus pause and ask ourselves whether   there is any real issue remaining to be tried.  Our view  is that as long  as a member  has expressed  desire  to withdraw  from a Sacco  and has even gone  further  to convert  the said  intention  into some form  of standard  communication, then  the Tribunal  is left with  nothing  to determine  were it  to admit the claim  for hearing.

The import of the foregoing reasoning to the Application before us is that the draft Defence annexed to the Application raises no triable issues. The Claimant has expressed interest to withdraw and have went ahead to issue appropriate Notice.  There is thus nothing remaining to be determined in trial.

Conclusion

With the above  finding in mind,  we find  that the Respondent’s Application  dated 31. 12. 2019 is  unmerited  and hereby  dismiss  it with  costs  to the Claimant. Orders accordingly.

Ruling signed, dated and delivered virtually this 3rdday of December, 2020.

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

Hon. F. Terer  Deputy Chairman  ............................

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