City Star Sacco Society Limited v Simion Machirah Ndirangu [2020] KECPT 5 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.394 OF 2019

CITY  STAR  SACCO  SOCIETY  LIMITED..........…………........CLAIMANT

VERSUS

SIMION  MACHIRAH  NDIRANGU........................................... RESPONDENT

RULING

What is  before  us for  consideration  and determination  is the Respondent’s  Application  dated  23. 1.2020. It seeks  for the following  Orders:

1. Spent;

2. That the  judgment  herein  be  set aside;

3. That  there be a stay  of execution  of the decree  obtained  herein  until hearing and  determination  of this Application; and

4. That the Applicant/ Respondent  be at liberty  to cross –examine the Process Server  who  claimed  to have served the summons and other accompanying  documents  upon  him.

The Application is supported by the grounds on its face and the Affidavit sworn by Simon  Machirah  Ndirangu on  22. 1.2020.

Despite service  of the Application,  the Claimant  has not filed  a response to the Application. It has, instead, filed  written  submissions on 27. 10. 2020. This  is a period  of over one (1) month  since the date  when the matter  was fixed  for  Ruling.  We will  nevertheless determine  the Application  based  on the material  on record.

Respondent’s contention

Vide  the instant Application, the  Respondent  content  that  it was not  served with  summons  to enter appearance  before  request  for judgment  was made  in the matter.  That  in lieu  of  this,  the ex- parte  judgment  should be  aside  ex debito justiciae.

Claimant’s  contention

Vide his  submissions  filed on  27. 10. 2020 the Claimant  contend  that the  Respondent’s statement  of  Defence  does not raise  any triable  issue.  That  the same  constitute  a ploy to delay  the Claimant from recovering  the loan  owed  by the Respondent.  It referred  to the case  of  Patel  -vs-  EA Cargo  Handling  Services Limited (1994) to support  its contention  that the  judgment  on record  is a regular  one.

Issues  for determination

The Respondent’s Application  has raised  the following  issues  for determination:

a. Whether  the Respondent  has raised  a proper basis  to warrant  the setting aside  of the default  judgment entered on  4. 11. 19.

b. Who  should meet  the costs  of the Application.

Setting  aside  of exparte 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  justiae.

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.”

With  the foregoing  principles  in the fore,  a question arises  as to whether  the current  Application  has met  the requisite  threshold  for setting aside  ex parte  judgment. We  will  look  at the principles  thematically  as follows:

Service  of summons

The Respondent  has vehemently  denied  being served  with summons  to enter appearance. He  has faulted  the averments  contained  in the Affidavit  of Service  sworn by  Thomas  Otieno Akech on  10. 9.2019. That contrary  to  the contentions  that he  was served  at Nyeri  County  Government  where  he is employed,  he is in fact not  an employee  of the County  in  any capacity. That  further, at  no point in time has  he been  an  employee  of  the Teachers  Service  Commission (TSC). That  as a result,  the judgment  was obtained  out of  deliberate  misrepresentation  of facts.

On the basis  of the judgment  in  the Fidelity  Commercial  Bank  case above,  the judgment entered  on 17. 10. 2019 is  irregular. We  say so taking  into account  the fact  that the Claimant  did not  file any document  to controvert the  foregoing  contentions  raised  by the Respondent. This  being  the case,  we find  that the  current  Application  will succeed  on this  point alone.  There is  no need  to  ascertain  whether  or not  the draft  Defence  raises  triable  issues.  Service of summons  to enter Appearance  is  quite  critical  and goes  to the  roof  of the judgment  on record,.

Conclusion

Based  on the foregoing,  we allow  the Respondent’s Application  dated  23. 1.2020 based  on the following  terms:

a. The  Respondent  to file  and serve  a statement  of  Defence  alongside witness  statements  and  list  and  bundle  of  documents  within  21 days herein;

b. The Claimant  to file  a Reply  to the Response  as well as amended  witness statements  and supplementary  list  and bundle  of documents  within  21 days  of service;

c. Mention (virtually)  to confirm  compliance  and fixing  a hearing  date on  11. 12. 2020; and

d. No orders  as to costs.

Ruling  signed,  dated  and delivered  at Nairobi this 29thday of October,  2020.

Hon. B. Kimemia   Chairperson  Signed 29. 10. 2020

Hon. F. Terer   Deputy Chairman  Signed 29. 10. 2020

Mr. P.Gichuki   Member    Signed 29. 10. 2020

Court Assistant   C. Maina

Hon. F. Terer   Deputy Chairman  Signed 29. 10. 2020