David Muema Muvela v National Hospital Insurance Fund Sacco Society [2021] KECPT 489 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.287 OF 2020

DAVID  MUEMA MUVELA........................................................................CLAIMANT

VERSUS

NATIONAL  HOSPITAL  INSURANCE

FUND  SACCO  SOCIETY.....................................................................RESPONDENT

RULING

1.  Matter  for determination  is a Notice of  Motion  Application  dated  21. 1.2021filed  on  25. 1.2021 seeking  the following  prayers:

1.  That the  Application  herein  be certified  urgent  and be  heard  ex-parte  in the first  instance  and service  thereof be dispensed  with.

2.  That  this Honorable  court be pleased  to order  a stay  of execution  of the judgment  of 21st December 2020,  Decree  and or any other  consequential  orders herein  pending  the hearing  and determination  of this  application.

3.  That this Honorable  court be  pleased  to set aside  the ex parte  judgment  entered  against  the defendant  on 21st  December  2020 and all  consequential orders.

4.  That the  Respondent  be granted leave  to defend  the suit  herein.

5.  That costs  of this application  be provided for.

Based  on the grounds of the face of  the Application  supported  by the  Affidavit  of Sophie  Otiu deponed  on 21. 1.2021 and filed  on 25. 1.2021.

2.  The same  is opposed  vide Replying  Affidavit  of the Claimant  deponed  on  12. 2.2021  and filed  on  18. 2.2021.

The Applicant filed a Further Affidavit on 8. 3.2021 and the Application  was ordered  to  be dispensed  by way of  written  submissions.

The Respondent filed their written submissions on 13. 4.2021.

3.  The gist of the Application  is that the  Respondent  was never  served  with any summons,  that the service  of summons to  a body  cooperate  was  not proper  as  it  was not  done to  the principal  office  of the Respondent.

The Respondent  only  found out  about the  judgment  on 21. 12. 2020 when they were served  with a notice  of  entry of judgment. That  immediately they notified  the  advocates  who informed  them that she  had also  received  the letter through her  email  address

4.  That they  have a good  Defence  which raises  triable  issues therefore  should be  given  opportunity  to defend  the  suit or they  will  suffer irreparable damage.

The Claimant  in the Affidavit  state  they relied  on the Affidavit of service by process server as proof  of service.

That  the Respondents and  advocates  on record  were duly  served  and there are  no triable  issues  raised in the Defence.

5.  Issue

(i)    Service  of summons

(ii)   Triable  issues

(iii)   Costs

Issue  one:

SERVICE  OF SUMMONS

The Applicants submitted  that they  never  received  summons  to enable  them enter appearance  and file a  Defence.

We note  that despite  several follow ups  to the Claimant to file  written submissions  the last one  being  17. 5.2021, via email, none  had been  filed  at the time  of recording  this Ruling. However,  we rely  on the Replying Affidavit  in the circumstances.  The Claimant  as earlier  stated  confirmed  having  served  the Respondent  and their  Advocates  Ms Purity  Makori  personally  through  email  respectively as  deponed  in the Affidavit of Service.

We have noted  the Affidavit of service deponed  and filed on  16. 11. 2020 attached  to the request  for judgment  and in the  Paragraph  2  the Process Server  confirmed  service  on  19. 6.2020 to the Secretary  one Mr. Vincent  located  at NHIF’s  Sacco  office  in NSSF Block  A  Eastern  Wing, 14th  floor  Bishop’s  Road.

That  the said  Mr. Vincent  received  the summons  and the statement of  claim  but refused to sign  and advised that service  be done  to their  lawyers  the firm  of Mogeni and Company  Advocate.

That  on 23. 10. 2020 he served  by email  Ms. Purity  Kemunto  Makori  of Mogeni  & company  Advocates through  her email  address  purity@mogeni. Com.

6.  The Applicant  avers  that the  summons were  not  served  at the principal  office  of the Respondent  but they  have not  challenged  the process server  on Affidavit of Service  filed which  indicates  that the  Defendant  was served  and directed  the process server  to their  advocates.

We  also note  that the said  Purity  Makori  Advocate  deponed  the further Affidavit  as the advocate  for the Respondent  and  a copy  of the email  is attached to the Affidavit of service.

The question  that begs to be  answered  is how  the process server  knew  who  the  Advocates  of the Respondent  were,  if not  directed  by the said  Mr. Vincent?

The 2nd Question -why  they did not  call to  cross  examine  the process server  if the Affidavit of service  deponed  is not a true  statement  of  fact?

It  is  trite  law  that one  is disputing service  of summons  a prayer  is made  in the application  for cross-examination of  the  process server.

Issue  two:

7.  TRIABLE  ISSUES

The  Applicants attached  a draft  Defence which  denies the  claimants  shares  amount  to  Kshs.521, 000/=  since  they made  a refund  on 22. 10. 2020 of Kshs.50,000/= and  that there was  non-refundable  share  capital  of  Kshs.20,500/= which  has not been  factored  in the claim.

That the Respondent has not pursued or exhausted the  by-laws  of the Sacco regarding  withdrawal.

The Claimant confirms having  received  Kshs.50,000/= but was not  informed about  it but  he is  willing  to  credit  their account  now that  he is aware.

That  it is not  true  the non-refundable  amount  is Kshs.25,000/= as  claimed.

8.  We note  that the Applicant  did not  attach  the said  by-laws  in their  application and or written submissions despite  filing a  statement  of account  which  indicates:

Registration  fees      –       Kshs500

Share  capital             –       Kshs.20,000/=

Total        Kshs.25,00/=      as  non-refundable  leaving  a balance  of Kshs.500,500. 00/=  less 1st payment  28. 10. 2019        Kshs.50,000/=

Net due    Kshs.450,500/=

We note that the  Claimant  has no  attaching  liabilities  in the form  of unpaid  loans  or guarantorship.

In the case of Mbogo &Another -vs- Shah (1968) EA  1993

“ ….the court’s discretion  to set  aside  an ex parte  judgment  is intended  to be exercised  to avoid  injustice or  hardship resulting  from accident, inadvertence,  or excusable  mistake  or error, but not  to assist  a person  who has  deliberately sought (whether  by evasion or  otherwise) to obstruct  or delay  the cause  of justice.”

And In  David  Kamau  Gakuru  - vs-  National  Industrial  credit  bank  CA  84   of 2001(unreported)

It  was held  that:

“……then  a distinction  has always  existed  between  a default  judgment  that  is regularly  entered and one  that  is  irregularly  entered. In a regular  Default  judgment the defendant  will have  been  duly served  with summons  to  enter Appearance or for  one reason  or another  failed to enter  appearance  or Defence resulting  in Default  Judgment  such  a Defence is  entered  under order  10 Rule  11  to  make   the court  to set aside  the default judgment  granted  leave  to defend  the suit.”

9.  In such a scenario the court has unfettered discretion in  determining  to set aside  Default judgment  will take  into  account  such  factors  as  the case may  be  length  of time  that has elapsed  and whether  the intended  Defence  raises  triable issues.

In an irregular  default judgment  on the other hand judgment  will have been entered  against  the  Defendant  who has  not been  served  or properly  served  with summons  to enter Appearance.

In such  a scenario  the default  judgment  is set aside ex debito  justiciae, as a matter  of right.

10.  In the  circumstances  of this  case  as earlier  discussed  the Respondent was properly  served  but failed  to enter  appearance  and therefore there is a regular  default  judgment  on record.

It is  therefore a matter  of unfettered  discretion  to factor  the reasons  of failure  to enter  Appearance  or  file  a Defence.

11.  We find  there was no reason  or explanation  by the Applicants why they  did not  enter appearance  or file Defence  with  the stipulated  statutory  period.

The Respondent have therefore not been condemned without notice.

As per  the citation above  the circumstances  of this case  does  not  compel  us to go to  the triable  issues  raised by the  defence.

12.   However,  under Rule  3 and  4  Co-operative  Tribunal Practice and Procedure  2004 the Tribunal  is  not bound  by technicalities.  For expeditious  disposal  of the matter and  for justice  to be done. We have considered  the statement  of account  filed by  the applicant  and  note  the amounts  due to  the Claimant  who has  also  confirmed  receipt  of an initial  payment  of Ksh.50,000/=.

To avoid  further  delay  in the matter we find  that the issues  raised by Respondent  are clear  that Kshs.50,000/= is acknowledged  and due to  nature of Co-operatives,  share  capital  is never  refundable.

In light  of the above  for expeditious  disposal  of the matter and to do justice  to both  parties.

We issue  the following orders:

(i)  Judgment  for  Kshs.521, 000/=  is hereby  set aside and  in its  place  judgment  is entered   in favour  of the Claimant  against  the Respondent  for  Kshs.450,000/=. ( for  the  amount  of Kshs.500,500/= less initial payment.)Kshs.(50,000) paid on 28. 10. 2019. )

(ii)   Plus  costs  and interest  in the suit.

Ruling signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia                  Chairperson                Signed      27. 5.2021

Hon. J. Mwatsama              Deputy Chairperson  Signed      27. 5.2021

Mr. P. Gichuki                       Member                       Signed      27. 5.2021

Tribunal Clerk                       Leweri

Omangi  Gichana holding brief  for Miss  Makori  for Respondent

No appearance for  Claimant.

Hon. B. Kimemia                  Chairperson                Signed      27. 5.2021