Grace Wangeci Wachiuri v Urithi Housing Co -Operative Society Limited [2020] KECPT 14 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.584 OF 2019

GRACE WANGECI WACHIURI..........................CLAIMANT

VERSUS

URITHI HOUSING CO-OPERATIVE

SOCIETY LIMITED.........................................RESPONDENT

RULING

What is before us for consideration and determination is the Respondent’s Application dated 10. 3.2020. It seeks in the main, for the following Orders:

1. Spent;

2. Spent;

3. That  this Honourable Tribunal be pleased to set aside the judgment entered on 27th January, 2020 and all the consequential orders;

4. That this Honourable Tribunal be pleased to grant leave to the Respondent to defend this suit and that the annexed draft defence be deemed as duly filed and served; and

5. That costs of this Application be provided for.

The Application is supported by the grounds on its face and the Affidavit sworn by Samuel Ngundo Mainaon 10. 3.2020.

The Claimant has opposed the said Application by filing a Replying Affidavit sworn by herself on 15. 8.2020.

Respondent’s Contention

Vide the instant Application, the Respondent contend that the Claimant has obtained ex-partejudgment without serving it with summons to enter Appearance or statement of claim. That it has a strong Defence which raises triable issues.

Claimant’s Contention

Vide her Replying Affidavit, the Claimant has opposed the Application on the grounds that summons to enter Appearance was duly served upon the Respondent on 3. 10. 2019. That the Respondent acknowledged receipt by stamping on the counterpart copy.

That upon issuance of the Decree and certificate of costs on 4. 12. 2019, the Claimant commenced the process of execution. That since then, the Respondent has issued three (3) Cheques to the Claimant banked as follows:

a. Kshs.94,000/= on 15. 2.2020;

b. Kshs.94,000/= on 15. 3.2020; and

c. Kshs.96,655/= on 15. 4.2020.

That on 20. 2.2020, the Respondent replaced the first cheque with cash after it bounced.

That the Respondents negotiated to settle the full amount by way of installments.

Disposal of the Application

Vide the directions given on 27. 7.2020, the Application was canvassed by way of written submissions. The Respondent filed its submissions on 31. 8.2020 while the Claimant did so on 10. 9.2020. We will consider the same whilst determining the issues raised by the Application.

Issues for determination

We have framed the following issues for determination:

a. Whether the Claimant has established a proper basis to warrant the setting aside of the ex parte judgment entered on 13. l1. 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 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.”

From the foregoing, it follows therefore that before a regular Judgment can be set aside, the following conditions must obtain:

a. Reason for failure to file a memorandum of Appearance or Defence;

b. The length of time that has elapsed since default Judgment was entered;

c. Whether the intended Defence raises triable issues;

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

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

We will consider the above principles in the context of the instant Application as follows:

Reasons for failure to enter Appearance

The Respondent contends that it was not served with summons to enter Appearance. We have, however, perused the Affidavit of Service sworn by Enos Mulima Lubutsi on 5. 11. 2019.

We have also perused the counterpart copy of the summons dated 2. 10. 2019. We note that the same was received by the Respondent by way of stamping on 3. 10. 19. We are thus satisfied that the Respondent was duly served with summons to enter Appearance.

Length of time lapsed since entry of judgment

We note that judgment was entered in the matter on 13. 11. 19 while the instant Application was filed on 10. 3.2019. This is a period of about 3 months since judgment was entered. The Respondent has not given an explanation as to why it took such a period to file this Application.

Defence raising triable issues

We have perused the draft Defence annexed to the Application marked as SNM-2. While the Respondent acknowledge that the Claimant is one of its members, it has denied the other averments in the statement of claim. It has denied ever receiving the 60 days’ Notice from the Claimant.

Further it denies ever receiving a demand for refund of Kshs.296,000/= from the Claimant.

Upon perusal of the said draft Defence vis-à-vis the statement of claim, we note that the same does not raise triable issues. The Respondent has not denied ever receiving the sum of Kshs.296,000/= from the Claimant. The draft Defence, as it is, is thus a shame.

Conclusion

The upshot of the foregoing is that it is in the interests of justice for the instant Application to be disallowed and the Claimant allowed to execute the default judgment. Consequently, the Application is dismissed with costs to the Claimant.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 29TH DAY 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

Miss Gitari holding brief for Mr. Mwangi for Respondent

Mr. Irumba holding brief for Ocheda for Claimant

Court Assistant    C. Maina

Gitari : Applying for 30 days stay

Irumba : Not opposed

Tribunal

30 days stay.

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