Heritage Roofing Limited v Lelo Investments Limited & another [2023] KEHC 17346 (KLR)

Heritage Roofing Limited v Lelo Investments Limited & another (Civil Appeal E323 of 2022) [2023] KEHC 17346 (KLR) (Civ) (12 May 2023) (Judgment)

Neutral citation: [2023] KEHC 17346 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E323 of 2022

DAS Majanja, J

May 12, 2023

Between

Heritage Roofing Limited

Appellant

and

Lelo Investments Limited

1st Respondent

Joseph Karuoro

2nd Respondent

(Being an appeal from the Ruling and Order of Hon. C. A. Okumu, RM/Adjudicator dated 5th May 2022 at the Small Claims Court Nairobi, Milimani in SCCC No. E1090 of 2022)

Judgment

1. The Appellant appeals against the ruling of the Small Claims Court dismissing its application to set aside ex-parte judgment entered against it on March 22, 2022.

2. Before the Small Claims Court, the Respondents filed suit against the Appellant claiming Kshs. 230,500. 00 being repair costs incurred following breach of construction contract by the Appellant. The matter proceeded ex-parte after the Plaintiff failed to file its defence and attend. The Appellant moved the court to set aside the ex-parte judgment by its Notice of Motion dated April 11, 2022, the Appellant claimed that a mention notice sent to it on March 14, 2022 was received on March 25, 2022 after the mention date has passed. It argued that the mention notice ought to have been served physically which is the most convenient form of service on the Appellant’s Advocates. It contended that the court ought not have entered judgment against it or make any substantial order on a mention date. It stated that it had a good defence which ought to be considered.

3. The Respondents opposed the application. It stated that one the claim was filed on March 1, 2022, the Appellant was served with the claim at its email disclosed in the CR 12 issued by the Registrar of Companies. That on March 8, 2022, the firm of Paul Mwangi and Company Advocates service it with a Notice of Appointment which firm was served with the notice for the mention scheduled for March 14, 2022. That when the matter came on March 14, 2022, the Respondent’s counsel was not present nevertheless the court granted the Appellant time to file its defence. When the matter came up of the mention onMarch 22, 2022, the Respondent did not attend court despite being served by email whereupon the court entered judgment as the Appellant has failed to file its defence. Based on the narrated facts, the Respondent argued that the Appellant had not made out a case for setting aside since the Small Claims Court operates on strict timelines.

4. After considering the arguments, the Adjudicator found as a fact that the Appellant had been served by email with the notice for the mention scheduled for March 22, 2022whereupon the court entered judgment in accordance with section 27(1) of the Small Claims Court Act, 2016 ("the SCCA") which provides that,“if the Respondent fails to response the claim within the prescribed period, the court, may, either on its own motion or on the Claimant’s application enter judgment for the Claimant and order the relief sought in the statement of Claim.”The court did not find any reasons to set aside the judgment as it was regular.

5. The issue in this appeal is whether the court should allow the appeal and set aside the ex-parte judgment bearing in mind that the jurisdiction of this court is limited to matters of law under section 38(1) of the SCCA. This means that the court must loyally accept the factual findings of the trial court and only intervene if the findings or conclusion are perverse.

6. I have considered the grounds of appeal set out in the Memorandum of Appeal dated May 19, 2022 and the parties’ written submissions. The issue in this appeal is whether Adjudicator exercised discretion judiciously when it declined to set aside the judgment. I agree with the Adjudicator that the judgment was regular and that the Appellant’s advocates on record were duly served by email. Service by email is now a primary mode of service hence there is no requirement that an advocate who has an email address be served physically if that email address is set out in its address of service in the court documents.

7. Even when judgment is regular the court still has the discretion to set aside the judgment since it has unfettered discretion to do in order to do justice to the parties (see Patel v Cargo Handling Services Ltd[1974] EA 75). From the ruling, it is evident that the Adjudicator failed to consider that whether the Appellant’s defence raised triable issues. In Tree Shade Motors Limited v D T Dobie and Company (K) Ltd andanother[1998] eKLR, the Court of Appeal held that even where the judgment is regular, the court is obliged to consider a defendant has a reasonable defence and if it does, the court should grant leave to defend the suit. As I have stated, it apparent that the Adjudicator failed to consider this material fact.

8. While it is correct to note that the Small Claims Court has strict timelines, it also has a level of flexibility to do justice to the parties by imposing such terms and conditions as would ensure that a fair and expeditious trial is conducted. The court should not fetter its discretion merely on the ground that the entire process is time limited. The question is whether the suit can be heard within the prescribed time lines. In Richard Ncharpi Leiyagu v Independent Electoral Boundaries Commission and 2 others[2013] eKLR, the Court of Appeal set aside a dismissal order despite the fact that the time for hearing the election petition is strictly limited by the Constitution and statute. The court observed that,“The learned Judge was clearly wrong in the exercise of his discretion which resulted in an injustice, the petition could have proceeded for hearing within the same time frame. The appellant was denied a hearing, we have no choice but to allow this appeal as disallowing the appeal would go against the spirit of the overriding objectives and also the provisions of article 159 of the Constitution. “

9. In this case, the court still had sufficient time to order a hearing and impose such terms and conditions on the Appellant that would ensure that the matter proceeds and that the Respondent prejudice is assuaged by an award of costs.

10. I have said enough to show that the appeal has merit. While I accept that the ex-parte judgment must be set aside, the Appellant must suffer the burden of the causing the Respondents’ inconvenience.

11. I allow the appeal on the following terms:a.The ex-parte judgment entered against the Appellant on March 22, 2022and all subsequent order and proceeding be and are hereby set aside.b.The reinstated suit shall be heard and determined within the next 21 days from the date hereof in default of which it shall stand dismissed.c.The Appellant shall pay the costs of the proceedings in the Subordinate Court and the costs of this appeal.d.The Appellant shall pay costs of the appeal which are assessed at Kshs. 20,000. 00 to be paid with 14 days in default of which the suit shall stand dismissed.

DATED AND DELIVERED AT NAIROBI THIS 12TH DAY OF MAY 2023. D.S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Mr Mumia instructed by Mwaniki Gachoka and Company Advocates for the Appellant.Mr Kiptoo instructed by Tharuma Trevisan Advocates for the Respondent.