Jiangxi Khongmei Eng. Company Ltd v Maelo [2023] KEHC 25412 (KLR)

Jiangxi Khongmei Eng. Company Ltd v Maelo (Civil Appeal E040 of 2021) [2023] KEHC 25412 (KLR) (17 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25412 (KLR)

Republic of Kenya

In the High Court at Bungoma

Civil Appeal E040 of 2021

DK Kemei, J

November 17, 2023

Between

Jiangxi Khongmei Eng. Company Ltd

Appellant

and

Eliud Wafula Maelo

Respondent

(Being an appeal arising from the Ruling by Hon. G.P. OMONDI (S.R.M) in Bungoma Civil Suit no. 276 of 2018 delivered on 30th April,2020)

Judgment

1. Vide a plaint dated 30th May,2018 the Respondent sued the Appellant and another seeking for payment of Kshs.120,000/= w.e.f 1st December 2016 until full payment plus costs and interest. The Appellant filed a defence dated 23rd July 2018 and the Respondent in turn filed a response to the defence dated 1st October,2018.

2. Parties thereafter complied with Order 11 of the Civil Procedure Rules paving way for the matter being set down for hearing. On the 1st hearing date, the Appellant’s counsel sought for an adjournment which was allowed with costs to the Respondent and that the matter was fixed for hearing on 2nd July, 2019 by consent. Come 2nd July, 2019, the Appellant did not appear and the matter proceeded ex-parte with the Respondent calling two witnesses and thereafter closing his case. The Appellants case was subsequently closed for non-attendance and directions on filing submissions were taken for 16th July,2019 and- thereafter judgment was subsequently delivered on 16th October,2019.

3. The Respondent drew his bill of costs dated 31st October,2019 and served the Appellant who did not oppose the same and that the Court subsequently taxed it at Kshs. 513,765/=. The Respondent immediately commenced execution and instructed a firm of Auctioneers namely Eshikhoni Auctioneers who attached the appellant’s assets to realize the sums owed by the Appellant as well as their costs.

4. The Appellant filed an application dated 9th December,2019 seeking orders inter alia for stay of the courts decree restraining the firm of auctioneers from seizing proclaimed property and for the setting aside of the judgment delivered on 16th October, 2019. The court issued interim orders which were vacated on 30th April,2020 when the court dismissed the application with costs to the Respondent. At the same time, the auctioneers bill of costs dated 13th December,2019 was allowed as presented as the Appellant did not register its opposition.

5. The Appellants filed yet another application dated 19th June,2020 seeking for orders inter alia; stay of execution of the judgment delivered on 16th October, 2019 and for release of the attached motor vehicle. Interim orders were granted and a hearing date issued. On the hearing date, the trial Court was informed that a similar application had been filed in the High Court and that the decretal sum had been deposited in a joint interest earning account and thus the application was deemed as spent. Various other applications were filed in this court all which have already been dealt with leaving behind for determination the appeal dated 2nd July,2021 challenging the court’s ruling dated 30th April 2020 on the application dated 9th December,2020.

6. The Appellant lodged its Memorandum of Appeal dated 2nd July,2021, on the following grounds:a.The learned trial magistrate erred in law and in fact in treating the application and submissions before him superficially and consequently coming to a wrong conclusion on the same.b.The learned trial magistrate failed to exercise discretion judiciously when he disallowed the application seeking to set aside ex-parte proceedings and judgment where the court had condemned the Appellant to pay Kshs. 3,896,715/= plus interest and costs yet the case had not been heard and determined on its merits.c.The learned trial magistrate erred in law and in fact by failing to appreciate that the Appellant’s then advocates M/S Kidiavai & Company Advocates had without care and out of negligence failed to attend- court when the matter was coming up for hearing and communicate his in ability to reach the Appellant and adjourn the matter to another date.d.The learned trial magistrate erred in law and in fact in failing to consider the pleadings filed and authorities submitted on behalf of the appellant and further taking into account evidence that was not supported by the pleadings before court and thus arriving at an award that is so manifestly high so as to be erroneous.e.The learned trial magistrate erred in law and in fact in failing to appreciate that the failure by the Appellant to attend court due to communication breakdown between it and their advocates was an excusable mistake visited upon the Appellant buy it advocates.f.The learned trial magistrate erred in law and in fact in not appreciating sufficiently or at all the pleadings and evidence that was on record as a whole.g.The learned trial magistrate failed to exercise discretion judiciously when justice for the case mandates that the mistakes of an advocate even if they were blunders, should not be visited on the clients when the situation can be remedied by costs.h.The learned trial magistrate in rendering his ruling dismissing the application to set aside ex-parte judgment and proceedings failed to take into account the principle of proportionality, and did not do justice to the appellant whose advocates failed to attend court and was condemned to pay Kshs.3,896,715/= plus interest and costs.

7. The Appellant prayed for the appeal to be allowed and the ruling in question be set aside and in its place the Appellant be allowed to defend the suit in the subordinate court or in the alternative the award for general damages in the subordinate court be reduced in line with the vehicle hire agreement as produced in the lower court and/or as this Honourable court deems fit and just.

8. The appeal was canvassed by way of written submissions. The Appellant and the Respondent filed and exchanged their respective submissions.

9. Vide submissions dated 27th June 2023 and filed on 29th June,2023, the Appellant submitted that the impugned ruling offended the interest of justice. It was their submission that the failure to attend court for defence hearing was neither deliberate nor intentional but due to communication breakdown between the appellant and their advocate on record. Counsel quoted the case of Mbogoh & Another vs. Shah (1968)EA 93 and James Kanyiita Nderitu & Another vs. Marios Philotas Ghiksa & Another (2016) eKLR. The Appellant further relied on Article 159 (2) of the Constitution Section 1A and 1B of the Civil Procedure Act and stated that it filed an arguable defence denying the Respondents claim and that it was only fair that they be allowed to prosecute their case and by so doing the Respondent would not be prejudiced in any way

10. It was further submitted that the sum involved was colossal and that the Appellant was disputing the car hire agreement informing the Respondents claim. Counsel quoted the case of Patel vs. EA Handling Services Limited (1974) EZ 75 and Tree Shade Motor Ltd vs, DT Dobie Co. Ltd CA 38 of 1998 and Maina vs. Muriuki (1984)KLR 407. The Appellant submitted that the court should not condemn the Appellant unheard and that they ought not to suffer due to a mistake by its counsel and quoted the case of Lee G Muthonga vs. Habib Zurich Finance (K) Limited & Another in Civil Application no. Nair 236 of 2009 and Winnie Wambui Kibinge & 2others vs. Match Electrical Limited Civil Case No. 222 of 2010. It was further submitted that the Appellant’s defence raised triable issues and that the Respondent can be compensated by way of costs and that the decretal sum had been deposited in a joint account. Lastly, the Appellant submitted that that the Respondent himself had filed an application to appeal out of time meaning that he was also dissatisfied with the lower court’s judgment and the Court should therefore allow this appeal and set aside the lower court’s judgment

11. The Respondent’s submissions are dated 20th September,2023 and filed on 22nd September,2023. He submitted that the Court judiciously exercised its discretion and disallowed the Appellants application subject of this application. It was his submission that the Appellant’s argument in the application was not justifiable thus unworthy of the orders sought and that the trial Court cannot therefore be faulted. Counsel quoted the case in Civil Appeal 36 of 1983 United India Insurance Co. Limited & Others vs. East Africa Underwrites (Kenya) Limited (1985) Eklr. It was submitted that the argument that the Respondent sough to appeal the trial courts findings was not reason enough to allow the Appellants appeal. Lastly, the Respondent submitted that the Appellant did not develop the argument for reduction of the decretal sum as prayed in the appeal and he therefore urged the court to dismiss the Appeal with costs.

12. This being a first appeal, parties are entitled to and expect a rehearing, reevaluation and reconsideration of the evidence afresh and a determination of this court with reasons for such determination. In other words, a first appeal is by way of retrial and this court, as the first appellate court, has a duty to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, of course bearing in mind that it did not see the witnesses testifying and therefore give due allowance for that.

13. In Gitobu Imanyara & 2 others v Attorney General [2016] e KLR, the Court of Appeal stated that;“An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put, they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowances in this respect”

14. In Peters v Sunday Post Ltd [1958] EA 424, the Court held that;“Whilst an appellate court has jurisdiction to review the evidence to determine whether the conclusions of the trial judge should stand, this jurisdiction is exercised with caution; if there is no evidence to support a particular conclusion, or if it is shown that the trial judge has failed to appreciate the weight or bearing of circumstances admitted or proved, or had plainly gone wrong, the appellate court will not hesitate so to decide”

15. Similarly, in Abok James Odera t/a A.J Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] e KLR, the same stated with regard to the duty of the first appellate court;“This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and reanalyze the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way”

16. I have given due consideration to the appeal herein, the evidence before the trial Court, the grounds of appeal and the submissions by the parties in this appeal as well as the parties’ submissions in the lower Court. In my humble view, I find the issues for consideration is whether the appeal has merit and what is the appropriate order for costs.

17. That the decision whether or not to set aside ex parte judgement is discretionary is not in doubt and that the discretion is intended so to be exercised to avoid injustice and hardship resulting from accident, inadvertence or excusable mistake or error, but is not designed to assist a person who has deliberately sought whether by evasion or otherwise to obstruct or delay the course of justice. See Shah vs. Mbogo & Another [1967] EA 116.

18. In this case, the grounds upon which the application to set aside the judgement was made were two-fold. First, it was contended that there was a miscommunication between the Appellant and their advocate on record on the stages of proceedings before the trial court and secondly as a result, they were denied an opportunity to defend their case.

19. As was held by the Court of Appeal in CMC Holdings Ltd vs. Nzioki [2004] KLR 173:“In an application for setting aside ex parte judgement, the Court exercises its discretion in allowing or rejecting the same. That discretion must be exercised upon reasons and must be exercised judiciously…In law the discretion that a court of law has, in deciding whether or not to set aside ex parte order was meant to ensure that a litigant does not suffer injustice or hardship as a result of amongst other an excusable mistake or error. It would not be proper use of such discretion if the Court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error. Such an exercise of discretion would be wrong principle. In the instant case the learned trial magistrate did not exercise her discretion properly when she failed to address herself as to whether the appellant’s unchallenged allegation that its counsel did not inform it of the hearing date for the hearing that took place ex parte and hence it would appear was true and not if true, the effect of the same on the ex parte judgement was entered as a result of the non-appearance of the appellant and on the entire suit. The answer to that weighty matter was not to advise the appellant of the recourse open to it as the learned magistrate did here. In doing so she drove the appellant out of the seat of justice empty handed when it had what it might have well amounted to an excusable mistake visited upon the appellant by its advocate...The second disturbing matter which arises from the decision of the learned magistrate in dismissing the application for setting aside the ex parte judgement is that in so dismissing the same application, the learned trial magistrate does not appear to have considered whether or not the defence which was already on record was reasonable or raised triable issues. The law is now well settled that in an application for setting aside ex parte judgement, the Court must consider not only the reasons why the defence was not filed or for that matter why the applicant failed to turn up for the hearing on the hearing date but also whether the applicant has reasonable defence which is usually referred as whether the defence if filed already or if draft defence is annexed to the application, raises triable issues. The Court has wide discretion in such cases to set aside ex parte judgement. In the instant case, the defence and counterclaim was already in the file when the matter was heard ex parte and the trial magistrate stated that she considered the same and dismissed the same defence and counterclaim when the appellant was not in court to put forward its case. Further it appears that certain matters raised in the defence were not considered at all and indeed could not be considered without the appellant’s input..... What the Trial Court should have done when hearing the application to set aside the ex parte judgement was to ignore her judgement on record and look at the matter afresh considering the pleadings before her and see if on their face value a prima facie triable issue (even if only one) was raised by the defence and counterclaim. If the same was raised, then whether the reasons for the appellant’s appearance were weak, she was in law bound to exercise her discretion and set aside the ex parte judgement so as to allow the appellant to put forward its defence. Of course in such a case, the applicant would be condemned in costs or even ordered to pay thrown away costs. The learned judge should not have considered what the learned Trial Court had concluded on the evidence before her but should have in the same way looked at the pleading and considered whether a triable issue was raised by the defence and if so, then the appeal should have been allowed.”

20. In Pindoria Construction Ltd vs. Ironmongers Sanytaryware Civil Appeal No. 16 of 1976 it was held that:“It is a common ground that it is a matter for discretion whether or not to set aside a judgement under rule 8 of Order 9B of the Civil Procedure Rules. It is also well settled that the Court of Appeal will not interfere with the exercise of the discretion of a judge unless it is satisfied that he misdirected himself in some matter and as a result arrived at a wrong decision or unless it is manifest from the case as a whole that the Judge was clearly wrong in the exercise of his discretion and that as a result there has been injustice… The appellant was not altogether free from blame. He could have tried harder to be present at the date of hearing. He delayed considerably in filing his application to set aside the ex parte judgement. The trial Judge’s exasperation at his behaviour was understandable. Although he should not have been precluded from defending the claim against him he has to be penalized to some extent in view of his somewhat dilatory actions.”

21. The principle that emerges from the above cited cases is that the discretion of a court to set aside or vary ex-parte judgment entered in default of appearance or defence is a free one and is intended to be exercised to avoid injustice or hardship but not to assist a person guilty of deliberate conduct intended to obstruct or delay the course of justice. This was the position that was adopted in Rayat Trading Co. Limited vs Bank of Baroda & Tetezi House Ltd [2018] eKLR where the court listed the matters to be considered in the exercise of this discretion as follows: -i. the defendant has a real prospect of successfully defending the claim; orii.it appears to the court that there is some other good reason why; iii. the judgment should be set aside or varied; or iv. the defendant should be allowed to defend the claim

22. Similarly, in the case of, Thorn PLC vs Macdonald [1999] CPLR 660, the Court of Appeal highlighted the following guiding principles: -i. while the length of any delay by the defendant must be taken into account, any pre-action delay is irrelevant; ii. any failure by the defendant to provide a good explanation for the delay is a factor to be taken into account, but is not always a reason to refuse to set aside; iii. the primary considerations are whether there is a defence with a real prospect of success, and that justice should be done; and iv. prejudice (or the absence of it) to the claimant also has to be taken into account.

23. In the case of Rahman vs Rahman (1999) LTL 26/11/9, the court considered the nature of the discretion to set aside a default judgment and concluded that the elements the judge had to consider were: the nature of the defence, the period of delay (i.e., why the application to set aside had not been made before), any prejudice the claimant was likely to suffer if the default judgment was set aside, and the overriding objective.

24. In Philip Kiptoo Chemwolo and Mumias Sugar Company Ltd vs Augustine Kubende (1982-1988) KAR, the Court of Appeal held that: -“The court has unlimited discretion to set aside or vary a judgment entered in default of appearance upon such terms as are just in the light of all facts and circumstances both prior and subsequent and of the respective merits of the parties. Kimani -v- MC Conmell (1966) EA 545 where a regular judgment had been entered the court would not usually set aside the judgment unless it was satisfied that there is a triable issue.”

25. One of the key factors to consider when setting aside an ex-parte judgment is whether the defendant has a defence on merit. In Sebei District Administration vs Gasyali & others (1968) EA 300 Sheridan J. observed that: -“The nature of the action should be considered. The defence if one has been brought to the notice of the court, however irregularly, should be considered, the question as to whether the plaintiff can reasonably be compensated by costs for any delay occasioned should be considered and finally, I think, it should always be remembered that to deny the subject a hearing should be the last resort of the court”

26. In the case of, Tree Shade Motor Limited vs DT Dobie Co Ltd CA 38/98, the Court held that even when ex-parte judgment was lawfully entered, the court should look at the draft defence to see if it contains a valid or reasonable defence.

27. As can be noted from the proceedings, this matter first came to court on 14th November,2018 when the Appellants were not present and a further mention date for 20th February,2019 fixed and again, the Appellants were not present and a hearing date for 16th April,2019 was issued. On the said date, Ms. Wekesa held brief for Mr. Kidiavai, counsel for the Appellant and sought for an adjournment which was objected to but however granted with orders as to costs. Thereafter, a fresh date for hearing was set i.e on 2nd July,2019. On that date, neither the Appellant nor their counsel on record were present in court despite the date having been fixed by consent. The trial court ordered the case to proceed. The Respondent who was present called two witness and closed his case while the Appellant’s case was equally closed. Directions for submissions were taken for 16th July,2019 and thereafter a date for judgment was fixed for 11th September,2019 but the judgment was delivered on 16th October,2019.

28. Thereafter, the Respondent filed a bill of costs dated 31st October,2019 which was fixed for assessment on 27th November,2019 and the Respondent was ordered to serve the same upon the Appellant. When this matter came up for taxation, the Appellant was absent despite there being proof that they were served and that the court set a date for ruling on the bill of costs for 4th December,2019 when the bill of costs was taxed off at Kshs.513,765/=. On 10th December, 2019 the Appellant came to court with the application which informed the impugned ruling.

29. It is imperative to note that the current application was filed on 10th December,2019 after proclamation that was done on 5th December,2019 while judgment was entered on 16th October,2019. Therefore, the current application was filed about two months after entry of Judgment. In my view, I find that a two months delay in filing the application is not only inordinate but has also not been explained by the applicant. This coupled with the fact that counsel for the Appellant was consistently served with notices. I am not persuaded that the appellant has made out a case for the grant of the discretionary orders to set aside the interlocutory judgement entered herein.

30. My above findings notwithstanding, this court is still minded to exercise its discretion so as to grant the applicant a reprieve by granting them a chance to be heard more so considering the fact that the suit involves a claim for the sum of close to Kshs 4 million which is quite a substantial amount of money. This reprieve will however not be granted without any conditions on the part of the applicant who has clearly been indolent in the handling of its case. My line of thinking is bolstered by the decision in in Rayat Trading Co. Limited vs Bank of Baroda & Tetezi House Ltd [2018] eKLR where the Court held that: -“If the court sets aside a default judgment, it may do so on terms. In most cases, the defaulting defendant will be ordered to pay the claimant’s costs thrown away. In addition, the Court may consider imposing a condition that the defendant must pay a specified sum of money into court to await the final disposal of the claim.”

31. Further, i agree with the holding of the Supreme Court of India which stated in Sangram Singh vs. Election Tribunal, Koteh, AIR 1955 SC 664, at 711 cited in the case of Gerita Nasipondi Bukunya & 2 others v Attorney General [2019] eKLR that:“There must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them.”

32. In Wachira Karani vs. Bildad Wachira (2016) eKLR as was quoted in the case of David Gicheru v Gicheha Farms Limited & another [2020] eKLR the Court held that:-“The fundamental duty of the Court is to do justice between the parties. It is in turn, fundamental that to that duty, those parties should each be allowed a proper opportunity to put their cases upon the merits of the matter…”

33. Further, even if the absence of the Appellant was to be blamed on their counsel, as was appreciated by Apalloo, J. A (as then was) in the case of Philip Chemowolo & Another –vs- Augustine Kubede [1982-88] KAR 103 at 1040:“Blunder will continue to be made from time to time and it does not follow that because a mistake has been made that a party should suffer the penalty of not having his case heard on merit. I think the broad equity approach to this matter is that unless there is fraud or intention to overreach, there is no error or default that cannot be put right by payment of costs. The Court as is often said exists for the purpose of deciding the rights of the parties and not the purpose of imposing discipline.”

34. In the result, it is my finding that the appeal has merit. The same I allowed. The ruling delivered on 30th April, 2020 in Bungoma CMCC No. 276 of 2018 is hereby set aside and substituted with an order allowing the appellant’s application dated 19thDecember, 2019 with thrown away costs of Kshs 20, 000/ being paid by the appellant to the respondent. Each party to bear their own costs of this appeal.It is so ordered.

DATED AND DELIVERED AT BUNGOMA THIS 17TH DAY OF NOVEMBER 2023. D.KemeiJudgeIn the presence ofNo appearance Samba Odek for AppellantNo appearance Angima for RespondentKizito Court Assistant