John Kariuki v Urithi Housing Co-operative Society Limited [2021] KECPT 588 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 193 OF 2020

JOHN KARIUKI...........................................................................................CLAIMANT

VERSUS

URITHI HOUSING  CO-OPERATIVE  SOCIETY  LIMITED.........RESPONDENT

RULING

Vide the Application  dated 9. 10. 2020,as amended on  14. 10. 2020,  the Claimant has moved  this Tribunal  seeking  for the following Orders:

1. That this  application  be certified  urgent and heard  exparte in the first instance;

2. That pending  the hearing and  determination  of this Application, this Honourable Tribunal  be pleased  to stay execution  of the judgment  and decree  entered  on  4th September, 2020;

3. That  this Honourable  Tribunal  be pleased  to set aside  the judgment  and decree  entered  on 4. 9.2020 and  all consequential  ordersex debito justiae;

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;

5. That  there be a  stay of execution  and further  proceedings  until  the Claimant  herein  pays  to the Respondent  the costs  awarded  in SPMCC.NO.112 of 2020 John  Kariuki- vs- Urithi Housing  Cooperative  Society  Limited;

6. That the costs of this Application  be  provided for.

The Application is supported by the grounds on its face and the  supporting Affidavit  sworn by its Chairman, Samuel  Ngundo Maina on  14. 10. 2020. The Claimant   has  opposed  the Application vide  the  Replying  Affidavit  sworn by himself  on 6. 11. 2020.

Vide  the  directions  given  on  12. 10. 2020, and further  on 13. 11. 2020,  the Application  was canvassed  by way of  written submissions.  The Respondent filed  their written submissions  on  19. 10. 2020 while  the Claimant did so on 1. 12. 2020.

Respondent   contention

Vide the instant Application, the Respondent  prays  for the default  judgment  entered  on 4. 9.2020 to be set  aside  on grounds that  the Claimant  did not  effect  proper  service  of summons  to enter  Appearance.  That the  Claimant  proceeded  to obtain  judgment  whilst  knowing  very well  that the Respondent  had an Advocate.

That  the Respondent has a valid  Defence which  raises  triable  issues.

Claimant’s Case

The Claimant  has opposed  the Application  on grounds  that the  Respondent was duly  served  with summons  to enter Appearance and other pleadings. That  service  was effected  at their  registered  office in Thika  on  27. 7.2020. That   the Respondent  duly acknowledged receipt  of the court  papers  by way of  stamping  on  the counterpart copies.

That the  draft Defence  does  not raise  triable  issues. That  the same  consist  of mere  denial. That  in the circumstances,  the Application should  be dismissed  with costs.

Issues for determination

The  instant Application has presented  the following  issues  for determination:

a. Whether  the Respondent  has laid  a proper  basis  to warrant  the settling aside  of the default  judgment  entered  on  4. 9.2020;

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.”

We examine the foregoing  principles  in light  of this Application as follows:

Reason for failure to  enter  Appearance  or file Defence

The Respondent  contend that  the Claimant  did not effect  proper  service  of summons  to enter  Appearance  upon  it.

We have  perused  the Affidavit  of Service  sworn  byOpere Bernard  Peter Swao on  10. 8.2020. He  depones  that  he  effected  service  of  summons  to enter Appearance  as well as  the Memorandum  of claim upon  the Respondent  at its  Thika  officer  located  at Thika  West  Building  on 5. 8.2020. That  the  Respondent  acknowledged  service  by way of  stamping  of the counterpart  copies.

We  are satisfied  with  service  of summons  to enter Appearance  upon  the Respondent  on  two fronts. Firstly, the Affidavit  of Service  of Bernard  Opere has not been  contested  in the usual  manner, that is,  by way  of  cross examination of the deponent. As such,  it  is deemed  that the contents  of the same  are uncontroverted.

Secondly,  we have  perused  a copy  of the summons  to enter  Appearance  annexed  to the said  Affidavit  the same  bears  the stamp  of the Respondent. This  is proof  that the Respondent  was served  with summons  to  enter  Appearance.

With  the foregoing in mind,  we are not  satisfied  by  the reasons  advanced  by the  Respondent  for not  entering  Appearance.

Draft  Defence

The Respondent  avers  that  the draft  Defence  raises  triable  issues  worthy  of consideration  during  trial.

We have  perused  the said  Defence.  While  acknowledging  that  Claimant  bought  a plot  of  land from  the Respondent, contend avers  that  the Claimant  was well  aware of  the model  employed  by the  Respondent  to facilitate  the sale  of the said  land  to the Claimant and other  purchasers.  That  the model  entailed:

a. Purchase  of a big  chuck  of  land;

b. Inviting  members  to make  bookings of plots  by paying  deposits;

c. After  full payment  of the plots, the  land would  be sub-divided into plots which  would  eventually  be transferred  to individual  members.

That as regards  the claim before court,  the Claimant  is yet  to make  any payment  in regard  to the suit  property.

That  in the alternative, if  any funds  were received  from the  Claimant  then the same  has been  sunk  into the  project  and  thus  there is  nothing  to refund.

We have  perused  the list of  documents  accompanying  the claim  dated 17. 7.2020. Documents  3-5 are slips  evidencing  payment  of funds.  Documents  3  is an Application  for  transfer  of Kshs.1,500,000/= from  the Claimant’s  account. This  document  alone  extinguisher  the Respondent’s contention  at paragraph  4 of the draft  Defence  that the  Respondent  did not receive  any consideration towards  the purchase of the  suit property. In effect,  the deposit slip renders  the contention  a mere  denial.

The totality  of the  foregoing  is that  we find  that  the draft  defence  does not raise  any triable issues.

Conclusion

The upshot  of the foregoing  is that  we do not  find merit  in the Claimant’s Application  dated  9. 10. 2020 as amended on 14. 10. 2020 and hereby  dismiss  it with costs  to the Claimant. Accordingly, we discharge  the Orders  issued on  1. 12. 2020.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 4TH  DAY OF  MARCH,  2021.

HON. B. KIMEMIA  CHAIRPERSON    SIGNED  4. 3.2021

MR. P. GICHUKI   MEMBER    SIGNED  4. 3.2021

MR. B. AKUSALA   MEMBER    SIGNED  4. 3.2021

MISS  GITAU FOR RESPONDENT

No appearance  for Claimant

Miss Gitau  for Respondent:We  pray for  30 days  stay of execution .

Order:30 days  stay of  execution  granted.

HON. B. KIMEMIA  CHAIRPERSON    SIGNED  4. 3.2021