Martha Njeri Mbene (Suing for and on behalf of the estate of James Monari Bosire-deceased) v Statutory Manager United Insurance Company Limited [2018] KEELC 969 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT & LAND COURT AT NAIROBI

ELC SUIT NO. 222OF 2015

MARTHA NJERI MBENE

(Suing for and on behalf of the estate of JAMES

MONARI BOSIRE-DECEASED)...................................PLAINTIFF

VERSUS

THE STATUTORY MANAGER UNITED

INSURANCE COMPANY LIMITED.........................DEFENDANT

RULING

The plaintiff brought this suit on 16th March, 2015 to enforce an agreement for sale that was entered into between the plaintiff’s deceased husband, James Monari Bosire and United Insurance Company Limited in respect of all that parcel of land known as Kajiado/Kaputei North/15666 (hereinafter referred to as “the suit property”). The defendant who is the statutory manager of United Insurance Company Limited was served with summons to enter appearance on 30th April, 2015.  The defendant did not enter appearance and on 17th June, 2015, the plaintiff requested for interlocutory judgment that was entered against the defendant on 22nd June, 2015.

The suit was subsequently fixed for formal proof on 19th January, 2016 when the plaintiff gave evidence and closed her case.  On 2nd August, 2016, the court entered judgment for the plaintiff against the defendant as prayed in the plaint.  The plaintiff thereafter extracted a decree on 9th September, 2016 and served the same upon the defendant on 12th October, 2016.  For over five (5) months after being notified of the judgment, the defendant took no action. The defendant neither complied with the decree nor came to court to challenge the same. It was not until 8th May, 2017 when the plaintiff sought an order that the Deputy Registrar does execute on behalf of the defendant the instrument of transfer of the suit property in her favour that the defendant filed an application dated 5th May, 2017 seeking stay of execution of the judgment that was entered by the court on 2nd August, 2016 and the setting aside of the same.

This is the application which is the subject of this ruling.  The application was brought on the grounds that the defendant was not heard before judgment was entered against it on 2nd August, 2016 and that the summons to enter appearance and the plaint were received by the former Statutory Manager of United Insurance Company Limited who misplaced the same resulting in no action being taken to defend the suit.  The defendant averred that it has a good defence to the plaintiff’s claim which it should be given an opportunity to put forward.  The defendant contended that United Insurance Company Limited is under statutory management and if the judgment entered in favour of the plaintiff is not set aside, the execution thereof would be tantamount to giving the plaintiff preferential treatment.  In its affidavit in support of the application sworn by Christopher Onyango on 5th May, 2017, the defendant annexed among others, a draft statement of defence to the plaintiff’s claim.

The application was opposed by the plaintiff through a replying affidavit sworn on 27th December, 2017.  The plaintiff averred that the defendant was served with summons to enter appearance and subsequently with a copy of the decree but failed to take action in response thereto until 3rd April, 2017 when it was served with the plaintiff’s application seeking the enforcement of the judgment. The plaintiff contended that the defendant was the author of its own misfortune and as such was not deserving of the exercise of this courts discretion.  The plaintiff contended further that her claim was not affected by the moratorium that was declared by the defendant under section 67 (c) (10) of the Insurance Act in that she was neither a policy holder nor a creditor of United Insurance Company Limited. The plaintiff contended that the defence which the defendant intends to put forward against her claim raises no triable issues.

The application was heard on 31st January, 2018.  I have considered the application and the affidavit that was filed in opposition thereto by the plaintiff.  I have also considered the submissions by the advocates for the parties and the authorities that were cited before me in support thereof. Order 10 Rule 11 of the Civil Procedure Rules gives the court power to set aside or vary a judgment and subsequent decree where such judgment was entered in the absence of or without hearing the other party.  In the case of Patel v E. A Cargo Handling Services Ltd. (1974) E.A 75 at page 76 C and E, the court stated as follows:

“There are no limits or restrictions on the judge’s discretion to set aside or vary an ex-parte judgment except that if he does vary the judgment, he does so on such terms as may be just.  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 it by the rules….That where there is a regular judgment as it is in the case here, the court will not usually set aside the judgment unless it is satisfied that there is a defence on the merits.  In this respect, defence on the merits does not mean a defence that must succeed.  It means a “triable issue” that is an issue which raises a prima facie defence which should go to trial for adjudication.”

I am satisfied on the material before me that the defendant has established a prima facie defence to the plaintiff’s claim and should be given an opportunity to defend the suit.  I would however exercise my discretion in favour of the defendant conditionally in view of the manner in which the defendant has conducted itself in these proceedings.  The defendant has exhibited a high degree of indolence which a court of equity must frown at.  I have found the explanation given by the defendant for its failure to enter appearance and defend the suit not convincing. There is also no explanation for the inordinate delay in bringing the present application.  Due to the foregoing, I hereby make the following orders:

1. The judgment entered herein on 2nd August, 2016 against the defendant and the subsequent decree issued on 9th September, 2016 are set aside.

2. The defendant shall file its statement of defence, list of documents and witness statements within 21 days from the date hereof.

3. The defendants shall pay to the plaintiff thrown away costs assessed at Kshs.30,000,000/= within 21 days from the date hereof.

4. The Land Registrar Kajiado shall enter a restriction on the title Kajiado/ Kaputei North/15666 restricting any other or further dealings with the said parcel of land pending the hearing and determination of this suit or further orders by this court.

5. In the event that the defendant fails to comply with order 3 above within the prescribed time, the judgment entered herein on 2nd August 2016 and the subsequent decree issued on 9th September, 2016 shall be automatically reinstated without further reference to the court and if any defence would have been filed by the defendant, the same  shall stand struck out.

Delivered and Dated at Nairobi this 25th day of October 2018

S. OKONG’O

JUDGE

Ruling read in open court in the presence of:

Mr. Odaga h/b for Warui for the Plaintiff

Mr. Saenyi for the Defendant

Catherine - Court Assistant