Mary Nyambura Maingi v Urithi Housing Co-operative Society Limited [2021] KECPT 597 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.292 OF 2019

MARY NYAMBURA  MAINGI....................................................................CLAIMANT

VERSUS

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

RULING

Vide the Application  dated 26. 2.2020, the Respondent has moved  this Tribunal  seeking  for the following Orders:

1. That  this  Application  be certified  urgent  and heard  ex-parte in the first instance;

2. That pending  hearing and determination  of this Application,  this  Honourable  Tribunal  be pleased  to stay execution  of the judgment and decree  issued on  17. 10. 2019;

3. That  this Honourable  Tribunal  be pleased  to set aside the judgment  and decree  issued  on  17. 10. 2019 and all the 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; and

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

The Application is supported by the grounds on its face and the  Affidavit sworn by  Samuel  Ngundo  Maina  on  even date.

The Claimant  has  opposed  the Application by filing a  Replying  Affidavit  sworn by herself on 26. 8.2020.

Vide  the  directions  given  on  6. 8.2020,  the Application  was canvassed  by way of  written submissions.  The Respondent   filed  its initial  set of submissions  on 26. 8.2020, and supplementary  ones on  9. 11. 2020.  The Claimant  filed her submissions on 27. 10. 2020.

Respondent’s Contention

Vide the instant Application, the Respondent  contend that the Claimant  has obtained  an irregular  judgment and is in the  process  of executing it.  That prior  to  the entry of the said judgment,  it  was not served with  summons  to enter  Appearance.  That it  therefore  follows that the matter  proceeded without  the Respondent being afforded  an opportunity  to be heard.  That it has  a strong  defence  which  raises triable issues.

Claimant’s  Case

The Claimant  has opposed  the Application  on grounds  that the summons to enter  Appearance  were duly  served upon  it. That  the Respondent  acknowledged  service  by stamping on the counter part copy. That a return of service  to that effect was filed.

That  the draft defence does not raise triable issues  as the  Respondent  and herself executed two sale  agreements  for the purchase  of  two  (2) plots  being plot  203 &  204 of the rate of Kshs.59,000/= each. That the said sale  agreements were  executed  on 17. 5.2017.

That  as regards  plot  203,  she paid the full purchase  price and a receipt issued.

As regards plot  204,  she paid  in two  tranches of Kshs.275, 000/= and Kshs.320,000/= was to be paid  on  installments.

That the plots were  to be excised  from  LR. NO.  10823/8.

Issues  for determination

The Respondent’s Application  has presented  the following issues  for determination:

a. Whether the  Respondent has laid a proper  basis  for the setting   aside  of the default judgment  entered  on  17. 10. 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.”

A question  arises  as to whether  the current Application  has satisfied  the foregoing  conditions.  We  will look at the said conditions  individually  as follows:

Reasons  for failure  to enter Appearance

The Respondent’s  borne of  contention  is that it was  not served  with  summons to enter  Appearance.  As such,  it did not  enter Appearance prior  to entry  of the default  judgment. We  have however,  perused  the Affidavit of service  sworn by  Josphat Karanja on  3. 10. 2019. It is Apparent  that the Respondent  was dully served  with summons  to enter Appearance  on 7. 8.2019. The Respondent confirmed  this  fact by stamping  on the counterpart  copy of the summons. It  cannot  be heard  therefore to  dispute  service  of  the same.  It is our finding  that the Respondent  was duly  served with summons  to enter Appearance  on  7. 8.2019.

Whether  proposed  Defence  raises  triable  issue

We have  perused  the draft  Defence  annexed  to the  supporting  Affidavit of Samuel  Ngundo  Maina and marked  as SNM-2. We  note that  the Respondent  confirm  having entered  into an agreement  for sale  of the two plots (plots  203  and  204) to the Claimant. That the said plots  were to be transferred  upon  the Claimant  complying  with the  terms  laid down  in  the agreements. That  from the onset,  the Claimant  was aware  of the model  employed by the Respondent  which  entailed  the  purchase  of a big  chunk of  land,  invite members to  make bookings by way of purchase  of plots. That upon  payment  for the plots,  the property  would  be  sub-divided  and  transferred  to them.

That the Claimant  is yet to complete  payments  of the purchase  price  as well  as  conveyancing  fees to enable  the Respondent transfer  the property  to her.  That the issue of refund does not  occur  since  the amount paid by the Claimant  went  into payment of deposits for  owners  of the land as well as meeting  surveyors  expenses.

We have  perused  the Claimant’s   list and bundle  of documents dated  22. 5.2019. Documents  3 and 4  are receipts  for Kshs.595,000/= while  documents  5  is a receipt  for Kshs.275,000/=. They are  both  dated 15. 3.2017.

Documents  1 and 2  are the  two sale agreements. Document 6  is a demand  letter dated 14. 3. 2020.

Upon  appreciation  of  the sale Agreements, it is apparent  that the Claimant made full purchase  price for plot  203  and  a sum of Kshs.275,000/= towards  plot Nos.  204 receipts  were issued on  15. 3.2017.

As  was  legitimately expected,  the  Respondent  did not  avail title  documents to facilitate  transfer  of the said  plots into her name. This prompted the  Claimant  to issue  demands which were not honored  or acted upon  thus  precipitating  the instant claim.

In the  instant claim, the Claimant prays  for a refund  of the said purchase price. This  is  a liquidated  claim  supported  by  receipts.

We thus  find that  having  failed  to  avail title documents  to facilitate  transfer of the suit plots  to the Claimant,  the Respondents  defence  is a sham and does  not raise  triable  issues.

Conclusion

The upshot  of the foregoing  is that we do not  find merit  in the Respondent’s  Application  dated 26. 2. 2020 and hereby  dismiss  it with costs  to the Claimant.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 7TH   DAY OF JANUARY, 2021.

HON. F. TERER    DEPUTY CHAIRMAN SIGNED  7. 1.2021

MR. P. GICHUKI   MEMBER    SIGNED  7. 1.2021

MR. B. AKUSALA    MEMBER   SIGNED  7. 1.2021

In the presence  of  Ms. Gitau holding brief  for  Mr. Mwangi for Respondent

Mr. Githumbi  holding for  Mr. Manyala for Respondent

Court clerk  Maina

HON. F. TERER    DEPUTY CHAIRMAN SIGNED  7. 1.2021

Miss Gitau- praying  for  30 days  stays of execution.

Tribunal-  30   days stay of execution granted.

HON. F. TERER    DEPUTY CHAIRMAN SIGNED  7. 1.2021