Pekatewa Investments Company Limited v NIC Bank Limited [2017] KEHC 9611 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL DIVISION

HIGH COURT CIVIL  CASE NO. 380 OF 2013

PEKATEWA INVESTMENTS

COMPANY LIMITED...........................................PLAINTIFF/RESPONDENT

VERSUS

NIC BANK LIMITED............................................DEFENDANT/APPLICANT

RULING

1. The application dated 6th February, 2017 principally seeks orders that the exparte judgment entered herein on 6th December, 2016 against the Defendant and all consequential orders thereto be set aside and that the Amended Statement of Defence filed by the Defendant in court on 28th November, 2016 be admitted and form part of the court record.

2. The application is premised on the grounds stated therein and is supported by the affidavit sworn by Irene Mburu, the learned counsel for the Applicant. It is stated that the amended plaint was served on 10th November, 2016. That instructions were then sought from the client and the Amended Defence was brought to court for filing on 24th November, 2016 but the court file could not be traced. That the Amended Defence was filed on 28th November, 2016 when the court file was traced. That a request for judgment was filed by the Plaintiff on 29th November, 2016 and subsequently judgment entered by the Deputy Registrar on 6th December, 2016.

3. It is further stated that the entry of the judgment was irregular and the same ought to be set aside. That the Defence raises triable issues and the suit ought to proceed on merits.  That the Amended Defence was filed without inordinate delay and the Plaintiff will not suffer any prejudice that cannot be compensated by way of damages.

4. The application is opposed. It is stated in the replying affidavit that the Applicant failed to file the Amended Defence within the time ordered by the court, hence the entry of the judgment. That the Amended Defence is irregularly on record as it was filed out of time and without the leave of the court. That at the time the judgment was entered there was no Amended Defence on record. The Respondent wondered why the Amended Defence was signed on 16th December, 2016 if indeed it was filed on 28th November, 2016.  It is contended that the Amended Defence has no merits and is only meant to delay the trial.  The Respondent further averred that the court file has always been available in the registry.

5. During the hearing of the application, the parties opted to file written submissions. I have considered the said submissions together with the authorities cited.

6. The principles applicable in determining whether to set aside an exparte judgment were laid out by the Court of Appeal in the case of Pithon Waweru Maina v Thuka Mugiria [1983]eKLRas follows:

“a) Firstly, there are no limits or restrictions on the judge’s discretion 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.Patel v EA Cargo Handling Services Ltd [1974] EA 75 at 76C and E b).Secondly, this discretion is intended so to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but is not designed to assist the person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice.Shah v Mbogo [1967]EA 116at 123B, Shabir Din v Ram Parkash Anand (1955) 22 EACA 48. c).Thirdly the Court of Appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been misjustice.Mbogo v Shah [1968]EA 93.

3. The court has no discretion where it appears there has been no proper service(Kanji Naran v Velji Ramji [1954] 21 EACA 20).Judgment does not cease to apply because a decree has beenextracted (Fort Hall Bakery Supply Company v Frederick Muigon Wargoe[1958] EA 118).5. Some of the matters to be considered when an application is made are, the facts and circumstances, both prior and subsequent, and all the respective merits of the parties together with any other material factors which appear to have entered into the passing of the judgment, which would not or might not have been present had the judgement not beenex parteand whether or not it would be just and reasonable, to set aside or vary the judgment, upon terms to be imposed(Jesse Kimani v McConnel [1966] EA 547,555 F).

6. 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, it should be remembered that to deny the subject a hearing should be the last resort of a court.(Jamnadas v Sodha v Gordandas Hemraj (1952) 7 ULR 7)”

7. In the instant case, the court orders made on 27th October, 2016 were that the Amended Defence be filed within 14 days after service of the Amended Plaint. It is not in dispute that the Amended Plaint was served on 10th November, 2016. Thus the last date within which the Amended Defence could have been filed within time was on 24th November, 2016. The Amended Defence was therefore filed out of time by a period of four days.

8. The Applicant’s explanation for the late filing of the Amended Defence is that the court file was not available in the registry and was not traced until the 28th November, 2016.  However there was no letter shown to this court written by the Applicant to the court requesting for the file especially taking into account the consequences of failing to file the Amended Defence within time. I hold that the Amended Defence was filed out of time.

9. The Amended Defence was filed on 28th November, 2016. The Request for Judgment was filed on 29th November, 2016. The judgment was entered on 6th December, 2016.  Thus going by the dates in the court file the judgment was entered after the Amended Defence had already been filed.  Although the Respondent has questioned whether indeed there was an Amended Defence on record by the time the judgment was entered, there is no evidence to controvert the position on record that the Amended Defence was filed on 28th November, 2016 as per the court stamp on the same and the payment receipt for the said filing.  This court is therefore satisfied that the Amended Defence was filed on 28th November, 2016.

10. The Applicant’s side has submitted that the exparte judgment ought not to have been entered when the Amended Defence was already on record. The court was urged to consider that the delay of four days was not inordinate and can therefore be excused and the Amended Defence admitted as part of the record. On the other hand, the Respondent’s counsel has submitted that the judgment was regularly entered as there was no Amended Defence that had been filed within time. My view is that the Deputy Registrar  should not have entered the judgment when the Amended Defence was already on the record.  In that regard, I am in agreement the holding in Alpha Logistics Kenya Ltd v Edcom Ltd & another [2014] eKLR.

11. I have considered the Defence filed. The said Defence does not merely consist of mere denials but raises triable issues in response to the Plaintiff’s claim for damages for defamation, negligence and for the liquidated sum of Ksh.119,000/=

12. With the foregoing, this court’s view is that the Applicant should not suffer the consequence of their case not being heard on merits. The Plaintiff can be compensated by way of costs and will therefore not suffer any prejudice. Consequently, I allow the application on condition that the Defendant do pay the Plaintiff thrown away costs and the costs of this application.

Date, signed and delivered at Nairobi this 8th day of Nov, 2017

B. THURANIRA JADEN

JUDGE