Platinum Credit Ltd v Mbogori [2022] KEHC 2995 (KLR)

Platinum Credit Ltd v Mbogori (Civil Appeal E052 of 2021) [2022] KEHC 2995 (KLR) (10 May 2022) (Judgment)

Neutral citation: [2022] KEHC 2995 (KLR)

Republic of Kenya

In the High Court at Meru

Civil Appeal E052 of 2021

EM Muriithi, J

May 10, 2022

Between

Platinum Credit Ltd

Appellant

and

Samuel Mwenda Mbogori

Respondent

(This was an Appeal from the Ruling of the Senior Resident Magistrate’s Court at Githongo delivered on 19th February 2020 in RMCC No. 114 of 2017, Samuel Mwenda Mbogori -vs Platinum Credit Ltd. by Hon. E.W. Ndegwa, SRM)

Judgment

1. By a Memorandum of Appeal dated 24/7/2020 and another dated 12/4/2021 pursuant to leave granted on 19/3/2021 in H.C. Misc. Application No. 62 of 2020, with similar the appellant appeals to this court from the judgment of Githongo Magistrate’s Court on grounds that;a)the learned magistrate erred in law and fact by refusing to set aside the judgment of 21/8/2019 upon the appellants non-attendance at the hearing which non-attendance was inadvertent mistake on the part of the counsel.b)The learned magistrate erred in law and fact by refusing to set aside the judgment of 21/8/2019 when the appellant had shown it had a good defence to the suit and it should have been given a chance to be heard.c)The learned magistrate erred in law and fact by refusing to set aside the judgment of 21/8/2019 yet counsel who held brief on the mention date is not known to the Advocates on record and was not sent by the Advocates on record.d)The learned magistrate erred in law and fact by refusing to set aside the judgment of 21/8/2019 without considering the appellant’s right to be heard as enshrined in the Constitution of Kenya.e)The learned magistrate erred in law and fact in finding that defendant was not keen in defending the suit yet in fact the defendant had always [wanted] the suit to be heard on merit and in addition to filling an amended defence had filed all the pre-trial documents in readiness to the hearing.f)The learned magistrate erred in law and fact by refusing to set aside the ex-parte judgment yet in the said judgment, she indicated that the respondent had paid the entire loan when in actual fact, this was not true and will go a long way in prejudicing the appellant’s rights of recovery.

2. The Parties canvassed the appeal by way of written submissions with the appellant and respondent filing their admissions on 9/9/2021 and 21/10/2021, respectively.

3. In the appellant’s substantive submissions, it gave a background of the facts leading to this appeal as summarized herein. That the respondent initiated Civil Suit No.114 of 2017 seeking temporary orders of injunction restraining the appellant from selling the repossessed motor vehicle as well as orders to compel the appellant to surrender the said motor vehicle. Having certified the matter urgent, Hon. Manyamba SRM granted a temporary injunction restraining the sale of the motor vehicle pending inter-partes hearing. Subsequently, Hon. E.W. Ndegwa issued a temporary interlocutory injunction restraining the appellant from selling, transferring or disposing the said motor vehicle pending the main suit.

4. During the pendency of the suit, parties unsuccessfully explored an out of court settlement. The plaintiff then amended its plaint seeking damages for detinue and the defendant in response filed an amended defence and all other compliance documents in line with Order 11 of the Civil Procedure Act. The hearing did not proceed as scheduled on 10/4/2019 but instead Mr. Muchomba holding brief for the defendant’s counsel sought for an adjournment which was granted as the last adjournment and a further hearing date reset for 3/7/2019. The appellant alleges that it was not aware of the said date when the matter proceeded ex-parte and a judgment was delivered on 21/8/2019 without notice to it and only discovered of the judgment around 16/9/2019 from the auctioneers. It immediately filed an application to set aside the judgment and hearing of the matter on merits which application was dismissed on 19/2/2020 and also that the respondent taxed costs in absence of the appellant, sought warrants of attachment and sought to proclaim the appellant’s items, hence this appeal.

5. The appellant submitted that four issues arose for determination, namely; whether the appellant was condemned unheard without notice of the hearing, judgment and assessment of costs; that the counsel who held brief is not known to the appellant and was not sent to hold brief and thus could not take a hearing date which was not communicated to the appellant’s counsel or have respondent’s counsel communicate the same; that the learned Magistrate dismissed the application to set aside without considering the defence and that the matter arose from a commercial transaction where the respondent used his car as collateral for a loan; and that the trial magistrate used her discretion capriciously.

6. The appellant went further to submit on the grounds of appeal and dealt with grounds 1, 3, 4 and 5 together. On grounds 1 and 3, it was submitted that the non-attendance was inadvertent and an innocent mistake. That at pages 171-177 of the record show that the counsel who held brief was unknown and had no instruction to take the hearing date. On ground 4, the appellant submitted that it is a party’s constitutional right to be heard. It is the appellant’s submission on ground 5 that it had always appeared in the matter and complied with pre-trial requirements and a hitch only occurred when Mr. Muchomba held brief without instructions and did not give any feedback. The appellant’s counsel also alleges that despite calling the respondent’s counsel severally, he was not keen to give details. Also, a mention notice without a purpose was sent to the appellant’s counsel. That this is a trial by ambush which should be discouraged and it should not suffer for the counsel’s mistake. Reliance was placed on, Civil Application No. Nai 9 of 1978 Belinda Murai 9 others v Amos Wainaina (1979) eKLR and Benjamin Mwea Mwanthi v East Africa Spectre (2020) eKLR and ELRC Cause No.73 of 2015 Peter Murando Nyaberi v Bakery & Another (2021) eKLR.

7. Further and in submission on grounds 2 and 6, the appellant submitted that it had raised triable issues in the amended defence and supporting documents, which the trial court ought to have considered in arriving at a decision, citing CMC Holdings Ltd v James Nzioki (2004) eKLR. The appellant also submitted that the trial magistrate was in error to find that the respondent had cleared the outstanding loan yet it admitted in paragraph 5 of the plaint, amended plaint and witness statement to having an outstanding balance.

8. In addition, the appellant submitted that the alleged payment of Kshs.381,069/= through a cheque bounced as seen at page 17 of the record. It was also submitted that it was necessary to have the appellant explain some of the documents referred to by the trial court.

9. The Respondent opposed the appeal, and submitted on the issue whether the judgment should be set aside urging that setting aside of an ex-parte judgment is at the discretion of a court, relying on Order 12 Rule 7 of the Civil Procedure Rules which states,“Where under this order judgment has been entered or suit dismissed, the court, on application, may set aside or vary the judgment or order upon such terms as may be just.’’Reliance was also placed on the case of Shah v Mbogo & Another (1967) EA 116.

10. He further submitted that the issue of mistake was never raised by the appellant at trial but is being raised now at the appeal stage. That parties are bound by their pleadings and that the judgment date was taken by consent of the parties by one Mr. Kimathi for the plaintiff and Mr. Muchomba held brief for Ms. Sheila Mugo for the defendant.

11. It was his submission that the appellant did not peruse the court file for a period of three months to confirm the position of the matter and concluded that equity aids the vigilant and not the indolent and that courts discretion should not be exercised to help a party frustrate the other in quest to access justice and reap on their judgment.

Issue for determination 12. Having analyzed the record of appeal as well as the parties’ submissions, the issue commending itself for determination is whether the trial court judgment should be set aside.

Determination 13. First, it is clear from the record that on 10/4/2019 that one Mr. Muchomba held brief for Ms. Sheila Mugo, the then counsel for the appellant. He indicated he was initially ready to proceed but then said the counsel was indisposed and not ready to proceed and sought for an adjournment. Mr. Kimathi for the plaintiff indulged counsel and the court issued a last adjournment to the matter and set the hearing for 3/7/2019 by consent.

14. The appellant alleges to not knowing counsel, one Mr. Muchomba who held its brief on 10/4/2019. That as it may, there was a span of about three months to the next hearing date. A vigilant litigant ought to have taken steps in establishing the position of the matter from the court file. Looking at the entire record, at no time did the appellant peruse the court file. It is only now that it is claiming that was a mistake on the part of the counsel which is excusable.

15. Order 12 rule 7 of the Civil Procedure Rules grants jurisdiction to set aside ex parte judgment. In addition, the court has inherent jurisdiction in terms of Section 3A of the Civil Procedure Act provides that, ‘Nothing in this Act shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.” I respectfully agree with the elaboration by Mativo J. in Wachira Karani v Bildad Wachira [2016] eKLR that “the fundamental duty of the court is to do justice between the parties.”

16. In Abdalla Mohammed & Another v Mbaraka Shoka (1990) eKLR the Court of Appeal (Nyarangi, Gicheru (as he then was) & Kwach, JJA.) held: -“[T]he tests for the correct approach in an application to set aside a default judgment are; firstly whether there was a defence on merits; secondly, whether there would be any prejudice; and thirdly, what is the explanation for any delay – see the judgment of Kneller, JA (as he then was) in the case of Merama Nyangombe v Chacha Mwita, Court of Appeal, Civil Appeal No 79 of 1983. ”

17. In this matter, there was a merited defence which the respondent should be accorded a chance to ventilate. Similarly, the appellant stands to be prejudiced for loss in business if the respondent does not clear the outstanding loan balance.

18. The court notes from the lower court record, the appellant had put in all necessary pleadings and documents for the prosecution of its case. It is not clear why they did not attend the hearing despite having taken the date by consent.

19. However, at page 65 of the Record of Appeal, it is the respondent’s evidence that he was in arrears of less than Kshs.65,042/=. During trial, the respondent did not deny or confirm to being in arrears. In view of the Respondent’s admission of owing the appellant some amount less than Kshs.65,042/=, the trial court erred in finding that there was no outstanding balance. The alleged cheque payments are said to have been dishonoured. This amounts to a triable issue which ought to have been addressed if the matter was heard on merits, at the hearing. It is was thus improper for the trial court to dismiss the application on ground that it raised no sufficient cause.

20. The test for appellate interference with the discretion of a trial court is settled in Mbogo v Shah (1968) E.A 93 as follows:“A Court of Appeal should 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 misjustice”.

21. The trial court was plainly wrong in shutting out the appellant’s defence which already admitted owing some money to the appellant. There would result a misjustice if the appellant bank lender is disabled by an order of the court from recovering an acknowledge debt, the exact amount of which is the only issue to be determined.

22. From the analysis, it is evident that for substantive justice to be seen to have been done, the defence/appellant ought to be given a chance to have their day in court. The court is guided by the Constitution and the authorities cited above in exercising its discretion to set aside the trial court judgment.

Orders 23. Accordingly, for the reasons set out above, the Courts finds merit in the appeal, which is consequently hereby allowed, the trial court’s judgment and any consequential orders are hereby set aside. The matter to be set down for hearing de novo before the trial court differently constituted.

24. There shall be no order as to costs.Order accordingly.

DATED AND DELIVERED THIS 10TH DAY OF MAY 2022. EDWARD M. MURIITHIJUDGE