Rachael Ndunge Kitetu v Airtel Yes Sacco Limited [2021] KECPT 596 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.472 OF 2019

RACHAEL  NDUNGE  KITETU......................................................CLAIMANT

VERSUS

AIRTEL YES  SACCO  LIMITED............................................. RESPONDENT

RULING

Vide the Application  dated 14. 1.2020, the Claimant has moved  this Tribunal  seeking  for Orders inter alia:

1. That this  matter be  certified  urgent  and be heard  exparte  in the first instance and service  hereof  be dispensed with  in the first instance;

2. That  the  Tribunal  be pleased  to allow Yes Sacco  Limited  to file  appearance and defence  out of  time;

3. That  pending  hearing  and determination  of this Application  the Tribunal  be pleased  to stay  execution; and

4. That cost of this Application be provided for.

The Application is supported by the grounds on its face and the   following Affidavits

a. Supporting  Affidavit  sworn by Benson  Mbuthia Njiru advocate  on 14. 1.2020;

b. Supplementary Affidavit  sworn  by the said  Benson  Mbuthia  on 17. 2.2020

The Claimant has  opposed  the Application vide  the  Replying  Affidavit  sworn by herself on 23. 1.2020.

Vide  the  directions  given  on  25. 2.2021, the Application  was canvassed  by way of  written submissions.  The Respondent filed its  written submissions  on  8. 3.2020 while  the Claimant did so  on 15. 12. 2020.

Respondent’s  Contention

Vide  the instant  Application  the Respondent  prays  for the default  judgment  entered  on 17. 10. 19 to be set  aside on  the ground  that the  Claimant  sued and  obtained  judgment  against a non-existent body.

Claimant’s  Case

The Claimant has opposed  the Application  on the ground  that the  Application  is a non-starter  as those grounds  advanced  in  is support  are untenable. That the Respondent  in its previous  dealing  with the Claimant  was described  as Airtel Yes Sacco  Limited and that  he is not aware  if there was any change  of name.  that the  inclusion of the word ‘Airtel ‘ in the description of  the Respondent  has not in any way prejudiced it. That  the Defendant  has no valid  Defence  raising  triable  issues. That  it is truly  and justify  indebted  to the Claimant.

Respondent’s  Supplementary  Affidavit

Vide  the supplementary  Affidavit  sworn  on  17. 2.2020, the Respondent  has sought  to  rebut  the averments  made by  the Claimant  above. It reiterates  the fact that  the proceedings  herein  have been  commenced  against  a non-existent  entity.

Issues  for determination

We have  framed  the following  issues  for determination

a. Whether  the Respondent  has established  a proper  basis  for setting  aside  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.”

Reasons  for failure  to file a  memorandum  of Appearance  or Defence

The Respondent has  not  expressly  given  an explanation  as to why it  did not  enter appearance  within  the  time limited  by law.  However,  it has  accused  the Claimant  for executing  court process  on a non-existent entity.

Draft defence

The question  arises  as to whether  the draft  defence  raises  triable  issues.  We have  perused  the application  and the  annextures  thereto. We note that  a draft  defence  is not part of them.  This is a crucial  document which  is  meant  to help  the Tribunal  ascertain  the  bonafides of an application  for setting  aside  a default  judgment.  Failure  to enclose  it to the  Application  is fatal to  the Application.

Be  that as it may, and assuming  that we were  to rely  on the grounds  in support  of the Application  to make  a determination  as to  the  bona fides of the same,  we find that  the Respondent  has not given  any plausible  reason  as to why  the default  judgment  should  be set aside.  It is  not enough for the  Respondent  to allege  that the  Claimant  has sued a non-existent  entity. We take judicial notice  that ‘Airtel  Yes Sacco and Yes  Sacco  have a common  relationship in that  the former changed  to the later.  The  Respondent can thus  not be heard  to be  evading  responsibility  merely  because  of  a misnomer in the  manner  in which  it has  been described.

Conclusion

The upshot  of the foregoing  is that  we do  not find  merit  in the Respondent’s  Application  dated  14. 1.2020 and hereby  dismiss  it with costs  to the Claimant.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 25TH   DAY OF  MARCH,  2021.

HON. B. KIMEMIA   CHAIRPERSON   SIGNED  25. 3.2021

HON. JANE MWATSAMA DEPUTY CHAIRPERSON SIGNED  25. 3.2021

MR. P. GICHUKIMEMBER   SIGNED  25. 3.2021

Mbuthia  Advocate for Respondent

Okoth  Advocate  for Respondent

HON. B. KIMEMIA   CHAIRPERSON   SIGNED  25. 3.2021