Rarlon Kenya Construction Materials Ltd v Peng & 2 others; Powerchina Guinzhou Engineering Loiyangalani- Suswa Project Co Ltd (Objector) [2022] KEHC 15089 (KLR)

Rarlon Kenya Construction Materials Ltd v Peng & 2 others; Powerchina Guinzhou Engineering Loiyangalani- Suswa Project Co Ltd (Objector) (Civil Suit E824 of 2021) [2022] KEHC 15089 (KLR) (Commercial and Tax) (11 November 2022) (Ruling)

Neutral citation: [2022] KEHC 15089 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Suit E824 of 2021

A Mabeya, J

November 11, 2022

Between

Rarlon Kenya Construction Materials Ltd

Plaintiff

and

Peng Jian Peng

1st Defendant

Lou Guang Yang

2nd Defendant

Powerchina Guinzhou Engineering Company Ltd

3rd Defendant

and

Powerchina Guinzhou Engineering Loiyangalani- Suswa Project Co Ltd

Objector

Ruling

1. Before court is an application dated January 19, 2022 brought under order 22 rule 22 of the Civil Procedure Rules 2010, section 3, 3A and 63E of the Civil Procedure Act.

2. The applicant seeks to have the judgment and court order dated December 15, 2021 set aside and the 3rd defendant be granted leave to file a defence and the suit against it struck out.

3. The application is premised on the grounds on the face of it and is supported by the affidavit of He Yingtao who is the representative of the 3rd defendant. The applicant’s case is that the court pleadings were not served upon them. That they only learnt of the existence of the suit upon being served with the warrants of execution by the auctioneers. It was contended that there was no contractual relationship between the third defendant and the plaintiff and thus the applicant had a viable defence against the plaintiff’s suit. That the impugned judgment was obtained by misrepresentation of facts.

4. The application was opposed through a replying affidavit sworn by Li Yaling who is a director of the plaintiff. She stated that the plaintiff served the 3rd defendant with the documents at the company premises on 1st October. That the 3rd defendant had always been well represented by the firm of Orina and Co advocates who entered appearance on October 1, 2021.

5. The application was canvassed byway of written submissions which I have considered. The main issue for determination is whether the applicant is entitled for the orders sought.

6. The applicant has sought that the orders made December 15, 2021 be set aside. It is the applicant’s submissions that the summons to enter appearance were not served upon them and that the applicant was not registered in Kenya. That neither did it have business in Kenya as alleged by the respondent.

7. In response, the respondent submitted that the defendants advocate had duly entered appearance on October 1, 2021 and actively participated in the proceedings. That on September 30, 2021 it served the certificate of urgency, the plaint and supporting documents to the 3rd defendant at their offices.

8. I have perused the entire record. The suit was lodged vide a plaint dated September 22, 2021. According to the affidavit of service sworn by Mike Makhulo service was effected on September 30, 2021. The defendants were required to enter appearance within 15 days of service. It is not disputed that the 3rd defendant counsel filed a notice of appointment but failed to file a defence. The defence ought to have been filed within 14 days of entering appearance as required by under order 7 rule 1 of the Civil Procedure Rules. As a result, interlocutory judgment in default of appearance and defence was entered.

9. Order 10, rule 11 of the Civil Procedure Rules provides: -“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.”

10. In Shah v Mbogo & another [1967] EA It was held: -“The court’s discretion to set aside an exparte judgment is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but not to assist a person who has deliberately sought (whether by evasion or otherwise to obstruct or delay the cause of justice, the motion should therefore be refused.”

11. In Patel v EA Cargo Handling Services Ltd (1974) EA 75, it was held: -“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.”

12. I have considered the reasons advanced by the applicant for failing to file the defence. Proper service was effected with respect to the suit. The same is evidenced by the affidavit of service deposed by the process server which was not disputed or challenged. In this regard, the judgment was entered regularly. However, the court is clothed with the discretion to ensure justice is dispensed to all parties.

13. In Tree Shade Motors Ltd v DT Dobie & another (1995-1998) IEA 324, it was held that: -“Even if service of summons in valid, the judgment will be set aside if defence raises triable issues. Where a draft defence was tendered together with an application to set aside a default judgment, the court hearing the application was obliged to consider if it raised a reasonable defence to the plaintiff’s claim. Where the defendant showed a reasonable defence on the merits, the court could set the ex-parte judgment aside.”

14. I have read the draft defence and in my opinion it raises triable issues. In the premises, I find that it would be in the interest of justice to hear the parties fully on merit in respect to their respective claims.

15. In the upshot, the application is allowed on the following conditions: -a.That the 3rd defendant’s statement of defence and counterclaim shall be deemed as properly filed upon payment of the requisite court filing fees.b.The reply to defence, if any be filed and served within 7 days of service.c.The applicant shall bear the costs to the application.

It is so ordered.DATED AND DELIVERED AT NAIROBI THIS 11TH DAY OF NOVEMBER, 2022. A MABEYA, FCIArbJUDGE