Seneca East Africa Limited & another v Ondari [2022] KEHC 12908 (KLR)

Seneca East Africa Limited & another v Ondari (Civil Appeal E455 of 2018) [2022] KEHC 12908 (KLR) (Commercial and Tax) (14 September 2022) (Judgment)

Neutral citation: [2022] KEHC 12908 (KLR)

Republic of Kenya

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

Commercial and Tax

Civil Appeal E455 of 2018

DAS Majanja, J

September 14, 2022

Between

Seneca East Africa Limited

1st Appellant

Isoe Sibwaga

2nd Appellant

and

Fred Makori Ondari

Respondent

(Being an appeal from the Ruling and Order of Hon. E. Wanjala dated 14th September 2018 at the Magistrates Court at Nairobi, Milimani in Civil Case No.622 of 2016)

Judgment

1. The respondent filed suit in the subordinate court against the appellants seeking damages for injuries sustained in a road traffic accident which took place on October 30, 2013 involving him and the 1st appellant’s motor vehicle registration number KBN 056V driven by the 2nd appellant. Following interlocutory judgment entered against the appellants on March 31, 2017, the court fixed the matter for formal proof. The suit was heard on November 15, 2017 and judgment delivered on January 25, 2018. The subordinate court awarded the respondent Kshs 450,000. 00 as general damages, Kshs50,000. 00 for future medical care, Kshs 1,500. 00 as special damages, costs and interest.

2. The appellants thereafter moved the subordinate court by the notice of motion dated March 27, 2018 seeking to set aside the interlocutory judgment and all ex-parte proceedings citing,inter alia, order 9 rule 9 and 10 and order 10 rule 11 of the Civil Procedure Rules(“the rules”). The respondent opposed the application. After considering the application, depositions and submissions the trial magistrate dismissed the application by the ruling dated September 14, 2018 (‘’the ruling’’) thus precipitating this appeal.

3. In their memorandum of appeal dated September 28, 2018, the appellants challenge the ruling of the trial magistrate based on 6 grounds which can be condensed to one ground; whether the trial magistrate erred in law and in fact in failing to exercise discretion in the appellants’ favour.

4. The thrust of the appellant’s application before the subordinate court was that though they were served with summons to enter appearance (“the summons”), they forwarded the same to their insurers who inadvertently overlooked entering appearance and filing defence within the time prescribed. They argued that the failure to enter appearance and file defence was not intentional but due to inadvertent and excusable misfortune and oversight on the part of their insurers. They further argued that it is just and equitable that the ex-partejudgment be set aside as they had a good defence which ought to be heard on the merits. They submitted that the respondent would not suffer any prejudice that would not be compensated by way of costs.

5. In his response, the respondent pointed out the appellants were not disputing service but rather raising the mistake of the insurer as a ground and in any case, they urge that the summons to enter appearance were served in 2016 and were never followed up. It contended that the judgment was regular and the matter had proceeded for formal proof. As regards the appellants’ defence, the respondent was of the view that it had no prospect of success. In short, the respondent urged that the appellants had not made out a case for setting aside the judgment.

6. In the ruling, the trial magistrate accepted that the summons had been served and that the judgment was therefore regular as the fact of service was not disputed. The trial magistrate then considered whether the appellants’ statement of defence raised triable issues. She held that the defence did not raise any triable issues since the respondent was not in control of the motor vehicle as she was a passenger hence could not be liable at all.

7. The parties have filed written submissions in support of their respective positions which mirrored their arguments before the trial court. As stated earlier, the issue in this appeal is whether the trial magistrate erred in the exercise of his discretion to set aside the default judgment. In an appeal against the exercise of discretion by the trial court, the appellate court will not interfere with the decision of the trial court unless it is satisfied that the court in exercising its discretion has misdirected itself 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 court has been clearly wrong in the exercise of its discretion and that as a result there has been an injustice (see Mbogo v Shah [1968] EA 93 and United India Insurance Co Ltd and Others v East African Underwriters (Kenya) LtdNRB CA Civil Appeal No 36 of 1983 [1985] eKLR).

8. It is not in dispute that the court has unfettered discretion under order 10 rule 11 of the rules to set aside default judgment. This discretion is intended to be exercised to avoid injustice or hardship but not to assist a person guilty of deliberate conduct intended to obstruct or delay the course of justice. However, where the judgment is irregular, the court does not have discretion to set aside the judgment, it must set it aside (see Mwala v Kenya Bureau of StandardsEALR [2001] 1 EA 148).

9. In this case, it was common ground that the appellants were served with summons hence the judgment was regular. The trial magistrate then proceeded to consider whether the appellants’ draft statement of defence raised any triable issue. This is in line with the decision of the Court of Appeal in Kingsway Tyres and Automart Ltd v Rafiki Enterprises Ltd NRB CA Civil Appeal No 220 of 1995 [1996] eKLR where it observed that, “There are ample authorities to the effect that, notwithstanding regularity of it, a court may set aside an ex parte judgment if a defendant shows he has a reasonable defence on the merits.”

10. In considering whether the appellants’ statement of defence raised triable issues, the trial magistrate found as a fact the respondent was a passenger and based on the police abstract, whose contents were not challenged, the appellants did not have a defence to the suit. Although, trial magistrate cited the case of Equitorial Commercial Bank Ltd v Jodam Engineering Works Ltd and Another[2014] eKLR as authority for the proposition that a bona fide triable issue is not necessarily one that a defendant must succeed, the trial magistrate proceeded to consider the evidence without necessarily looking at the statement of defence.

11. In the statement of defence, the appellants’ denied that the respondent was a passenger or that the accident took place as alleged or at all. In the alternative, the appellants pleaded contributory negligence and stated, in part, that the respondent was, “jumping or attempting to jump out of a moving motor vehicle.” It must be recalled that in cases of negligence the plaintiff bears the burden of proving its case and in light of the defence of contributory negligence raised, the trial magistrate erred in holding that since the respondent was a passenger then liability was not an issue. I wish to point out at this stage that the court is not required to conduct a mini trial. It only has to be satisfied that there is at least a bona fide defence or reasonable basis for holding that there is a plausible defence. In this case, it is a triable issue whether in fact the respondent was jumping off or attempting to jump off the moving vehicle. All in all, the issue of whether and to what extent the appellants are liable are matters of evidence which ought to be dealt with at the trial. I therefore find that the trial magistrate erred in failing to set aside the judgment.

12. In the circumstances, I allow the appeal on the following terms:a.The notice of motion dated March 27, 2018 is allowed and the judgment entered on April 9, 2018 be and is hereby set aside.b.The appellants’ statement of defence filed on April 6, 2021 is deemed as duly filed and served.c.The appellants shall bear thrown away costs of the application before the subordinate court while the respondent shall bear the costs of this appeal assessed atKES 20,000. 00.

DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF SEPTEMBER 2022. D. S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Mr Mahugu instructed by Wangai Nyuthe and Company Advocates for the Appellant.Mr Bundi instructed by O. N. Makau and Mulei Advocates for the Respondent.