Starling Automation Solutions Limited v Kenya Pipeline Company Limited [2019] KEHC 12327 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

HCCC NO.  E061 OF 2018

STARLING AUTOMATION SOLUTIONS LIMITED………………...PLAINTIFF

VERSUS

KENYA PIPELINE COMPANY LIMITED…………………………..DEFENDANT

RULING

1. Through its application dated 28th January 2019, the defendants/applicant herein seeks the following orders:

a) Spent.

b) That there be a stay of execution, exparte in the first instance of the decree  issued by this court on application by the plaintiff and the warrants of sale and/or attachment of property in execution of decree for money dated 18th January, 2019 to Moran Auctioneers pending the hearing and determination of this application.

c) That there be an order setting aside the judgment of the court entered on 21st December, 2018 and decree issued thereof against the defendant/applicant herein and all the consequential orders flowing from the said judgment.

d) That the Honourable court do grant leave to the defendant/applicant to file its defence out of time and the matter proceed as defended.

e) That this Honourable court make such further or other order as it may deem just and expedient in this case.

f) That the plaintiff/respondent and /or its advocates should bear the auctioneers charges arising from the illegal, irregular decree and warrants of sale and/or attachment dated 18th January, 2019.

g) That the costs of this application be borne by the plaintiff/respondent.

2. The application is premised on the grounds that the failure by the defendant to enter appearance and file a defence within the prescribed period was due to the inaction and/or failure by the firm of Manyonge & Wanyama Associates Advocates to act on the matter despite having been instructed to act in the case.

3. The defendant further contends that it has a formidable defence that raises triable issues and argues that the mistake errors and failures of its advocates should not be visited upon it. It is the applicant’s case that the judgment against it was irregularly entered in contravention of the requirements of Order 5 Rule 3 of the Civil Procedure Rules (CPR) and that additionally the warrants in execution of the decree are illegal and incapable of being executed for failure by the plaintiff to comply with the provisions of Order 22 Rule 6 of the Civil Procedure Rule.

4. At the hearing  of the application, Mr. Wekesa, learned counsel for the  applicant highlighted the applicants written submissions and  maintained that the court has unfettered discretion  to set aside default judgment as long as certain conditions are met, which conditions he enumerated to be; the reason advanced for failure to enter appearance and file defence, the length of time taken before the application to set aside judgment is filed, the prejudice  to be suffered by the applicant if judgment is not set aside and the wider interest of justice for the parties.

5. It was submitted that the instant application meets the threshold of all the conditions set for the granting of orders to set aside default judgment and that any inconvenience caused to the respondent if judgment is set aside can be mitigated by an award of thrown away costs.

6. The respondent/plaintiff opposed the application through the statement of grounds of opposition dated 1st February 2019 and the written submissions dated 1st March 2019.

7. At the hearing of the application Mr. Okoth learned counsel for the respondent reiterated the grounds of opposition and argued that the applicant’s defence did not raise any triable issues as the subject matter of the case was a procurement process which had been duly undertaken and awarded to the respondent before it was subsequently unilaterally suspended by the applicant.

8. Counsel also took issue with the legality of the appearance by counsel for the applicant and submitted that he needed to have complied with the provisions of Order 9 Rule 9 before coming on record for the applicant.  It was the respondent’s case that the applicant’s delay in entering appearance had not been explained.

Determination.

9. I have carefully considered the applicant’s application, the respondent’s response, the submissions made by the parties’ respective counsel together with the authorities that they cited.  The main issue for determination is whether the applicant has made out a case for the granting of the orders to set aside the default judgment entered on 21st December 2018.

10. Article 50 of the Constitution guarantees every person the right to a fair hearing while Article 159(2) of the Constitution mandates the courts to among other things, do justice to all irrespective of status and without undue regard to procedural technicalities.  Order 10 Rule 4(1) and 11 of the Civil Procedure Rule on the other hand stipulates as  follows:

4. (1) Where the plaint makes a liquidated demand only and the defendant fails to appear on or before the day fixed in the summons or all the defendants fail so to appear, the court shall, on request in Form No. 13 of Appendix A, enter judgment against the defendant or defendants for any sum not exceeding the liquidated demand together with interest thereon from the filing of the suit, at such rate as the court thinks reasonable, to the date of the judgment, and costs.

11. 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.

11. In the instant case, the applicant case is that it initially instructed the law firm of Manyonge Wanyama & Associates to act for it in this matter and attributes the delay to enter appearance and file a defence to the failure by the said firm of Manyonge Wanyama & Associates Advocates to file the said  appearance on time  or at all.

12. I have perused the supporting affidavit to the application sworn by the applicants Senior Legal Officer one Jael V. Ludeki, on 28th January 2019 and I note that she concedes that indeed, the applicant received summons to enter appearance and plaint whereupon it instructed the said law firm of Manyonge Wanyama & Associates who then acknowledged the receipt of instructions through a letter dated 31st October 2018.  She attached copies of the letter of instructions and acknowledgement as annexure “JVL2” to the said affidavit.

13. From the contents of the annexure “JVL2”, I find that it is not in doubt that the applicants engaged the services of advocates (M/S Manyonge Wanyama Associates) to act for it in this matter and cannot therefore be faulted for the failure by the said advocates to enter appearance and file defence in time thereby leading to the entry of default judgment that is the subject of this present application.

14. Courts have held, time without number, that the mistake of an advocate should not be visited on the client.  In CMC Holdings Limited vs. Nzioki [2004] 1 KLR 173it was held as follows:

“That discretion must be exercised upon reasons and must be exercised judiciously…In law the discretion that a court of law has, in deciding whether or not to set asideex parteorder was meant to ensure that a litigant does not suffer injustice or hardship as a result of amongst others an excusable mistake or error.  It would not be proper use of such discretion if the Court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error. Such an exercise of discretion would be wrong principle...The answer to that weighty matter was not to advise the appellant of the recourse open to it as the learned magistrate did here. In doing so she drove the appellant out of the seat of justice empty handed when it had what it might have well amounted to an excusable mistake visited upon the appellant by its advocate”.

In the present case, is quite clear from the court record that the said firm of Manyonge Wanyama Advocates did not enter appearance for the applicant as instructed and that the only other time that the applicant became aware of the goings on in the case was during the execution of warrants of attachment following the entry of the default judgment.  One can say that in this case, the applicant was let down by the lawyers that it had instructed to act for it.

16.  I further find that the applicant has demonstrated, through annexure “JVL5” (draft defence), that it has defence against the plaintiff’s case which raises triable issues that can only be unlocked during the trial.

17. Having regard to the above findings and observations, I am satisfied that the applicant has made out a case for the granting of the orders sought in the instant application.

18. Consequently, I allow  the  application in the following terms;

a) That there shall be a stay of execution and the warrants of sale and/or attachment of property in execution of decree for money dated 18th January, 2019.

b) That the judgment of the court entered on 21st December, 2018 and decree issued thereof against the defendant/applicant herein and all the consequential orders flowing from the said judgment are hereby set aside.

c) That the defendant/applicant is hereby granted leave to file its defence out of time within 7 days from the date of this ruling and the matter shall proceed as defended.

d) I award thrown away costs to the respondents.

Dated, signed and delivered in open court at Nairobi this 11th day of July 2019.

W. A. OKWANY

JUDGE

In the presence of:

Mr. Okoth for the plaintiff/respondent

Mr. Wesonga for Wekesa for defendant/applicant

Court Assistant- Robert