Starzone Office Supplies Limited v Credit Bank Limited & another [2024] KEHC 15777 (KLR)

Starzone Office Supplies Limited v Credit Bank Limited & another (Commercial Suit E298 of 2020) [2024] KEHC 15777 (KLR) (Commercial and Tax) (13 December 2024) (Ruling)

Neutral citation: [2024] KEHC 15777 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Commercial Suit E298 of 2020

BM Musyoki, J

December 13, 2024

Between

Starzone Office Supplies Limited

Plaintiff

and

Credit Bank Limited

1st Defendant

Kenya Power and Lighting Company Limited

2nd Defendant

Ruling

1. Due to dynamics of this case in terms of the title of the parties and in order to avoid confusion as to the references, I will for the purposes of this ruling be referring to the parties as follows: Starzone Office Supplies Limited as the plaintiff;

Credit Bank Limited as the 1st defendant;

Kenya Power & Lighting Company Limited as the 2nd defendant;

Gabriel Njoroge Mbuthia as the 3rd defendant; and

Emelda Njoki Kimaru as the 4th defendant.

2. This suit was filed against the 1st defendant only but was later amended to bring in the 2nd defendant. Upon service of summons, the 1st defendant filed a defence and counterclaim. The 1st defendant later filed request for judgment for the counterclaim against the plaintiff and the 1st, 3rd and 4th defendants which was grounded on an affidavit of service sworn by one Martin Muia Mutua.

3. On 30-03-2023, the 1st defendant’s advocates wrote a letter to the Deputy Registrar forwarding a request for judgment dated 23-08-2021 which does not appear to have been filed before. The letter asked the Deputy Registrar to act on the request for judgment. Acting on that letter, Deputy Registrar (S. Bett) on 31-03-2023 ruled as follows;‘I have seen the letter forwarding the request for judgment dated 31st March 2023 and the request for judgement dated 23/08/2021. The plaintiff in the counterclaim filed the counter-claim on 19th October 2020 and served the firm of Triple WW LLP Advocates of Hazina Towers on behalf of the 2nd and 3rd defendants.

4. I have also seen the firm of Kibue Mugiira & Mbagara filed an affidavit to swear court process on 19-10-2020 authorising the 3rd defendant to undertake all necessary actions on behalf of the 1st and 2nd defendant is authorised to give evidence on behalf of the 1st defendant.

5. As at 19-10-2020, the firm of Maina & Partners were acting for the 1st defendant in the counter claim. A notice of change of advocates was served upon the court by the firm of Kibue Mugiira & Mbagara advocates.

6. Having this is mind, I am not satisfied that the 1st defendant in the counterclaim was duly served with defence & counterclaim as they were never served to the advocates on record that is Maina & Partners Advocates & Kibue Mugiira & Mbagara advocates. The request for judgment is dismissed in relation to the 1st defendant.

7. Secondly no firm has ever entered appearance for the 3rd defendant and there is no proof that she was ever served with the summons in person as prescribed for in Order 5 Rule. The request is dismissed in relation to the 3rd defendant.

8. The request for judgement is allowed as against the 2nd defendant Gabriel Njoroge Mbuthia who was served in person at his place of work but failed to file a defence to the counter claim within the prescribed time.’

9. The application before me asks for interlocutory judgement entered against the plaintiffs to be set aside. It is clear from the above ruling by the Deputy Registrar that there is no judgment against the plaintiffs. In this matter, there is only one plaintiff in the man suit and one plaintiff in the counter claim who is the 1st defendant in the main suit. Logically there could not be a judgment against Credit Bank Limited on the counter-claim which means that the only plaintiff referred to in the application is the plaintiff in the main suit (Starzone Office Supplies Limited). In the circumstances the application is not necessary as there is no judgement against the plaintiff in the main suit. Going by the submissions of the parties, there seem to be confusion on the part of both sides as to the status and position of the suit.

10. I would have ended the ruling there but I think it is important that I address the issue of the judgement against the 3rd defendant who has sworn the affidavit in support of the application dated 17th July 2013. The application may not be making reference to the 3rd defendant in its prayers but it is important that this court makes the record straight so that parties can progress this old matter especially noting that the defence to counterclaim filed on 15-05-2023 makes reference to him. This court has discretion to consider setting aside an interlocutory judgement suo moto especially where the said judgment is irregular.

11. As stated above, the judgement against the 3rd defendant was entered on 31-03-2023. The affidavit of service dated 17th February 2021 by one Martin Muia Mutua which was in support of the request for judgment stated at the pertinent paragraphs that;‘3. On 10th February 2021, I travelled to Westlands Nairobi in the process of serving 2nd and 3rd defendants in their company named Starzone Office Supplies Limited and found that they had moved from cross road plaza about two years ago.4. On the same day I called the 2nd defendant Gabriel Njoroge Mbuthia through his mobile number 0722955435 and I got him and after explaining to him about the matter he told me that he has a lawyer named Triple W.W. LLP & Co. Advocates and I am to go to Hazina Towers, 3rd Floor and serve the same.5. On 12th February 2020, I travelled to Hazina Towers Nairobi and at the office, I met a lady who after introducing to each other she told me Mr. Ndegwa the Advocate was in. I gave her the court documents she took in the Advocates office and she came out with them and she told me she has been instructed to receive the court documents on behalf of the 2nd and 3rd defendants. The said secretary accepted service on both summon by signing and stamping on the principal copies hereof which I return to this court duly served.’

12. The principles which guide the court in deciding whether or not to grant an application to set aside default judgement are settled. Where there is a regular judgment, the court has discretion to set aside judgement upon the defendant giving good reasons behind failure to enter appearance or file defence in time. The court will also set aside a regular judgment if it is convinced that the applicant has a good defence to the claim upon such conditions or terms as it may think fit. The court should not fetter its discretion by imposing conditions on itself. Where the judgement is irregular, the court should set aside the same as a matter of right. A judgment can be irregular by reasons that the summons and other necessary pleadings were not properly served or not served at all. A judgment would also be irregular if it was entered by mistake, omission, error or an oversight. Irregular judgement therefore is that which should not have been entered in the first place.

13. The affidavit of service I have produced above states that the summons were served upon the secretary of Triple NW & Company Advocates LLP and not on the 3rd defendant personally as the Deputy Registrar stated in her ruling. As at the time of the service the 3rd defendant had not appointed the said firm to act for him and could not possibly had done so since he was not a party to the suit until the counterclaim was filed. The Deputy Registrar correctly observed that the only party who was represented at the time of service was the plaintiff. She was however clearly wrong when she stated that the 3rd defendant had been personally served at his place of work.

14. In the circumstances, I must hold that the 3rd defendant was not personally served with the summons and the pleadings. From the record and what I have reproduced above, there was clear confusion on the representation of the 3rd defendant before the default judgment was entered. I note from the defence to the counterclaim dated 12-05-2023 and filed on 15-05-2023 that the plaintiff and the 3rd and 4th defendants are now represented by the firm of Triple NW and Company Advocates LLP. In that regard I understand the 3rd defendant when he talks of breakdown of communication between him and his advocates because the advocates also seem to have mixed up the representation and status of the case. I cannot blame him for the failure to file defence in time.

15. The above notwithstanding, I find that the service having not been proper, the judgment is consequently irregular and should be set aside as a matter of right. I resonate with the Court of Appeal holding in James Kanyiita Nderitu & Hellen Njeri Nderitu v Marios Philotas Ghikas & Mohammed Swaleh Athman (2016) KECA 470 (KLR) where the learned judges held that;‘In an irregular judgment, on the other hand, judgment will have been entered against a defendant who has not been served or properly served with summons to enter appearance. In such a situation, the default judgment is set aside ex debito justitiae, as a matter of right. The court does not even have to be moved by a party once it comes to its notice that the judgment is irregular; it can set aside the default judgment in its own motion. In addition, the court will not venture into consideration of whether the intended defence raises triable issues or whether there has been inordinate delay in applying to set aside the irregular judgment.’

16. In conclusion I am minded to put all the parties in the same pedestal and level of representation for the greater interest of justice and in order to progress this matter, I make the following orders; 1. Default judgment entered against Gabriel Njoroge Mbuthia the 2nd defendant in the counter-claim on 31-03-2023 is hereby set aside unconditionally.

2. The reply to defence and defence to counterclaim dated 12-05-2023 and filed in court on 15-05-2023 is deemed to have been properly filed and is properly on record.

3. Parties shall appear before the Deputy Registrar for case management on a date to be fixed after this ruling.

4. All the parties shall comply with Order 11 of the Civil Procedure Rules before the date to be fixed as per order ‘3’ above.

5. The costs of this application shall be in the cause.

DATED SIGNED AND DELIVERED AT NAIROBI THIS 13TH DAY OF DECEMBER 2024. B.M. MUSYOKIJUDGE OF THE HIGH COURT.Ruling delivered in presence of Miss Mwangi holding brief for Mr. Kiroko Ndegwa for the applicant and Miss Weituga for Mr. Mugisha for the defendants.