Wakandera Sacco Limited v Geoffrey Njunge Wakabu [2021] KECPT 551 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL  CASE NO.651 OF 2018

WAKANDERA  SACCO  LIMITED...................................CLAIMANT

VERSUS

GEOFFREY  NJUNGE  WAKABU.................................RESPONDENT

RULING

Vide the Application dated 29. 10. 2019, the Respondent has moved this Tribunal seeking for Orders inter alia:

a. That the  interlocutory  judgment  entered  on 11. 4.2019 and the consequential proceedings  be set aside and  the Respondent  granted  leave  to  file  a Defence; and

b. Costs be provided for.

The Application is based  on the grounds on its face and the Supporting Affidavit sworn by Respondent on even date( 29. 10. 2019).The Claimant has  opposed  the Application  vide the  Replying  Affidavit  sworn by Joseph  Kamau Mungai, its Chairman on   10. 3.2020.

Vide  the  directions  given  on  24. 8.2020,  the Application  was canvassed  by way of  written submissions.  The Respondent  filed  his submissions  on 1. 2.2021 while  the Claimant  did not file  its submissions.

RESPONDENT’S CASE

Vide the  instant  Application, the  Respondent  has sought  for the  default  judgment entered  on  10. 4.2019 to be set aside  on the grounds  that he  was never  served with  Summons  to  enter Appearance. That  the Affidavit  purporting  to confirm  service of  the said summons  is false and  that its  deponent  should be  cross-examined.  That he has a defence  which  raises triable  issues.

CLAIMANT’S CASE

On its part,  the Claimant has opposed  the application  on the ground that the  Respondent  was duly  served  with Summons  to enter  Appearance. That  further,  the Respondent  engaged  the  Claimant  on negotiations  whilst  knowing  that this suit  had been instituted.

ISSUES  FOR DETERMINATION

We have  framed the  following  issues for determination:

a. Whether  the Respondent  has established  a proper  basis  to  warrant  the setting aside  of the default  judgment  entered  on 10. 4.2019;

b. Who should  meet the  cost  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.”

We  look  as and/or examine  the foregoing  principles thematically as  follows:

REASONS  FOR FAILURE  TO FILE A MEMORANDUMOF APPEARANCE  OR DEFENCE.

It is  the Respondent’s case  that  he was not served  with Summons  to enter  Appearance.  That  the  Affidavit  of Service sworn by  Leonard  Mbatha Makau is full of falsehoods and therefore  seeks  leave  to cross-examine  him  on the contents  of  the said  Affidavit.

The Claimant  did not make  any specific  response  on this  contention. It  however accuses the Respondent  of originating  the instant Application  whilst  actively  engaging  them on negotiation  regarding  the mode of  settling  the loan.

We have  perused  the Affidavit  of  service  sworn by  Leonard  Mbatha  Makau on  28. 3.2019. Much  as the Respondent  denies  service  of Summons  to enter  Appearance,  we are  convinced  that he was  personally  served  with Summons  to enter  Appearance and therefore there is no need for  an  order  for cross examination  of the deponent  of the said  Affidavit.

DRAFT  DEFENCE

We have perused  the Respondent’s  Statement  of Defence particularly  paragraph  5 thereof. The Respondent  denies  default  in repaying  the loan.  He contends  that  by  the time  the Claimant filed  this claim,  he had  paid a sum  of Kshs.95,800/=.  That  the Claimant  has failed  to disclose  this amount. What  we discern  from this  assertion is  that the  Respondent  denies  even  defaulting  in repayment  of the loan.  The question  that abounds  is whether  the Respondent  is indebted  to the Claimant.  This is  an issue which  can only  be determined  upon adduction  of  evidence  during trial.

To this end and  on this basis  alone,  we find  that the Draft  Statement of  Defence raises  triable  issues.

CONCLUSION

The upshot  of the foregoing  is that we  find merit  in the Respondent’s  Application  dated 29. 10. 2019 and  hereby  allow  it based  on the following  terms:

a. That he  Respondent  to file and  serve  a statement  of Defence, witness  statement  and list  and bundle  of  documents  within  14 days herein;

b. The Claimant  to file  a Reply to  Defence,  supplementary  witness  statements  and documents  within  14 days  of service,

c. Mention  to confirm  compliance  and fixing  a hearing  date on ...................................

d. Costs  in the cause.

Ruling signed, dated and delivered virtually this 6th   day of May, 2021.

Hon. B. Kimemia                Chairperson                ...................................

Hon. J. Mwatsama              Deputy Chairperson  ....................................

Mr. P. Gichuki                       Member                       ....................................

Tribunal Clerk                       .............................