Wakenya Pamoja Sacco Society Limited v Evans Ndemo [2021] KECPT 277 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.529 OF 2019

WAKENYA  PAMOJA SACCO SOCIETY  LIMITED....CLAIMANT

VERSUS

EVANS  NDEMO............................................................. RESPONDENT

RULING

1. The matter  for determination   is the  Respondent’s  Notice of Motion  under certificate of  urgency  dated  1. 3.2021 filed  on the same date seeking   the following  Orders:

1. Spent

2. That pending  the hearing  and determination  of the  instant  Notice of Motion, the Honourable  Co-operative  Tribunal  be pleased  to grant  an Interim  Order  of Stay of  Execution  of the Judgment  and Decree  herein together  with all  Consequential  Orders.

3. That pending the hearing  and  determination  of the instant  Notice of  Motion,  the Honourable  Co-operative  Tribunal  be pleased  to grant  an order  of Stay  of Execution  of the Judgment  and Decree  herein  together  with all Consequential  Orders.

4. The  Honourable  Co-operative  Tribunal  be pleased  to vary,  rescind and/or  set aside  the Interlocutory  Judgment  entered  against  the Respondent/Applicant  together  with all Consequential  Orders thereto.

5. That  consequent to  prayer (3) herein above being granted  the Honourable  Co-operative  Tribunal  be pleased  to grant  leave  to the Respondent/Applicant to file Statement  of Defence  out of time in terms  of the draft  annexed  Defence.

6. Costs  of this  Application  do  abide   the Appeal.

2. Based  on the grounds  on the face  of the Application  and supported  by the Affidavit  of Evans  Ndemo  the Respondent herein.

3. The Claimant  filed a Replying  Affidavit  deponed  on 13. 4.2021  filed  on 16. 4.2021.

4. The Respondent  filed  a Supplementary Affidavit  on 24. 5.2021.

5. The Application  was ordered  to be dispensed  with by way  of  Written Submissions. The Respondent  filed their  Written Submissions  on 24. 5.2021while  the Claimant  filed  on 29. 6.2021.

1. The Respondent  submitted  that he  was never  served  with the claim  herein  and therefore  was condemned  unheard. That the Respondent  did  not file a defence  therefore  the judgment  entered was  reached  without  affording  them an opportunity  to be heard against  the provisions of Act  50  Constitution of Kenya.

2. That  he was  served  with a Notice to Show Cause  on WhatSapp page of  his  mobile  phone.

3. That they  therefore  pray  for Stay of  Execution  of the judgment,  and any other Orders  since they  were entered  without  his participation.

4. That he was never  served  with  Summons  and the Affidavit  of Service  is full of falsehoods.

5. That the  Respondent’s  Defence  has raised  triable  issues that  require the court  to grant him  an opportunity  to be heard.

6. The Claimant  submitted  that the Respondent  deliberately  ignored,  refined  and or abandoned  to honour  his loan obligation. That  on 15. 7.2014,  he wrote  a letter  in which  he committed  himself  to repay the loans  in monthly  installments. That  therefore the draft  defence  amounts  to mere denials  and does not  raise any triable  issues.

7. That  the Respondent  was served  with the Summons  to enter Appearance  on 8. 10. 2019  as per  the Affidavit of Service  filed by  Thomas  Otieno  after he was  identified  by  James  Obaga  a former  colleague  of the Respondent  and an employee  of the Claimant. That  the Respondent  signed  the principle copy  therefore  acknowledging  service.  That the  said signature  is not disputed. That the ex-parte  judgment is  therefore  a regular  judgment  and the same  should not  be set aside.

8. We have carefully considered  the pleadings,  documents  and the written  submissions on record and consider  the issues raised  hereunder.

WHETHER  THE DEFAULT  JUDGMENT  WAS  REGULAR  OR IRREGULAR

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 file  a defence resulting  to default  judgment.

Such  a defendant  is entitled  under  Order  10 Rule  11 Civil Procedure  Rules, to move  the  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:

i. The reason  for the  failure  of the defendant to  enter appearance  or file  the Defence.

ii.  The  length  of time  that  has elapsed  since the  default  judgment  was entered.

iii. Whether  the intended  defence  raises  triable  issues

iv. The respective  prejudice  each party  is likely to suffer.

v. Whether  its  in the interest  of justice  to set  aside  the  default  judgment.

This  Principles  are well  established in Mbogo  & Another  -vs-  Shah [1968]  EA 63 &  Patel  -vs – EA  Cargo  Handling  Services  Limited [1979] EA 75

For an irregular  default  judgment,  on the other  hand, it will have  been entered against  a defendant  who  has not  been served  or properly  served  with summons. In such  a case  the default  judgment  is set aside  ex debito  justiciae (as a matter  of right) and not  as a matter  of discretion  because  the party  against  whom  it is  entered  has been  condemned  without  notice  of the  allegations  against  him or an opportunity  to be heard  in response  to those  allegations. This  was held  in Onyango  Oloo  vs  Attorney General [1986-1989] EA  456.

Issues  for determination

i. Whether  the Respondents  were served

ii. Whether  there was  inordinate  delay  to file  this Application

iii. Whether  the draft  defence  raises  triable  issues

iv. Whether  it is  in the  interest  of  justice  to  set aside  the default  judgment (prejudice  to the  respective  parties.)

v. Costs.

i. Whether  the Respondents  were  served

9. The Respondent  submitted  that  they were  not served  with  the summons  to enter Appearance  and that  the Affidavit of Service  of the Process Server  was full of deliberate falsehoods. That the  Respondent  did not meet  the process  server  at all  and therefore there  was no  service  hence the  Interlocutory  Judgment  cannot be  based  on the Affidavit of Service filed.

10. The Claimant  submitted  that indeed  the Respondent  was served  on 8. 10. 2019as per  the Affidavit of Service  sworn  by Thomas  Otieno Akach on identification  by  James  Obaga. That the Respondent  signed  on the face  of the Summons, and the signature  has not been  disputed.

11. In Shadrack Arap  Baiywo – vs- Bodi  Bach[1987] eKLR,  it  was held that:

“ there  is a presumption  of service  as stated  in the Process  Server’s  report,  and the burden  lies  on the party  questioning  it, to show that  the return  is incorrect. But  an Affidavit  of  the Process  Server is  admissible  in evidence  and in the absence  of  contest  it  would normally  be considered  sufficient  evidence  of the regularity  of the proceedings.  But if the fact of service  is denied, it is desirable  that the Process  Server  should be  put into  the witness box  and  an opportunity  of cross-examination  given  to those who  deny the  service.”

In this  case,  the service  is denied  by the Respondent  but  there is  no  prayer  to cross-examine  the Process  Server.  Indeed  the  Process  Server  as per  Affidavit of Service  has deponed  that  Paragraph 4:

“ I proceeded  to the offices of  Kisii County Government  where  the Respondent employed. On arrival,  I met  the Respondent, I therefore introduced  myself  and the purpose  of my visit.

Paragraph 5:

“ ......the Respondent  thereafter received his copy of the summons  together  with all the attached documents and signed my copy......”

Indeed,  the Summons  is  signed  on  8. 10. 2019 and signed  by the  Recipient, the Respondent herein.

12. The  signature,  the place  of work  are not  disputed  by the Respondent.  The Respondent  submitted  that the Affidavit  of  Service  was  full of falsehoods, however,  there  was no request  to cross-examine the Process  Server. In the  Shadrack  Arap Bwaiyo case (Supra) there  is a presumption  of  service  as stated  in the Affidavit of Service  and the burden  lay upon  the Respondent  to  show that  it was  full of falsehoods. The  Affidavit of  Service  is  hereby  deemed  sufficient  evidence  of  the service, since  the  Respondent  has not offset  the onus  of proving  the allegation  of its falsehoods, and neither  is  there  a prayer  for cross examination of the  Process Server.

13. The Request  for judgment  was filed  on  8. 11. 2019 and the Tribunal  having satisfied  itself  that  service  of  Summons  was effected  as per the Affidavit of Service, entered Summary Judgment  for  the liquated  claim  of Kshs.1,011,235/= plus  costs  and interest  on  13. 11. 2019.

14. The Interlocutory/ex-parte/Summary Judgment is therefore  a regular  default  judgment  and the Respondent  is not  entitled  to setting  aside  ex debito  justiciae, but  the Tribunal  has the  discretion to set aside  as held  in Kenya  Orient  Insurance  Limited  - vs-  Cargo  Stars Limited,  John  Bosco & Another [2017] eKLR.

ii. Whether  there  was inordinate  delay  in filing  this Application

15. The Claimant  filed the Request  for Judgment  on 8. 11. 2019 after having  effected  service  on 8. 10. 2019. Summary  Judgment  was entered  on  13. 11. 2019.

The Respondent  filed a Memorandum  of Appearance  dated 22. 11. 2021 on  28. 1.2021 and a Notice of  Appointment  of Advocates  on 1. 3.2021 together  with a Notice of  Motion  Application under Certificate of  Urgency.

We  note that  this entry  of Appearance  was filed  by the Respondent  himself about 14 months after entry  of judgment. Thereafter, the  Advocate  filed a Notice of Appointment on 1. 3.2021. We note that  the Application  having been  filed over  14 months after  entry  of judgment, there  was inordinate  delay.

Whether  the draft Defence  raises  triable  issues

The Respondent  submitted  that the claim  proceeded  without  their participation hence  he has  been condemned  unheard. They cited:

1. Court of Appeal  No. 937/02

Reliance  Bank  Limited –vs-  Norlake Investment Limited  and

2. Court of Appeal  No. 342/05

Malcom Bell  -vs-  Daniel T. Moi & Another

Where  stay of  execution  was granted  because  execution  was imminent and  that the draft  Defence had  triable  issues.

17. The  Claimant  submitted  that the draft Defence  did not  raise  any triable  issues  and constitutes  mere denials. That the Respondent on 15. 7.2014 wrote to the Claimant the commitment  letter to  repay  his loans “annexture  “107” , “ Kshs.700,000/= from his provident  fund  Benefits  and Kshs.25,000/= per month from  end  month  July  2014  latest  5th  of the following  month”

That  therefore making a denial  in the draft  defence  is not  merited  since  he  had already admitted  and  given a payment  proposal  which  was not kept.  That he should have provided  an account of  the payments made to offset  the loan since  he made  the commitment in 2014.

18. We have  carefully  considered  the submissions  of both parties. We have  noted  the  loan  Applications  annexed  by the  Claimant, the Statements of Accounts and the Respondent’s  letter dated  1. 7.2014  to the  Replying  Affidavit.

In the  Supplementary  Affidavit  filed on  24. 5.2021,  there  was no  mention or response  to counter  the contents  of the Replying Affidavit, particularly  paragraph  19.

19. The draft  Defence  paragraph  5 alludes  to the payment  of the loan is  full but there  is no  attachment  to show  the same.

The written submissions have not given any pursuation  whatsoever on the “triable  issues” raised  in the Defence.

In Mbogo –vs-  Shah (Supra) it  was held  that the  Tribunal  has unfettered  discretion  to set aside  a regular  default  judgment. It is  also  trite law  that:

“ a person  cannot be  permitted  to take  advantage  of his own default  or omission  to  defeat  a claim  against  him as held  in Cheall –vs- Association  of Professional  Executive  Clerical  & computer  staff (1983) 1 All.

iv. Whether  it is in the interest  of justice  to set aside  the default  judgment  (prejudice  to the respective  parties)

20.  As discussed  in this Ruling,  the Respondent  was duly  served  with the Summons  and  neglected,  and/or  refused  to enter Appearance  or file a  Defence. By  the time  of filing  this Application,14 months had lapsed hence there was  inordinate  delay.

The Respondent  obtained  a facility  and in July  2014  made a commitment  to repay. However, to date, there  is no evidence  of any one  payment  in honour  of the said commitment or to show  that the  loan was paid  in full,  hence the  Defence  raises  no triable  issue.

21. The Respondent  after  service  of Summons, slept  on their  rights  and only woke up  14 months  later  to apply for  setting aside of a regular  judgment  and to stay  execution. There is  no reasonable  explanation  why,  even after  the commitment to repay  in 2014,  the Respondent  did not  offset  the loan  and after  service  of Summons, opted  not to file  an Appearance  or Defence. The draft  Defence  does  not raise  triable  issues and therefore, no  useful  purpose  would be served by setting  aside  an otherwise  regular  judgment.

22. We  therefore  find  that the Notice of Motion  Application  dated  1. 3.2021  has no  merits  and we accordingly dismiss  it with  costs assessed  at Kshs.10,000/=.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY  AT NAIROBI THIS 19TH  DAY OF AUGUST, 2021

Hon. B. Kimemia                  Chairperson                Signed      19. 8.2021

Hon. J. Mwatsama              Deputy Chairperson  Signed      19. 8.2021

Mr. G. Kamiti                        Member                       Signed      19. 8.2021

Tribunal Clerk                       R. Leweri

Mr. Getange  advocate  for Claimant/Respondent  present

No appearance for  Applicant.

Hon. B. Kimemia                  Chairperson                Signed      2. 9.2021

Notice to show cause  dated  2. 12. 2020 filed on  19. 8.2021 for  7. 12. 2021.

Hon. B. Kimemia                  Chairperson                Signed      2. 9.2021