REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.541 OF 2019

DAVID  MAYIANI TIGES.................................................................CLAIMANT

VERSUS

METROPOLITAN NATIONAL SACCO LIMITED.................RESPONDENT

RULING

Vide the Application  dated 15.11.2019,  the Respondent has moved  this Tribunal  seeking  for Orders inter alia:

1. Spent;

2.  That pending interparties hearing  of this Application, an Order  be and is hereby  issued  staying the judgment  in default  and staying  any issuance  of warrants  in this matter;

3. That the  interlocutory  judgment entered  as against the Respondent  for default  of appearance  and defence, together with  all consequential  orders be and are hereby  set aside  and the Respondent/Applicant  be allowed  to  file its defence;

4. That an order  be and is hereby  issued to the process server  who allegedly  served  the summons  to enter  appearance  to be cross examined  on his affidavit  during  the interparties  hearing  of this application;

5. Costs of this Application  be  provided for.

The Application is supported by the grounds on its face and the Affidavit sworn  by Collins  Amimo   on  10.11.2019. The Claimant  has  opposed  the Application by filing a Replying  Affidavit  sworn by himself on 22.1.2020.

Vide  the  directions  given  on  6.2.2020,  the Application  was canvassed  by way of  written submissions.  The Respondent filed  its submissions  on  9.11.2020 while  the Claimant did so on 8.10.2020.

Respondent’s Contention

It is  the Respondent’s case  that the Claimant  has obtained  a default judgment  without  serving  summons  to enter  Appearance  and other  Court  documents  upon it.  That the Respondent  has  since  8.11.19 been trying  to file Notice  of Appointment  and defence to no avail.  That when  it eventually  filed  the Notice of  appointment,  the same was  not placed  in the court file  thus prompting  the default  judgment  to be entered  against it.  That the Respondent  has a good  defence  in that it operates  members accounts  diligently  and in accordance  with the customs  and  practices of banking  and that in the Respondent’s Annual General Meeting of 2019, members resolved  to  schedule  refunds  on first come  first serve  basis. That therefore, the Claimant’s refund  is forthcoming  and is scheduled  to be in May,  2021. That the Claimant  is well aware  about this fact.

Issues  for determination

This Application has presented 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 13.11.2019.

b. Who should  meet the costs  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.”

Reasons  for failure  to enter Appearance  or file Defence

The Claimant’s borne of  contention  is that it has been  trying  to enter  Appearance  as from  8.11.2019, but could not  manage  to do so  until  13.11.2019, when  it eventually  filed it. That this was  the  day  when interlocutory  judgment  was entered.

We have  perused  the annextures  to the supporting  Affidavit  sworn by  Collins  Amimo on  10.11.2019.  We note that  the  Respondent  was desirous  to defend  the claim  as of  8.11.2013.  The Notice  of Appointment  shows  that the same was  received  by  our Registry  on 13.11.2019.

We  are  thus satisfied   in the  Respondent’s  reason  for failure  to enter Appearance  in good  time.

In light  of our  finding  above,  we  allow the Application  on the following  terms:

a. The Respondent  to  file and serve  a statement  of Response  as well as witness  statements  and  list and bundle  of documents within  7 days  herein;

b. The  witness statements  and bundle  of  documents  to be deemed  as the respective  evidence  of the parties  in the claim;

c. The Claimant  to file a Response  to Defence as well as  supplementary list and bundle  of documents  and witness  statements  alongside  final written  submissions within 14 days  of  receipt  of the statement  of Defence.

d. The Respondent  to file and  serve  final written  submissions  within  14 days  of receipt  of Claimant’s  submissions; and

e. Mention  to confirm  compliance  and fixing  a judgment  date on  19.4.2021.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 28TH DAY OF JANUARY, 2021.

Hon. B. Kimemia                  Chairperson                Signed      28.1.2021

Mr. B. Akusala                      Member                       Signed      28.1.2021

Mr. R. Mwambura                Member                       Signed      28.1.2021

Mutemi  Advocate  holding brief  for  Thimba  for Respondent/Applicant:  Present

Miss Kagoi for Claimant/Respondent: Present

Hon. B. Kimemia                  Chairperson                Signed      28.1.2021