REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW DIVISION

JR APPLICATION NO. 375 OF 2018

REPUBLIC.......................................................................................................................................................................APPLICANT

-VERSUS-

THE COUNTY SECRETARY’MOMBASA COUNTY GOVERNMENT.......................................................1^ST RESPONDENT

CHIEF OFFICER, FINANCE/COUNTY TREASURER MOMBASA COUNTY GOVERNMENT...........2^ND RESPONDENT

-AND-

VETERAN PHARMACEUTICALS LIMITED.........................................................................................EX PARTE APPLICANT

RULING

1. The Respondents herein moved this court vide an application dated 26^th January, 2021 seeking for ORDERS:

1. Spent

2. Spent

2. THAT after inter parte hearing this Honourable Court be pleased to vary, set aside and/or discharge the Judgment delivered on 22^nd January, 2019 and the proceedings over the application dated 7^th June, 2019.

4. THAT the costs of this application be in the cause.

2. The application is founded on the grounds set out on the face therein and the Supporting Affidavit of Jimmy Waliaula sworn on even date. He averred that the debts emanating from HCCC No. 219 of 2015 were incurred in the year 2012 before the establishment of County Governments and municipal debts were ideally supposed to go through identification, validation and verification process and institutional structures were established through the Intergovernmental Relations Act, 2012 to facilitate the verification and transfer of assets and liabilities belonging to the now defunct local authorities. Therefore, the Applicant was required to submit its alleged contractual debt to the Transitional Authority for verification as required by law.

3. That failure of the Applicant to forward its then debt to the Transitional Authority Contravened Section 35 of the Transition to Devolved Government Act, 2012 which stipulates that a state organ, public office, public entity of local authority (defunct) shall not transfer assets or liabilities during the transition period without seeking approval of the Authority. It was their contention that the above averments could not be earlier addressed before this court since the Applicant served them with a chamber summons application dated 22^nd May, 2018 coming up for hearing on 22^nd October, 2018 seeking leave to file for judicial review orders and a substantive motion dated 5^th November, 2018 also slated for hearing on 22^nd October, 2018. As such, they could not defend their position thereby suffering prejudice and occasioning this Honourable court to enter judgment without their response.

4. Accordingly, they urged that there was no proper service neither is there evidence of a hearing date issued and by virtue of this misrepresentation, the Respondents were condemned unheard and the application granted. Therefore, they urged the court to review its judgment entered on 22^nd January, 2019 and accord the Respondents an avenue to be heard and adjudicate over the matter in a just and fair manner.

Response

5. The Applicant opposed the application through the Replying Affidavit of Robert Kamau Willie Ngigi sworn on 9^th March, 2021. The deponent is a Director at the Applicant’s company. He deponed that they filed a Chamber Summons application dated 22^nd May, 2018 on 10^th September, 2018 and served it for hearing upon the Respondents on 16^th October, 2018 and despite service, the Respondents did not attend court on 22^nd October, 2018 and leave was granted to institute judicial review proceedings. That the substantive motion dated 5^th November was once again served upon the Respondents on 13^th November, 2018 and the same was slated for hearing on 27^th November, 2018 and despite service, the Respondents once again were a no show and therefore the allegation that they were never served with a hearing notice is false. It was also his deposition that further to the above and attached to the notice of motion was the order dated 26^th October, 2018 and issued on 22^nd October, 2018 granting leave and further fixing the matter for hearing on 27^th November, 2018.

6. Consequently, a judgment was delivered on 29^th January, 2019 and the Applicant’s advocate wrote to the Respondents on 8^th April, 2019 informing them of the outcome and served the decree, certificate of order and of taxation. Further, on 12^th June, 2019, the County Attorney was once again served with the decree and a notice of motion dated 7^th June, 2019 for notice to show cause why the Respondents should not be committed to civil jail for contempt against the orders of this Honourable Court. That it was after this service that the County Attorney filed a Notice of Appointment and when the matter came up for hearing on 23^rd July, 2019 before Lady Justice Nyamweya, the County Attorney informed the court of their willingness to pay the decretal amount of Kshs. 11,872,630/- together with costs of Kshs. 361,974/- and the accrued interest. That the County Attorney further indicated to the Applicant’s advocates through email correspondences that they will continue to pay the balance once the reconciliation of the municipal debts were done and as at 7^th October, 2019, the Respondents had paid Kshs. 1,463,500/- and since then no further payments have been forthcoming.

7. It was his averment that because of the halt of the payments, on 17^th February, 2020, in the absence of the County Attorney, they requested to be allowed to file contempt proceedings against the Respondents in their official capacities and the same was served on them on 8^th December, 2020. Therefore, it came as a shock that two years later, the Respondents are seeking orders of stay of execution and setting aside of orders that they had partially complied with. Accordingly, the issues that the Respondents now attempt to raise in their application have already been overtaken by events  to wit the existence of a valid decree that ultimately found the County liable to pay the amount due to the Applicant .

8. It was contended that the Respondents have failed to meet the threshold for the grant of stay of execution as they have not shown what substantial loss they stand to suffer, more so, in light of a valid decree and, further that, they have failed to demonstrate that the application was filed without unreasonable delay clearly demonstrating the motive of the Respondents to continue denying the Applicant the fruits of their judgment.  He therefore urged that the application be dismissed.

9. In a rebuttal, the Respondents filed a Replying Affidavit sworn by Jimmy Waliaula on 18^th May, 2021. He deponed that they were not disputing service of the pleadings but that the hearing date was not properly served creating a confusion as both the date for hearing for the chamber summons and substantive motion were on the same day. It was further his deposition that while some payments were made in offsetting the judgment debt, there is a predicament as to the whole debt bearing in mind part of the debt is pre-devolution and part is post devolution and had the Respondents been given an opportunity to defend themselves, the same would have been highlighted. He further added that public debts are bound by the Constitution and the Public Finance Management Act and urged that they be given an opportunity to be heard.

Parties Submissions

10. The Respondents filed written submissions dated 14^th June, 2021 in support of the application. On the issue whether the Respondents were duly served with a hearing date over the substantive motion, counsel submitted that the Applicant has not provided any evidence of service of the hearing notice and failure to do so greatly prejudiced the Respondents and curtailed their right to fair hearing. To buttress that argument, counsel cited the case of Wachira Karani v Bildad Wachira (2016) eKLR for the proposition that the discretion that a court of law has in deciding whether or not to set aside ex parte orders was meant to ensure that a litigant does not suffer injustice or hardship as a result of among other things an excusable mistake or error.

11. On whether this Honourable Court should vary, set aside and/or discharge the judgment delivered on 22^nd January, 2019 and the proceedings thereafter, counsel while relying on the Wachira Karani case (supra) and Section 3A of the Civil Procedure Act submitted on when a judgment can be set aside. Counsel also cited the case of Shah v Mbogo where the court held that it must be satisfied about one of two things namely; either the defendant was not properly served with summons or that the defendant failed to appear in court due to sufficient cause. Indeed, it was submitted that the prayers sought in the application be granted.

12. The Applicant on the other hand filed written submissions dated 3^rd August, 2021 opposing the motion.  Counsel cited the Supreme Court decision in Civil Application No. 4 of 2019, Mohamed Fugicha v Methodist Church in Kenya (through its registered trustees) & 3 Others (2020) eKLR where the court analyzed when a review of the judgment, ruling or orders of the court can be made.  Indeed, counsel submitted that the Respondents are seeking to appeal the judgment both in HCCC No. 219 of 2015 delivered on 26^th October, 2016 while arguing the issue of the Transition Authority which was never argued or brought up by their then advocates and the judgment delivered by Lady Justice Nyamweya on 29^th January, 2019.  As such, counsel submitted that the present application does not envisage or provide an avenue for an appeal through an application for review and urged the court not to allow such an illegality to occur. In any case, counsel urged that there are no sufficient grounds adduced by the Respondents to sway this court to review, stay or set aside the judgment of 29^th January, 2019.

Analysis and Determination

13. I have considered the pleadings herein and the arguments advanced by the parties. The main issue for determination is whether the judgment delivered on 22^nd January, 2019 and the proceedings over the application dated 7^th June, 2019 should be stayed, set aside and or varied.

14. The law on setting aside of ex parte orders is found under Order 12, rule 7 of the Civil Procedure Rules, 2010 which provides thus:

“Where under this Order judgment has been entered or the suit has been dismissed, the court, on application, may set aside or vary the judgment or order upon such terms as may be just.”

15. This provision is amplified by Order 51, rule 15 which provides that the court may set aside an order made ex parte and the principles governing the exercise of the court’s discretion to set aside a judgment obtained ex parte are well settled.

16. In Stephen Ndichu v Monty’s Wines and Spirits Ltd [2006] eKLR, the court held as follows:

“The principles governing the exercise of judicial discretion to set aside ex parte judgments are well settled.  The discretion is free and the main concern of the court is to do justice to the parties before it (See Patel –vs- E.A. Cargo Handling Services Ltd (1974] E.A.75).  The discretion is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake or error but is not designed to assist a person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the cause of justice (see Shah –vs- Mbogo [1969] E.A.116).  The nature of the action should be considered, the defence if any should also be considered; and so should the question as to whether the plaintiff can reasonably be compensated by costs for any delay bearing in mind that to deny a litigant a hearing should be the last resort of a court.  (See Sebei District Administration – vs- Gasyali [1968] E.A. 300).  It also goes without saying that the reason for failure to attend should be considered.”

17. Similarly, in Philip Kiptoo Chemwolo and Mumias Sugar Company Ltd v Augustine Kubede (1982-1988) KAR, the Court held:

“The Court has unlimited discretion to set aside or vary a judgment entered in default of appearance upon such terms as are just in the light of all facts and circumstances both prior and subsequent and of the respective merits of the parties”

18. In dispensing justice, the courts are also guided by Article 159(2)(d) of the Constitution and Sections 1A and 1B of the Civil Procedure Act. The emphasis is on substantive justice rather than procedural technicalities, as well as the just, efficient, and timely resolution of cases.

19. In the instant case, the Respondents claim that they were served with a chamber summons application seeking leave to file for judicial review orders and the substantive motion all coming up for hearing on 22^nd October, 2018 causing confusion. As such, they could not adequately defend their position and a judgment was entered on 22^nd January, 2019 in favour of the Applicant. The Applicant on the other hand argues that service was indeed effected upon the Respondents for hearing of the chamber summons on 22^nd October, 2018 and hearing of the substantive motion on 27^th November, 2018.  In any event, the Applicant argued that the Respondents have failed to meet the threshold for grant of stay of execution.

20. While I am cognizant of the fact that it would be unjust and indeed a miscarriage of justice to deny a party who has expressed the desire to be heard the opportunity of prosecuting his case resulting from accident, inadvertence and excusable mistake or error, I have perused the court record and indeed the pleadings herein and there is a confirmation that indeed, the Respondents were served with the substantive motion on 13^th November, 2018 as evidenced by the affidavit of service sworn by James Wafula Yuko on 23^rd November, 2018 and filed in court on 26^th November, 2018.

21. The fundamental duty of the court is to do justice between the parties and that parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. The proceedings herein are in respect to enforcement of a decree in respect of HCCC No. 219 of 2015 in favour of the Applicant. However more than five (5) years down the line, the Applicant is yet to enjoy the fruits of their judgment and has been in this court since 2018 trying to enforce the said judgment. While the right to be heard is a non-derogable right under the Constitution, this court cannot aid the Respondents’ indolence having failed to enter appearance or file responses despite being served with the application therein and more so, seeking to vary the said orders two (2) years down the line. This delay is inexcusable, In the circumstances, I find that the application dated 26^th January, 2021 is not meritable. The upshot is that the same is dismissed with costs to the Applicant.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 10^TH DAY OF MARCH, 2022

A. K. NDUNG'U

JUDGE