Brief back ground:
1. Through a statement of claim, the 1st Respondent filed a suit on 5th June 2023 claiming that on or about the 18th February, 2023 the Claimant was standing at a petrol station known as "Petro" situated along the Ngong-Kiserian road when the Respondent's motor vehicle registration number KAM 374U.
2. According to him was in the control of the 1st Respondent and/or its driver and/or its servant and /or its employee and/or person under their authority caused the same to be negligently, recklessly and/or carelessly driven, reversed, controlled and/or managed that he permitted the motor vehicle to hit the 1st Respondent thereby causing an accident occasioning serious bodily injuries to the 1st Respondent.
3. On the 19th March, 2024 a decision was delivered in Milimani SCCC NO. E2698/23.The appellant challenges the decision through a Memorandum of Appeal dated 25th July 2024.
4. The appellant seeks the following orders:
a) THAT the appeal herein be allowed and the Judgement by the Learned Adjudicator Hon.
Barbara, A. Akinyi delivered on the 19th March, 2024, be set aside and the court herein be pleased to hold that the Respondent herein is not entitled to the award granted by the trial court.
b) THAT the costs of this appeal and the trial court be awarded to the Appellant.
The appellants case:
5. In the Memorandum of Appeal it raises the following grounds:
1) THAT the Honourable Adjudicator erred in law in arriving at the conclusion that the Appellant was properly served with the Statement of Claim and Mention Notice.
2) THAT the Honourable Adjudicator erred in law in finding that the subsequent judgment entered against the Appellant jointly with the 1st and 3rd Respondents was regular hence refusing to set it aside.
3) THAT the Honourable Adjudicator erred in law in failing to consider the draft response filed by the Appellant together with the Notice of Motion Application which raises an arguable response worth the court's consideration in the matter.
4) THAT the Honourable Adjudicator erred in law in disregarding the provisions of Articles 159 and 50 of the Constitution of Kenya and allowed technicalities to deny the Appellant a right to be - heard in the claim brought against it.
5) THAT the learned Adjudicator erred in law by weighing the I" Respondent's response to the application in isolation of the issues raised in the said application by the Appellant.
6. Through its submissions the appellant, advances its appeal in line with the belief that the trial court erred in law by stating that the Appellant was properly served with the pleadings and the mention notice thus making them aware of the continuance of the proceedings at the trial court and as a result of their non-appearance, judgement was entered against them.
7. The Appellant submits that at no given time were they served with the aforementioned documents by the 1st Respondent.
8. The 1st Respondent intimated at the trial court that the Appellant was served through a mobile number displayed on the Appellant's website.
9. The Appellant opposed this and stated before court that the said number was changed and that the said number is hardly ever used thus the Appellant was not properly served and especially considering that their physical offices are accessible even for purposes of service of court documents.
10. The Appellant wishes to state that they only became aware of the lower court's proceedings when Immediate Auctioneers showed up to proclaim their office equipment.
11. That had they been properly served with the lower court pleadings, they would have entered appearance and defended this matter.
12. It submits that since the Appellant was never properly served with the pleadings the judgement entered by the court was an irregular one for want of effective service.
13. The Appellant relies on the case of James Kanyiita Nderitu & Another vs. Marios Philotas Ghikas & Another (2016) eKLR, the Court of Appeal explained the nature and effect of an irregular judgment as follows:
In an irregular default 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 justitie, as a matter of right.
14. 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 on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue or whether there has been inordinate delay in applying to set aside the irregular judgment.
15. The reason why such judgment is set aside as of right and not as a matter of discretion, is 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.
16. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.
17. Reliance is placed in Order 10 Rule 11 of the Civil Procedure Rules which provides:
"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."
18. The court in this matter proceeded to state, 'Firstly, there are no limits or restrictions on the judge's discretion except that if he does vary the judgment he does so on such terms as may be just 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 it by the rules.
19. Secondly, this 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 the person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice. Thirdly the Court of Appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been injustice.
20. The Appellant faults the trial court for failing to take into consideration of all facts and circumstances of the parties and of the respective merits of the parties.
21. That the trial court proceeded to decline the Appellant's application for setting aside without considering circumstances being that the Appellant's filed the application to set aside the lower court's judgment was timeously.
22. Judgment was delivered on 19th March, 2024 and the said application was filed on 4th July, 2024 which was immediately after they were served with the proclamation notice by the auctioneers instructed by the 1st Respondent.
23. It submits that the trial court erred by failing to take into consideration the great prejudice the Appellant stood to suffer as a result of being condemned unheard.
24. The Appellant submits that the prejudice will be that it will have its properties sold in settlement of a claim where it was not liable for the cause of action arising from it.
25. The Appellant submits that it was not the owner, neither was it in possession or control of the motor vehicle that caused the accident, the subject of the instant claim as at the time of the said accident.
26. The Appellant is a financial-lending institution that, offers loan facilities to its clients who secure the facilities with securities in the form of motor vehicle log books.
27. The Appellant submits that it offered a loan facility to STEPHEN NDEMWA MAKELO (the 3rd Respondent herein). When the borrower defaulted, the Appellant, acting within its rights and in line with the provisions of the loan facility agreement proceeded to sell the motor vehicle registration number through a public auction to WENDY OCHIENG RICHARO.
28. The Appellant only had a security interest in the said motor vehicle following the agreement to lend money to the 3" Respondent herein and its name appears on the logbook probably because the purchaser of the said motor vehicle following the auction of it has never! followed up with the relevant authority, that is, the National Transport and Safety Authority to have a proper reflection of the current ownership of it.
29. It is also the Applicant's submission that the 1st Respondent neglected the provisions of Order 22 Rule 6. which places an obligation on a person in whose favour a judgment is entered to serve the person against whom the judgment is entered a notice of entry of the said judgment not less than 10 days before they can proceed to undertake execution.
30. He further submits that the Appellant appreciates that the trial court (Small Claims Court) is not bound by strict rules of procedure as per Section 32 of the Act giving rise to that court.
31. However, service of court documents including pleadings and a notice of entry of judgment remains a crucial procedural aspect.
32. It submits that the actions of the 1" Respondent are illegal as they amount to a negation from Article 50 of the Constitution of Kenya, 2010 and also go against the rules of natural justice.
33. It invites the court to invoke Section 3A of Civil Procedure Act Cap 21 Laws of Kenya which empowers this Court to make such order as may be necessary for the ends of justice and this power has been donated by Article 159(2) of the Constitution of Kenya.
34. The Appellant further pleads with this Honourable court to be guided by the 9" Edition of the Black's Law dictionary in defining the term 'triable issues. The given meanings for "triable issues" and"the trial" are to the effect that triable issues are those that are subject to judicial examination in a Court, for determination on their merits.
35. The Appellant further cites the case of Job Kilach v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Rono (20151 eKLR where the Court of Appeal observed that, "a bona fide triable issue is any matter raised by the defendant that would require further interrogation by the court during a full trial and does not need to be an issue that would succeed but just one that warrants further intervention by the Court."
36. The Appellant submits that it has a defence raising triable issues as was attached to the application filed at the lower court to set aside the judgment entered against them.
37. It is thereforé the Appellant's humble submission that indeed the trial court erred in failing to conclude that the appellant had a triable defence raising triable issues such as whether the 1st Respondent's claim raised any cause of action against the Appellant and whether the Appellant was liable for the subject accident.
38. On costs it submits that the general rule is that costs follow the events unless the court is satisfied otherwise. Section 27 of the Civil Procedure Act, Cap 21 Laws of Kenya. Additionally, the Respondent submits that by dint of Section 26 of the Civil Procedure Act, interests on all the awards herein do accrue from the date of the judgment till payment in full.
The 1ST Respondent’s case;
39. The 1st Respondent filed a claim against the Appellant and two others in the Small Claims Court at Milimani under claim number SCCC/E2698/2023 filed on 15th June 2023.
Judgment in regard to the claim was delivered on 24th July 2024 in favour of the 1st Respondent.
40. The Appellant was required to pay the entire decretal sum to the 1st Respondent. The 1st Respondent thereafter initiated execution proceedings. It is his case that the Appellant was duly served with the Statement of Claim and Mention Notice through their official number via WhatsApp.
41. The messages were blue-ticked, a clear indication that the Appellant was in receipt of the documents. The Appellant denied ever receiving these documents as the number they were sent to was not theirs.
42. This claim was refuted in open court when the number was dialed and one of the phones belonging to their representative rang, explicitly proving that that was their official number and it was registered to them.
43. It is his that the advocates of the Appellant later reached out to the 1stRespondent’s advocates to enter into a consent.
44. The consent was impertinently abandoned and they consequently went ahead to file this Appeal, seeking a stay of the execution of the decree.
45. The Appellant is guilty of prevarication and this court should not aid them further by staying the execution proceedings.
46. Order 42 Rule 6(1) and (2) of the Civil Procedure Rules,2010 is a proviso on stay of execution, it provides as follows:
No appeal or second appeal shall operate as a stay of execution or proceeding under a decree or order appealed from except in so far as the Court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.
47.Reliance is placed in the case of Manga v Onono(Miscellaneous Application E193 of 2023) [2023] KEHC 23417 (KLR) (18 September 2023) (Ruling) stated:
In “Kyangaro v Kenya Commercial Bank Ltd & Another (2004) 1 KLR 126 as cited in Patrick Waweru Mwangi & Another v Housing Finance Co of Kenya Ltd (2013) eKLR at page 145, the court stated as doth:
“He that comes to equity must come with clean hands and must also do equity. The conduct of the plaintiff in this case betrays him. It does not endear him to equitable remedies. ... He who comes to equity must fulfill all or substantially all his outstanding obligations before insisting on his rights. The plaintiff has not done that. Consequently, he has not done equity.”
48. He further stated that In Brenda Karanja v Mweki Dominic [2021] eKLR, the court stated as doth:-
“The courts are duty bound to determine matters on a balance of probability whilst taking into consideration the facts and evidence that has been placed before them. In the case of Arbuthnot Express Services Limited v Manchester Outfitters Suiting Division Limited & Another [1989] LLR 5515 (HCK) the court observed as follows:-
“The general principle of law is that as far as possible, the courts should lean in favour of the trial and determination of proceedings on merits. There are yet other principles viz that delay defeats equities and that he who comes to equity must come with clean hands. The court is duty bound to balance the application of all the principles by weighing one thing against another to see which way the balance tilts.”
49. It submits that the Appellant did not come before the court with clean hands for the following reasons.
The Appellant (in open court) denied that the number on the website was not its official number and it was at this moment that the presiding Magistrate went ahead and dialed the number in open court as a way of finding out whether or not the allegation was true.
50. The individual who received the call confirmed to the Magistrate that indeed that is their official number. The website to this date still bears the said number that is- 0722 399 176.
51. He submits that upon confirmation of this fact by the presiding Magistrate, that the number was indeed registered to the Appellant and they had been taking the court’s process for granted, the judge dismissed the Appellant’s Application at the time which bore the same orders as those sought for in this Appeal.
52. The 1st Respondent’s further submits that the Appellant is hard of obedience of court orders and procedures and is determined to evade accountability by all means necessary.
53. Reliance is placed in the case of Jubilee Insurance Company (K) Limited v Daniel Maingi Muchiri [2016] KECA 796 (KLR), held that:
The trial magistrate, (T. S. Nchoe – Ag. SRM) allowed the application on 7th May, 2014. The trial court made a finding that the applicant did not file a replying affidavit and that the defence consists of mere denials.
The applicant appealed to the High Court (Civil Appeal No. 195 of 2015) against the ruling. On 17th July 2015 the High Court (Sergon, J.) dismissed the appeal. The High Court made a finding that failure by the applicant to file a replying affidavit to the affidavit in support of the application to strike out the defence was an admission of facts in the application. The High Court also made a finding that the applicant did not controvert the allegation that it was served with a statutory notice. Further, the High Court made a finding that the averment in the applicant’s defence that respondent did not comply with the statutory requirements attendant to issuance of relief was a general traverse and that the applicant did not demonstrate that it was within any exception to the contract of insurance.
54. He relies on these authorities to advance the argument that an appeal can be dismissed, if a party is proven to ignore the court proceedings which consequently the Appellant has proven in light of failing to controvert the claim filed in the Small Claims Court but instead choosing to show disdain to the court by alleging that they had not received the documents, an allegation that has been proven to be false.
55. Reliance is also placed in Machira t/a Machira & Co Advocates v East African Standard [2002] KEHC 1167 (KLR) stated that:
As the appellant or intended appellant exercises his right of appeal nothing ought to be done which will jeopardize his interests in case his appeal is successful, or which may be a futile endeavor trying to take further steps; but on the reverse side of things, from the point of view of the party who is, at least for the time being, successful to a point, nothing should be done to unduly delay or deny expeditious justice to him in the event that the appeal or intended appeal in question fails.
56. In bleak economic times, a weakened currency might change the matrix in hours or overnight, so that delayed further proceedings as appeal or intended appeal is awaited (which may well be unsuccessful) may have adverse effects so that assessment of damages after a failed appeal may likewise be an exercise in futility and costs a poor solace.
57. To be obsessed with the protection of an appellant or intending appellant in total disregard or flitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion.
58. The ordinary principle is that a successful party is entitled to the fruits of his judgment or of any decision of the court giving him success at any stage. That is trite knowledge. This is one of the fundamental procedural values which is acknowledged and normally must be put in effect by the way we handle applications for stay of further proceedings or execution, pending appeal.
59.When a party has been found by a court to be in the right at whatever stage in the litigation, he should ordinarily have access to the consequences of that judicial finding and decision and enjoy his rights as so found and determined.
60. Any subsequent decision of the court which tends to impede the normal flow of justice, by suspending the enjoyment of the consequential benefits of one’s success can only be rendered in exceptional circumstances after an exercise of great caution and finding that suspension is necessary in justice and fairness.
61. It submits that granting the stay of execution would be obstructing the 1st Respondent from enjoying his rights as so found in the judgement and rewarding the Appellant for ignoring court proceedings at the lower court.
62. The Appellant’s application for stay of execution is based merely on the ground of annoyance of feelings and the court should not be tricked into colluding with their maneuver of interference with the ordinary course of justice and the process of law.
63. It submits that the prayers sought by the Appellant is a ploy to mislead the honorable court and waste precious judicial time.
64. It is his case that had the Appellant wished to obey the rule of law, they would have formalized the proposed consent with the 1st Respondent and followed through instead abdicating it and seeking shortcuts through the court of appeal.
65. According to him no factual ground has been placed by the Appellant to support any claim on misrepresentation of facts, apparent error on the application of the law or proceedings, nor any on the lack of application of the law and procedure.
66. The Appellant has relied on untrue facts and is therefore guilty of misleading this honorable court by stating that the 1st Respondent, though his advocates failed to serve the pleadings while in actual sense, service was indeed dispensed with and proven in court.
67. He submits that when the counsel for the Appellant in the lower court was exposed for intentionally misleading the court, the Appellant appointed the now firm currently on record, thus the call to record a consent was tailored to waste time to allow for the Appellant’s new advocates file the Appeal.
68. It is his case that the 1st Respondent’s submission that, the Appellant’s defence that it was merely but a financier, is a fallacy and should be treated like so.
69. The Appellant has not annexed any documentation to indicate substantively that the loan facility has been fully repaid and there exists no further relationship between itself and the 3rdRespondent.
70. He submits that the relationship still does exist and the Appellant will not suffer any financial incapacitation should attachment against it proceed as it can recover the same from the 3rd Respondent.
71. He submits further that The Appellant had sufficient time to defend itself in the lower court, stating that it learned of the suit at the point of attachment is not only false but also extremely misleading and we urge this court to carefully peruse the court proceedings on this subject.
72. He urges this court to dismiss the Appellant’s appeal on grounds of unclean hands and contempt of court as evidenced.
73. The Appellant has capacity and locus to enter into a consent with the 1st Respondent and resolve this issue, hence his application is a fallacy and is aimed at misguiding this court.
74. It is only fair to grant the 1st Respondent a chance to enjoy his judgment thus, allowing the Appellant’s application will take the suit back to trial yet the decretal sum has not
been paid.
75. The essence of litigation is to bring issues to an end and not extend the same by entertaining non-issues that have potential of elongating litigation.
76. He submits that the Appellant is fishing for grounds to avoid accountability and thus the Appellant’s Application is a waste of this court’s precious time and should be dismissed and the judgement by the Small Claims Court be upheld.
Analysis and determination:
77. Issues for determination:
1) Whether the appeal has merit
2) Who shall pay the costs.
Whether the appeal has merit;
78. The appeal largely revolves around the issue of the service of Summons and a Mention Notice.In determining whether the Appellant was served with the Summons, The court has looked affidavit of service of the advocate who served the mention notice indicates that:
“I, VIVIENNE WANJIRU an Advocate of the High Court of Kenya, practicing as such in the firm of Vivienne & Partners Advocates and of P.O Box 42838-00100, Nairobi do make oath and state as follows: -
THAT Iam an Advocate of the High Court of Kenya hence duly authorized by law to effect service and the court processes thereof.
THAT, on the 23rd day of August, 2023, I prepared a mention notice noting the 2nd Respondent's absence in court since inception of the suit and acting on the court's directions, the same was to be served upon the 2nd Respondent.
THAT the 2nd Respondent's telephone number as indicated on the NTSA motor vehicle search certificate are 0722399176.
THAT the 2nd Respondent regardless of the "blue ticks" on WhatsApp which indicate proof of receipt did not acknowledge service. Herewith returned are the screenshots as proof of service being effected successfully on the 2nd Respondent.”
79. In the judgment, the adjudicator, made an observation that, The 2nd respondent was served with summons to enter appearance and all accompanying pleadings but it neither entered appearance nor filed a statement of defence. Vide a court order dated 20th November 2023, interlocutory judgement was entered against the 2nd respondent.
80. On the appellant’s part, it is alleged that the phone number in issue was a company number.
81. The manner of service of summons on a Corporation is set out in Order 5 rule 3 of the Civil Procedure Rules which states as follows:
Subject to any other written law, where the suit is against a corporation the summons may be served -
i. on the secretary, director or other principal officer of the corporation; or
ii. if the process server is unable to find any of the officers of the corporation mentioned in rule 3(a) -
1. by leaving it at the registered office of the corporation;
2. by sending it by prepaid registered post or by a licensed courier service provider approved by the court to the registered postal address of the corporation; or
ill. if there is no registered office and no registered postal address of the corporation, by leaving it at the place where the corporation carries on business; or
iv. by sending it by registered post to the last known postal address of the corporation.
82. From the aforesaid provisions, the Summons must, in the first instance, be served, "on the secretary, director or other principal officer of the corporation", before resorting to other modes of service.
83. From the Affidavit of Service it is clear that service was not effected on any of the principal officers of the Company.
84. A default judgments is entered on the basis of an affidavit of service which on its face show, that service has been effected in accordance with the applicable rules.
85. In this case, I find and hold that the advocate did not comply with Order 5 rule 3(a) of the Civil Procedure Rules in effecting service on the Defendant. The trial adjudicator followed the lapse and proceeded to enter default judgment on the basis of an ailing procedure or mode of service.
86. Order 10 rule 11 of the Civil Procedure Rules, the court has unfettered discretion to set aside judgment on such terms as it deems fit and just (see Shah v Mbogo and Another [1967) EA 116).
87. Since the service as disclosed in the Affidavit of Service was not in accordance with Order 5 rule 10 of the Civil Procedure Rules, it was irregular hence the court is entitled to set aside the judgment as a matter of right.
88. In James Kanyiita Nderitu& Another vs. Marios Philotas Ghikas & Another [2016] eKLR, the Court of Appeal explained the nature and effect of an irregular judgment as follows:
In an irregular default 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 on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue or whether there has been inordinate delay in applying to set aside the irregular judgment.
89. The reason why such judgment is set aside as of right, and not as a matter of discretion, is 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. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.
90. It is clear that the default judgment in this matter was irregular. It ought to be set aside. It is set aside.
Determination:
91. The appeal has merit.
Order:
1. The judgment that was entered on19th March, 2024 is set aside.
2. The appellant shall file and serve its Response within 14 days from the date hereof.
3. Costs to the appellant.
Dated, signed and delivered at Nairobi this 30th Day of December ,2025.
1. Through a statement of claim, the 1st Respondent filed a suit on 5th June 2023 claiming that on or about the 18th February, 2023 the Claimant was standing at a petrol station known as "Petro" situated along the Ngong-Kiserian road when the Respondent's motor vehicle registration number KAM 374U.
2. According to him was in the control of the 1st Respondent and/or its driver and/or its servant and /or its employee and/or person under their authority caused the same to be negligently, recklessly and/or carelessly driven, reversed, controlled and/or managed that he permitted the motor vehicle to hit the 1st Respondent thereby causing an accident occasioning serious bodily injuries to the 1st Respondent.
3. On the 19th March, 2024 a decision was delivered in Milimani SCCC NO. E2698/23.The appellant challenges the decision through a Memorandum of Appeal dated 25th July 2024.
4. The appellant seeks the following orders:
a) THAT the appeal herein be allowed and the Judgement by the Learned Adjudicator Hon.
Barbara, A. Akinyi delivered on the 19th March, 2024, be set aside and the court herein be pleased to hold that the Respondent herein is not entitled to the award granted by the trial court.
b) THAT the costs of this appeal and the trial court be awarded to the Appellant.
The appellants case:
5. In the Memorandum of Appeal it raises the following grounds:
1) THAT the Honourable Adjudicator erred in law in arriving at the conclusion that the Appellant was properly served with the Statement of Claim and Mention Notice.
2) THAT the Honourable Adjudicator erred in law in finding that the subsequent judgment entered against the Appellant jointly with the 1st and 3rd Respondents was regular hence refusing to set it aside.
3) THAT the Honourable Adjudicator erred in law in failing to consider the draft response filed by the Appellant together with the Notice of Motion Application which raises an arguable response worth the court's consideration in the matter.
4) THAT the Honourable Adjudicator erred in law in disregarding the provisions of Articles 159 and 50 of the Constitution of Kenya and allowed technicalities to deny the Appellant a right to be - heard in the claim brought against it.
5) THAT the learned Adjudicator erred in law by weighing the I" Respondent's response to the application in isolation of the issues raised in the said application by the Appellant.
6. Through its submissions the appellant, advances its appeal in line with the belief that the trial court erred in law by stating that the Appellant was properly served with the pleadings and the mention notice thus making them aware of the continuance of the proceedings at the trial court and as a result of their non-appearance, judgement was entered against them.
7. The Appellant submits that at no given time were they served with the aforementioned documents by the 1st Respondent.
8. The 1st Respondent intimated at the trial court that the Appellant was served through a mobile number displayed on the Appellant's website.
9. The Appellant opposed this and stated before court that the said number was changed and that the said number is hardly ever used thus the Appellant was not properly served and especially considering that their physical offices are accessible even for purposes of service of court documents.
10. The Appellant wishes to state that they only became aware of the lower court's proceedings when Immediate Auctioneers showed up to proclaim their office equipment.
11. That had they been properly served with the lower court pleadings, they would have entered appearance and defended this matter.
12. It submits that since the Appellant was never properly served with the pleadings the judgement entered by the court was an irregular one for want of effective service.
13. The Appellant relies on the case of James Kanyiita Nderitu & Another vs. Marios Philotas Ghikas & Another (2016) eKLR, the Court of Appeal explained the nature and effect of an irregular judgment as follows:
In an irregular default 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 justitie, as a matter of right.
14. 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 on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue or whether there has been inordinate delay in applying to set aside the irregular judgment.
15. The reason why such judgment is set aside as of right and not as a matter of discretion, is 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.
16. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.
17. Reliance is placed in Order 10 Rule 11 of the Civil Procedure Rules which provides:
"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."
18. The court in this matter proceeded to state, 'Firstly, there are no limits or restrictions on the judge's discretion except that if he does vary the judgment he does so on such terms as may be just 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 it by the rules.
19. Secondly, this 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 the person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice. Thirdly the Court of Appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been injustice.
20. The Appellant faults the trial court for failing to take into consideration of all facts and circumstances of the parties and of the respective merits of the parties.
21. That the trial court proceeded to decline the Appellant's application for setting aside without considering circumstances being that the Appellant's filed the application to set aside the lower court's judgment was timeously.
22. Judgment was delivered on 19th March, 2024 and the said application was filed on 4th July, 2024 which was immediately after they were served with the proclamation notice by the auctioneers instructed by the 1st Respondent.
23. It submits that the trial court erred by failing to take into consideration the great prejudice the Appellant stood to suffer as a result of being condemned unheard.
24. The Appellant submits that the prejudice will be that it will have its properties sold in settlement of a claim where it was not liable for the cause of action arising from it.
25. The Appellant submits that it was not the owner, neither was it in possession or control of the motor vehicle that caused the accident, the subject of the instant claim as at the time of the said accident.
26. The Appellant is a financial-lending institution that, offers loan facilities to its clients who secure the facilities with securities in the form of motor vehicle log books.
27. The Appellant submits that it offered a loan facility to STEPHEN NDEMWA MAKELO (the 3rd Respondent herein). When the borrower defaulted, the Appellant, acting within its rights and in line with the provisions of the loan facility agreement proceeded to sell the motor vehicle registration number through a public auction to WENDY OCHIENG RICHARO.
28. The Appellant only had a security interest in the said motor vehicle following the agreement to lend money to the 3" Respondent herein and its name appears on the logbook probably because the purchaser of the said motor vehicle following the auction of it has never! followed up with the relevant authority, that is, the National Transport and Safety Authority to have a proper reflection of the current ownership of it.
29. It is also the Applicant's submission that the 1st Respondent neglected the provisions of Order 22 Rule 6. which places an obligation on a person in whose favour a judgment is entered to serve the person against whom the judgment is entered a notice of entry of the said judgment not less than 10 days before they can proceed to undertake execution.
30. He further submits that the Appellant appreciates that the trial court (Small Claims Court) is not bound by strict rules of procedure as per Section 32 of the Act giving rise to that court.
31. However, service of court documents including pleadings and a notice of entry of judgment remains a crucial procedural aspect.
32. It submits that the actions of the 1" Respondent are illegal as they amount to a negation from Article 50 of the Constitution of Kenya, 2010 and also go against the rules of natural justice.
33. It invites the court to invoke Section 3A of Civil Procedure Act Cap 21 Laws of Kenya which empowers this Court to make such order as may be necessary for the ends of justice and this power has been donated by Article 159(2) of the Constitution of Kenya.
34. The Appellant further pleads with this Honourable court to be guided by the 9" Edition of the Black's Law dictionary in defining the term 'triable issues. The given meanings for "triable issues" and"the trial" are to the effect that triable issues are those that are subject to judicial examination in a Court, for determination on their merits.
35. The Appellant further cites the case of Job Kilach v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Rono (20151 eKLR where the Court of Appeal observed that, "a bona fide triable issue is any matter raised by the defendant that would require further interrogation by the court during a full trial and does not need to be an issue that would succeed but just one that warrants further intervention by the Court."
36. The Appellant submits that it has a defence raising triable issues as was attached to the application filed at the lower court to set aside the judgment entered against them.
37. It is thereforé the Appellant's humble submission that indeed the trial court erred in failing to conclude that the appellant had a triable defence raising triable issues such as whether the 1st Respondent's claim raised any cause of action against the Appellant and whether the Appellant was liable for the subject accident.
38. On costs it submits that the general rule is that costs follow the events unless the court is satisfied otherwise. Section 27 of the Civil Procedure Act, Cap 21 Laws of Kenya. Additionally, the Respondent submits that by dint of Section 26 of the Civil Procedure Act, interests on all the awards herein do accrue from the date of the judgment till payment in full.
The 1ST Respondent’s case;
39. The 1st Respondent filed a claim against the Appellant and two others in the Small Claims Court at Milimani under claim number SCCC/E2698/2023 filed on 15th June 2023.
Judgment in regard to the claim was delivered on 24th July 2024 in favour of the 1st Respondent.
40. The Appellant was required to pay the entire decretal sum to the 1st Respondent. The 1st Respondent thereafter initiated execution proceedings. It is his case that the Appellant was duly served with the Statement of Claim and Mention Notice through their official number via WhatsApp.
41. The messages were blue-ticked, a clear indication that the Appellant was in receipt of the documents. The Appellant denied ever receiving these documents as the number they were sent to was not theirs.
42. This claim was refuted in open court when the number was dialed and one of the phones belonging to their representative rang, explicitly proving that that was their official number and it was registered to them.
43. It is his that the advocates of the Appellant later reached out to the 1stRespondent’s advocates to enter into a consent.
44. The consent was impertinently abandoned and they consequently went ahead to file this Appeal, seeking a stay of the execution of the decree.
45. The Appellant is guilty of prevarication and this court should not aid them further by staying the execution proceedings.
46. Order 42 Rule 6(1) and (2) of the Civil Procedure Rules,2010 is a proviso on stay of execution, it provides as follows:
No appeal or second appeal shall operate as a stay of execution or proceeding under a decree or order appealed from except in so far as the Court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.
47.Reliance is placed in the case of Manga v Onono(Miscellaneous Application E193 of 2023) [2023] KEHC 23417 (KLR) (18 September 2023) (Ruling) stated:
In “Kyangaro v Kenya Commercial Bank Ltd & Another (2004) 1 KLR 126 as cited in Patrick Waweru Mwangi & Another v Housing Finance Co of Kenya Ltd (2013) eKLR at page 145, the court stated as doth:
“He that comes to equity must come with clean hands and must also do equity. The conduct of the plaintiff in this case betrays him. It does not endear him to equitable remedies. ... He who comes to equity must fulfill all or substantially all his outstanding obligations before insisting on his rights. The plaintiff has not done that. Consequently, he has not done equity.”
48. He further stated that In Brenda Karanja v Mweki Dominic [2021] eKLR, the court stated as doth:-
“The courts are duty bound to determine matters on a balance of probability whilst taking into consideration the facts and evidence that has been placed before them. In the case of Arbuthnot Express Services Limited v Manchester Outfitters Suiting Division Limited & Another [1989] LLR 5515 (HCK) the court observed as follows:-
“The general principle of law is that as far as possible, the courts should lean in favour of the trial and determination of proceedings on merits. There are yet other principles viz that delay defeats equities and that he who comes to equity must come with clean hands. The court is duty bound to balance the application of all the principles by weighing one thing against another to see which way the balance tilts.”
49. It submits that the Appellant did not come before the court with clean hands for the following reasons.
The Appellant (in open court) denied that the number on the website was not its official number and it was at this moment that the presiding Magistrate went ahead and dialed the number in open court as a way of finding out whether or not the allegation was true.
50. The individual who received the call confirmed to the Magistrate that indeed that is their official number. The website to this date still bears the said number that is- 0722 399 176.
51. He submits that upon confirmation of this fact by the presiding Magistrate, that the number was indeed registered to the Appellant and they had been taking the court’s process for granted, the judge dismissed the Appellant’s Application at the time which bore the same orders as those sought for in this Appeal.
52. The 1st Respondent’s further submits that the Appellant is hard of obedience of court orders and procedures and is determined to evade accountability by all means necessary.
53. Reliance is placed in the case of Jubilee Insurance Company (K) Limited v Daniel Maingi Muchiri [2016] KECA 796 (KLR), held that:
The trial magistrate, (T. S. Nchoe – Ag. SRM) allowed the application on 7th May, 2014. The trial court made a finding that the applicant did not file a replying affidavit and that the defence consists of mere denials.
The applicant appealed to the High Court (Civil Appeal No. 195 of 2015) against the ruling. On 17th July 2015 the High Court (Sergon, J.) dismissed the appeal. The High Court made a finding that failure by the applicant to file a replying affidavit to the affidavit in support of the application to strike out the defence was an admission of facts in the application. The High Court also made a finding that the applicant did not controvert the allegation that it was served with a statutory notice. Further, the High Court made a finding that the averment in the applicant’s defence that respondent did not comply with the statutory requirements attendant to issuance of relief was a general traverse and that the applicant did not demonstrate that it was within any exception to the contract of insurance.
54. He relies on these authorities to advance the argument that an appeal can be dismissed, if a party is proven to ignore the court proceedings which consequently the Appellant has proven in light of failing to controvert the claim filed in the Small Claims Court but instead choosing to show disdain to the court by alleging that they had not received the documents, an allegation that has been proven to be false.
55. Reliance is also placed in Machira t/a Machira & Co Advocates v East African Standard [2002] KEHC 1167 (KLR) stated that:
As the appellant or intended appellant exercises his right of appeal nothing ought to be done which will jeopardize his interests in case his appeal is successful, or which may be a futile endeavor trying to take further steps; but on the reverse side of things, from the point of view of the party who is, at least for the time being, successful to a point, nothing should be done to unduly delay or deny expeditious justice to him in the event that the appeal or intended appeal in question fails.
56. In bleak economic times, a weakened currency might change the matrix in hours or overnight, so that delayed further proceedings as appeal or intended appeal is awaited (which may well be unsuccessful) may have adverse effects so that assessment of damages after a failed appeal may likewise be an exercise in futility and costs a poor solace.
57. To be obsessed with the protection of an appellant or intending appellant in total disregard or flitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion.
58. The ordinary principle is that a successful party is entitled to the fruits of his judgment or of any decision of the court giving him success at any stage. That is trite knowledge. This is one of the fundamental procedural values which is acknowledged and normally must be put in effect by the way we handle applications for stay of further proceedings or execution, pending appeal.
59.When a party has been found by a court to be in the right at whatever stage in the litigation, he should ordinarily have access to the consequences of that judicial finding and decision and enjoy his rights as so found and determined.
60. Any subsequent decision of the court which tends to impede the normal flow of justice, by suspending the enjoyment of the consequential benefits of one’s success can only be rendered in exceptional circumstances after an exercise of great caution and finding that suspension is necessary in justice and fairness.
61. It submits that granting the stay of execution would be obstructing the 1st Respondent from enjoying his rights as so found in the judgement and rewarding the Appellant for ignoring court proceedings at the lower court.
62. The Appellant’s application for stay of execution is based merely on the ground of annoyance of feelings and the court should not be tricked into colluding with their maneuver of interference with the ordinary course of justice and the process of law.
63. It submits that the prayers sought by the Appellant is a ploy to mislead the honorable court and waste precious judicial time.
64. It is his case that had the Appellant wished to obey the rule of law, they would have formalized the proposed consent with the 1st Respondent and followed through instead abdicating it and seeking shortcuts through the court of appeal.
65. According to him no factual ground has been placed by the Appellant to support any claim on misrepresentation of facts, apparent error on the application of the law or proceedings, nor any on the lack of application of the law and procedure.
66. The Appellant has relied on untrue facts and is therefore guilty of misleading this honorable court by stating that the 1st Respondent, though his advocates failed to serve the pleadings while in actual sense, service was indeed dispensed with and proven in court.
67. He submits that when the counsel for the Appellant in the lower court was exposed for intentionally misleading the court, the Appellant appointed the now firm currently on record, thus the call to record a consent was tailored to waste time to allow for the Appellant’s new advocates file the Appeal.
68. It is his case that the 1st Respondent’s submission that, the Appellant’s defence that it was merely but a financier, is a fallacy and should be treated like so.
69. The Appellant has not annexed any documentation to indicate substantively that the loan facility has been fully repaid and there exists no further relationship between itself and the 3rdRespondent.
70. He submits that the relationship still does exist and the Appellant will not suffer any financial incapacitation should attachment against it proceed as it can recover the same from the 3rd Respondent.
71. He submits further that The Appellant had sufficient time to defend itself in the lower court, stating that it learned of the suit at the point of attachment is not only false but also extremely misleading and we urge this court to carefully peruse the court proceedings on this subject.
72. He urges this court to dismiss the Appellant’s appeal on grounds of unclean hands and contempt of court as evidenced.
73. The Appellant has capacity and locus to enter into a consent with the 1st Respondent and resolve this issue, hence his application is a fallacy and is aimed at misguiding this court.
74. It is only fair to grant the 1st Respondent a chance to enjoy his judgment thus, allowing the Appellant’s application will take the suit back to trial yet the decretal sum has not
been paid.
75. The essence of litigation is to bring issues to an end and not extend the same by entertaining non-issues that have potential of elongating litigation.
76. He submits that the Appellant is fishing for grounds to avoid accountability and thus the Appellant’s Application is a waste of this court’s precious time and should be dismissed and the judgement by the Small Claims Court be upheld.
Analysis and determination:
77. Issues for determination:
1) Whether the appeal has merit
2) Who shall pay the costs.
Whether the appeal has merit;
78. The appeal largely revolves around the issue of the service of Summons and a Mention Notice.In determining whether the Appellant was served with the Summons, The court has looked affidavit of service of the advocate who served the mention notice indicates that:
“I, VIVIENNE WANJIRU an Advocate of the High Court of Kenya, practicing as such in the firm of Vivienne & Partners Advocates and of P.O Box 42838-00100, Nairobi do make oath and state as follows: -
THAT Iam an Advocate of the High Court of Kenya hence duly authorized by law to effect service and the court processes thereof.
THAT, on the 23rd day of August, 2023, I prepared a mention notice noting the 2nd Respondent's absence in court since inception of the suit and acting on the court's directions, the same was to be served upon the 2nd Respondent.
THAT the 2nd Respondent's telephone number as indicated on the NTSA motor vehicle search certificate are 0722399176.
THAT the 2nd Respondent regardless of the "blue ticks" on WhatsApp which indicate proof of receipt did not acknowledge service. Herewith returned are the screenshots as proof of service being effected successfully on the 2nd Respondent.”
79. In the judgment, the adjudicator, made an observation that, The 2nd respondent was served with summons to enter appearance and all accompanying pleadings but it neither entered appearance nor filed a statement of defence. Vide a court order dated 20th November 2023, interlocutory judgement was entered against the 2nd respondent.
80. On the appellant’s part, it is alleged that the phone number in issue was a company number.
81. The manner of service of summons on a Corporation is set out in Order 5 rule 3 of the Civil Procedure Rules which states as follows:
Subject to any other written law, where the suit is against a corporation the summons may be served -
i. on the secretary, director or other principal officer of the corporation; or
ii. if the process server is unable to find any of the officers of the corporation mentioned in rule 3(a) -
1. by leaving it at the registered office of the corporation;
2. by sending it by prepaid registered post or by a licensed courier service provider approved by the court to the registered postal address of the corporation; or
ill. if there is no registered office and no registered postal address of the corporation, by leaving it at the place where the corporation carries on business; or
iv. by sending it by registered post to the last known postal address of the corporation.
82. From the aforesaid provisions, the Summons must, in the first instance, be served, "on the secretary, director or other principal officer of the corporation", before resorting to other modes of service.
83. From the Affidavit of Service it is clear that service was not effected on any of the principal officers of the Company.
84. A default judgments is entered on the basis of an affidavit of service which on its face show, that service has been effected in accordance with the applicable rules.
85. In this case, I find and hold that the advocate did not comply with Order 5 rule 3(a) of the Civil Procedure Rules in effecting service on the Defendant. The trial adjudicator followed the lapse and proceeded to enter default judgment on the basis of an ailing procedure or mode of service.
86. Order 10 rule 11 of the Civil Procedure Rules, the court has unfettered discretion to set aside judgment on such terms as it deems fit and just (see Shah v Mbogo and Another [1967) EA 116).
87. Since the service as disclosed in the Affidavit of Service was not in accordance with Order 5 rule 10 of the Civil Procedure Rules, it was irregular hence the court is entitled to set aside the judgment as a matter of right.
88. In James Kanyiita Nderitu& Another vs. Marios Philotas Ghikas & Another [2016] eKLR, the Court of Appeal explained the nature and effect of an irregular judgment as follows:
In an irregular default 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 on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue or whether there has been inordinate delay in applying to set aside the irregular judgment.
89. The reason why such judgment is set aside as of right, and not as a matter of discretion, is 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. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.
90. It is clear that the default judgment in this matter was irregular. It ought to be set aside. It is set aside.
Determination:
91. The appeal has merit.
Order:
1. The judgment that was entered on19th March, 2024 is set aside.
2. The appellant shall file and serve its Response within 14 days from the date hereof.
3. Costs to the appellant.
Dated, signed and delivered at Nairobi this 30th Day of December ,2025.