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JudgmentALITEX ENTERPRISES LIMITED VS TIMOTHY MWEMA MUEKE12 min read

ALITEX ENTERPRISES LIMITED VS TIMOTHY MWEMA MUEKE

High Court at Milimani High Court · · Andayi W.F.

  1. The appeal before this court through the memorandum of appeal dated 14/7/2023 is for orders that the appeal be allowed, the ruling delivered on 14/7/2023 in Milimani Commercial Courts Civil Suit No. 375 of 2019 be set aside and substituted with a ruling of this court and costs of the appeal and the trial court be awarded to the appellant.
  2. The impugned ruling dismissed an application by way of Notice of Motion by the appellant dated 24/3/2023 for orders inter alia that the process server be cross-examined to ascertain service and the appellant be granted leave to defend the suit. The respondent had obtained default judgment dated 16/2/2023 for a liquidated sum of KShs 165,800/= together with costs and interest and was seeking to execute the decree arising therefrom for then an outstanding sum of KShs 416,717.71.
  3. In the said ruling the trial court found that the appellant’s draft defence to the suit filed by the respondent raised no triable issues, that the application was an afterthought as it had been filed on 24/4/2023 way after the default judgment was entered on 30/4/2022 and consequently dismissed the application to set aside the judgment and give the appellant an opportunity to defend the suit.
  4. The appellant was dissatisfied with that decision and has filed the present appeal based on three grounds, that the learned trial magistrate erred in law and in fact by:
    1. holding that the application lacked merit;
    2. not considering documents submitted by the appellant;
    3. holding that the appellant cannot set aside the interlocutory judgment yet the respondent had not produced documents to court to show that they served the summons;
    4. totally failing to take into account the appellant’s submissions.
  5. All these grounds can be summarized into one, whether or not the learned trial magistrate was right in his finding that there was proper service of summons upon the appellant and that the draft defence raised no triable issues.
  6. The appeal was canvassed by way of written submissions. Learned counsels for both parties filed their respective submissions urging their respective positions on the matter.
  7. This being a first appeal, the duty of the court is to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. In the case of Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 it was held that:

“An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled.  Briefly put they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect.  In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally (Abdul Hameed Saif v Ali Mohamed Sholan (1955), 22 E.A.C.A. 270)”.

  1. I have considered the trial court record, the grounds of appeal as set out in the memorandum, the submissions for and against this appeal and cited cases. The issues for determination are whether the learned trial magistrate erred in dismissing the appellant’s application and whether or not the court should grant the application and set aside the interlocutory judgment entered by the trial court and all consequential orders and give the appellant an opportunity to defend the suit.
  2. An application to set aside a default judgment is brought under Order 10 Rule 11 CPR. The said Rule provides for the setting aside of judgment entered in default of appearance and/or defence that:

“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.”

  1. The superior courts have considered this provision in various decisions and held that it gives a wide discretion to the court to set aside an ex parte interlocutory judgment.
  2. In the case of Abdalla Mohamed & another v Mbaraka Shoka [1990] eKLR the Court of Appeal said that “the tests for the correct approach in an application to set aside a default judgment are; firstly, whether there was a defence on merits; secondly, whether there would be any prejudice; and thirdly, what is the explanation for any delay.” The court will also consider whether the judgment on record is regular or irregular.
  3. The first issue to consider is whether the judgment sought to be set aside was regular or irregular. Learned counsel for the appellant submits that the default judgment was irregular as there was no service upon the appellant and that the learned trial magistrate did not offer any reason for finding that the service of summons was effected. Learned counsel for the respondent did not submit much on the issue of the trial court’s finding on service of summons.
  4. Whether a judgment is regular or irregular depends on how service of summons to enter appearance was made upon the defendant. In the present case, the process server, Brian K. Mukuru deposes in his first affidavit of service sworn on 15/4/2019 that he served the appellant at its offices on 5/3/2019 through one Mr. Evans at Elgon Court building Block D5 Ralph Bunche road, opposite GA House. He received copies of the plaint and summons to enter appearance but declined to sign on the principal copies. He made a second service of the a mention notice and amended plaint on 27/4/2022 at the same place but this time upon the secretary of the appellant at the reception but she also declined to acknowledge on the principal copies.
  5. However, in the succeeding paragraph of the affidavit of service, he deposes that “… I return herewith signed and stamped original copies of Hearing Notice dated 25th April, 2022 together with Amended Plaint dated 12th July 2021 service duly effected.” In his submissions on the application to set aside the default judgment at the trial court, learned counsel for the appellant took issue with these contradictory depositions by the process server. In the first paragraph, he deposed that the secretary had declined to acknowledge the service and yet in the succeeding paragraph he deposes that the returned documents are signed and stamped. Even as learned counsel wishes to take issue with those contradictory depositions, it should be remembered that there is a prior affidavit of service of the original plaint and summons which does not bear such contradiction. It is clear to see that the contradictory depositions especially on the subsequent paragraph after stating that the secretary had declined to acknowledge service in the second affidavit of service with respect to the amended plaint must have arisen from the process server copying and pasting his affidavit from an earlier one. I say so because, it is apparent that in the affidavit of service he was making, he had deposed prior that he was serving a mention notice and amended plaint but in the contradicting paragraph he indicates hearing notice. I find that it was a typographical error to indicate that the documents were signed and stamped. Counsel for the respondent should take responsibility for laxity in failing to go through the affidavit before it was filed. Other than that, I do not find any substance in that issue of contradictory depositions. The reasons are that both in the first affidavit of service and in the second, the process server deposes that service was given effect at the respondent’s offices.
  6. The appellant does not however, dispute what is deposed in both affidavits of service that its offices are at the location indicated and that one Evans was present there on 5/3/2019 at 2.00 p.m. or that the secretary was present at the reception on 27/4/2022 when the process server deposes that he served them respectively. Neither of these persons has sworn an affidavit to dispute that they were so served. Without disputing the location of its offices and the presence of these persons thereat at the respective times indicated by the process server and without their disputing service, I find no merit in the prayer to summon the process server for cross-examination. I believe that even if he was put to task in cross-examination, he would readily defend his service.
  7. I find as untrue the appellant’s allegations that it was never served with summons to enter appearance and pleadings in this case and only came to know about the case when the process of execution was commenced.
  8. In the case of Kingsway Tyres & Automart Ltd v Rafiki Enterprises Ltd [1996] eKLR the Court of Appeal in the course of its judgment said: -

\"To our minds, the onus was on the respondent to fault the service. Having failed to do so, and in the absence of evidence on record to lead us to hold that the service was improper, it is our view and so hold that ex parte judgment was a regular judgment. It would only, if at all, be properly, vacated on grounds other than non-service of summons.”

  1. The appellant’s disputation that it was never served with summons to enter appearance is without merit and the same is dismissed. I am satisfied that the appellant was properly served with summons to enter appearance and other process herein but failed to enter appearance or file defence within the time stipulated under the law. I therefore find that the interlocutory judgment entered in the trial court on 16/2/2023 was regular. I find no fault in the learned trial magistrate’s finding on this issue.
  2. The next issue to consider is whether the application to set aside was made timeously. According to the affidavits of service, the appellant was first served with the summons to enter appearance on 5/3/2019 and subsequently with the amended plaint on 27/4/2022. The default judgment was entered on 16/2/2023, some ten months after the amended plaint was served and about four years after the summons to enter appearance were served. The appellant filed his application to set aside the default judgment around 24/3/2023 about one year after the judgment was entered. The appellant deposes that it only came to learn of the case sometime in March, 2023 when the auctioneer went to proclaim its property. I have found above that the judgment was regular. In the circumstances of this case, I find the period of four years from the time the initial summons to enter appearance were served to the time the application was served to be inordinate and inexcusable.
  3. The next issue to consider is whether there is a defence on the merits. In the case of Kingsways Tyres cited above, the Court of Appeal went on to say that:

“There are ample authorities to the effect that, notwithstanding regularity of it, a court may set aside an ex parte judgment if a defendant shows he has a reasonable defence on the merits.”

  1. I have looked at the draft statement of defence annexed to the supporting affidavit by the appellant in support of the application in the trial court. I have also looked at the contract/agreement between the appellant and the respondent dated 27/8/2013 which sets out the terms of their engagement which gave rise to the suit by the respondent against the appellant. The agreement was a mutual business partnership between the appellant and the respondent where the respondent was to provide his motor vehicle registration number KBV 890H to the appellant to operate the same for business and to remit agreed proceeds of KShs 40,000/= to the respondent on a monthly basis. The respondent’s case as summarized in his replying affidavit to the application, the subject of this appeal is that the appellant failed remit proceeds for three months leading to the claim in the trial court. The appellant’s defence is that the respondent’s vehicle had mechanical issues for about a month before the respondent decided to withdraw the same from the appellant without notice. During that period, the vehicle was not used for the intended purpose and therefore did not generate any income and the respondent was well aware of this.
  2. The learned trial magistrate found that this defence did not raise any triable issue to warrant admitting the same for trial. In the case of David Kiptanui Yego & 134 others v Benjamin Rono & 3 others [2021] eKLR the 1st, 2nd and 3rd defendants had failed to enter appearance and file defence in time. Interlocutory judgment was entered for the plaintiff. The said defendants filed an application to set aside the judgment. The High Court, Omondi H. A. LJ (as she then was) considered several decisions on the issue of setting aside interlocutory judgment and in granting the order said that:

“Courts have the discretionary power to set aside ex parte judgment with the main aim being that justice should prevail. The Courts are not required to consider the merits of a defence in an application of this nature …. Therefore, courts ought to look at the draft defence to the plaint and accompanying witness statements before proceeding to give its ruling as to whether the applicant’s defence raises triable issues.

  1. I agree with learned counsel for the appellant that the learned trial magistrate did not offer any reason for rejecting the draft defence as raising no triable issue. The issue of whether or not the vehicle was serviceable and therefore in use for the period the respondent claimed that the proceeds from its operation were not remitted and whether he was aware of the same is triable. This is because, the agreement between the parties in clause 2 under the Owner’s obligations provides that the owner agreed to carry out necessary regular service, maintenance and repairs whenever they were due and had been advised by the company. It follows that before the appellant was liable to pay for operating the vehicle it had to be in serviceable condition. Whether or not this term of the agreement was fulfilled by the respondent is a triable issue. I therefore find that the learned trial magistrate erred when he found that there was no triable issue raised by the defence. There could be several but there is at least one as pointed out above. 
  2. The final issue to consider is whether any prejudice would be occasioned to the respondent if the court grants the appellant leave to file defence out of time.
  3. In the case of, Sebei District Administration -v- Gasyali & others (1968) EA 300 cited by learned counsel for the appellant, Sheridan J. observed that:

“The nature of the action should be considered. The defence if one has been brought to the notice of the court, however irregularly, should be considered, the question as to whether the plaintiff can reasonably be compensated by costs for any delay occasioned should be considered and finally, I think, it should always be remembered that to deny the subject a hearing should be the last resort of the court”

  1. In the final analysis, I find that it will not be proper to deny the appellant an opportunity to present its case for determination by the court at a full hearing. I find that the prejudice occasioned to the respondent if the regularly obtained judgment entered against the appellant is set aside can be compensated by an award of costs with an order that the case be fast tracked for hearing.
  2. I find that the appeal herein has merit and the same is allowed. The learned trial magistrate’s ruling dated 14/7/2023 dismissing the appellant’s application to set aside the interlocutory judgment entered on 16/2/2023 is set aside and substituted with an order that the application to set aside the default judgment dated 24/3/2023 has merit and the same is allowed. The appellant shall file and serve its defence to the suit in the trial court within 15 days from today after which the matter shall be fast tracked for hearing.
  3. The appellant being the one who occasioned this appeal by its failure to enter appearance when it was duly served, it is ordered that it will bear the costs of this appeal, the application for stay in this appeal and the throw away costs in the trial court all assessed at KShs 30,000/= within 15 days from today. The appellant will also pay the auctioneers charges to be advised by the auctioneer and agreed upon or assessed in the trial court if no agreement is reached within 15 days of the agreement or assessment whichever comes first.
  4. Failure to abide by any of the conditions herein the trial court’s orders shall prevail.
  5. Orders accordingly.

Written, dated and signed at Milimani this 17th day of September 2024.


    ALITEX ENTERPRISES LIMITED VS TIMOTHY MWEMA MUEKE ALITEX ENTERPRISES LIMITED VS TIMOTHY MWEMA MUEKE