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JudgmentASV TRADING COMPANY LIMITED VS FRANCOIS BORGATO29 min read

ASV TRADING COMPANY LIMITED VS FRANCOIS BORGATO

High Court at Mombasa High Court · · Magare Dennis Kizito Ngwono

  1. This matter has had a checkered history. The defendants made two applications seeking to set aside Judgment against them. The same was strenuously opposed by the plaintiff. The Plaintiff maintained that the judgment they have is lawful and ought to be maintained. The plaintiff filed a replying affidavit sworn by Benson Musili, advocate. He stated that contrary to the averments by the Applicants the defendants were properly served.
  2. They stating that they carried a search indicating that Serah Gatie Amuma was a sole shareholder. They state that the director is now Everlyne Macharia Amuma, but the number used was for serah Gatie Amuma. They was confirmed by sending money to the number. They 2nd defend did not apply to set aside judgment till the plaintiff filed grounds stating the said fact.
  3. They stated that the Defendants are engaged in defeating the course of justice. Parties were serious with their cases and had the depondents cross examined.
  4. It came out that the sole director of the 2nd defednat is a wife of the 1st Defendant Francois Borgato, she attempted to transfer the company shares, gratuitously to her sister. The purported new director was a person who can easily get lost in a smallest market town 2 km from her home. She came out in cross examination as a front for the first defendant.
  5. I also noted that the failed to disclose the relationship between the parties. I agree with the plaintiff that the purported transfer of shares was nothing more than a scheme to defraud the plaintiff. I was surprised by the level of lies peddled by the trio. I was remembering the words of Odunga J (as he then was), alluded to in the case of Kioko Peter v Kisakwa Ndolo Kingóku [2019] eKLR while referring to the reasoning of Madan J, (as he then was) in the case of N vs. N [1991] KLR 685. The Learned Judge lamented as follows:

“Parties and Counsel ought to give the courts some credit that the courts are not manned by morons who can be easily duped into believing all manner of incredible stories with little or no iota of truth. It is these kinds of allegations that Madan, J (as he then was) had in mind when in N vs. N [1991] KLR 685 when he expressed himself in the following terms:

“I wish people would not tell me absurd and unbelievable lies. I feel disappointed if a lie told in court is not reasonable imitation of the truth and is not reasonably intelligently contrived. I wish people who tell lies before me would respect my grey hair even if they consider that my intelligence is not of high order. I wish the witness had not told me the most stupid of his lies, which both disappointed and made me feel intellectually insulted.”

  1. The supplementary affidavit by Everline Machuma Amuma was false. The letter by Everline Machuma Amuma indicating that she was to take over from her sister Serah Amuma was meant for this case and a ruse to obfuscate issues. Notices are usually issued by the retiring director. In any case the service was done properly. The letter of transfer of shares was false. Shares were transferred but not for valuable consideration. I shall deal with the effect of such in a later date.
  2. The first Defendant submitted that the 1st defendant was in Italy in 2023. They questioned the services of Maragia & Co. Advocates. The 1st defendant dealt extensively with non-service of the 2nd defendant yet the advocates. When this was pointed out, a new Application dated 30/1/2024 was filed.

Background

  1. The suit was filed on 14/9/2023. A request for Judgment was made on 6/10/2023. Service is said to have been done at 10:30 am. Service was on a person who did not identify himself as Borgato. A decree was extracted on 11/10/2023 for USD 1,809,600/= plus VAT. It should be recalled that the claim was over consultancy fees. In other words, it was for amounts other than money had and received.
  2. There was a need to show how the amount were arrived at. The firms of Lloyd & Partners took over from Ms Gikandi & Company on 6/11/23 on behalf of the plaintiff. The said firm proceeded to deal with garnishee proceedings. A firm of Advocates known as Maragia & Company Advocates filed a consent dated 27/11/2023. They gave no details except an address Yvonne@mpa.co.ke. A check on the Law Society of Kenya website shows 5 names under Maragia and Co. Advocates, No. 105/10226/14 – Maragia Yvonne Kwamboka of P O Box 33520 Nairobi exists.
  3. The said firm filed a consent for amendment and dropped out of the picture. This allowed the filing of an amended plaint. The said advocates were served with the amended plaint on 1/12/2023.A request for Judgment was made against both defendant vide a request made on 19/12/2023. The request was on the basis of service upon Maragia & Company Advocates. There was no affidavit of service upon the 2nd defendant.
  4. There may be one subsequently. That is of no importance as it has not been used to enter any judgment. On 17/1/2024 an application made against both defendants. An affidavit of service was dated 23/1/2024 for service upon the firm of Maragia and Company Advocates and I and M Bank. The bank and Maragaia & Partners were served with hearing notice dated 25/1/2024.
  5. On 26/1/2024 Kenga & Company advocates were appointed to Act for the 1st Defendant. They filed a notice of change the following day on 26/1/2024. On 27/1/2024 the Defendants appointed the firm of Kenga & Company to act for them.
  6. On 26/1/2024 the defendants made an application dated even date seeking
  7. The Honourable Court be pleased to set aside entered on 5/1/2024 and 11/1/2024 respectively together with consequential orders….”
  8. The Honourable court be pleased to grant unconditional leave to defence the suit by filing the necessary responses to the suit.
  9. The main grounds that the amount claimed is not due. The service could not be done as the 1st defendant was in Italy and not in Kenya. They stated that no garnishee orders were issued as the Respondents were required to serve. They stated that in between a firm of Advocates purported to Act without instructions.
  10. It was the defendant case that the said firm entered a consent to amend the plaint. At that time, these proceedings were unknown to them. They concluded by asking the court to find that there was no service on the   2nd defendant.
  11. It was their case that they perused the pleadings and realized that serious fraud was being perpetrated against them and as such they are likely to be condemned to pay humongous amount of money for a nonexistent deal.
  12. The plaintiff filed grounds of opposition to the initial application dated 26/1/2024 filed on behalf of the 1st defendant.
  13. On 30/1/2024 the 2nd defendant filed a similar application seeking similar orders on 31/1/2024.- It was on a similar grounds though this appears to have been filed ex abundanti cautela after grounds of opposition were filed. By filing grounds of opposition, the Respondent conceded to the factual basis of the application
  14. Later, however, the plaintiff filed a replying affidavit to two Notices of motion and dealt at length on the shareholding of Serah Gatie Amuma and nothing on the issue of summons to enter appearance. Everline Amuma filed a supplementary affidavit. The deponents to these affidavits were cross examined at length.

1st Applicant’s submissions

  1. The 1st Applicant submitted that it would appear that upon service of the Garnishee application, the Plaintiff/Applicant realized that the 1st Applicant’s bank account had insufficient funds, incapable of settling the decretal sum, prompting an amendment to the Plaint to join the 2nd Applicant onto the matter. This is said to have been done through a consent by the Firm of Maragia & Partners Advocates, allegedly acting for the 1st Applicant.
  2. They stated that upon the grant of leave to amend the plaint, the plaintiff filed its amended Plaint on 29th November, 2023, introducing Pitagora Fin Limited on the matter as the 2nd Applicant and proceeded to request for default judgment not only against both Applicants’ without serving summons to enter appearance on the 2nd Applicant.
  3. The 1st Defendant stated they were unaware of the case until 25th January, 2024 when the Garnishee informed the 1st Applicant in Italy that their funds are frozen as a debt and about to be released to the Plaintiff/Applicant herein, hence these proceedings.
  4. A certified copy of an Affidavit of service on service of the notice of entry of judgment and the Notice of entry of judgment are produced jointly as annexture BF-4 and as appearing from pages 48 to 50 of the application.
  5. They stated that the affidavit of service by the Court process server, one Patrick M. Mutuma, sworn on 13th October, 2023 is materially the same and a replica of his earlier affidavit of 6th October, 2023 on service of the summons and pleadings at time the 1st Applicant was not in Kenya in the year 2023.
  6. It was their case that the 2nd Applicant is a Private Limited Liability Company with a sole director by the name of Everlyne Machuma Amuma. The request was made on the mistaken belief the 2nd Applicant was served with the Amended Plaint. This resulted in default judgment.
  7. They stated that the suit was filed on 23rd August, 2023 vide a Plaint. It sought USD 1,809,600 (Kshs. 264,201,600/=) being allegedly consultancy fees for investment consulting services purportedly rendered to the 1st Applicant/Applicant through an alleged agent by the name of John N. Kiege. There was no evidence of any appointment of such a person as his agent, neither are there instructions for the purported agent to enter into investment consulting services agreements.
  8. To the 1st Applicant these are very serious triable issues and since the claim involves Millions of shillings, the 1st Applicant and by extension the 2nd Applicant ought to be heard in this suit on merit. They pleaded that the suit is part of a fraudulent scheme which will come out in trial.
  9. They stated that the Applicant lied that they effected service upon the 1st Applicant through one Patrick M. Mutuma, when he, the 1st Applicant was out of Kenya in 2023. What appears to be garments were not executed.
  10. The Applicant relied on the case of Mohammed & Another -vs- Shoka (1990) KLR 463, where the Court set out the tenets which a court should consider before entering interlocutory Judgment as hereunder in these kinds of cases, that is:-
  11. Whether there was a regular judgment?
  12. Whether there is a Defence on merit?
  13. Whether there is a reasonable explanation for any delay?
  14. Whether there will be any prejudice?
  15. They differentiated between a regular and irregular judgment, where the learned judge adopted the findings in the case of Mwalsa- vs- Kenya Bureau of Standards EALR (2001) 1 EA 148 where the Court had held as follows: -

“to all that I should add my own views that a distinction is to be drawn between a regular and irregular ex-parte judgment. Where the judgment sought to be set aside is a regular one, then all the above consideration as to the exercise of discretion should be borne in mind in deciding the mater. Where on the other hand, the judgment sought to be set aside is an irregular one, for instance, one obtained either where there is no proper service, or any service at all of the summons to enter appearance or when there is a memorandum of appearance or defence on record but the same was in inadvertently over looked the same ought to be set aside not as a matter of discretion, but ex debit justiciae for a court should never countenance an irregular judgment on its record.”

  1. It was their submission that in this case, the Default judgment was irregular as there was no service at all of the summons to enter appearance and pleadings in the matter. In allowing the application, it is said that the Court shall not be exercising its judicial discretion but as a matter of right to the party seeking to set aside the Default judgment. Their case was that, once the Court becomes aware that a default judgment was entered without proof of service of pleadings or in error, believing that there was service, yet there wasn’t, the Court should suo Moto set aside the Default Judgment. In essence the court should not entertain any technicities.
  2. In the alternative, they stated that even assuming that the default judgment was regular, though not, looking at the Defence raised through the draft statement of Defence attached to the affidavit in support of the application as annexture BF-14, appearing on pages 98 and 99 of the application raises are triable issues.
  3. They raise issues on the agreements that were reared by the Applicant’s advocates on record as the same were witnessed, yet they involve a claim which translates to a sum of Kshs. 264,201,600/=.
  4. They relied on the cases of Patel -vs- E.A Handling Services lLmited (1974) EZ 75, Tree Shade Motor Ltd -vs- DT Dobie Co. Ltd CA38 of 1998 and Thayu Kamau Mukigi -vs- Tree Shade Limited – DT Dobie Co. Ltd  ca 38/98, Civil Appeal No. E074 of 2022 (Mombasa) Yooshin Engineering Corporation -vs- AIA Architects Limited, Kenya Power & Lighting Company Limited –vs- Abdulhakim Abdulla Mohamed & Another (2017) eKLR. In the latter case, the court stated as doth: -

“37. The overriding consideration in an application to set aside a default; judgment where the intended defence raises triable issues and, absent evidence of intention or deliberate action by the Appellant to overreach, obstruct or delay the cause of justice, is to do justice to both parties ...

There was not even a remote suggestion that the Appellant would be unable to pay or would delay payment of the sum in question, if after a full hearing it were found that the Applicants are entitled to the money. The contested order, which demands that a party pay substantial sums of money in a claim which is yet to be proved and in respect of which the court has found that there is an arguable defence raising triable issues, does not appear to us in any away to advance or facilitate the just, proportionate, affordable and resolution of disputes as demanded by the overriding objective….”

  1. The Applicant filed grounds of opposition as follows: -
  2. Given paragraph 14 of the Supporting Affidavit stating the 1st Defendant is presently in Italy, the application is fatally defective for begin supported by a defective affidavit.
  3. There is no evidence presented to show that the 1st Defendant exited Kenya and was out of Kenya on the dates when service of process was begin effected.
  4. The 1st defendant has provided no evidence that would rebut the presumption in favor of the process.
  5. The 2nd Applicant has not challenged the judgment and has also not appointed the 1st Applicant’s advocates to represent it. Consequently, the 1st Applicant and his advocate have no locus standi to impugn the judgment against the 2nd Applicant.
  6. The Respondent set out issues for determination as follows: -
  7. Whether the applications are fatally defective.
  8. Whether there is a basis for setting aside the judgment.
  9. They raised issue on how the applicant swore an affidavit in Italy the following day upon learning of the existence of the case from the garnishee herein.
  10. When cross-examined, the 1st Defendant confirmed that he was in Italy on 26th January, 2024, when it is said he swore the supporting affidavit. They stated that it is settled that affidavits sworn in countries other than Commonwealth countries are only admissible in Kenyan courts if they are notarized and accompanied by a certificate to that effect. They relied on the case of Rene Hans Advocates LLP v Kiwipay (Kenya) Limited & 4 Others [ 2023] KEHC 2970 (KLR). They prayed that I strike out he supporting affidavit. This is one request I will decline, since the issue is mundane and does not go to the merit of this matter.
  11. They also questioned the second Applicant’s application as equally problematic. It was said to be sworn in Mombasa on 30th January, 2024. However, cross-examination, Everlyne Machuma Amuma confirmed that she was in Mpeketoni on 30th January, 2024.
  12. They stated that if Ms. Everlyne was in Mpeketoni, she certainly did not appear before the commissioner of oaths in Mombasa on 30th January, 2024. The law is that affidavits must be taken in the presence of a commissioner of oath. Where that is not done, the affidavit is for striking out. They relied on the case of Mary Gathoni & Another v Frida Otolo & Another [2020] eKLR. 10.
  13. They prayed that the Applications be struck out for begin defective and not complying with the law.
  14. On merit they conceded that where judgment was entered without service, it must be set aside as of right. It seems the 1st and 2nd Applicant’s premise their application as one for setting aside as of right. They said there is a presumption in favour of the process server. I don’t think this is the correct position in law. All parties come to court on a balanced ground. Only where there is a legitimate affidavit of service will such presumption be imagined of. Where there is no evidence of service, no number of affidavits can cure such a fatal error.
  15. They relied on the case of Wangunyu v Ndehi & aAnother [ 2022] KEHC 12007 (KLR). It was their case that the process sever here explains in great detail the manner in which he effected service on the 1st Applicant. The details include, the location, the house number, the surroundings of the house, the 1st Applicant’s physical appearance, and such like details. They state that the response was that he was out of the country in 2023.
  16. They stated that Ms. Everlyne did not cover herself in glory during cross- examination as she could not recall the building that houses her supported company. A company that had been hand dover to her to run because Ms. Serah could not do it from overseas.
  17. In the case of Mureithi Charles & another v Jacob Atina Nyagesuka [2022] eKLR Justice Odunga, as he was then stated as follows: -

“In my view, this position is supported by the holding of OJwang, J (as he then was) in Haile Selassie avenue Development CO. Limited v Jopshat Murithi & 10 others [ 2004] eKLR where the held that: -

“The rules to procure which regulate the trial process are intended to serve the constructive purpose of expediting trials, and facilitating judicial decision – malign with finality. These rules cannot be said to be oppressive to parties, or that they necessarily wreak injustice. On the facts of this particular case, the Applicant’s ought to have complied with these rules   of procedure.”

  1. In the case of David Gicheru v Gicheha Farms Limited & Another [2020] eKLR the Court held that: -

“The fundamental duty of the Court is to do justice between the parties. It is in turn, fundamental that to that duty, those parties should each be allowed a proper opportunity to put their cases upon the merits of the matter….”

In considering whether or not to set aside a judgment, a judge has to consider the matter in the light of all the facts and circumstances both prior and subsequent and of the respective merits of the parties before it would be just and reasonable to set aside or vary the judgment, if necessary, upon terms to be imposed. Hence the justice of the matter and the good sense of the matter, are certainly matters for the judge. It is, as I have held elsewhere in this ruling and unfettered discretion, although it is to be used with reason, and so a regular judgment would not usually be set aside unless the court is satisfied that there is a defence on the merits, namely a prima facie defence which should go to trial or adjudication. The principle obviously is that, unless and until the court has pronounced a judgment upon the merits or by consent it is to have the power to invoke the expression of its coercive power, when that has been obtained only by a failure to follow any of the rules of procedure. It is then not a case of the judge arrogating to himself a superior position over a fellow judge, but being required to survey the whole situation to make sure that justice and common sense prevail. Indeed, there is no parallel with an appeal.  The judge before whom the application for setting aside is presented will have a greater range of facts concerning the situation after an inter partes hearing, than the Judge who acts ex parte. Moreover, the judge is not interfering with the findings med by a fellow judge but is making sure that injustice or hardship would not result from accident, inadvertence or excusable mistake or error. The substance of his judgment would be that in view of the defence, three is prima facie defence. He may not be satisfied with the blunders or non –attendance of the Applicant or his advocate, but nevertheless he may hold that it would be just to set aside the ex parte judgment. See Bouchard International (services) Ltd vs M’ Mwereria [1987] KLR 193; Evans vs Bartlam [ 21937] 2 ALL ER 647.

In this case the Applicant’s failure to appear in court when judgment date was set is attributed to lack of notification and the fact that the appellant’s counsel was not present in court on that hate due to engagements before the High Court in Makueni. Even if the absence of the Appellants was to be blamed on their counsel, as was appreciated by Apallooo, J.A (as then was) in the case of Philip Chemowolo & another -vs- Augustine Kubede [ 2981 – 88] KAR at 1040:

“Blunder will continue to be made from time and it   does not follow that because a mistake has been that a party should suffer the penalty of not having his case heard on merit. I think the broad equity approach to this matter is that unless there is fraud or intention to overreach. There is no error or default that cannot be put right by payment of costs. The Court as it often said exists for the purpose of deciding the rights of the parties and not the purpose of imposing discipline.”


  1. In the case of Yoshin Engineering Corporation v AIa Architects Limited (Civil Appeal E) & 7 of 2022) [ 2023] KECA 872 (KLR) (7 July, 2023) (Judgment), the Court of Appeal stated as doth: - SG KAIRU, P NYAMWEYA & GV ODUNGA, JJA)

“The issue before us in this appeal is whether in the circumstances of this case, the trial court was justified in giving a conditional leave to defend the suit and whether or not the conditions imposed were just. In answering this question, the first issue for determination is whether the judgment in question is regular or an irregular one. This Court in Bouchard International (Services) Ltd v M’ Mwereria [ 1987] KLR 193 held that: “The basis of approach in Kenya to the exercise of the discretion to be employed or rejected under either Rule 8 or Rule 10 (the later dealing with judgment by default) is that if service of summons to enter appearance has not been effected, the lack of an initiating process will cause the steps    taken to set aside ex debito justitiae. If service of notice of hearing or summons to enter appearance has been served, then the court will have before it a regular judgment which may yet be set aside or varied on just terms. To exercise   this discretion is a statutory duty and the exercise must be judicial. The court in doing so is duty bound to review the whole situation and se that justice is done. The discretion is intended so to be exercised to avoid injustice or hardship resulting from accident, inadvertence ort excusable mistake by evasion or otherwise to obstruct or delay the course of justice.”

24. The court added that:

A judge has to judge the matter in the light of all the facts and circumstances both prior and subsequent and the of the respective merits of the parties before it could be just and reasonable to set aside or vary the judgment, if necessary, upon terms to be imposed. Hence the justice of the matter, the good sense of the mater, were certainly masters for the judge. It is unconditional unfettered discretion, although it is to be used with reason, and so a regular judgment would not usually be set aside unless the court is satisfied that there is a defennce on the merits, namely a prima facie deefnce which should go to trial or adjudication. The principle obviously is that, unless and until the court has pronounced a judgment upon the merits or by consent it is to have the power to revoke the expression of its coercive power, when that has been obtained only by a failure to follow any of the rules of procedure.”

25. While it is appreciated that the decision to set side ex parte judgment is an exercise of discretion, this court in the above matter held that: -

“It is clear that the Court of Appeal should not interfere with the discretion of a judge acting within this jurisdiction unleashes the court is clearly satisfied that he was wrong. But the court is not entitled simply to say that the judge had jurisdiction and had all the facts before him the Court of Appeal cannot review his order, unless he has shown to have   applied wrong principle. The court must, if necessary, examine a new the relevant facts and circumstances, in order to exercise by way of a review a discretion, which may reverse or vary the order. Otherwise in interlocutory maters, the judge might be regarded as impendent of supervision. Yet an interlocutory order of the judge, and may be one, which requires a careful examination by the Court of Appeal.”

  1. In this matter summons for the second Applicant were not extracted and as such could not possibly be served. The service was effected upon the firm of M/s Maragia and Company advocates. They were never and never pretend to be on record for the 2nd Applicant. It is irrelevant whether it is any of the two sisters who were directors. The request for judgment was made on basis of affidavits served on Maragia and company. It is inevitable therefore to find and hold that there was no service upon the 2nd Applicant. The judgment entered there is therefore highly irregular.
  2. When judgment is that irregular there is no discretion on the matter. The court has to set aside the interlocutory judgment against the 2nd Applicant. I will thus allow the application by the 2nd defendant with costs of Kshs. 20,000/=

  1. The application shall take out summons to enter an appearance and serve the same upon the advocates who are currently on record for the 2nd Applicant. The 2nd applicant shall have 15 days from the date of service to enter appearance and 15 days after entering appearance to file defence.
  2. Turning to the for 1st Applicant, I note that he indicated he was in Italy the whole time and annexed almost the entire passport. The process server was evasive as   to the person he served. He stated that the person became menacing   and did not tell him whether he was the 1st Applicant. The same affidavit is represented word for word for subsequent service I was satisfied that the Applicant was in Italy.
  3. However, it is not true that he had no knowledge of the process. I don’t believe that an advocate could turn up in court record a consent without some form of instructions. Service was thus not an issue for the first Applicant. The only question is whether the judgment was regular or irregular after service was done.
  4. The dispute is over consultancy fees. Such is not a liquidated claim. There is no particulars of breach of contract as per order 2 Rule 10. This provides as doth: -

“(1) Subject to subrule (2), every pleading shall contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing—

(a) particulars of any misrepresentation, fraud, breach of trust, willful default or undue influence on which the party pleading relies; and

(b) where a party pleading alleges any condition of the mind of any person, whether any disorder or disability of mind or any malice, fraudulent intention or other condition of mind except knowledge, particulars of the facts on which the party relies.

  1. Further begin a claim for special damages, the me ought to be particularized and specifically proved. In the case of   David Bagine vs Martin Bundi [ 1997] eKLR, The Court of Appeal stated as follows: -

“It has been held time and again by this court that special damages must be pleaded and strictly proved. We refer to the remarks by this Court in the case of Mariama Maghema Ali v Jackson M. Nyambu t/a Sisera Store, Civil appeal NO. 5 of 1990 (unreported) and Idi Ayub Sahbani v Citr Council of Nairobi (1982-88) IKAR 681 at page 684:” … special damages in addition to begin pleaded, must be strictly proved as stated by Lord Goddaard C.J. In Bonham Certer vs Hyde park Hotel Limited [ 1984] 64 TLR 177thus:

“Plaintiffs must understand that if they bring actions for damages it is for them to prove damage, it is not enough to write down the particulars and, so to speak them at the head of the court, saying, “this is what I have lost, I ask   you to give me these damages.”  They have to prove it”.

  1. The Deputy Registrar thus erred in entering final judgment without formal proof. In the case of Samson S. Maitai & another v African Safari Club Ltd.  & another [ 2010] eKLR Emukule, J, as he then was observed thus:

“  ……. I have not seen judicial definition of the phrase “Formal Proof”. “Formal” in its ordinary Dictionary meanings – refers to being” methodical “according to rules) (of evidence). On the other hand, according to Halsbury ‘s # 39 Laws of England, Vol. 15, para 260, “proof” is that which leads to a conviction as to the truth or falsity of alleged facts which are the are the subject of inquiry. Proof refers to evidence which satisfies the court as the truth of falsity of a fact. Generally, as well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”

  1. The first defendant filed submissions on 29/2/2024. They also signed Replying submissions. Despite a lot of paper work going into this matter, the case relates to setting aside. I am guided by the principles of see out in Shah- v s- Mbogo and Another (1967) EA.
  2.   I am al so well aware of the postulations in the case of Tree Shade Motors Limited v D.T. Dobie and Company (K) Limited & Another [1998] eKLR, where the court of Appeal stated as doth: -

“..that is what this Court decided in the case of Kingsway Tyres and Automart Ltd v Rafiki Enterprises Ltd (Civil Appeal No. 220 of 1995) (Unreported). In the course of its judgment the Court 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.

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. The respondent did not annex to its application in the lower court a draft defence. A director of the company did, however, swear an affidavit to state that the appellants's claim was based on certain LPOs which had been stolen from it (the respondent) by its employees. Too, that the employees had been arraigned in court on criminal charges relating thereto. In view of that, it did not think the claim, properly, lay against it. It was desirable, we think for the respondent to annex to its application a draft defence to include all that and any other defences it may have had to the appellant's claim. Be that as it may, the defences, above, were not such as would have properly, influenced the court below to exercise its discretion in favour of setting aside. That is the more so considering the manner the parties conducted business between themselves."

As we have already said, in this case the second defendant annexed a draft defence to the affidavit in support of the application to set aside, the gist of which is that it purchased the motor vehicle from the first defendant as a purchaser for value without notice. The effect of this defence, if it prevails, is that the plaintiff would have to seek redress from the person with whom he had left his motor vehicle and who sold it to the second defendant. That is a defence which the second defendant should be allowed to raise although it has been less than candid on the issue of service. The plaintiff has been inconvenienced, but he certainly has not been prejudiced, and his inconvenience can be redressed by an appropriate order for costs.

  1. The court will be inclined to hear parties inter parties and not drive a party from the seat of justice. As regards to the 1st defendant there are only 2 issues: -
  2. Whether there was an irregular judgment which will entitle a party to automatically defend.
  3. If the judgment was regular, whether the defendant or any of them is entitled to defend.
  4. It is note worth that if judgment is irregular, it must, by necessity be set aside without argument or cavil. If it is a regular judgment, the party applying to set aside must show that they are entitled to defendant as they a good reason for non appearance. They also must show that they have a defence with triable issues such a defence need not succeed.
  5. In the case of Kipkai Enterprises Ltd v Maurine Louise Osembe [ 2019] eKLR, Kipkai Enterprises Ltd v Maurine Louisee Osembe [ 2019] eKLR, Justice B M Eboso stated as follows:-

“8. The jurisdiction to set side ex p arte judgment is a discretionary one and is exercised upon a well established criteria. The Court of Appeal is discussed the criteria in the case of James Kanyita Nderitu and Another v Marios Philotas Ghika & another (2016) eKLR. The court of appeal further outlined   the distinction between regular and an Irregular ex-parte judgment and set out the criteria to be adopted when exercising   jurisdiction to set aside either of the two categories of exparte judgment. It stated thus: -

“In a regular default judgment, the defendant will have been duly served with Summons to Enter Aberrance, but for one reason or another, he had failed to enter appearance or to file defence rustling in default judgment. Such a defendant is entitled under Order 10 Rule 11 of the Civil Procedure Rules, to move the court to set aside the default judgment and to grant   him leave to defend this suit. In such a scenario, the court has unfettered discretion in determining whether or not to set aside the reason for the failure of the defendant to file his memorandum of appearance of defence, as the case may be, the length of time that has elapsed 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 interest of justice to set aside the default judgment, among others.

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 I set aside ex-debito justitiae as a matter of right. The court does no even have to be moved by the party once it comes to its notice that the judgment is irregular; it can set the default judgment on its own motion. In addition, the court will not venture into considerations of whether the intended defence raised triable Issues or whether there has ben inordinate delaying applying to set aside the Irregulars judgment. The reason why such judgment is set aside a o f 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.”

  1. In Shah v Mbogo & Another 1967 EA 116, the Court of Appeal stated that the discretion to set aside an exparte judgment is intended to avoid injustice or hardship resulting from accident, inadvertence or excusable error but not to a assist a party who has deliberately sought (whether by evasion or otherwise) to obstruct or delay the cause of justice.
  2. I have not seen that the 1st respondent has sought to delay. Though served, the judgment entered was irregular. It ought to be set aside ex debito justiceae with condition.
  3. The consequence of the foregoing is that I allow the two applications.

Determination

  1. In the end I make the following orders: -
  2. The exparte and interlocutory Judgment entered against the 2nd Defendant was irregular and as such must ex debt debtor justiae be set aside.
  3. The plaintiff to extract and serve summons to enter appearance within 15 days from today upon the advocates on record.
  4. The 2nd Defendant to enter appearance within 15 days of service, and to file defence within 15 days of entry of Appearance.
  5. The 1st Defendant was properly served. However, they have an arguable defence as the matter did not proceed of formal proof.
  6. Ex parte judgment enter d in favour of the plaintiff against the 1st defendant is set aside. The 1st defendant to file Defence within 15 days from today.
  7. The plaintiff to bear the 2nd defendant’s costs of Kshs. 25,000/=
  8. The 1st defendant to pay throw away costs of Kshs. 10,000/= to the plaintiff.
  9. The matter shall be mentioned on 20/6/2024 before the Deputy Registrar to confirm compliance with the orders herein.

DELIVERED, DATED and SIGNED at MOMBASA on this 17th day of April, 2024. Ruling delivered through Microsoft Teams Online Platform.

In the presence of:-

Mr. Kongere for Mr. Njuru for the Plaintiff

Mr. Kenga for the Defendant

Court Assistant- Brian

    ASV TRADING COMPANY LIMITED VS FRANCOIS BORGATO ASV TRADING COMPANY LIMITED VS FRANCOIS BORGATO