(An appeal from the ruling and order of the Senior Magistrate Court at Kiambu delivered on 24th February 2020 (Hon. S. Atambo, SPM) in Kiambu CMCC No. 269 of 2017)
1. The appeal before this court is in respect of lower court's ruling and order dated 24th February 2020, by which the court dismissed the Appellant's application dated 25th July, 2019.
Background Information
2. By a plaint dated 19th April 2017 ,the Respondent herein sought compensation in the form of general and special damages, costs and interests. The cause of action, it was pleaded, arose from a road traffic accident that occurred on 3rd July 2016, along Nairobi -Limuru Road. The appellant did not enter appearance and file defence within stipulated time. Following an application for request for judgement dated 20th May 2019 was made by the Respondent against the Appellants and on 17th May 2018 an interlocutory judgement was thereby entered.
3. Following the interlocutory judgment, the appellant proceeded to file an application dated 25th July, 2019, the Appellant had sought inter alia orders to setting aside the interlocutory judgement entered against the Appellant (as defendant) on 17th May 2018, the ex-parte proceedings and the final judgment and decree dated 20th May, 2019.The Appellant also prayed for unconditional leave to defend the suit.
4. In opposition of the application, the plaintiffs/respondents filed a replying affidavit in which they stated the defendant/applicant was misleading the court on material facts. The demand letter was served upon the defendant on 9th August 2016 and a copy of the demand letter and statutory notice issued against the defendant's insurer.
5. The plaintiff/respondent stated that both the refusal of the defendant and its insurer that this suit was filed on 7th June 2017. A notice of institution of suit dated 9th June 2017 and copies of all pleadings were served upon the defendant's insurer on 13th June 2017. Their advocates instructed the licensed court process server to track and serve summons to enter appearance and all other pleadings therein upon the defendant.
6. The respondent stated the process server proceeded to Karuri police station where the accident had been reported and given the cell phone number of Danson Mungai, the applicant's employee who upon being called said he was no longer working for the applicant.
7. After hearing the application, the trial court magistrate Hon.S.Atambo delivered a ruling dated 25th July 2019 in which the trial court dismissed the applicant’s application dated 25th July 2019. It is that ruling that has provoked the instant appeal.
The appeal
8. Being aggrieved by the above ruling the Appellant has filed this instant Memorandum of Appeal dated 28th February 2020 setting out eight (8) Grounds of Appeal of appeal as follows: -
i. The Learned Magistrate erred in law and in fact in failing to set aside the ex-parte proceedings and judgment ex debito justiciae and further erred in departing from a binding decisions/precedent presented to the Court by the Advocates for the Appellant for no good reason.
ii. The Learned Magistrate erred in law and in fact in holding that the Appellant had not deponed on the status of Mr. Moses Karanu and further erred in failing to appreciate the provisions of Order 5 Rule 3 of the Civil Procedure Rules and apply them correctly;
iii. The Learned Magistrate erred in law and fact in holding that the Appellant had not produced evidence proving that Mr.Moses Karanu was not its duector, shareholder and/or owner when such evidence was actually tendered not only by the Appellant but also by Moses Karanu himself;
iv. The Learned Magistrate erred in law and in fact in holding that the institution of a declaratory suit against the Appellant's Insurers is prima face evidence of service of summons in the primary suit and further erred in failing to appreciate the distinctiveness of the parties sued in the matters.
v. The Learned Magistrate erred in law and in fact by dismissing the Appellant's application after finding and holding that the Appellant had not denied institution of the declaratory suit despite the Appellant not being a party or aware of the existence of the declaratory suit.
vi. The Learned Magistrate erred in law and fact in failing to set aside the ex-parte proceedings and judgment and further erred in taking into account irrelevant factors and in some instances failed to consider relevant factors hence arrived at a wrong decision.
vii. The Learned Magistrate erred in law and fact by considering against the Appellant the failure to annex a draft defence in the Appellant's application despite the fact that the Appellant sought orders to set aside the ex-parte proceedings and judgement ex debito justiciae.
viii. The Learned Magistrate disregarded and/or misapprehended the evidence on record, the consequence of which was a decision which lacks any basis in law and fact;
9. The appellant proposed that this court orders that this appeal be allowed with costs; That the order dismissing the Appellant's Notice of Motion dated 25th July, 2019 to be set aside and be replaced with an order allowing the application with costs; and the costs of the proceedings in the subordinate court and in this appeal be given to the appellant.
SUBMISSIONS
10. By consent of parties this appeal was canvassed by way of written submissions. The appellant filed written submissions dated 14th November 2023 and the respondent filed written submissions dated 1st December 2023.
11. The appellant submitted that the defendant was never served with summons to enter appearance, the defendant was entitled to have the interlocutory judgement set aside. The appellant referred to the decision in Remco Limited vs Minstry Jadra Parbat and Co.Limited & Others[2002]1 EA 227.
12. The appellant submitted that The appellant submitted that the real issue which the lower court should have considered was whether Appellant had been served with summons to enter appearance. The appellant submitted that upon reaching the correct conclusion that summons to enter appearance were not served upon the Appellant, the only correct decision which the court should have reached was to set aside the impugned judgements ex-debito justiciae. The appellant submitted that that Grounds 1, 2, 3, 7 and & of the appeal have merit and the same should be allowed, with the result that this appeal should succeed.
13. The appellant submitted on grounds 4, 5 and 6 that Institution of a declaration suit was not a relevant matter for consideration by the trial court. The appellant submitted that the trial Magistrate relied on the fact that the Respondent had filed a declaratory suit, being Kiambu C.M.C.C. No. 283 of 2019, against Jubilee Insurance Company Limited who were the insurers of the Appellant's motor vehicle.
14. It is the Appellant's submission that the trial Magistrate erred in relying on the filing of the declaration suit as a ground for dismissing the application to set aside the irregular judgement because: - The Appellant was not a party to the declaratory suit. The filing of the declaratory suit did not bar the Appellant from seeking to be heard in the suit where it had been sued and in which judgement and decree had been obtained against it irregularly.
15. The appellant submitted that the filing of the declaratory suit was also an irrelevant matter which the trial Magistrate should not have considered in determining the application before her and the lower court was therefore wrong in holding that "other than denying that there was proper service of the summons to enter appearance and plaint, the defendant did not deny that the declaratory suit had been filed against its insurer and that pleadings had already closed accordingly as per the requisite statutory timelines. The appellant urged this court to allow the appeal.
16. The respondent submitted that the appellant is misleading the court as a copy of the demand letter was served upon them on 9th August 2016 and a copy of the letter and statutory notice issued against the defendant’s insured.
17. The respondent submitted that Appellants are misleading the court as a copy of the demand letter was served upon them on 9th August 2016 and a copy of the letter and statutory notice issued against the Defendant's insured.
18. The respondent submitted that once the process server was instructed to track and serve the summons to enter appearance and all other pleadings upon the Defendant, he proceeded to Karuri Police Station where the accident had been reported and given the number of Danson Mungai, the Appellants former employee who being called upon said he was no longer working for the Appellant. The respondent submitted further that he gave the Process server the mobile number of Moses Karanu, the Appellants owner who resided along James Gichuru road in Nairobi where the applicant was stationed. Upon calling Moses Karanu, the process sever was informed that they meet at ABC Place along Waiyaki Way where he served him with the summons to enter appearance and all the pleadings on the sole basis that Mr. Karanu introduced himself as the Appellants owner. Mr.Karanu acknowledged receipts of the summons and pleadings by signing the return copy.
19. The respondent submitted that It is a result of due diligence that the Process Server was able to get Danson Mungai and Moses Karunu's phone numbers. It is also on the basis of compelling evidence of service contained in the Process Server's Affidavit of Service that the trial court got convinced that service of the summons to enter appearance and the pleadings had been properly effected upon the Appellant and proceeded to enter judgment in default of entering appearance against the Appellant.
20. The respondent submitted further that the judgment and decree in this suit have already been executed vide Kiambu CMCC NO. 283 of 2019Julia Nyambura Munene & John Gaturi Munee (suing as personal representative of the Estate of Francis Gaturi Munene versus Jubilee Insurance Company Limited, a declaratory suit filed against the Appellant's insurer. Therefore, this Appeal has been overtaken by events and the orders being sought are unmeritorious.
21. The respondent submitted that the Appellants’ insurer did settle part the Declaratory suit in favour of the Respondent resulting to resulting to part execution of the judgment. The respondent urged this court to dismiss the Appeal be dismissed with costs.
Analysis and Determination
22. I have considered the foregoing, the submissions filed on behalf of the parties herein and the authorities relied upon in support thereof. The decision whether or not to set aside ex parte judgement is discretionary is not in doubt and that the discretion is intended so to be exercised to avoid injustice and hardship resulting from accident, inadvertence or excusable mistake or error, but is not designed to assist a person who has deliberately sought whether by evasion or otherwise to obstruct or delay the course of justice. See Shah vs. Mbogo & Another [1967] EA 116.
23. In this case the grounds upon which the application to set aside the judgment was made were two-fold. First it was contended that the Appellants were never served with summons to enter appearance. Secondly, that the trial court erred by dismissing the application and holding that the appellant had not denied institution of the declaratory suit despite appellant not being a party or aware of the existence of the declaratory suit.
24. As was held by the Court of Appeal in CMC Holdings Ltd vs. Nzioki [2004] KLR 173:
“In an application for setting aside ex parte judgment, the Court exercises its discretion in allowing or rejecting the same. That discretion must be exercised upon reasons and must be exercised judiciously…In law the discretion that a court of law has, in deciding whether or not to set aside ex parte order was meant to ensure that a litigant does not suffer injustice or hardship as a result of amongst other an excusable mistake or error.
25. In the instant case the appellants have submitted that they were never served summons to enter appearance. I have perused the court record and I note that there is an affidavit of service filed on 17th May 2018 by Japheth Kabogo which is sufficient proof of service upon the appellants.
26. The appellant has also asked this court to allow it to unconditionally allow it a statement of defence, however I note that the appellant have not annexed a draft of the statement of defence to enable this court determine whether the defence has triable issue.
27. The respondent has informed this court that part of the judgment amount has already been settled by the appellants insurer in favor of the respondent. The pertinent question that arise is ‘’why did the appellants insurer settle the claim if at all appellant had a defence to the Respondent’s claim? The only irresistible conclusion one comes to is that the appellant had no defence to the claim. By settling part of the claim, the appellants were bound by the orders of the trial court. It is important to note that when a declaratory suit has been filed against the defendant's, and which the defendant has not denied, there can then be no stay of execution of the judgment and decree. In the upshot, it is my finding that the appeal lacks merit. The same is dismissed with costs to the Respondent assessed at Ksh 30,000//
28. Dated signed and delivered this 30th day of JULY 2024.
WENDY KAGENDO
JUDGE