1. I am invited to set aside a default Judgment entered in this matter on 9/12/2025 against the 2 nd , 4 th and 5 th Defendants in the Counterclaim, together with any consequential orders arising therefrom, and to grant the said Defendants (Applicants) leave to defend the Counterclaim by filing a defence of defences. This is the import of the Notice of Motion dated 14/01/2026 filed through Messrs Mogeni & Co. Advocates .
2. The background of this matter is that by the Plaint dated 26/01/2024, the Plaintiff sought Judgment for a permanent injunction to bar the 1 st and 2 nd Defendants in the main suit from, inter alia , disposing, or selling, transferring, or interfering with a number of the Plaintiffs’ motor vehicles said to have been proclaimed by the 1 st and 2 nd Defendants. It is not in dispute that the proclamation was a consequence of advancement of financial facilities to the Plaintiff by the 1 st Defendant for purposes of the Plaintiff carrying out several construction contracts awarded to it, but whose repayment the 1 st Defendant accuses the Plaintiff of defaulting on. It is also not in dispute that the 1 st Defendant, in response, through Messrs Wamae & Allen LLP , filed the Defence dated 23/02/2024, in which it introduced a Counterclaim whereof it sought Judgment for the alleged outstanding loan balance of Kshs 542,988,239 and USD 147,658 with interest, against the Plaintiff and 5 other individuals (including the 3 Applicants) whom the Defendant joined into the suit, and whom it described as Guarantors to the loan facilities.
3. I may also point out that on 26/06/2025, this Court ( Mongare J ) had allowed the Plaintiff’s Application for an interlocutory injunction to restrain the 1 st and 2 nd Defendants from, inter alia , disposing of, selling, transferring, or interfering with the motor vehicles proclaimed as aforesaid. In allowing the Application, the Judge however directed the Plaintiff, as a condition for the injunction, to deposit into the loan account, within 120 days, proceeds of the 3 construction contracts. The Defendant had also filed a rival Application which sought a raft of orders, including, issuance of warrant of arrests against the 2 nd – 5 th Defendants in the Counterclaim to show cause why they should not furnish security for the debt and that they deposit their passports in Court, that the Plaintiff’s creditors be ordered to pay to the Defendant all monies due to the Plaintiff, that an injunction be issued restraining the Plaintiff and the 5 newly joined individuals from transferring company shares they own, and that the Plaintiff’s creditors be ordered to file details of monies, paid and unpaid, in respect of the contracts. This rival Application by the Defendant was however dismissed vide the same Ruling, for failure to serve it upon the current Applicants, newly joined as Defendants in the Counterclaim.
4. The Defendants then, taking a cue from the above Ruling, applied for, and obtained, on 22/10/2025, leave to serve the 2 nd - 5 th Defendants in the Counterclaim with the Summons to Enter Appearance. It is also evident that the 1 st Defendant then caused publication of the notice of service to appear in the Daily Nation Newspaper of 3/11/2025. While the 3 rd Defendant duly entered Appearance through Messrs A.S. Kuloba & Wangila Advocates , the Applicants failed to do so. In the circumstances, the 1 st Defendant filed the Request for Judgment dated 18/12/2025 against the Applicants, which Judgment was duly entered on 9/12/2015.
5. Back to the Application for setting aside the default Judgment, which is the subject of this Ruling, the same is supported by the Affidavit sworn by Purity Makori , the Applicants’ Counsel in this matter. In the Affidavit, she deponed that the publication of the service of Summons in the newspaper of 3/11/2025 was only brought to Counsel for the Applicants’ attention on 19/11/2025 when this matter came up for Mention in Court, upon which she attempted to reach the Applicants to notify them of the same, which they were not aware of, but her efforts were futile due to communication challenges as the Applicants were out of the country, and as a result, the Applicants were unable to enter appearance within the requisite timelines. She deponed that the Applicants were only able to issue instructions to her law firm on 9/12/2025 during the Court recess by which time the Advocates had already closed their offices for the Christmas break. She asserted that the her law firm only became aware of the entry of Judgment upon being served with the Notice of Entry of Judgment dated 13/01/2026, and contended that the delay the delay to enter appearance was therefore inadvertent, and that the Applicants’ defence intended to be filed raises triable issues.
6. The Defendant, in response, filed the Replying Affidavit sworn on 27/01/2026 by Collins Sabatia , who introduced himself as the Defendant’s Manager-Business Support & Resolution Business and Commercial Clients. He gave a long narration of the background to the advancement of the loan facilities, including the participation of the Applicants as Guarantors, whom he also stated were foreigners, the default, and the recovery efforts that culminated into the filing of this suit. Regarding the delay to enter appearance, he contended that the Applicants were deemed to have been aware of the suit as their common Advocate has been on record from the outset and the Managing Director, who is also a Guarantor, has not adduced evidence that his co-Guarantors were not aware of the suit, that the Application for substituted service was served on the firm of Mogeni & Co. Advocates , and that the Defendant paid a sum of Kshs 51,040/- for the newspaper notice. He deponed further that the Application for setting aside is defective as it sworn by an Advocate on contested facts, that the Advocates have not adduced evidence to show that the Applicants were made aware of the Application, or that the Applicants were out of the country, that the Applicants have themselves not sworn any Affidavits, that the draft Defence is a sham and consists of bare denials, and that setting aside the Judgment will delay justice and prejudice the Defendant noting the colossal sums outstanding. He prayed that the Application be dismissed but, in the alternative, the Guarantors be ordered to deposit in an escrow account the sum counterclaimed. In the end, he contended that as a demonstration of the continued frustration in complying with Court orders, the Plaintiff has made no payments to the Defendant despite this Court’s orders made on 19/11/2025 directing the Plaintiff to furnish the list of pending bills within 14 days.
7. The parties then filed written Submissions. The Applicants’ Submissions is dated 26/02/2026 while the Defendant’s is dated 3/03/2026. Both Submissions are basically restatements of the matters already set out above and contain authorities in support of the respective positions.
Determination
8. The issue for determination herein is “ whether to set aside the default Judgment entered in this matter on 9/12/2025 against the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants), and to then grant them leave to defend the Counterclaim .”
9. In civil litigation, matters to do with the consequences of a Defendant failing to appear or attend Court, or failing to file a defence, are governed by Order 10 of the Civil Procedure Rules . The provisions permit the entry of Judgment in default of entry of appearance or filing a defence, and sets out guidelines on the process of entry of such interlocutory judgment s. Order 10 Rule 11 then empowers the Court, in the exercise of its discretion, to set aside or vary such ex parte Judgments. The provisions apply to Counterclaims mutatis mutandis
10. A Defendant, once served with Summons, is expected to act promptly and expeditiously in entering appearance, and subsequently filing defence or answer to the claim. The time limit provided under Order 6 Rule 1 is 14 days for entering appearance, and, under Order 7 Rule 1 , another 14 days to file the defence. In the event a Defendant fails to meet the set timelines and a default judgment is entered, then he will be under a legal duty, should he wish to seek setting aside of the Judgment, to sufficiently explain the reasons why he delayed to act.
11. The Court of Appeal, in the case of Gicharu Kimani & Associates Advocates –vs- Samwel Kazungu Kambi [2020] eKLR , in restating the difference between a default Judgment regularly entered and one, which has been obtained irregularly, and the different effects flowing therefrom, held as follows:
“Considering the circumstances of this motion, the facts regarding the merits or demerits of it one must take into account in exercise of discretion that it’s within the ambit of the guiding principles laid down in the case of James Kanyiita Nderitu & Another v Marios Philotas Ghikas & Another Civil Appeal No 6 of 2015 eKLR (Msa), the Court of Appeal stated as follows:
“We shall first address the ground of appeal that faults the learned judge for setting aside the default Judgment and consequential orders in the circumstances of the case. From the outset, it cannot be gainsaid that a distinction has always existed between a default Judgment that is regularly entered and one, which is irregularly entered. In a regular default Judgment, the Defendant will have been duly served with summons to enter appearance, but for one reason or another, he had failed to enter appearance or to file defence, resulting 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 the suit. In such a scenario, the Court has unfettered discretion in determining whether or not to set aside the default Judgment, and will take into account such factors as the reason for the failure of the Defendant to file his memorandum of appearance or defence, as the case may be; the length of time that has elapsed since 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 to set aside the default Judgment, among other. (See Mbogo & Another v Shah (supra), Patel v EA Cargo Handling Services Ltd {1975} EA 75, Chemwolo & Another v Kubende {1986/KLR 492 and CMC Holdings v Nzioki {2004/1 KLR 173})’.
12. In this case, there is no dispute that the default Judgment was a regular one. I say so because the Applicants readily admit that service by way of newspaper notice was published on 3/11/2025 as directed by the Court. Judgment was then entered about 1 month later on 9/12/2025. As observed above, even where the Judgment is regular as herein, the Court still retains the power to set it aside if justice of the case demands, for instance, where the Defendant demonstrates that it has a good defence, or where prejudice caused may be compensated by an award of costs. This is what the Court of Appeal affirmed in the case of Tree Shade Motors Ltd v D T Dobie and Company (K) Ltd and Another [1998] eKLR).
13. In this case, it has been alleged that appearance was not entered for the Applicants within the stipulated timelines because the Advocates, then only acting for the Plaintiff, upon learning on 19/11/2025, of the publication of the service in the newspapers, tried to reach the Applicants to notify them of the same but they were unsuccessful as the Applicants were out of the country. This is what deponed by the Applicants’ Counsel, Ms. Makori . This account has however been doubted by Mr. Gichuhi, SC , Advocate for the Applicants, and I agree that, in doing so, Mr. Gichuhi possesses understandable and reasonable grounds. First, considering the close connection between the Applicants and the Plaintiff, it is doubtful that the Applicants would not be unaware of this suit and its progress, particularly, the filing and subsequent allowing of the Application to serve the Applicants by substituted service. It is also apparent that the Advocates on record for the Plaintiff are the same Advocates who eventually came on record for the Applicants. With the advance levels of communication technology now prevailing in the modern world, regardless of whichever part of the world they were, it is also doubtful that all 3 Applicants could not reached. Nonetheless, this only amounts to speculation which I cannot hold against the Applicants since I appreciate that an Advocate can only come on record for a party, upon receipt of express instructions. To this end, I shall give the Applicants the benefit of doubt in respect to the explanation that the Advocates were unable to reach the Applicants in time to notify them of the developments in the case.
14. I also consider that while the default Judgment was entered on 9/12/2025, the instant Application was brought only about a month later, on or about 14/01/2026. It is also relevant to note that the period concerned was the normally busy and hectic festive Christmas and New Year season when a lot of travelling and family engagements are involved, and during which most Advocates’ offices are also closed.
15. The draft defence presented by the Applicants cannot also be outrightly dismissed as not raising any triable issues. Among the issues raised are whether Section 44 of the Banking Act applies in this case and, as such, whether the 1 st Defendant raised interest rates on the loan facilities without obtaining the Cabinet Secretary’s approval to do so, and whether the 1 st Defendant irregularly levied unexplained penalties, commissions. Clearly, the intended defence is not one that can be summarily described as incapable of sustaining a reasonable defence at the trial. I also do not find any reason why the Applicants, if they indeed they were aware of the newspaper notice, would deliberately not enter Appearance knowing the consequences that could follow. What would they have to gain? The amounts involved in this case are also no doubt, colossal.
16. Although Mr. Gichuhi has correctly attacked the fact of the Supporting Affidavit being sworn by the Advocate, instead of the litigants, I think the explanation in this case being simply for the delay, part of which the law firm also took responsibility for, there would be no serious prejudice in the Advocate swearing the Affidavit.
17. The prayer that the Applicants, as Guarantors, be ordered to deposit in an escrow account the sum counterclaimed is also, in my view premature, as their culpability as such Guarantors is contested and would thus be best established after they have been heard on merits.
18. Although the Applicants may not be entirely blameless, as this is a case of exercise of discretion by the Court, I find that declining to set aside the default Judgment and allowing the Applicants to defend the case would be too draconian in the circumstances.
19. Indeed, Apaloo, J.A. ( as he then was ), in the case of Philip Chemowolo & Another v Augustine Kubede, [1982-88] KAR 103 at 1040 , Apaloo, J.A. ( as he then was ), advised as follows:
“Blunders will continue to be made from time to time and it does not follow that because a mistake has been made 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 is often said exists for the purpose of deciding the rights of the parties and not the purpose of imposing discipline.”
20. Further, the Court of Appeal, in the case of Richard Ncharpi Leiyagu v Independent Electoral Boundaries Commission & 2 others [2013] eKLR , held that:
“22]. The right to a hearing has always been a well-protected right in our Constitution and is also the cornerstone of the rule of law. This is why even if the courts have inherent jurisdiction to dismiss suits, this should be done in circumstances that protect the integrity of the court process from abuse that would amount to injustice and at the end of the day there should be proportionality.”
21. Similarly, the Court of Appeal, in the case of CMC Holdings Ltd vs James Mumo Nzioka (2004) KLR 173 , guided as follows:
“The discretion that a court of law has, in deciding whether or not to set aside ex parte order such as before us was meant to ensure that a litigant does not suffer injustice or hardship as a result of among other things an excusable mistake or error. It would in our mind not be a proper use of such discretion if the court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error.”
22. Lastly, C.B. Madan, JA ( as he then was ) in the case of Belinda Murai & 9 Others -Vs- Amos Wainaina [1982] KLR 38 , pronounced himself in the following manner:
“A mistake is a mistake. It is no less a mistake because it is unfortunate slip. It is no less pardonable because it is committed by senior counsel. Though in the case of junior counsel the court may feel compassionate more readily. A blunder on a point of law can be a mistake. The door of justice is not closed because a mistake has been made by a lawyer of experience who ought to have known better. The court may not forgive or condone it but it ought to certainly do whatever is necessary to rectify it if the interests of justice so dictate. The courts of justice themselves make mistakes which is politely referred to as erring in their interpretation of laws and adoption of a legal point of view which courts of appeal sometime overrule.”
23. Applying the above principles, I believe that the nature of the dispute herein, and the broad equity approach justifies allowing the Application. I believe the default can be put right by payment of costs.
Final Orders
24. The upshot of my findings above is that this Application dated 14/01/2026 succeeds, and is allowed in the following terms:
i) The default Judgment entered herein on 9/12/2025 against the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants herein) is hereby set aside
ii) The 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants) are granted leave to file their Statement(s) of Defence to the Defendant’s Counterclaim, which Defence the Applicants shall have fourteen (14) days from the date hereof to file.
iii) As a condition for the setting aside of the default Judgment, the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants) shall, within fourteen (14) days from the date hereof, pay to the Defendant in the main suit, the following amounts:
a) Kshs 51,040/- incurred by the Defendant in the main suit, in publishing the notice of service in the Daily Nation Newspaper of 3/11/2025.
b) Kshs 50,000/- as thrown away costs for the instant Application.
iv) In the event of default, order (i) shall stand vacated.
DELIVERED, DATED AND SIGNED AT NAIROBI THIS 14 TH DAY OF AUGUST 2026
……………………..
WANANDA JOHN R. ANURO
JUDGE
Delivered in the presence of:
Mr. Wabwire h/b Mr. A. Gichuhi, SC, for the Defendant in the main suit/Plaintiff in the Counterclaim
N/A for other parties
Court Assistant: Amos Boso
2. The background of this matter is that by the Plaint dated 26/01/2024, the Plaintiff sought Judgment for a permanent injunction to bar the 1 st and 2 nd Defendants in the main suit from, inter alia , disposing, or selling, transferring, or interfering with a number of the Plaintiffs’ motor vehicles said to have been proclaimed by the 1 st and 2 nd Defendants. It is not in dispute that the proclamation was a consequence of advancement of financial facilities to the Plaintiff by the 1 st Defendant for purposes of the Plaintiff carrying out several construction contracts awarded to it, but whose repayment the 1 st Defendant accuses the Plaintiff of defaulting on. It is also not in dispute that the 1 st Defendant, in response, through Messrs Wamae & Allen LLP , filed the Defence dated 23/02/2024, in which it introduced a Counterclaim whereof it sought Judgment for the alleged outstanding loan balance of Kshs 542,988,239 and USD 147,658 with interest, against the Plaintiff and 5 other individuals (including the 3 Applicants) whom the Defendant joined into the suit, and whom it described as Guarantors to the loan facilities.
3. I may also point out that on 26/06/2025, this Court ( Mongare J ) had allowed the Plaintiff’s Application for an interlocutory injunction to restrain the 1 st and 2 nd Defendants from, inter alia , disposing of, selling, transferring, or interfering with the motor vehicles proclaimed as aforesaid. In allowing the Application, the Judge however directed the Plaintiff, as a condition for the injunction, to deposit into the loan account, within 120 days, proceeds of the 3 construction contracts. The Defendant had also filed a rival Application which sought a raft of orders, including, issuance of warrant of arrests against the 2 nd – 5 th Defendants in the Counterclaim to show cause why they should not furnish security for the debt and that they deposit their passports in Court, that the Plaintiff’s creditors be ordered to pay to the Defendant all monies due to the Plaintiff, that an injunction be issued restraining the Plaintiff and the 5 newly joined individuals from transferring company shares they own, and that the Plaintiff’s creditors be ordered to file details of monies, paid and unpaid, in respect of the contracts. This rival Application by the Defendant was however dismissed vide the same Ruling, for failure to serve it upon the current Applicants, newly joined as Defendants in the Counterclaim.
4. The Defendants then, taking a cue from the above Ruling, applied for, and obtained, on 22/10/2025, leave to serve the 2 nd - 5 th Defendants in the Counterclaim with the Summons to Enter Appearance. It is also evident that the 1 st Defendant then caused publication of the notice of service to appear in the Daily Nation Newspaper of 3/11/2025. While the 3 rd Defendant duly entered Appearance through Messrs A.S. Kuloba & Wangila Advocates , the Applicants failed to do so. In the circumstances, the 1 st Defendant filed the Request for Judgment dated 18/12/2025 against the Applicants, which Judgment was duly entered on 9/12/2015.
5. Back to the Application for setting aside the default Judgment, which is the subject of this Ruling, the same is supported by the Affidavit sworn by Purity Makori , the Applicants’ Counsel in this matter. In the Affidavit, she deponed that the publication of the service of Summons in the newspaper of 3/11/2025 was only brought to Counsel for the Applicants’ attention on 19/11/2025 when this matter came up for Mention in Court, upon which she attempted to reach the Applicants to notify them of the same, which they were not aware of, but her efforts were futile due to communication challenges as the Applicants were out of the country, and as a result, the Applicants were unable to enter appearance within the requisite timelines. She deponed that the Applicants were only able to issue instructions to her law firm on 9/12/2025 during the Court recess by which time the Advocates had already closed their offices for the Christmas break. She asserted that the her law firm only became aware of the entry of Judgment upon being served with the Notice of Entry of Judgment dated 13/01/2026, and contended that the delay the delay to enter appearance was therefore inadvertent, and that the Applicants’ defence intended to be filed raises triable issues.
6. The Defendant, in response, filed the Replying Affidavit sworn on 27/01/2026 by Collins Sabatia , who introduced himself as the Defendant’s Manager-Business Support & Resolution Business and Commercial Clients. He gave a long narration of the background to the advancement of the loan facilities, including the participation of the Applicants as Guarantors, whom he also stated were foreigners, the default, and the recovery efforts that culminated into the filing of this suit. Regarding the delay to enter appearance, he contended that the Applicants were deemed to have been aware of the suit as their common Advocate has been on record from the outset and the Managing Director, who is also a Guarantor, has not adduced evidence that his co-Guarantors were not aware of the suit, that the Application for substituted service was served on the firm of Mogeni & Co. Advocates , and that the Defendant paid a sum of Kshs 51,040/- for the newspaper notice. He deponed further that the Application for setting aside is defective as it sworn by an Advocate on contested facts, that the Advocates have not adduced evidence to show that the Applicants were made aware of the Application, or that the Applicants were out of the country, that the Applicants have themselves not sworn any Affidavits, that the draft Defence is a sham and consists of bare denials, and that setting aside the Judgment will delay justice and prejudice the Defendant noting the colossal sums outstanding. He prayed that the Application be dismissed but, in the alternative, the Guarantors be ordered to deposit in an escrow account the sum counterclaimed. In the end, he contended that as a demonstration of the continued frustration in complying with Court orders, the Plaintiff has made no payments to the Defendant despite this Court’s orders made on 19/11/2025 directing the Plaintiff to furnish the list of pending bills within 14 days.
7. The parties then filed written Submissions. The Applicants’ Submissions is dated 26/02/2026 while the Defendant’s is dated 3/03/2026. Both Submissions are basically restatements of the matters already set out above and contain authorities in support of the respective positions.
Determination
8. The issue for determination herein is “ whether to set aside the default Judgment entered in this matter on 9/12/2025 against the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants), and to then grant them leave to defend the Counterclaim .”
9. In civil litigation, matters to do with the consequences of a Defendant failing to appear or attend Court, or failing to file a defence, are governed by Order 10 of the Civil Procedure Rules . The provisions permit the entry of Judgment in default of entry of appearance or filing a defence, and sets out guidelines on the process of entry of such interlocutory judgment s. Order 10 Rule 11 then empowers the Court, in the exercise of its discretion, to set aside or vary such ex parte Judgments. The provisions apply to Counterclaims mutatis mutandis
10. A Defendant, once served with Summons, is expected to act promptly and expeditiously in entering appearance, and subsequently filing defence or answer to the claim. The time limit provided under Order 6 Rule 1 is 14 days for entering appearance, and, under Order 7 Rule 1 , another 14 days to file the defence. In the event a Defendant fails to meet the set timelines and a default judgment is entered, then he will be under a legal duty, should he wish to seek setting aside of the Judgment, to sufficiently explain the reasons why he delayed to act.
11. The Court of Appeal, in the case of Gicharu Kimani & Associates Advocates –vs- Samwel Kazungu Kambi [2020] eKLR , in restating the difference between a default Judgment regularly entered and one, which has been obtained irregularly, and the different effects flowing therefrom, held as follows:
“Considering the circumstances of this motion, the facts regarding the merits or demerits of it one must take into account in exercise of discretion that it’s within the ambit of the guiding principles laid down in the case of James Kanyiita Nderitu & Another v Marios Philotas Ghikas & Another Civil Appeal No 6 of 2015 eKLR (Msa), the Court of Appeal stated as follows:
“We shall first address the ground of appeal that faults the learned judge for setting aside the default Judgment and consequential orders in the circumstances of the case. From the outset, it cannot be gainsaid that a distinction has always existed between a default Judgment that is regularly entered and one, which is irregularly entered. In a regular default Judgment, the Defendant will have been duly served with summons to enter appearance, but for one reason or another, he had failed to enter appearance or to file defence, resulting 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 the suit. In such a scenario, the Court has unfettered discretion in determining whether or not to set aside the default Judgment, and will take into account such factors as the reason for the failure of the Defendant to file his memorandum of appearance or defence, as the case may be; the length of time that has elapsed since 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 to set aside the default Judgment, among other. (See Mbogo & Another v Shah (supra), Patel v EA Cargo Handling Services Ltd {1975} EA 75, Chemwolo & Another v Kubende {1986/KLR 492 and CMC Holdings v Nzioki {2004/1 KLR 173})’.
12. In this case, there is no dispute that the default Judgment was a regular one. I say so because the Applicants readily admit that service by way of newspaper notice was published on 3/11/2025 as directed by the Court. Judgment was then entered about 1 month later on 9/12/2025. As observed above, even where the Judgment is regular as herein, the Court still retains the power to set it aside if justice of the case demands, for instance, where the Defendant demonstrates that it has a good defence, or where prejudice caused may be compensated by an award of costs. This is what the Court of Appeal affirmed in the case of Tree Shade Motors Ltd v D T Dobie and Company (K) Ltd and Another [1998] eKLR).
13. In this case, it has been alleged that appearance was not entered for the Applicants within the stipulated timelines because the Advocates, then only acting for the Plaintiff, upon learning on 19/11/2025, of the publication of the service in the newspapers, tried to reach the Applicants to notify them of the same but they were unsuccessful as the Applicants were out of the country. This is what deponed by the Applicants’ Counsel, Ms. Makori . This account has however been doubted by Mr. Gichuhi, SC , Advocate for the Applicants, and I agree that, in doing so, Mr. Gichuhi possesses understandable and reasonable grounds. First, considering the close connection between the Applicants and the Plaintiff, it is doubtful that the Applicants would not be unaware of this suit and its progress, particularly, the filing and subsequent allowing of the Application to serve the Applicants by substituted service. It is also apparent that the Advocates on record for the Plaintiff are the same Advocates who eventually came on record for the Applicants. With the advance levels of communication technology now prevailing in the modern world, regardless of whichever part of the world they were, it is also doubtful that all 3 Applicants could not reached. Nonetheless, this only amounts to speculation which I cannot hold against the Applicants since I appreciate that an Advocate can only come on record for a party, upon receipt of express instructions. To this end, I shall give the Applicants the benefit of doubt in respect to the explanation that the Advocates were unable to reach the Applicants in time to notify them of the developments in the case.
14. I also consider that while the default Judgment was entered on 9/12/2025, the instant Application was brought only about a month later, on or about 14/01/2026. It is also relevant to note that the period concerned was the normally busy and hectic festive Christmas and New Year season when a lot of travelling and family engagements are involved, and during which most Advocates’ offices are also closed.
15. The draft defence presented by the Applicants cannot also be outrightly dismissed as not raising any triable issues. Among the issues raised are whether Section 44 of the Banking Act applies in this case and, as such, whether the 1 st Defendant raised interest rates on the loan facilities without obtaining the Cabinet Secretary’s approval to do so, and whether the 1 st Defendant irregularly levied unexplained penalties, commissions. Clearly, the intended defence is not one that can be summarily described as incapable of sustaining a reasonable defence at the trial. I also do not find any reason why the Applicants, if they indeed they were aware of the newspaper notice, would deliberately not enter Appearance knowing the consequences that could follow. What would they have to gain? The amounts involved in this case are also no doubt, colossal.
16. Although Mr. Gichuhi has correctly attacked the fact of the Supporting Affidavit being sworn by the Advocate, instead of the litigants, I think the explanation in this case being simply for the delay, part of which the law firm also took responsibility for, there would be no serious prejudice in the Advocate swearing the Affidavit.
17. The prayer that the Applicants, as Guarantors, be ordered to deposit in an escrow account the sum counterclaimed is also, in my view premature, as their culpability as such Guarantors is contested and would thus be best established after they have been heard on merits.
18. Although the Applicants may not be entirely blameless, as this is a case of exercise of discretion by the Court, I find that declining to set aside the default Judgment and allowing the Applicants to defend the case would be too draconian in the circumstances.
19. Indeed, Apaloo, J.A. ( as he then was ), in the case of Philip Chemowolo & Another v Augustine Kubede, [1982-88] KAR 103 at 1040 , Apaloo, J.A. ( as he then was ), advised as follows:
“Blunders will continue to be made from time to time and it does not follow that because a mistake has been made 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 is often said exists for the purpose of deciding the rights of the parties and not the purpose of imposing discipline.”
20. Further, the Court of Appeal, in the case of Richard Ncharpi Leiyagu v Independent Electoral Boundaries Commission & 2 others [2013] eKLR , held that:
“22]. The right to a hearing has always been a well-protected right in our Constitution and is also the cornerstone of the rule of law. This is why even if the courts have inherent jurisdiction to dismiss suits, this should be done in circumstances that protect the integrity of the court process from abuse that would amount to injustice and at the end of the day there should be proportionality.”
21. Similarly, the Court of Appeal, in the case of CMC Holdings Ltd vs James Mumo Nzioka (2004) KLR 173 , guided as follows:
“The discretion that a court of law has, in deciding whether or not to set aside ex parte order such as before us was meant to ensure that a litigant does not suffer injustice or hardship as a result of among other things an excusable mistake or error. It would in our mind not be a proper use of such discretion if the court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error.”
22. Lastly, C.B. Madan, JA ( as he then was ) in the case of Belinda Murai & 9 Others -Vs- Amos Wainaina [1982] KLR 38 , pronounced himself in the following manner:
“A mistake is a mistake. It is no less a mistake because it is unfortunate slip. It is no less pardonable because it is committed by senior counsel. Though in the case of junior counsel the court may feel compassionate more readily. A blunder on a point of law can be a mistake. The door of justice is not closed because a mistake has been made by a lawyer of experience who ought to have known better. The court may not forgive or condone it but it ought to certainly do whatever is necessary to rectify it if the interests of justice so dictate. The courts of justice themselves make mistakes which is politely referred to as erring in their interpretation of laws and adoption of a legal point of view which courts of appeal sometime overrule.”
23. Applying the above principles, I believe that the nature of the dispute herein, and the broad equity approach justifies allowing the Application. I believe the default can be put right by payment of costs.
Final Orders
24. The upshot of my findings above is that this Application dated 14/01/2026 succeeds, and is allowed in the following terms:
i) The default Judgment entered herein on 9/12/2025 against the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants herein) is hereby set aside
ii) The 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants) are granted leave to file their Statement(s) of Defence to the Defendant’s Counterclaim, which Defence the Applicants shall have fourteen (14) days from the date hereof to file.
iii) As a condition for the setting aside of the default Judgment, the 2 nd , 4 th and 5 th Defendants in the Counterclaim (Applicants) shall, within fourteen (14) days from the date hereof, pay to the Defendant in the main suit, the following amounts:
a) Kshs 51,040/- incurred by the Defendant in the main suit, in publishing the notice of service in the Daily Nation Newspaper of 3/11/2025.
b) Kshs 50,000/- as thrown away costs for the instant Application.
iv) In the event of default, order (i) shall stand vacated.
DELIVERED, DATED AND SIGNED AT NAIROBI THIS 14 TH DAY OF AUGUST 2026
……………………..
WANANDA JOHN R. ANURO
JUDGE
Delivered in the presence of:
Mr. Wabwire h/b Mr. A. Gichuhi, SC, for the Defendant in the main suit/Plaintiff in the Counterclaim
N/A for other parties
Court Assistant: Amos Boso