Efil Enterprises Limited & 2 others v Air Travel & Related Studies Centre Ltd [2018] eKLR

Key Facts

Transaction Type

Issues

• The second issue involved whether the Applicant should be granted leave to defend the case. The Applicant claimed the 15-day period had not lapsed since the notice of appointment was filed on 20th June 2017, and the judgment was entered on 29th June 2017, which is only 9 days later. The Respondents disputed the service of the notice and argued against granting leave.
• The third issue was whether the Applicant satisfied the legal requirements to stay the execution of the ex parte judgment and have it set aside. The court examined the Applicant's arguments based on procedural technicalities and the presence of triable issues in the defense and counterclaim, as well as the Respondents' concerns about prejudice and the need for security.
• The first issue was whether the interlocutory judgment entered on 29th June 2017 was a regular judgment. The Applicant argued that the judgment was entered only 9 days after the notice of appointment, which is less than the 15 days required by Order 10 Rule 4. The Respondents contended that the judgment was regular as it was entered in default of the Applicant's failure to file a defense within the stipulated time.

Holdings

• The court applied principles from Joseph Njuguna Thairu v City Council of Nairobi (2015) eKLR and Eunice Wanjiru Chege v Hannah Wanjiku Chege (2013) eKLR, emphasizing that irregular judgments must be set aside ex debito justitiae and that procedural technicalities should not bar a party from justice. The court also noted the need to balance the rights of both parties under Article 48 and Article 59 of the Constitution.
• The court set aside the ex-parte interlocutory judgment dated 29th June 2017, granted the Applicant (Defendant) unconditional leave to defend the case, and required the Applicant to file and serve a defence and counterclaim within two days of the order. The Applicant was also ordered to pay the Respondents the costs of the Application and a throw-away cost of Kshs 20,000. The judgment was vacated if the defence and counterclaim were not filed within the stipulated period.
• The court determined that the Applicant raised triable issues in its defence and counterclaim, which warranted a hearing on the merits of the case. It concluded that it was in the interest of justice to allow the Applicant to defend the suit, while safeguarding the Respondents' rights by requiring compliance with filing conditions.

Remedies

• The court directed that if the Applicant fails to comply with the order to file a defence and counterclaim within two days, the order will be vacated without further reference to the court.
• The court set aside the ex-parte interlocutory judgment entered on 29th June 2017 and all consequential orders, provided the Applicant files and serves a defence and counterclaim within two (2) days of this order. The Applicant is also ordered to pay the Respondents the costs of this Application and an additional Kshs 20,000 for any inconvenience caused by setting aside the judgment.
• The Applicant was granted unconditional leave to defend the case, allowing them to present their defence and counterclaim in accordance with the court's conditions.

Monetary Damages

Legal Principles

Precedent Name

• In Tree Shade Motors Ltd vs DT Dobie & Another
• Joseph Njuguna Thairu vs City Council of Nairobi
• James Wanyoike & 2 Others vs C M C Motors Group Limited & 4 Others
• Eunice Wanjiru Chege vs Hannah Wanjiku Chege
• Ramco Limited vs Mistry Jadva Parbat & Company Ltd & Ors
• Patel vs EA Cargo Handling Services Limited

Cited Statute

• Constitution of Kenya
• Civil Procedure Rules of Kenya

Judge Name

Passage Text

• "...the Court will not usually set aside the judgment unless it is satisfied that there is a Defence and Counterclaim on the merits..." (Patel vs EA Cargo Handling Services Limited (1974) EA 75)
• The Court ordered that the interlocutory judgment entered on 29th June 2017 be set aside and all consequential orders, but only on condition that the Applicant files and serves a defence and counterclaim within two (2) days of this order.
• "...unless under very clear circumstances, a party should not be driven away from the seat of justice without a hearing..." (Eunice Wanjiru Chege vs Hannah Wanjiku Chege (2013) eKLR)

Damages / Relief Type