Housing Finance Company of Kenya v Richard Ndere Johnson & 3 others [2010] KECA 154 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that courts must consider whether a defendant has a real defence before refusing to undo a default judgment.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned Judge erred in finding that there was no explanation offered for the failure to enter appearance and in holding that a delay of two months was inordinate
- 2.Whether the learned Judge was bound to consider, and failed to consider, the merits of the draft defence filed with the application to set aside the ex parte judgment
- 3.Whether the Judge properly exercised his discretion in refusing to set aside the ex parte judgment entered against the appellant
Key legal issues
#Duty of the court when considering an application to set aside ex parte judgment
The court must consider the merits of any draft defence; shutting its mind to that consideration is a misdirection warranting appellate interference.
The Court of Appeal, applying Shah v Mbogo, Sebei District Administration and related authorities, held that delay is not the only matter to be considered on enlargement of time or setting aside ex parte judgment. The draft defence filed with the application disclosed some merit which the trial judge should have but did not examine. The Judge gave no reasons for holding that the filing of a defence made no difference, and it was unclear whether he found there was or was not a defence on merit. That omission amounted to a misdirection in the exercise of discretion.
Explanation for default and the status of a corporate defendant's officers
A less than satisfactory explanation for default does not by itself defeat an application to set aside judgment where no deliberate intent to subvert justice is shown; a distinction is drawn between an individual defendant and a secretary/officer of an incorporated body with multifarious duties.
Following Sheridan J in Sebei District Administration v Gasyali, the Court treated the appellant's Assistant Manager, Legal Services, Janet Mwaluma, as analogous to Mr. Arapata in that case. The explanation blaming lapses in the appellant's offices, and the loss of the summons to enter appearance as explained by the officer who received them, did not evince any intention to deliberately subvert or delay the cause of justice. The unexplained loss of summons alone did not justify refusing to set aside the judgment.
Inherent jurisdiction to set aside judgment to avoid injustice
Even where no sufficient cause for non-appearance is shown, the court may exercise its inherent jurisdiction to set aside judgment in order to avoid injustice, and a plausible defence on merit weighs heavily in that exercise.
The Court invoked Goudie J in Girado v Alam & Sons (U) Ltd, where judgment was set aside despite no sufficient cause for non-appearance being shown, in order that there be no injustice to the applicant. Combining that approach with theToprani and Sodha line of authorities stressing that to deny a party a hearing should be the last resort, the Court concluded that the justice of the case required the appellant's defence to be heard on its merits, subject to payment of the First Respondent's costs.
Legal principles established
#- In an application to set aside an ex parte judgment, the court is under a duty to consider whether there is a defence on merit to be tried; delay and an unexplained default are not the only criteria so long as there is no deliberate intention to subvert or delay justice.
- Failure to satisfactorily explain default in filing a defence is not the sole criterion for refusing to set aside an ex parte judgment, provided there is no intention to deliberately subvert or delay the cause of justice.
- Mere loss of summons in a defendant's offices, without more, does not demonstrate a deliberate intention to obstruct or delay the course of justice.
Court orders
#- 1.Appeal allowed
- 2.Order of the High Court dismissing the appellant's application to set aside judgment set aside
- 3.Ex parte judgment entered against the appellant on 2nd April 2002 in High Court Civil Case No. 2095 of 2000 set aside
- 4.Appellant to pay the First Respondent costs of the appeal and in the court below
- 5.Appellant granted 21 days from the date of the judgment to file and serve its defence on the respondents still on record
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 2095 of 2000
- Jurisdiction invoked
- First appellate jurisdiction over appeals from the High Court under the Civil Procedure Act and appellate jurisdiction of the Court of Appeal (judgment does not expressly cite a specific provision)
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We would accordingly and in order that no injustice is occasioned to the appellant, allow the appeal, set aside the order dismissing the appellant’s application and order that the ex parte judgment entered against the appellant on 2nd April 2002 in High Court Civil Case No 2095 of 2000 be and is hereby set aside with an order that the appellant pays the First Respondent costs of the appeal and in the court below.
The appellant shall have 21 days from the date hereof to file and serve its defence on the respondents who are still on record.
It is also clear from authorities that failure to satisfactorily explain default in filing defence is not the only criterion to be taken into account so long as an intention to deliberately subvert or delay the cause of justice is not evinced thereby.
The learned Judge was under a duty in dealing with that application to set aside an ex-parte judgment to consider whether there was a defence on merit to be allowed to be filed and to be tested at the trial.
Such loss, alone without more, does not point to such an intention.
Issues in the judgment
#Internal inconsistency in dates: the plaint alleges the auction was to take place on 9th December 1998 while the account of the draft defence and the accounting prayer refer to 9th December 1997.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Okal Ongaro v James Owiyo Odipo [2017] KEELC 274 (KLR)[2017] KEELC 274 (KLR)5 Apr 2017
- Imperial Bank Limited v Moses Waweru Ndungu & another t/a Omondi Waweru & Co. Advocates [2016] KEELC 1049 (KLR)[2016] KEELC 1049 (KLR)16 Mar 2016
Cite this brief
#Cite this brief
Caselaw, "Housing Finance Company of Kenya v Richard Ndere Johnson & 3 others [2010] KECA 154 (KLR)", Case Analysis (2010). Civil Appeal No. 52 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/154/eng@2010-07-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.