Kotecha & Sons Limited & another v Amalo & Company Limited (Civil Appeal 81 of 2019) [2025] KECA 65 (KLR)
The bottom line
#The Court of Appeal refused to overturn a Kshs.260 million default judgment because the defendants ignored court summons and their draft defence raised no genuine dispute.
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 properly exercised her discretion in refusing to set aside the judgment entered against the appellants
- 2.Whether the draft defence raised triable issues warranting leave to defend
- 3.Whether the learned Judge erred by examining the evidence at the interlocutory stage
- 4.Whether the appellants were condemned unheard
Key legal issues
#Whether the learned Judge properly exercised her discretion in refusing to set aside the default judgment
Yes. The discretion was exercised judiciously and upon reasons; the appellants failed to show it was wrong in principle or perverse.
The Court reiterated the CMC Holdings principle that discretion must be exercised upon reasons and judiciously, and that an appellate court intervenes only where the discretion was exercised wrongly in principle or perversely on the facts. The Judge considered the delay, found it excusable though unexplained, and examined the draft defence. The appellants could not identify any error of principle justifying appellate intervention.
Whether the draft defence raised triable issues
No. The defence was a mere denial; the alleged lack of board resolution was an internal matter between the two appellants and did not affect the respondent's claim, and the guarantee and settlement documents were not denied.
The Judge was obliged to examine the draft defence on its face value against the claim, which is not the same as investigating or interrogating evidence. The claim of lack of board resolution was a matter between the two appellants and could not affect the respondent's claim. The deed of guarantee and indemnity and settlement agreement were not denied, and the commissioned audit raised no issue regarding the transactions or liability for the amount claimed.
Whether the Judge erred by prematurely examining the evidence before trial
No. Juxtaposing the defence against the claim as pleaded is neither investigation nor interrogation.
Under CMC Holdings, when a draft defence is tendered the court must examine it to decide whether on its face value it raises a triable issue. The Court found the Judge simply juxtaposed the defence against the respondent's claim in the plaint; that was her statutory obligation, not an impermissible deep examination of evidence.
Whether the appellants were condemned unheard
No. Having been served with summons and failed to enter appearance or file a defence without plausible reason, they could not complain of denial of the right to be heard.
The appellants were served with summons to enter appearance on 4th June 2018 and failed to act, resulting in judgment on 21st June 2018. They were given the opportunity to defend the claim by entering appearance and filing a defence and did not take it without plausible reason; nor were they unheard on their application, which was determined on its merits.
Character of the judgment sought to be set aside
The judgment was neither summary nor interlocutory judgment, but judgment entered upon a liquidated demand in default of appearance and defence under Order 10 Rule 4.
The plaint sought a liquidated sum of Kshs.260,593,381.52 with interest at twenty one percent, and judgment was entered after the appellants failed to enter appearance or file a defence following proper service. The submissions by the appellants on summary judgment and interlocutory judgment principles were therefore irrelevant.
Legal principles established
#- An appellate court will not interfere with the exercise of discretion by a lower court unless that discretion was exercised wrongly in principle or perversely on the facts.
- Where a draft defence is tendered with an application to set aside default judgment, the court is obliged to consider whether it raises a reasonable defence on its face; that is not an investigation of the evidence.
- The discretion to set aside ex parte judgment exists to avoid injustice from accident, inadvertence or excusable mistake, not to assist a litigant who deliberately obstructs or delays the cause of justice.
Court orders
#- 1.Appeal dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- not stated
- Jurisdiction invoked
- First appeal to the Court of Appeal against a ruling of the High Court in the exercise of its appellate/supervisory discretion (statutory basis not expressly stated in the judgment)
Relief refused
#Setting aside of the High Court ruling and leave to defend the suit
The appellants failed to show the trial judge's discretion was exercised wrongly or perversely; the draft defence was a mere denial raising no triable issues
Costs
Appeal dismissed with costs (costs of the appeal awarded to the respondent)
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.
On appeal from that decision, the Appellate Court would not interfere with the exercise of that discretion unless the exercise of the same discretion was wrong in principle or that the Court did act perversely on the facts.
Where a draft defence is tendered with the application to set aside the default judgment, the Court is obliged to consider it to see if it raises a reasonable defence to the plaintiff's claim.
the Courts discretion to set aside an ex-parte judgment is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but not to assist a person who has deliberately sought (whether by evasion or otherwise) to obstruct or delay the cause of justice
Having failed to take any advantage of this opportunity without any plausible reason, the appellants cannot be heard to complain that they were denied a right to be heard
Consequently, we dismiss this appeal with costs.
Issues in the judgment
#The grounds of appeal in the judgment contain two grounds both numbered 'viii' and one numbered '(vii))' with irregular numbering
The judgment refers to Sections 1(A), 1(B), 3, 3(A) and 63(e) as provisions 'of the Civil Procedure Rules' whereas those are provisions of the Civil Procedure Act; the motion is also quoted as relying on them
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Charo & 5 others v Mwaro & another (Civil Appeal E014 of 2023) [2025] KECA 1701 (KLR)[2025] KECA 1701 (KLR)24 Oct 2025followed
- Kalama v Baobab Beach Resort Mombasa (Kenya) Limited; Director of Occupational Health and Safety Services (Interested Party) (Miscellaneous Application E046 of 2024) [2025] KEELRC 809 (KLR)[2025] KEELRC 809 (KLR)13 Mar 2025
- Kalama v Baobab Beach Resort Mombasa (Kenya) Limited; Director of Occupational Health and Safety Services (Interested Party) (Miscellaneous Application E046 of 2024) [2025] KEELRC 809 (KLR)[2025] KEELRC 809 (KLR)13 Mar 2025applied
Cite this brief
#Cite this brief
Caselaw, "Kotecha & Sons Limited & another v Amalo & Company Limited (Civil Appeal 81 of 2019) [2025] KECA 65 (KLR)", Case Analysis (2025). Civil Appeal (Kisumu) - number not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/65/eng@2025-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.