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ELCOtherNot stated in the judgment· [2018] KEELC 969 (KLR)

Martha Njeri Mbene (Suing for and on behalf of the estate of JAMES MONARI BOSIRE-DECEASED) v Statutory Manager United Insurance Company Limited [2018] KEELC 969 (KLR)

Environment and Land Court
25 October 2018
SOS. Okong'o
1,171 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court set aside a default judgment against an insurer, but only on strict conditions with heavy costs and automatic reinstatement if missed.

What this practically means

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Executive summary

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The plaintiff sued to enforce an agreement for sale of Kajiado/Kaputei North/15666 entered into between her deceased husband and United Insurance Company Limited. The defendant, the statutory manager of the insurer, failed to enter appearance despite service, and interlocutory judgment was entered on 22nd June 2015. After formal proof on 19th January 2016, judgment was entered for the plaintiff on 2nd August 2016 and a decree extracted on 9th September 2016. When the plaintiff sought execution of the transfer instrument, the defendant filed an application on 5th May 2017 seeking stay of execution and setting aside of the judgment, arguing it was not heard, that the summons were misplaced by the former statutory manager, that it has a good defence, and that execution would confer preferential treatment on the plaintiff given the insurer's statutory management. The plaintiff opposed, contending the defendant was the author of its own misfortune, that she was neither a policy holder nor a creditor affected by the moratorium, and that the draft defence raised no triable issues. Relying on Order 10 Rule 11 and Patel v E. A. Cargo Handling Services Ltd, the court found the defendant had established a prima facie defence warranting an opportunity to be heard, but, disturbed by the defendant's indolence, unconvincing explanation and inordinate delay, exercised its discretion conditionally. The judgment and decree were set aside subject to filing a defence within 21 days and payment of thrown away costs of Kshs.30,000,000, with automatic reinstatement of the judgment on default, and a restriction was placed on the suit property pending determination.

Key legal issues

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01

Power to set aside judgment entered after formal proof

Holding

Order 10 Rule 11 confers a wide discretion to set aside or vary a judgment entered without hearing a party, to be exercised on such terms as are just

Reasoning

The court relied on Order 10 Rule 11 and the decision in Patel v E. A. Cargo Handling Services Ltd, which holds that there are no limits on the judge's discretion except that any variation be on just terms, and that where a regular judgment exists it will not usually be set aside unless a defence on the merits, meaning a triable issue, is shown. The court found the draft defence raised a prima facie defence.

p. 2
02

Effect of the defendant's indolence and inordinate delay

Holding

The defendant's unconvincing explanation and delay warranted imposing conditions on the setting aside

Reasoning

The court found the defendant's explanation for failing to enter appearance — that the former statutory manager misplaced the summons — unconvincing, and noted there was no explanation for the delay of over five months after service of the decree before bringing the application. Equity frowns upon such indolence, so the discretion was exercised conditionally with automatic reinstatement of the judgment on default.

p. 2

Legal principles established

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  • A court may set aside a regular judgment where the defendant demonstrates a triable issue, but the discretion will be exercised conditionally where the defendant has been indolent

Court orders

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  1. 1.The judgment entered on 2nd August 2016 and the subsequent decree issued on 9th September 2016 are set aside
  2. 2.The defendant to file its statement of defence, list of documents and witness statements within 21 days
  3. 3.The defendant to pay the plaintiff thrown away costs assessed at Kshs.30,000,000 within 21 days
  4. 4.The Land Registrar Kajiado to enter a restriction on title Kajiado/Kaputei North/15666 restricting any further dealings pending hearing and determination of the suit or further orders
  5. 5.If the defendant fails to comply with the costs order within the prescribed time, the judgment of 2nd August 2016 and the decree of 9th September 2016 shall be automatically reinstated and any defence filed shall stand struck out

Authorities

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Legislation

  • Civil Procedure RulesOrder 10 Rule 11
  • Insurance ActSection 67(c)(10)

Cases cited (1)

  • Patel v E. A Cargo Handling Services Ltd
    (1974) E.A 75
Jurisdiction invoked
Inherent discretion under Order 10 Rule 11 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Martha Njeri Mbene (Suing for and on behalf of the estate of JAMES MONARI BOSIRE-DECEASED) v Statutory Manager United Insurance Company Limited [2018] KEELC 969 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/969/eng@2018-10-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.