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ELCPartially AllowedNot stated in the judgment as provided (ruling on Notice of Motion dated May 19, 2022)· [2022] KEELC 3750 (KLR)

DIM Agencies Limited v Kenya Airports Authority (Environment & Land Case E055 of 2021) [2022] KEELC 3750 (KLR)

Environment and Land Court
23 June 2022
5,471 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court set aside a default judgment against Kenya Airports Authority, confirming State corporations cannot rely on Government protections but must pay thrown-away costs for their delays.

What this practically means

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Executive summary

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This is a ruling on a Notice of Motion dated May 19, 2022 by the Defendant, Kenya Airports Authority, seeking leave for the Attorney General to come on record after judgment, setting aside of a default judgment entered on November 11, 2021 and the resultant decree of December 21, 2021, and unconditional leave to defend a trespass/land claim by the plaintiff over L.R No. 9042/617 at Jomo Kenyatta International Airport. The applicant attributed its default to inadvertence, bureaucratic delay and oversight, and contended it is part of Government so that Order 10 Rule 8 required notice before default judgment. The plaintiff opposed, asserting due service throughout, a valid title, and that KAA is a distinct State corporation. The court framed four issues. First, it held that KAA, being a body corporate with perpetual succession under the Kenya Airports Authority Act, is not the Government, and neither the Government Proceedings Act nor Order 10 Rule 8 applies to it, following Kenya Revenue Authority v Habimana and Bob Thompson Dickens Ngobi. Second, although the explanation for the 14-month default was unsatisfactory and offended Articles 10 and 232 values, courts exist to decide rights, not to punish. Third, the applicant raised bona fide triable issues by challenging the plaintiff's title as an illegal alienation of public airport land. Fourth, exercising its wide discretionary power, the court found refusal would occasion grave injustice. The court allowed the application, set aside the default judgment and decree, granted leave to defend within 21 days, allowed a reply within 21 days, directed exchange of documents within 14 days, and awarded thrown-away costs of KES 50,000 to the plaintiff, payable within 14 days with liberty to execute in default.

Key legal issues

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01

Whether Kenya Airports Authority is part of the Government for purposes of Order 10 Rule 8 and the Government Proceedings Act

Holding

KAA is a State corporation and autonomous body corporate with perpetual succession, capable of suing and being sued in its own name; it is not the Government, so no leave on notice was required before entry of default judgment.

Reasoning

The court noted KAA is created by the Kenya Airports Authority Act as a body corporate with perpetual succession, autonomous and able to sue and be sued in its own name. Relying on Kenya Revenue Authority v Habimana and Bob Thompson Dickens Ngobi v Kenya Ports Authority, the court held that statutory corporations must submit to the rigours of litigation and cannot hide behind the Attorney General. The contention that KAA constitutes government was found fallacious, misconceived and wholly erroneous.

p. 7
02

Whether the applicant showed sufficient cause for failing to enter appearance and file a defence

Holding

The explanation of inadvertence, bureaucratic delay and oversight was not satisfactory, given the failure to elucidate the delay spanning over 14 months and continued service of court processes, but the conduct should not attract punishment by shutting the door of justice.

Reasoning

The applicant did not break down the alleged bureaucratic delay or explain why it endured over 14 months from service of summons, nor account for subsequent service of the decree. The court found the conduct sloppy and offensive of Articles 10 and 232 constitutional values. Nonetheless, courts exist to decide rights on merits, not to impose discipline, and following Chemwolo and Belinda Murai the court declined to punish the applicant for its blunders.

p. 9
03

Whether the applicant has a triable defence

Holding

The applicant raised genuine, bona fide triable issues by challenging the validity of the plaintiff's title over land allegedly forming part of JKIA public land, fit for determination at a plenary hearing.

Reasoning

The plaintiff claims ownership under Sections 24 and 25 of the Land Registration Act, but the applicant contends the suit property is public land within Jomo Kenyatta International Airport, illegally excised from land vested in the Authority by Legal Notice No. 201 of June 7, 1994, and is affected by proposed road upgrading. These contested issues on the propriety of the plaintiff's title raise a prima facie defence warranting trial, per Patel v EA Cargo Handling Services.

p. 10
04

Whether the defendant is entitled to the discretion of the court

Holding

Yes; refusal to set aside the default judgment would occasion grave injustice and could vindicate what may be an illegal alienation of public land, so the discretion was exercised in the applicant's favour on terms.

Reasoning

Relying on Patel and Chemwolo, the court reiterated the unlimited discretion to set aside or vary default judgment on just terms. Given the triable defence and the public land contention, refusing to set aside would deprive the applicant of the chance to contest the registration of the suit property in the plaintiff's name and risk validating possibly illegal alienation of public land. The court therefore set the judgment aside, subject to thrown-away costs.

p. 11

Legal principles established

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  • A State corporation established under an Act of Parliament as a body corporate with perpetual succession does not constitute the Government or a government department, and the Government Proceedings Act and Order 10 Rule 8 of the Civil Procedure Rules 2010 do not apply to it.
  • The court's discretion to set aside a default judgment is wide and is exercised to do justice between the parties; a mistake or blunder by a party should not ordinarily shut the door of justice.
  • A defence on the merits means a triable issue, not a defence that must succeed.

Court orders

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  1. 1.The Application dated the May 19, 2022 be and is hereby allowed.
  2. 2.The Default Judgment dated the November 11, 2021 and the resultant Decree be and are hereby set aside.
  3. 3.The Defendant/Applicant be and is hereby granted leave to enter appearance and file Statement of Defence, to be filed and served within 21 days from the date thereof.
  4. 4.The Plaintiff/Respondent be and is hereby granted liberty to file Reply to Defence, if any, to be filed and served within 21 days from the date of service of the Statement of Defence.
  5. 5.The Parties to file their respective bundles of documents within 14 days from close of pleadings.
  6. 6.Thrown away costs assessed and certified at KES 50,000 awarded to the Plaintiff/Respondent, payable within 14 days, in default the Plaintiff/Respondent at liberty to execute.
Jurisdiction invoked
Original civil jurisdiction; application under the Civil Procedure Rules 2010 (setting aside default judgment)

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, "DIM Agencies Limited v Kenya Airports Authority (Environment & Land Case E055 of 2021) [2022] KEELC 3750 (KLR)", Case Analysis (2022). Not stated in the judgment as provided (ruling on Notice of Motion dated May 19, 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3750/eng@2022-06-23

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