Britam Life Assurance Company Limited v Lilian Mokeira Momanyi

an application dated 15th August 2024 for setting aside the judgment. Court gave directions that the application would be dealt with contemporaneously on 30th August 2024. 4. The ruling delivered on 30th August 2024 dismissing the application. The Respondent was ordered to settle the judgment within 15 days in default, the money then the sums of money equivalent to the value of Claimant’s judgment and decree held in the Respondent’s account No. 0102090011700 at the Standard Chartered Bank are to be released to the Claimant immediately at the lapse of those 15 days. Each party is to bear their own costs. 5. Being dissatisfied, the Appellant appealed the Ruling through the Memorandum of Appeal dated 6th September 2024 on grounds that; a. the learned adjudicator erred in law and in fact by failing to consider that the annexed defence/ response to the Statement of Claim, raised several triable issues, in total violation of the overriding objective principle under Sections 1A and 1B of the Civil Procedure Act, b. failing to take into account relevant factors that ought to have been considered in determining the application to set aside default judgment delivered on 26th July 2024 and as a result arrived at an erroneous decision, c. failing to consider the Appellant’s constitutional right to defend the suit, and the right to be heard, thereby resulting in miscarriage of justice, d. dismissing the Appellant’s application dated 15th August 2024, seeking to set aside default judgment delivered on 26th July 2024 e. declining to grant the Appellant leave to file a defence and defend the suit, and f. failing to exercise his discretion judiciously. 6. The Appellant prayed that the appeal be allowed and the whole ruling of Hon. Gatambia be set aside, that the default judgment be set aside, the Appellant be granted leave to defend the suit and their draft defence/response to the Statement of Claim be admitted in the interest of justice, so that the case can be heard and determined on its own merits, that costs of the appeal be granted to the Appellant, and that this court may grant any other order it deems fit. 7. The appeal was canvassed by way of written submissions. The Appellant in their submissions dated 7th December 2024 relied on Order 10 Rule 11 of the Civil Procedure Rules which provides that the ex parte interlocutory judgment in default of appearance or defence may be set aside. 8. That the purpose of clothing the court with discretion to set aside ex parte judgment was clearly stated in Jomo Kenyatta University of Agriculture and Technology v Musa Ezekiel Oebal (2014) eKLR and further in Philip Kiptoo Chemwolo and Mumias Sugar Company Ltd v Augustine Kubede (1982-1988) KAR, it was held that the court has unlimited discretion. The Appellant submitted that the court herein has wide and unlimited discretion to set aside a default judgment and that setting aside of the interlocutory judgment will not cause undue delay to the delivery of judgment. 9. On whether failure by the Respondent in entering appearance and filing a defence was deliberate and/or intentional, the Appellant cited the case of Philip Chemwolo & another v Augustine Kubede (1986) eKLR and submitted that in their affidavit in support of the application dated 15th August 2024, they stated that Summons to Enter Appearance and pleadings in the suit were never served upon the Respondent at all. That the same were served on the email address insurance@britam.com which is not used by the Respondent. That the Respondent’s official email addresses are info@britam.com https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19556/eng@2025-11-27 2

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or customerservice@britam.com. According to the Appellant, failure to enter appearance and file a response to the Statement of Claim was not deliberate. 10. The Appellant submitted on whether their defence raises triable issues by placing reliance on the case of Rift Valley Water Services Board v Oriental Construction Co. Limited (2018) eKLR where the Court of Appeal cited with approval the case of UAP Provincial Insurance Limited v Lenny M. Kivuti (Civil Appeal No. 216 of 1996) (unreported). The Appellant also cited the case of Kenya Trade Combine Ltd v M Shah (Civil Appeal No. 193 of 1999) (unreported). 11. The Appellant argued that the draft response to the Statement of Claim showed that the Respondent’s policy lapsed without having acquired a cash surrender value and therefore there were no benefits payable to the Respondent under the policy. That the period within which premiums paid would have been refunded lapsed and that the said premiums were utilized in providing cover to the Respondent while the policy was active. 12. On whether the orders sought will prejudice the Respondent and whether the same can be compensated by way of costs, the Appellant reiterated the holding in the case of Sebel District Administration v Gasyali & others [1968] E.A. 300 as captured in Thuo Mathenge & another v Family Bank (K) Limited (2020) eKLR and submitted that the Respondent does not stand to suffer any prejudice if the Appeal is allowed. 13. The Respondent in their submissions dated 31st March 2025 on whether proper procedure was followed submitted that through their Replying Affidavit, they demonstrated that the Appellant was served through its official email address as per their letterhead dated 29th April 2024 which was insurance@britam.com which email was also used in replying the demand letter. 14. The Respondent submitted that a good explanation as a ground for setting aside a default judgment in law involves demonstrating genuine and justifiable reasons for delay, as well as a strong defence, which have not been shown by the Appellant. That before this court sets aside the default judgment, it has to consider whether the appellant has a meritorious defence. 15. The Respondent argued that before the court made its determination, it considered the Appellant’s reply through their letter dated 29th April 2024. That the Appellant’s draft defence is therefore not meritorious for this court to set aside the judgment. 16. The Respondent contended that the Appellant has not offered security or throw away costs which is one of the grounds of setting aside a default judgment. That in the absence of such security, the appeal should be dismissed with costs. The Respondent stated that the Appellant having failed to meet conditions for setting aside a default judgment, it is not entitled to the orders sought. 17. To support their position, the respondent relied on the holdings in Nairobi Civil Appeal No. E475 of 2020, International Air Transport Association & another v Roskar Travel & 3 others, and Machakos Civil Appeal No. E10 of 2020, Mureithi Charles & another v Jacob Atina Nyagesuka. Analysis 18. The role of the first appellate court to reexamine and to reevaluate evidence to come up with its own findings was set out in Selle v Associated Motor Boat Co. (1968) E.A 123 as follows: “ … Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect …” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19556/eng@2025-11-27 3

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19. 20. I have considered the Record of Appeal dated 4th December 2024 and submissions by the parties. The issues for determination are: a. Whether service was effected upon the Appellant b. Whether the Appellant’s defence raises triable issues c. What orders on costs should issue The ruling by the trial court was based on the discretionary powers on whether or not to set aside the ex parte judgment. Order 10 rule 11 of the Civil Procedure Rules provides as follows; “ Where judgment has been entered under this Order, the court may set aside or vary such judgment and any consequential decree or order upon such terms as are just.” 21. Just like any other discretion, the power herein must be exercised judiciously and not whimsically. Among the grounds raised by the Appellant is lack of service of summons. 22. The Appellant denied that it was served with the court summons as the email that was used to effect service was insurance@britam.com which is not used by the Appellant. The official email that ought to have been used was info@britam.com or customerservice@britam.com. It was submitted that failure to enter appearance and file a Statement of Defence was no deliberate. It only came to its notice that judgment had already been entered against it after the bank account was frozen due to the garnishee proceedings. 23. Service of summons and pleadings is so critical as this would inform the other party of the existence of the suit. (See the case of Yalwala v Indumuli & Another [1989] eKLR). 24. I have perused through the Record of Appeal. I do confirm that the demand letter to the Appellant and the response thereto dated 29/04/2024 by the Appellant had the email address as insurance@britam.com and not alleged official email addresses. The Appellant cannot therefore state that that was not their email address and that summons of the court were not received. Further, the mode of service was not irregular, hence the default judgment was regular. I find that failure to enter appearance and file Statement of Defence on that ground fails. 25. Having found that service of summons was valid and the default judgment was regular, this court will exercise its discretion on setting aside the regular default judgment. In Waweru v Maina [2025] KECA 50 (KLR), the Court of appeal sated as follow; “ When confronted with an application to set aside a default or ex parte judgment, therefore, the first task of a trial court is to determine if the default judgment is an irregular or regular one. If it is the former, the trial court must be set aside the default judgment as a matter of right. If it is the latter, the trial court has unfettered discretion to determine if there is good cause and may set the default judgment aside if it so finds.” 26. The court will now proceed to determine if the Statement of Defence has triable issues. I have perused through the Response to the Claim, it is stated that despite the Respondent having paid premiums for 15 months, she did not meet the threshold for cash surrender value being payment of premiums for 24 months, hence not entitled to a refund. 27. I have perused through the reasoning of the trial court.in acknowledging that whereas parties are bound by the terms of their contract, there are instances calling for departure. He relied on the case of Kenya Commercial Finance Company Ltd v Ngeny & Another. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19556/eng@2025-11-27 4

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28. Further, in the case of Red Gems Investment Group Limited v Irene Chepkoech Chumo [2019] eKLR, the court stated as follows; “ The general principle is that parties are bound by their agreement and the court will not intervene unless, coercion, fraud, undue influence or other facts that may vitiate such an agreement are pleaded and proved. I therefore agree with the respondent that in a proper case the court may vitiate a contract where the terms are unfair or unduly harsh. This point was emphasized by the Court of Appeal in Margaret Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited NRB CA Civil Appeal No. 282 of 2004 [2014] eKLR where it observed that: 36. Nevertheless, courts have never been shy to interfere with or refuse to enforce contracts which are unconscionable, unfair or oppressive due to procedural abuse during formation of the contract, or due to contract terms that are unreasonably favourable to one party and would preclude meaningful choice for the other party. An unconscionable contract is one that is extremely unfair. Substantive unconscionability is that which results from actual contract terms that are unduly harsh, commercially unreasonable, and grossly unfair given the existing circumstances of the case (See Black’s Law Dictionary, 9th Edition, Gardner, Ed.). 29. I do agree with the trial court that the terms on cash refund would amount to harsh, unconscionable and oppressive terms of the contract. Based on this, I find that the discretion of the court shall not be exercised in setting aside the default judgment. 30. On costs, the appeal having failed, costs are awarded to the Respondent. Determination 31. The upshot of the foregoing is that the court renders itself as hereunder; i. The appeal, lacks merits and are hereby dismissed. ii. Costs to the Respondent It is so ordered. DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 27TH DAY OF NOVEMBER, 2025. ………………. HON. F. WANGARI JUDGE In the presence of: N/A by the Applicants N/A by the Respondent Ms. Salwa, Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19556/eng@2025-11-27 5

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