Johnathan Kimeu Ndeti v Suleiman Kibe Kaguchwa

4. The Applicant further contends that the Claimant is a policy-holder of Corporate Insurance Company Limited, which was placed under statutory management, and that a moratorium was declared in respect of the insurer. It is his case that the existence of the statutory management and moratorium was material to the proceedings and ought to have been brought to the attention of the Court. 5. The Applicant also contends that the notice of entry of judgment was never served upon him and that, had he been served with the proceedings, his insurer would have dealt with the claim because he was duly insured. He consequently maintains that he was condemned unheard. 6. The application is opposed through the Claimant's replying affidavit sworn on 25th August 2026. 7. The Claimant's case is that the application is not brought in good faith and constitutes an abuse of the process of the Court intended to frustrate execution of a regular judgment. 8. The Claimant states that the Applicant was served with the statement of claim and accompanying documents through WhatsApp and relies on a certificate of service dated 9th February 2026. He further states that the notice of entry of judgment was similarly served through WhatsApp and relies on a certificate of service dated 20th May 2026. 9. The Claimant further relies on an NTSA search in respect of motor vehicle registration number KCB 336P, which showed the Applicant as the registered owner and therefore the person against whom the claim was properly brought. 10. It is also the Claimant's contention that the application was filed after an unexplained delay of more than three months and that the proposed defence does not disclose any triable issue.

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11. The Claimant further submits that the Applicant's assertion that he was not served with the notice of entry of judgment is contradicted by his own affidavit, in which he acknowledges having received the same. 12. On the issue of statutory management, the Claimant's position is that a moratorium declared in respect of an insurer does not stop it from filing claims to recover money owed to it by its debtors, a moratorium is meant to shield the company from claims from its creditors not stop it from collecting its assets. 13. The matter came up for hearing and the parties made oral submissions. I have considered the application, the affidavits, the documents on record, the submissions by the parties and the entire court record. ISSUES FOR DETERMINATION. 14. In my view, the following issues arise for determination: a. Whether the Applicant was duly served with the pleadings and hearing notices; b. Whether the judgment entered on 8th April 2026 was a regular judgment; c. Whether the Applicant has demonstrated sufficient grounds for setting aside the judgment; d. Whether the statutory management and moratorium affecting Corporate Insurance Company Limited affects the judgment or execution against the Applicant; e. Whether the Applicant has demonstrated a valid defence raising a triable issue; f. Whether the Applicant is entitled to a stay of execution; and g. Who should bear the costs of the application? Whether the Applicant was duly served 15. The starting point is the court record. The claim herein was instituted by a statement of claim dated 8th January, 2026.

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16. The record shows that the Respondent/Applicant was served with the pleadings and mention notice on 6th February, 2026 through WhatsApp using mobile telephone number 0716 832 174. 17. The record further contains an M-Pesa message screenshot bearing the name of the Applicant and which was relied upon to demonstrate that the telephone number used for service belonged to him. 18. The matter subsequently came up for mention on 25th March 2026. Mr. Ouma appeared for the Claimant, holding brief for Miss Muema. There was no appearance for the Respondent. The Claimant sought default judgment, but the Court directed that the matter proceeds for hearing on 7th April 2026 and directed the Claimant to serve the Respondent with a hearing notice. 19. The record shows that the hearing notice was subsequently served upon the Applicant through the same WhatsApp number. 20. On 7th April 2026, Mr. Okello appeared for the Claimant. There was no appearance for the Respondent. The Claimant informed the Court that the hearing notice had been served and sought default judgment. 21. Owing to a problem with the CTS system, the Court was unable to verify the service on that date. In the interests of fairness, the Court directed the Claimant to serve another hearing notice for the following day, 8th April 2026. 22. The record shows that the further hearing notice was served upon the Applicant on the same day through WhatsApp using the same telephone number. A certificate of service is on record.

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23. On 8th April 2026, the matter came up for hearing. The Applicant did not appear and judgment was entered against him. 24. The above history is important. It demonstrates not one but several opportunities afforded to the Applicant to enter appearance, file a response and participate in the proceedings. 25. The law recognizes service through mobile-enabled messaging applications where the requisite conditions are satisfied. In Equity Bank Kenya Limited v Hassan & 3 Others [2024] KEHC 6942 (KLR), at paragraph 13 of the ruling, the High Court considered service through WhatsApp and held that where the defendant did not deny ownership of the number to which service was affected, service through that medium was proper. The Court consequently found the resulting judgment to have been regularly entered. 26. In the present case, the Applicant has not denied that telephone number 0716 832 174 belongs to him. More significantly, the same number was used repeatedly in the proceedings and the record contains material connecting the number to the Applicant. 27. There is another difficulty with the Applicant's case. In the application he states that he was not served with the notice of entry of judgment. Yet in his supporting affidavit he acknowledges receipt of the notice. The certificate of service relating to the notice of entry of judgment also identifies the same telephone number. 28. This contradiction goes to the credibility of the Applicant's account of events. A litigant seeking the equitable discretion of the Court must approach the Court candidly and place all material facts before it. 29. The Court is therefore unable to accept the Applicant's assertion that he was unaware of the proceedings until execution commenced. 30. I accordingly find that the Applicant was duly served with the pleadings, the hearing notices and the notice of entry of judgment.

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Whether the judgment was regular 31. Having found that proper service was effected, the judgment entered on 8th April 2026 was a regular default judgment. 32. This distinction is important. An irregular judgment arising from failure of service is liable to be set aside as of right because the affected party has not been accorded an opportunity to be heard. A regular default judgment, on the other hand, is one entered after proper service but upon the defendant's failure to take the requisite steps. 33. The High Court recently restated this distinction in A Plus Motors Limited v ANM alias AN (Minor suing through her mother and next friend EMM) & 3 Others [2026] KEHC 991 (KLR). The Court observed that an irregular default judgment is one entered without proper service and is set aside as of right, whereas the setting aside of a regular default judgment remains a matter of judicial discretion. The present judgment therefore falls within the second category. Whether the Court should set aside the regular judgment 34. The power of this Court to set aside a default judgment is found in section 43 of the Small Claims Court Act as read with Rule 11 of the Small Claims Court Rules. 35. Rule 11(4) provides that the Court may set aside a default judgment or consequential orders where it is satisfied that: a. The default was inadvertent; b. The Applicant has a valid defence with a probability of success; or c. There are sufficient grounds warranting the setting aside of the judgment, decree or order.

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36. The discretion must, however, be exercised judicially and on sound principles. 37. The classical principles remain those stated in Shah v Mbogo [1967] EA 116, as quoted with authority at paragraph 3 in Mbogori Baichu vs David Gitonga (sued as the legal representative of the estate of livingstone M’mungania )2021 KLR where the Court held that the discretion to set aside a judgment entered in default is intended to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake or error, but is not intended to assist a person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice. 38. The Court must therefore consider whether the Applicant's explanation for the default is satisfactory and, importantly, whether the proposed defence raises a genuine triable issue. Whether the Applicant's defence raises a triable issue. 39. A triable issue does not mean a defence that must ultimately succeed. It means an issue deserving investigation and determination at trial. However, a mere denial, or a defence founded on a misconception of the law, is not sufficient. 40. In the present case in my view, the applicants defence amount to mere denials and I have not seen any triable issue therein. 41. The claim was brought against the Applicant under the doctrine of subrogation. The fact that a claimant has received compensation from an insurer does not, by itself, extinguish the underlying cause of action against the party legally responsible for the loss. The insurer, having indemnified its insured, may exercise the insured's rights against the wrongdoer to the extent of the payment made. 42. The Applicant has not demonstrated that the existence of an insurance policy transferred his underlying legal liability to the insurer. The insurance policy may create contractual

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rights between the Applicant and his insurer, but it does not necessarily extinguish the Claimant's cause of action against the Applicant. 43. I therefore do not find the bare assertion that the Applicant was insured to constitute, in itself, a triable issue sufficient to set aside the judgment. Effect of statutory management and moratorium 44. This is the more substantial issue raised by the Applicant. 45. There is no dispute that Corporate Insurance Company Limited was placed under statutory management and a moratorium is in force since the claimant has not contested this issue. 46. The statutory position must, however, be carefully distinguished from the proposition advanced by the Applicant that the existence of statutory management automatically invalidated these proceedings. 47. A moratorium is not synonymous with an extinguishment of liability, nor does statutory management automatically render every proceeding involving an insured or the company null and void. In other words, it does not mean that when a company has been placed under statutory management it becomes a cripple incapable of doing anything including seeking redress against its debtors. 48. The recent decision of Nyaundi J. is instructive. In Njoroge v Insurance Regulatory Authority & 2 Others [2026] KEHC 13586 (KLR), delivered on 17th September 2026, the Court considered the statutory management of Corporate Insurance Company Limited, among other insurers.

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49. The learned Judge held that the purpose of statutory management is to take over the management and stabilize the insurer and that statutory management does not, by itself, extinguish existing insurance contracts. 50. A wider interpretation or reading of that decision is that a company under statutory management is still a legal person and still capable of being sued and suing. Actually, in that decision, the High Court issued a declaration that policies issued by corporate insurance company among others remained valid. This clearly shows that the claimant insurance could still sue despite being placed under statutory management. 51. Having said that, I find that even though an insurance company is under statutory management it does not cripple it or deny it its right to institute proceedings to recover its debts. 52. In the present case, the Applicant has not placed before this Court a specific court order staying these proceedings. Neither has he demonstrated that the particular moratorium relied upon expressly nullifies judgments already entered against policyholders or prohibits proceedings such as the present one. 53. The Applicant therefore cannot use statutory management as a basis for contending that the judgment entered on 8th April 2026 was irregular. Whether the Applicant is entitled to stay of execution 54. The prayer for stay of execution is consequential upon the prayer to set aside the judgment, but it also calls for independent consideration. 55. The Applicant has not demonstrated that the judgment was irregular. He has also failed to establish a sufficient basis for interfering with the regular judgment.

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56. The Applicant was served, was afforded several opportunities to participate in the proceedings, was served with hearing notices on more than one occasion and was served with the notice of entry of judgment. 57. The Court is therefore not persuaded that execution of a regular judgment should be stayed merely because the Applicant subsequently became aware of the consequences of his failure to participate in the proceedings. 58. The Applicant's recourse, if any, against his insurer arising from the insurance contract is a separate matter and does not, without a proper legal basis, render the judgment against him unenforceable. 59. The Court is alive to the constitutional right to a fair hearing under Article 50 of the Constitution. That right, however, does not entitle a litigant who has been duly served and afforded repeated opportunities to participate in proceedings to reopen a matter merely because he subsequently regrets his failure to act. 60. The overriding objective of the Small Claims Court is the expeditious and proportionate resolution of disputes. That objective would be undermined if a party who has deliberately or negligently failed to participate in proceedings could, after judgment and commencement of execution, reopen the matter without demonstrating a legally sufficient basis. 61. Having considered the totality of the circumstances, I find that the Applicant has not demonstrated inadvertence, sufficient cause or a valid defence raising a triable issue sufficient to warrant setting aside the judgment. 62. I accordingly dismiss his application dated 12th august, 2026 with costs assessed at ksh 10,000/

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63. The judgement entered on 8th of April 2026 and consequential orders arising therefrom shall remain in force. 64. The interim orders earlier granted are hereby vacated. 65. The claimant is at liberty to proceed with execution in accordance with the law. DATED, SIGNED AND DELIVERED AT THIKA THIS 21 ST DAY OF SEPTEMBER 2026.

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