[2025] KECPT 213 (KLR)

Alexander & another v Ashitiba & 6 others (Tribunal Case 244 of 2019) [2025] KECPT 213 (KLR) (27 March 2025) (Judgment)

Neutral citation: [2025] KECPT 213 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 244 of 2019

BM Kimemia, Chair, Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki & M Chesikaw, Members

March 27, 2025

Between

John Alexander & another

Claimant

and

Livingstone Ashitiba & 6 others & 6 others & 6 others & 6 others

Respondent

Judgment

1. The claim was instituted by was of a further Amended Statement of Claim dated 14/02/2019 and further Amended Statement of Claim of 04/08/2021.

2. The Claimant praying for judgement against the Respondents for Kshs.891,000/= social damages among other prayers.

3. The claimant’s aver as follows;1st -claimant had accumulated savings of Kshs.503,000 with Auscon Sacco2nd – Claimant had accumulated ksh.500,000/= with Auscon Sacco and a loan of ksh.120,000/=.

4. Claimant 1 and 2 have been following their savings until 2016 when their employer St. Service station closed operations.

5. The claimant state that respondent 1st, 2nd, 3rd, 4th, 5th ,6th have filed to refund them their claims or therefore seek ksh.891,000/= with interest among other prayers as the statement of claim.

6. The claim is supported by witnesses’ statement dated 14/02/2019 documents dated 14/02/2019 written submissions dated 04/09/2024 and the hearing proceedings of the claimant case 02/05/2023.

7. The claimant state that the 1st, 2nd, 3rd and 4th respondent were officials of the of the 6th respondent while the 5th respondent was a credit officer with the 6th respondent.

8. During the hearing of the claimant case on 02/05/2023, the 1st claimant stated that his savings with the cooperative was ksh.503,000/= having joined the cooperative in 2013. He stated that he has attached copies of membership to prove his claim.

9. The second claimant stated that he joined the Sacco in 2009 and saved ksh.500,000/= and had a loan of Kshs.120,000/= leaving a balance of ksh.380,000/= as his claim.

10. He avered that he has tried all means to get his savings refund to no avail. He stated that he is still a member of the cooperative until he gets his savings back.

11. The third claimant witness Mr. Otieno Linus a practicing auditor filed his audit report for the Sacco as at 31/12/2015 and highlighted members deposit as ksh.22. 600,000/= and loan kshs.20. 680,000/=

12. He stated that the Sacco did not declare dividends in 2015 since there was no profit made.

13. In their written submission dated 04/09/2024, the 1st and the 2nd claimant aver that the 1st Claimants claim is for ksh.503,000/= as per his slip while the 2nd Claimant’s claim is for ksh.388,000/=.The Claimant invites this tribunal to determine the following;a.Whether the 1st and 2nd claimant were members of the Saccob.Whether the claimants are owned ksh.503,000 and ksh.388,000 respectivelyc.Whether the 1st and 2nd, 3rd, 4th, 5th, and 6th respectively misappropriated and misappropriated the portion of the Saccod.Whether 1st, 2nd, 3rd, 4th, 5th and 6th respectively are liable to damages leading tp loss of ksh.891,000 as per statement of claime.Whether the claimants are entitled to exemplary damagesf.Who should bear the cost of the suit

14. The Claimant over that they have proven their membership and savings and pray for consideration of their Statement of Claim.

15. They further over that the Respondent who are the officials of the Sacco committed fraud occasioning the Cooperative Society not to refund their savings.

16. The Claimant filed a bundle of documents dated 14/02/2019 to support their claim

17. Key among the documents are the served letters, 1st member statements dated 31/12/2013 among others

18. Other documents filed inside this bundle are various committee minutes and correspondences before the Sacco, the employer and the government

19. Among the documents filed by the claimant is savings deduction by employer reflecting deductions in form of 1st and 2nd Claimants

20. The annual report and financial statement for the 2015 is filed as it shows that the capital for each member is ksh,1000/=.

21. 1st claimant has filed a payslip for June 2015 to prove membership of the Sacco and savings thereon

22. It should be noted that the 2nd claimant Mr. George Wamwea Kinogu authorized 1st claimant Mr. John Alexander on 04/08/2021 to appear, plead, swear and aver on their behalf.

Respondent’s Case 23. The Respondent case is based on the Respondent’s Statement of Defence of varying dates respondent witnesses’ statements of various date and the Respondents’ documents of various dated.

24. The Respondent’s case is further supported by the Respondents’ hearing proceedings on 11/06/2024 and their written submissions of varying dates.

25. The 1st Respondent vides his witness statement dated 25/06/2021 stated the Sacco experienced financial challenges occasioning borrowing from Kuscco and Mass redundancy. He stated that the Sacco had Ksh.1. 500,000/= at the time he ceased being chairman in 2016 and that the employer had not remitted Ksh.800,000/= to the Sacco.He stated that he should not have been sued as individual.

26. The 5th Respondent Mr. Stephen Kariuki in his witness’s statement of 15/09/2021 admits that the Claimants are entitled to their claim but the Sacco does not have sufficient funds.

27. The 6th Respondent statement of defence dated 20/04/2021 the cooperative society denies there was fraud in the Sacco and that the 1st, 2nd, 3rd 4th and 5th respondent did not handover the Sacco records after the election of 22/10/2016 where they were replaced

28. In his witness statement the 6th Respondent witness statement of 03/03/2022 states that they are unable to pay Claimant since they were only acting in their positions as have not traced missing funds

30. The 6th Respondents the Sacco has documents in support of their defence dated 03/03/2022. The documents include the Sacco account statement with the cooperative Bank for the period February 2013 to November 2015.

31. During the hearing of the respondents’ case on 14/08/2023, the following issues were captured. 1st, 2nd, 3rd, 4th and 5th Respondent were former officials of the SaccoThere was an alleged loss of ksh.18m from the SaccoEmployer stopped remitting to the Sacco in 2015. There were no records to support the claimKsh.1. 400,000/= was stated as available in the Sacco account

32. There is alleged fraud of the Sacco funds by the outstanding officials

33. The claim is not denied but can not be verified due to absence of documentsIn their written submission the following issues came up1st Respondent submission of 22/11/2024 Restrict the Claimant’s case to the two Claimants

Issues for determination are:a.Whether Claimants have proved fraud against 1st Respondentsb.Whether the 1st Respondent colluded with other Respondentsc.Whether claimants are entitled to reliefs sought, Challenged how the claimants arrived at the Ksh.891,000/= claim and demands for the claim to be specifically pleaded and strictly proved.

Fraud not proven by the Claimant

Why the current officials did not refund claimants ksh. 891,000/= while there was ksh.2. 174,060. 24/= in the society account

Admission of money available to refund the claimants

The Sacco is a legal entity -hence obliged to refund the Claimants

Claimants to channel claim to the employer who holds unremitted funds to the Sacco

The 5th Respondent submission highlights the following;

Claimant prove of fraud against the Respondents

Whether the 5th Respondent was involved in the fraud

Whether Claimants are entitled to reliefs sought

34. The respondent stated that the claimants neither substantiated nor adduced evidence to proof the allegation of fraud

35. The Respondent further states that the claimants have not shown how they arrived at ksh.891,000/=The claim that the figure is lumpsumAnalysisWe noted the claimant the following; Claimants’ membership in the Sacco has been proven by the claimants and occasional admissions by the Respondents. Their membership number have been indicated.

The Claimants have filed documents to show that they had savings with the Sacco

1st Claimant has filed a payslip as proof of membership and indebtedness with the Sacco.

The Audit Report serves to prove that there were funds in the Cooperative Society

The Sacco is no longer operational but has a Management Committee

Most of the members of the Sacco have lost employment with the employer

5th Respondent admits owing the Claimants their savings but states that the Sacco has no funds to refund

6th Respondent states that they cannot pay claimants since the Sacco has no funds

Claimants have tabulated their claims as hereunder;1st Claimant Mr. John Alexander Savings -Ksh.503,000

Less shares ksh.10,000

Net refundable ksh.493,000

2nd claimant Mr. George KinoguSavings-ksh.503,000Less loan ksh.120,000Less shares ksh.10,000Net refundable ksh.373,000The total refundable to 1st and 2nd Claimant is Kshs.866,000/=

36. We have included the share capital component in the tabulation since it was mentioned during the proceedings by officials of the Sacco

37. We have considered the evidence by two parties and note that this is a shares /deposits refund case which has been compounded by allegation of fraud.

38. Audit report has been filed in this court but has only proved amounts of funds available with tribunal Sacco

39. This tribunal has not been convinced beyond reasonable doubt that the former officials of the Sacco committed any fraud or were involved in any misrepresentation

40. In any case the fraud issue will not change the obligation of the 6th respondent, the Sacco as a body cooperative to refund the claimants the claim amounts

41. It is our position that in the absence of critical documents at the cooperative society, the documents filed by the claimants will be sufficient to make this court make a determination on the paryer sought by the claimants

42. We again note that as a body cooperative society was the custodian of the Sacco documents and not the claimant

43. In the circumstances and on the balance probability, this Tribunal is inclined to observe that the claim has merit and order as follows:

Upshot 44. The claim dated 14/02/2019 is found to be with merit and judgement is entered in favour of the Claimants against the 6th Respondents1st -5th Respondents have been discharged with no order as to costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF MARCH, 2025. HON. B. KIMEMIA - CHAIRPERSON SIGNED 27. 3.2025HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 27. 3.2025HON. BEATRICE SAWE - MEMBER SIGNED 27. 3.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 27. 3.2025HON. PHILIP GICHUKI - MEMBER SIGNED 27. 3.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 27. 3.2025Tribunal Clerk JonahLivingstone Ashitiba – 1st RespondentMrs. Gitau advocate for 1st and 2nd ClaimantMbugua advocate for the 5th RespondentOlewe advocate for 6th RespondentMrs. Gitau advocate- we request for certified copies of the judgment.Tribunal ordersJudgment to be uploaded on judiciary portal.