[2021] KECPT 289 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 219 OF 2021

GAD MWANGI NDIRANGU........................................................................................1ST CLAIMANT

EPHRAIM GICHINGIRI WANG’OMBE..................................................................2ND CLAIMANT

JOSEPH GITHUNGO MBATARU.............................................................................3RD CLAIMANT

-VERSUS-

DR. GEORGE MAKOKHA.................................................................................1ST RESPONDENT

PATRICK M. KILONZO.....................................................................................2ND RESPONDENT

DR. PRISCILLA N. GITONGA..........................................................................3RD RESPONDENT

STEPHEN KIARIE..............................................................................................4TH RESPONDENT

KENVERSITY CO-OPERATIVE SAVINGS

& CREDIT SOCIETY LTD.................................................................................5TH RESPONDENT

COMMISSIONER FOR CO-OPERATIVES....................................................6TH RESPONDENT

RULING

1. This Application challenges the elections of the 5th Respondent held on 24th April 2021 on the grounds that the said elections were held contrary to the bylaws of the 5th Respondent. The Claimants allege that the 1st to 4th Respondents were unprocedurally elected to hold office in the 5th Respondent, as the process leading to the said elections was unlawful, and lacked transparency and credibility. The Applicants contend that the 1st to 4th Respondents, under the misguidance of the 6th Respondent, acted outside the Society’s bylaws, and should thus not be permitted to benefit from their unlawful creation. They have sought for Prohibitory injunctive orders against the Respondents.

2. The 1st, 2nd and 4th Respondents, on their part, insist that the elections were held in strict compliance with the bylaws of the 5th Respondent. The only variance with the strict letters of the bylaws is, the meeting wherein the elections were conducted, was done virtually, and this was a constraint imposed by Government policies which prohibited physical meetings. Other than that, everything was by the book, and on the solid advice of the County Co-operative Officer. They have prayed that the Application be struck out with costs.

3. We have read all the Pleadings, as well as the robust and elaborate Submissions of all parties, which we have relied on. We wish to note that all the authorities cited have been analysed by the Tribunal, and even though some will not be cited in this Ruling, they nonetheless guided the Tribunal to the determination of this Application.

ISSUES FOR DETERMINATION

4. We have read and considered the cases of both parties. The Claimants are seeking Prohibitory Injunctions, which prayers are opposed by the Respondents. Now, without purporting to dispose of the main Claim at this stage, we have thus framed the following issues as necessary for determination in view of this present Application: -

(a) Whether the law was followed in the elections of the Society; and

(b) Whether the prerequisites for a Prohibitory Injunction have been met; and

(c) What Orders can be issued by this Tribunal?

We shall proceed to give our Ruling on the above issues.

5. ANALYSIS OF THE ISSUES

(a) Whether the law was followed in the elections of the Society

Our grundnorm for purposes of this case is the Society’s Constitution, and Bylaws [hereinafter ‘Bylaws’]. It would seem that there is a pair of Bylaws of the Society, and there is need to clarify which Bylaws are applicable. In the Bylaws of 2012, Clause 36 thereof (which is same as Clause 33 of the 2018 Bylaws) provides that an Annual General Meeting of the Society shall be held within 4 months after the end of the Society’s financial year. A 15-days’ notice is required for an AGM, and can be convened by the Board, the Commissioner, or upon the request of at least 100 members, or one fourth of the members.

Clause 37 of the 2012 By-laws (which is same as Clause 34 of the 2018 Bylaws) outlines the period for issuing a Notice for an Annual General Meeting, which is 15 clear days. The Notice is required to detail all the business to be dealt with at the AGM, and it shall be published as enumerated under Clause 37. 2. Duties of the AGM have been enumerated under Clause 40. 1 of the 2012 By-laws (which is same as Clause 37 of the 2018 By-laws), as follows:

Clause 40. 1(iv) of the 2012 By-laws (which is same as Clause 37. 1(iv) of the 2018 Bylaws) outlines that the General Assembly can elect or remove members of the Board and the Supervisory Committee, subject to the Act, Regulations, Co-operative Societies Act and Rules.

Clause 43 of the 2012 By-laws (which is same as Clause 40 of the 2018 Bylaws) of the Bylaws outlines the process of elections, thus:

Clause 43. 5 of the 2012 By-laws (which is same as Clause 40. 5 of the 2018 Bylaws) requires that the General Meeting shall be adjourned to allow for elections by secret ballot on a working day of the week following the Annual General Meeting. The reading of the Bylaws contemplate that the Annual General Meeting shall initialize the electoral process, where the candidates shall be presented to the membership, but the actual voting ought to take place on a working day of the week subsequent to the Annual General Meeting, and the new officials are to assume office, subject to being cleared within the Co-operative Societies Act, ap 490 of the Laws of Kenya.

6. As evident, a notice for elections must be sent out by the Hon. Secretary at least 15 days before the date slated for the General Meeting. However, Clause 44(viii) of the 2012 Bylaws (which is same as Clause 40(viii) of the 2018 Bylaws) of the Bylaws require that the elections must be held on a different day from the date of the AGM, on which election day there ought to be no other agenda. For avoidance of doubt, Clause 44(ix) of the 2012 Bylaws (which is same as Clause 40(ix) of the 2018 Bylaws) directs that Elections shall be held on the first Wednesday after the General Meeting, unless this day falls on a holiday.

There is also the Society’s Elections Policy of 2020 which further outlines the electoral processes of the Society.

The evidence on record shows the following:

(i) On 1st April 2021, the 5th Respondent’s Secretary sent out a Notice for the AGM slated for 24th April 2021. This Notice adhered to the minimum of 15 clear days required Notice Period;

(ii) The Notice called for a virtual meeting instead of the customary physical AGM. We shall discuss this issue shortly hereunder;

(iii) There was introduced an addendum on 15th April 2021, including a new agenda No. 17, for election of the Board. This addendum was 8 days to the AGM. We shall also discuss this hereunder;

(iv) Elections were conducted at the Annual General Meeting.

7. On the first limb of a virtual Annual General Meeting as opposed to the normal physical Annual General Meeting, the explanation given by the Respondents on why the Meeting deviated from the norm and required physical format to virtual is a matter that this Tribunal will take Judicial Notice of under Section 60(1)(o) of the Evidence Act Cap 80 of the Laws of Kenya. The Covid19 pandemic has forced the world, and most institutions to adapt to the stringent rules of self-protection to survive. Things cannot be done normally, and it is a justifiable and acceptable reason that the Society was not willing to risk the lives of membership by convening a physical Annual General Meeting , as this would be against government policy. We therefore find and hold that the virtual Annual General Meeting, for being a non-physical meeting, was properly convened, despite there being no provision thereof in the Society’s Bylaws.

8. This brings us to the second limb, on the elections coinciding with the Annual General Meeting. First, it cannot be gainsaid that the addendum Notice was shorter that what Is prescribed in law. It is actually an 8-days’ Notice. Such Notice must be, and is definitely unlawful. Any agenda discussed thereunder must be set aside. Also, the addendum seeks to conjoin the Annual General Meeting and the Elections, in what was the advice proffered by the County Commissioner of Co-operatives. In our considered view, neither the 6th Respondent nor his agents, even bearing a good conscience and well-intentioned thoughts, can vary the abstract provisions of the Bylaws.

9. The Respondents have not demonstrated any challenges in coming up with a date for elections separate from the date of the Annual General Meeting. The advice of the County Commissioner of Co-operatives that other Societies have a conjoined Annual General Meeting and elections is not a sufficient ground to depart from the provisions of the law. The only way there can be a change from the current position of separate dates for the Annual General Meeting and elections, is by a change of laws. To further reiterate, the Bylaws of the Society override the advice of the County Commissioner of Co-operatives. For this reason, we shall not delve into the elections themselves, as they were held against the Bylaws of the Society.

(b) Whether the prerequisites for a Prohibitory Injunction have been met

The principles of law on the grant of temporary and mandatory injunctions are settled. The requirements for the grant of temporary injunctions are stated in Giella vs Cassman Brown & Co Ltd, (1973) EA 358 , and these are that the applicant must establish a prima facie case, and that he or she would suffer irreparable loss which may not be compensated by an award of damages. If the Court finds that the two requirements are not satisfied, it may decide an application on the balance of convenience.

Halsbury’s Laws of England 4th Edition, Vol.24, paragraph 948 reads as follows:

‘A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks ought to be decided at once or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempted to steal a match on the plaintiffs ... a mandatory injunction will be granted on an interlocutory application.’

Courts are discouraged from issuing Mandatory Injunctions at the interlocutory stage, unless the case is so clear and straightforward that the courts will not be looking over its shoulders wondering if it made a mistake.

10. However, we note that the standards of issuing a Prohibitory injunction is lower. In the case of Nation Media Group & 2 others -vs- John Harun Mwau [2014] eKLR the Court of Appeal said:-

“It is trite law that for an interlocutory mandatory injunction to issue, an applicant must demonstrate existence of special circumstances ... A different standard higher than that in prohibitory injunction is required before an interlocutory mandatory injunction is granted [the emphasis is ours]. Besides existence of exceptional and special circumstances must be demonstrated as we have stated a temporary injunction can only be granted in exceptional and in the clearest of cases.”

This present Application gives us a chance to apply the standard of issuing Prohibitory Injunction Orders, which is, on a balance of convenience. The evidence adduced herein is overwhelming that the elections held contravened the Bylaws of the Society. Nothing can save an illegal act, not even equity: equity can only stand aside and weep, but never stand in aid of an illegality. For, we accept, equity follows the law.

(c) What Orders can be issued by this Tribunal?

We find and hold that no elections were conducted on 24th April 2021, within the meaning of the 5th Respondent’s Bylaws. For this reason, the Application by the Claimants dated 4th May 2021 succeeds.

11. We wish to thank all the parties for the industry they have put in this case, through observation of all the timelines as well as the profound research as elicited in their Written Submissions.

ORDERS

We therefore Order as follows:

a. THAT the Claimant’s Applications dated 4th May 2021 be and is hereby allowed with costs.

b.THAT pending the hearing and determination of the suit, a prohibitory injunction be and is hereby issued, restraining the 1st, 2nd, 3rd and 4th Respondents from forwarding, acknowledging, holding themselves out, conducting themselves, registering and/or undertaking any activities as elected officials of the 5th Respondent arising from the elections held on 24th April 2021;

c. THAT pending the hearing and determination of the suit, a prohibitory injunction be and is hereby issued, restraining the 6th Respondent from acknowledging, registering, and/or confirming the 1st, 2nd, 3rd and 4th Respondents as officials of the 5th Respondent’s arising from the elections held on 24th April 2021;

d. Parties to exchange witness statements and documents within 30 days hereof.

e. Mention for directions on 7. 12. 2021

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 2ND DAY OF SEPTEMBER, 2021.

Hon. B. Kimemia Chairperson Signed 2. 9.2021

Hon. J. Mwatsama Deputy Chairperson Signed 2. 9.2021

Mr. Gitonga Kamiti Member Signed 2. 9.2021

Mr. Boniface Akusala Member Signed 2. 9.2021

Tribunal Clerk R. Leweri

Kabuthi Advocate for 5th Respondent

Mathenge Advocate for Claimant /Applicant

Otenyo Advocate for 1st, 2nd and 4th Respondent

No appearance for 3rd Respondent.

Hon. B. Kimemia Chairperson Signed 2. 9.2021