[2024] KECPT 235 (KLR)

Henry v Yes Sacco Society Limited (Tribunal Case 230 of 2020) [2024] KECPT 235 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 235 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 230 of 2020

BM Kimemia, Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

March 7, 2024

Between

Bunei Brian Henry

Claimant

and

Yes Sacco Society Limited

Respondent

Judgment

Claimant’s Case 1. Claimant’s case is based on Claimant’s Statement of Claim dated 29th July 2020, Claimant’s Witness Statements of July 29th 2020, his List of Documents dated 29. 7.2020, his Reply to Statement of Defence of 30. 9.2020, hearing of 15. 6.2022 and written submissions dated 28. 10. 2022.

2. In his Statement of Claim, the Claimant prays for refund of Kshs. 63,029. 29/= and a declaration that his exit from the Respondent Sacco in unlawful and that further deductions from the Claimant’s salary is stopped.The claimed amount is the Claimant’s saving of Kshs. 474,850/= less an outstanding loan of Kshs. 396,820. 71/=.On instructions of the Claimant to the Respondent, the outstanding loan was offset with his shares leaving a balance of the claim amount of Kshs. 63,029. 29/=.

3. In his Witness Statement, the Claimant avers that the Respondent failed to pay Kshs. 63,029. 29/= being balance due to him after offsetting his shares with his loan.

4. The Claimant has produced the following documents to support his claim:a.Account Statementb.Emails correspondences on the matter -diverse datesc.Claimant’s payslips (June 2019- June 2020).d.Demand Letter dated August 5th 2019. During the hearing on 15. 6.2022, the Claimant stated that he was issued with a clearance letter by the Respondent dated 2. 3.2022 a position that was shared by the Respondent’s Advocate.As regards the claim No. (iv) of Kshs. 12,000/= deducted after the offsetting the claimant produced his payslip to prove his case.In his written submissions the Claimant avers that in Respondent letter of 2. 3.2022 the Respondent indicated that the Claimant had no outstanding liabilities with the Respondent. the Claimant thereafter on 10. 3.2022 issued his formal exit letter.The Claimant in his written submissions argued that from the Respondent documents he is entitled to Kshs. 459,859/= which the following items :a.Book value of his sharesb.Any dividend due to himc.Any deposits held by the Respondent.

5. In his further Supporting Affidavit dated 8. 10. 2020, the Claimant reinstates that at the time of serving notice to exit the Respondent his savings stood at Kshs. 474,850/= and an outstanding loan of Kshs. 396,820. 71/=.He states that he requested the loan be offset with his savings, which was done leaving a balance of Kshs. 63,029,29/= payable to him.

Respondent’s Case 6. The Respondent’s case is from the following documents:a.Respondent’s Statement of Defence dated 28. 9.2020b.Hearing proceedings on 15. 6.2022. c.Respondent’s written submissions dated 22. 9.2023. In the Respondent’s Statement of Defence, the Respondent states that the By-laws of the Respondent do not provide for off-setting of loans and avers that the Claimant should have been compelled to stay in the Sacco until he clears his loan.The Respondent denies the claim.

7. During the hearing of the matter on 16. 6.2022, the Claimants advocate stated that the Claimant has cleared his loan and was given a clearing letter by the Respondent dated 2. 3.2022. The advocate for the Claimant stated that he had spoken to the Respondent advocate who confirmed the position as stated by the Claimant’s advocate.

8. During the hearing the matter was taken out to give the Claimant time to confirm that he has been cleared.In his written submissions dated 22. 9.2023, the Respondent avers the following: That parties to a contract are bound by the terms and conditions of the same.

That a member may only exit a Cooperative Society if he/she has no liabilities with the Cooperative.

A member must give 60 days’ written Notice of Withdrawal .

Questions whether the Claimant met the 60 days’ notice requirement.

Challenges the legality of the offsetting of loan with savings.

9. The Respondent concludes that the Claimant has not fulfilled the exit conditions and prays that the Claimant should meet the conditions of exit before he is allowed to do so.

Analysis of The Case 10. The Claimant has adduced evidence to prove how the claim amount of Kshs. 63,029. 29/= was arrived at. He has produced payslips showing deductions and loan repayments to the Respondent.He has also provided communication regarding the Notice of Withdrawal and Statement showing the loan balance and the savings balance around the time of Notice of Withdrawal.The claim of Kshs. 63,029. 29/= is therefore adequately prosecuted. As regards the claim of Kshs. 495,859/= as sought in the submissions we find that the figure is not adequately prosecuted.We wonder why the Claimant did not seek to amend his – claim if indeed there was merit in his claim as per submissions.

11. As regards the Respondent, we note that the claim of Kshs. 63,029/- has not been denied but the Respondent has stated that the Claimant did not meet the by-law requirements on Notice to Withdraw.The Respondent states that; offsetting is not covered in the Respondent’s by-laws.

12. We note that the Respondent’s by-law No. 20 covers this aspect without necessarily using the word “offset”.By-law No. 20 of the Respondent reads in part…“a member who withdrawals or is expelled shall be repaid the following amounts after deduction of any debts owed by him to the society as a borrower, guarantor or otherwise..”

Conclusion 13. The prayers for determination are contained in the Statement of Claim dated 29. 7.2020:i.A declaration that the continued withholding of the Claimant’s net dues of Kshs. 63,029. 29/= is wrongful and unlawful;ii.A declaration that the Respondent’s unilateral action of reversing the Claimant’s exit from the Respondent is wrongful, unlawful and unconstitutional.iii.A declaration that the Respondent’s unilateral demand of the Claimant’s employer to continue deducting the Claimant’s salary and remit the same to the Respondent ad infinitum is wrongful, unlawful and unconstitutional.iv.The sum of Kshs. 12,000/= together with interest at commercial rates from the date of wrongful deduction until payment in full.v.The sum of Kshs. 63,029. 29/= together with interest at commercial rates from the due date of August 2019 until payment in full.vi.An order for the payment of costs for this claim and interest thereon at court rates from the date of filing claim until payment in full; andvii.Any other relief that this Honourable Tribunal may deem fit to grant.The withdrawal of the claimed amount is wrong.In this regard, we enter judgment in favour of Claimant against the Respondent as hereunder:i.A declaration that the continued withholding of the Claimant’s net dues of Kshs. 63,029. 29/= is wrongful and unlawful;ii.A declaration that the Respondent’s unilateral action of reversing the Claimant’s exit from the Respondent is wrongful, unlawful and unconstitutional.iii.A declaration that the Respondent’s unilateral demand of the Claimant’s employer to continue deducting the Claimant’s salary and remit the same to the Respondent ad infinitum is wrongful, unlawful and unconstitutional.iv.The sum of Kshs. 63,029. 29/= and Kshs.12,000/= total Kshs. 75,029/29 plus costs and interest at Tribunal rates from the date of filing claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OFMARCH, 2024. HON. BEATRICE KIMEMIA - CHAIRPERSON - SIGNED - 7. 3.2024HON. BEATRICE SAWE - MEMBER - SIGNED - 7. 3.2024HON. FRIDAH LOTUIYA - MEMBER - SIGNED - 7. 3.2024HON. PHILIP GICHUKI - MEMBER - SIGNED - 7. 3.2024HON. MICHAEL CHESIKAW - MEMBER - SIGNED - 7. 3.2024HON. PAUL AOL - MEMBER - SIGNED - 7. 3.2024Tribunal Clerk JemimahNo appearance by parties.Judgment delivered.HON. BEATRICE KIMEMIA - CHAIRPERSON - SIGNED - 7. 3.2024