[2022] KECPT 235 (KLR)

Kabugu & another v Urithi Housing & Cooperative Society Limited (Tribunal Case 741 of 2019) [2022] KECPT 235 (KLR) (Civ) (3 March 2022) (Judgment)

Neutral citation: [2022] KECPT 235 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 741 of 2019

J. Mwatsama, Vice Chair, P. Gichuki & B. Akusala, Members

March 3, 2022

Between

Boniface Waweru Kabugu & another

Claimant

and

Urithi Housing & Cooperative Society Limited

Respondent

Judgment

1. The matter for determination is brought under Statement of Claim dated 9. 12. 2019 filed on even date.The Claimants aver the 1st Claimant was registered as a member of the Respondent on 28. 9.2015 under Membership number UHCS/88498 and on 19. 9.2018 registered as a member of the Urithi Investment Club under membership No. UIC/800. The 2nd Claimant registered as a member of Respondent Sacco unit dubbed Urithi Investment Club No. UIC/801. The 1st Claimant states he bought 4 plots with the Respondent out of which 3 were in Kitengela,a.Ostrich 109 Kshs. 540,000/=b.Ostrich 110 Kshs. 550,000/=c.Ostrich 111 Kshs.550,000/=The 1st Claimant purchased this in 2014. The same were transferred to his name and issued with ownership certificate.4th plot was No. 75 which was brought in 2017 for Kshs. 1,245,000/= and sale agreement issued on 4. 12. 2019. Claimant avers despite demand for titles to be processed with respect to the 4 plots of land the respondent has ignored the same.

2. The 2nd Claimant aver they took a loan with Stima Sacco of Kshs. 2,000,000/= and invested it with the Respondent after being convinced they had a savings program with a return of 24% interest per annum.They executed an Investment Agreement No. O505b.The 1st Claimant had saved Kshs.3,000,000/= with Stima Sacco which had a return of 9% but withdrew the same and deposited with respondent Sacco and executed an Investment Agreement No. 676b under Membership no. UIC/801. The said investment for 1st and 2nd Claimant totalling to Kshs. 5,000,000/= was to mature every September at the rate of 24% per annum and investment would have earned an interest of Kshs. 1,200,000/= as at September 2019. That the 1st Claimant was informed in September 2019 that Respondent Sacco did not have liquid cash to disburse to the Claimant and Claimant travelled from Zambia his where place on 24. 11. 2019 to attend to the issue.The 1st Claimant met with one Madam Wacera from the Respondent Sacco on 26. 11. 2019 and she informed him that the Respondent could not refund the claimant’s savings of Kshs. 5,000,000/= or interest accrued of kshs. 1,200,000/= because the respondent was experiencing financial difficulties.The 1st and 2nd Claimants therefore pray for judgment against the Respondent for :a.Mandatory order to compel the Respondent to process within a set timeline title deeds in respect of Plot Number 75 on part of title No. Juja Komo Block 1/28, plot No. 109,110 and 11 with ostrich Farm Olive and have he Claimant the title deeds issued in the name of Boniface Waweru Kabugu , the Claimant herein. In the alternative, the Deputy Registrar of the Environment and Land Court , Nairobi be authorized to sign all documents and instruments of transfer of Plot Number 75 on part of title No. Juja Komo Block 1/28, plot No. 109, 110, and 11 within Ostrich Farm Olive on behalf of the Respondent and Title Deeds be issued to the Claimant.b.Special damages amounting to Kshs. 6,200,000/= as at September 2019. c.General damages for breach of contract.d.Costs of the suit.e.Interest on (b), ( c) and (d) above at commercial rates.f.Any other or further relief as this tribunal may deem fit to grant.

3. The Respondent entered appearance by filing Memorandum of Appearance on 7. 2.2022 and Statement of Defence dated 28. 8.2020 on 21. 9.2020. The Respondent in their Statement of Defence confirmed the Claimant were their members with Membership No. 800 and 801 respectively.That the Respondent sold plots to the 1st claimant and he was aware of the model employed by the Respondent which was purchase of land which was to be subdivided then transferred to members upon payment of purchase price and conveyancing fees.That the 1st Claimant is yet to complete payments of the purchase price as well as conveyancing fees to enable respondent to transfer property to him.Issue of refund should not occur since the amount was used to pay a deposit to the owners of the land.The Respondent without prejudice and in the alternative stated that any investment plan matures after 5 years and the Claimant’s untimely terminate of the agreed amounts to breach of contract.The Claimant was to do a notice of withdrawal 60 days in advance and society entitled to 90 working days from date of notice issued to enable Respondent facilitate the transfer and further society’s By-laws do not provide for refund of the shares they provide for transfer of the shares to another member.

4. The matter came for hearing on 19. 7.2021 and CW2 Boniface Kabugu gave his evidence as well for CW2. He adopted his witness statement and list of documents dated 9. 12. 2019 as evidence in chief and produced the documents as CEX 1 ( as a bundle of documents).During cross examination the Claimant stated he knows where his allocated plots are in Kitengela he had put a fence around them.He stated they did not have the sale agreement as the agreement were not issued.He stated title deeds were to be given after full payment. The only documents he has are proof of payment for the land.For the plot in Juja the Claimant stated he signed a sale agreement. He says he had engaged the Respondent to get a title but was not successful.He confirmed clause is of the agreement provided for mediation as an alternative for dispute resolution and 1st Claimant confirmed during cross examination they had 4 sittings with the Respondent board before they filed suit.On the investment he reiterated his averments in witness statement and confirmed requesting for 24% being residents of Zambia tax did not apply. He further stated he was not willing to have the same converted to other plots.

5. The Respondent did not call any witnesses and closed their case. Parties were directed to file written submissions.The Claimants filed their written submissions dated on …..The Respondent filed their written submissions dated 21/12/2021 on 10. 1.22. Having looked at the evidence and written submissions of parties the issues for determination are as follows:Issue oneWhether the Claimants are rightful owners of plot No. 75 title No, Juja Komo/Block 1/78, plot 109, 110 and 111 Ostrich Olive in Kitengela.Issue twoWhether the Claimants are entitled to their refund of Kshs. 5,000,000/= plus interest?Issue threeWhether General Damages are payable?

6. Issue oneWhether the Claimants are rightful owners of plot No. 75 title No, Juja Komo/Block 1/78, plot 109, 110 and 111 Ostrich Olive in Kitengela.The Claimants do not have any agreements to evidence purchase of the 3 plots in kitengela.All they have are Certificates of Ownership from the Respondent herein.The Respondent in the said certificates refer to the Claimant as the registered owners of plot number 109, 110 and 111 Ostrich Farm Olive and go ahead and indicate the Claimant has fully paid for the plots subjects to the Cooperative Societies Regulations.Question then is the certificate of ownership proof of ownership of the property?The Claimant in their Statement of Claim pray for a mandatory order to compel Respondent to process their title deed in respect to the aforementioned plots.The Respondent on the other hand in their Statement of Defence state they transferred to the Claimant the said plots.No reasons are given by the Respondent why the Claimants do not have the Title Deeds in their names as yet.It is clear certificate of ownership issued by Respondent are not title deeds.We therefore find the claimant as rightful beneficial owners of the plot number 109, 110 and 111. For the Juja plot there is an Agreement for sale dated 4. 12. 2019 produced as evidence of purchase.The Respondent in the said agreement put himself out as the beneficial owner and would have the same demarcated to plots in the scheme known as Olive Gardens IV.Page 37 of the Claimant’s list of documents is a receipt generated on 28. 11. 2019 showing the Claimant ahs no arrears in any of the purchased plots.This therefore means the Claimant had discharged their duties.The Respondent is the one who is yet to meet his end of the bargain and give title to the Claimants.

7. Issue twoWhether the claimants are entitled to their refund of Kshs. 5,000,000/= plus interest?The Claimant in his documents no 5 and 6 in his list of documents dated 9. 12. 2019 attached the investment agreement number 0676B and agreement number 0505b.He further produced receipts showing payments of the same.As per his member statements as number 12 page 38-39 is list of documents it shows he had invested Kshs. 2,000,000/= in Dhahabu investment for a period of 5 years from 25. 9.2018 and as of 28. 11. 2019 he was to receive Kshs. 480,000/= as interest.Page 40 of list of documents he had invested Kshs. 3,000,000/= under Dhahabu investment for 5 years and would have accumulated Kshs. 720,000/= each less 15%Issue threeWhether General Damages are payable?The Claimants avers he never received any of the payment in the year 2019 and even as at the date of hearing he had not received the amount.This was a breach of contract by the Respondent as the interest was not to be paid cumulatively but year after year.It is thus we find Respondents are in breach of the investment contract.

8. It is with this in mind that we find in favour of Claimant against the Respondent for :a.Special damages of Kshs. 6,200,000/=b.Prayer a granted in terms of a mandatory order compelling Respondent to process within 3 months from date of this judgment. Title deeds in respect to plot No. 75 or part of Title Juja Komo Block 1/28. Plot 109, 110 and 111 within Ostrich Farm Olive Garden and have Title Deeds issued in the name of 1st Claimant herein.c.Costs and interest from date of filing suit.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF MARCH, 2022. Hon. J. Mwatsama Deputy Chairperson Signed 3. 3.2022Mr. P. Gichuki Member Signed 3. 3.2022Mr. B. Akusala Member Signed 3. 3.2022Tribunal Clerk R. LeweriMs. Gitau Advocate for the RespondentChimei Advocate for the ClaimantMs. Gitau: We pray for 30 days Stay of Execution.Chimei : We are not opposed to the application.Tribunal : 30 days Stay of Execution granted.Hon. J. Mwatsama Deputy Chairperson Signed 3. 3.2022