https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/253

Kakayuni Rural Sacco Society Ltd v Mbindyo (Tribunal Case E704 of 2023) [2026] KECOPT 253 (KLR) (Civ) (15 June 2026) (Ruling) Neutral citation: [2026] KECOPT 253 (KLR) Republic of Kenya In the Cooperative Tribunal Civil Tribunal Case E704 of 2023 J Mwatsama, Ag Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members June 15, 2026 Between Kakayuni Rural Sacco Society Ltd Claimant and Stanley Mbindyo Respondent Ruling 1.The Notice of Motion Application dated 18th December,2025 is brought under Order 51 Rule 1, Order 22 Rule 22, Order 12 Rule 7 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act seeking among others orders:1.Spent2.THAT the Tribunal be pleased to issue an order of stay of execution of the Tribunal’s judgement delivered on 20/6/2024, the decree issued on 20/6/2025 and the warrants of sale dated 14/11/2025 together with all consequential orders arising thereof pending the hearing and determination of the application.3.THAT the Tribunal be pleased to issue an order stopping Eastern Kenya Auctioneers from selling the applicants attached goods/properties on the 20/12/2025 and the attached goods/properties be released/returned to the applicant unconditionally pending the hearing and determination of the application.4.THAT The Tribunal be pleased to issue orders that the Claimant avails Alex Wambua Muthenya to be cross-examined on the affidavit of service.5.THAT the Tribunal be pleased to set aside the ex-parte summary judgement delivered on 20/6/2024, the decree issued on 20/6/2025 and the warrants of sale dated 14/11/2025 together with all consequential orders arising thereof and the respondent/Applicant be granted unconditional leave to file defence to the action and the annexed draft defence be deemed as properly filed upon payment of the requisite court fees. 2.The Application was supported by the Affidavit of Stanley Mutiso Mbindyo on the grounds:I.That the applicant was never served with the summons to enter appearance so as to defend himself.II.That the applicant has defence to the Claimants case which defence raises triable issues.III.That the affidavit of service sworn by ALEX WAMBUA MUTHENYA is false and misleading as the applicant was never served with summons to enter appearance and the applicant neither hails nor resides in Kiomo village as he alleges in his affidavit of service.IV.That the exparte summary judgement is irregular for want of service of summons to enter appearance.V.That even the notice to Show Cause was never served upon the applicant.VI.That the Claimant by use of the decree issued by the Tribunal has already instructed EasternKenya Auctioneers who have already proclaimed and attached the applicant’s goods and have issued a notice to sale.VII.That the auctioneer is set to sale the applicant’s goods vide a public Auction to be conducted on 20/12/2025.VIII.That there is an urgent need for the Tribunal to intervene and stay the execution of the courts decree and further stop the sale of the applicant’s goods by Eastern Kenya Auctioneers vide public auction on 20/12/2025.IX.That unless the Tribunal intervenes the applicant shall be condemned unheard contrary to the rules of natural justice that no party shall be condemned unheard.X.That unless the tribunal stays the execution of the tribunal’s decree then the applicant shall suffer irreparable loss and damage and great inconvenience.XI.That the Claimant stands to suffer no prejudice if the application is allowed as the case shall be heard on merit.XII.That in the interest of justice and all fairness the application be allowed. 3.The Respondent also attached a Statement of Defence dated 18th December, 2025 stating among others that he was never advanced any loan by the Claimant and as such he could not have defaulted on what was never advanced. It was also the Respondent’s position that if any loan was advanced to him, the Claimant should have first deducted his shares, and if the shares cannot offset the loan amount, they should have pursued the remaining balance through his guarantors before finally instituting any legal action against him. 4.That the Tribunal on 22nd December, 2025 gave a stay of execution with the Claimant given 7 days to file a response. The Claimant through its CEO Martina Nthenya Kyumu filed a Replying Affidavit dated 2nd March, 2026 stating among others:i.That the subject matter of the suit is a claim for Compensation as a result of a default of payment of a loan advanced to the Respondent by the Claimant in the sum of Kshs. 1,137,212/= plus interests from 2nd March 2022 and a sum of Kshs. 5,000/= as costs for transport incurred by the Claimant in tracing and serving the Respondent.ii.That the Applicant’s application is an offence and is in complete disregard of Order 9 Rule 7 of the Civil Procedure Rules with the Respondent’s advocates on record having not been granted leave to come on record. As such, it should not be entertained by the Honorable Court.iii.That it is well-established that a litigant bears the ultimate responsibility for the prosecution of their case. The Applicant, having been personally served with all necessary pleadings and summons to enter appearance, had every opportunity to take appropriate steps, instructing an advocate, or appearing in court. The Respondent’s failure to take any action demonstrates a clear lack of diligence, and he cannot now seek the indulgence of the Honourable Tribunal to remedy a situation caused solely by his own inaction. 5.The Respondent later filed a Supplementary affidavit dated 13th April, 2026 stating among others that a demand letter is different from sermons to enter appearance, and that his home is located in Kasuna Village and as such the claim that he was served at Muusini Village is false and misleading. 6.The Respondent also filed Written Submissions dated 14th April, 2026 stating among others that he was never served and that he acted in good faith and that he had no reason to refuse and or decline receiving the court summons. 7.The Claimant did not file any Written SubmissionsWhether the annexed draft Defence raises triable issues? 8.Even if the judgement is regular, still in determining whether to set aside an ex-parte judgment or not, a Tribunal is additionally required to consider whether a party has annexed a defence, and whether that annexed defence raises triable issues. The High Court in the case of Tree Shade Motors Ltd v D.T. Dobie & Another (1995-1998) 1 EA 324 made it clear that:Even if service of summons is valid, the judgment will be set aside if the defence raises triable issues. Where a draft defence was tendered together with an application to set aside a default judgment, the court hearing the application was obliged to consider if it raised a reasonable defence to the plaintiff's claim. Where the defendant showed a reasonable defence on the merits, the court could set the ex-parte judgment aside.” 9.Several Court decisions define triable issues as those issues which raise a prima facie defence and which naturally should go to trial for adjudication. In this particular case, the Respondent has raised as triable issue:i.That he was never advanced any loan by the Claimant and as such he could not have defaulted on what was never advancedii.That if any loan was advanced to him, the Claimant should have first deducted his shares, and if the shares cannot offset the loan amount, they should have pursued the remaining balance through his guarantors before finally instituting any legal action against him 10.This Tribunal being a Court of record, we have considered the evidence filed by the Claimant, evidence which include a Loan Application form and a Statement of Account, which all show that two loans of Kshs. 500,000/= and Kshs. 300,000/= were disbursed to the Respondent, and after defaulting for more than one year, the Claimant started the process of recovery which began with a demand letter all the way to execution - this rebuts the claim that the Respondent did not take any loan from the Claimant. 11.On the issue of guarantors, it is important to state for the record that this Honourable Tribunal has held in numerous cases that guarantors are persons under secondary obligations who come in to satisfy the debt when the principal debtor has failed to service the loans. To mean the issue is not as to whether guarantors should come at some point to satisfy a debt once there is default - that has been settled, the issue is at what point should they come to satisfy that debt given that they are not the principal debtor. 12.This Honourable Tribunal in Atemba & 4 others v Trans-National Times Sacco Society Limited & another (Tribunal Case 251 of 2021) [2024] KECPT 974 (KLR) (30 May 2024) (Judgment) clearly laid down the procedure of attaching guarantor’s savings when it stated that:“.….It is and has always been our considered view that the guarantor is secondary and should be used as a last result when a loan is defaulted." 13.The 1st Respondent cannot decide/choose an easy way out to deduct the guarantor’s savings to repay a loan for a defaulter who they know where to locate and even have details of his source of income. The question we ask ourselves is also, why should the guarantors suffer loss while the loan defaulter is able and capable to repay their loan. 14.We reiterate the purpose of a guarantor is to assist members secure a loan and not service it for the loanee. 15.We are not disputing the fact that guarantors have an obligation towards the 1st Respondent however we are looking into the circumstances leading to the deductions. In the instant case the (Claimant) guarantors have done their due diligence and located the 2nd Respondent who is able to make payment but for some reason the 1st Respondent opted for the easy way out. This is an unacceptable and unconscionable practice which seeks to punish innocent parties…” 16.This in essence mean that the Claimant has not done anything wrong to pursue the Respondent as the principal loanee to recover on the defaulted loan, if they still believe that they have not exhausted the opportunities to recover from him, before moving on to recover from the guarantors whose obligation is secondary. Final Ordersi.The Notice of Motion Application dated 18th December,2025 is dismissed with costsii.The temporary stay orders of execution are discharged.File closed. RULING DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 15TH DAY OF JUNE, 2026.HON. J. MWATSAMA AG. CHAIRPERSON SIGNED 15/6/2026Hon. Beatrice Sawe Member Signed 15/6/2026Hon. Fridah Lotuiya Member Signed 15/6/2026Hon. Michael Chesikaw Member Signed 15/6/2026Hon. P. Aol Member Signed 15/6/2026Mutai - Court AssistantPius Muli advocate for the ApplicantMs. Mule advocate for the Claimant/RespondentHon. J. Mwatsama Ag. Chairperson Signed 15/6/2026