[2023] KECPT 78 (KLR)

Kamami & 9 others v Kyanjau Housing Co-op Society & another (Tribunal Case 346 of 2019) [2023] KECPT 78 (KLR) (Civ) (15 March 2023) (Judgment)

Neutral citation: [2023] KECPT 78 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 346 of 2019

BM Kimemia, Chair, M Mwatsama, Vice Chair & M. Mbeneka, Member

March 15, 2023

Between

Bernadette Njeri Kamami & 9 others

Claimant

and

Kyanjau Housing Co-op Society

1st Respondent

Michael Njuguna Njonge

2nd Respondent

Judgment

1. Matter for determination is Statement of Claim dated June 26, 2019 filed on June 27, 2019. The Claimants claim that they are members of 1st Respondent since 1970s having contributed to the 1st Respondent growth.On April 20, 2019 during 1st Respondent Annual General Meeting 2nd Respondent gave/attached the Claimant with tirade remarks without justification and or provocation. He claimed the Claimant were non-members and imposters of the 1st Respondent.The Claimants were ambushed with these allegations and were not given an opportunity to respond to the allegations.

2. The Claimant were thus subsequently ejected from the Annual General Meeting of 20/04/19 and informed they were no longer members of 1st Respondent and they were to refund all dividends paid for the time they were members.The Claimant were never invited after that to respond to the allegations.The Claimant thus pray for ;a.A declaration that the remarks of the 2nd Respondent on the 20/4/2019 were illegal, null and void and to be expunged from the records of the 1st Respondent.b.A declaration that the Claimants are legitimate members of the 1st Respondent entitled to all rights and privileges of the 1st Respondent.c.That a perpetual order of protection does issue to protect the rights and privileges of the Claimants in the 1st Respondent.d.Payment of all dividends due to the Claimants with interest from the date of declaration of the dividends.e.General damages for maltreatment and crueltyf.Costs of the suit and interestsg.Any other orders in the interest of justice

3. The Claimant’s filed written statements of Martin Igecha Karani and their list of documents dated June 26, 2019 filed on September 27, 2019 attaching share certificate and demand letters.

4. The Respondent filed a Statement of Defence date July 30, 2019 filed on even date to wit the defence denied the Claimants averments. The 1st Respondent avers the issue of membership was part of the agenda being a follow up from April 12, 2014 Annual General Meeting.The Respondent further filed a Counter Claim and they sought for dividends earned by Claimant since, 2010 and there are plots which they demanded from the Claimant.The Counter Claim prayed for;-a.Refund of all dividends earned by the Claimants totaling to Ksh. 710,065. 00. b.Return and or surrender of all plots allocated to the Claimants.c.Return of all plots sold by the Claimants at the current market value.d.The Claimants be ordered to cease from trespassing, accessing and or purporting to sell any of the plots as they are rightfully owned by Kyanjau Housing Society.e.The costs of this counterclaim be borne by the Claimants with interest.

5. The Claimants responded to the counter claim and filed Defence to Counter Claim date August 19, 2019 denying the averment the counter claim and requested for the same to be treated as a share and struck out/dismissed with costs and judgment be entered in favour of Claimant. Respondent filed a Further List of Documents dated October 24, 2019 filed on even date Claimant filed a further list of documents dated April 1, 2020.

6. Matter came for Claimant hearing on March 15, 2022 and C.W.1 – Martin Igecha Karani testified. He relied on his witness statements dated June 26, 2019 and the same was adopted as his evidence in chief. He produced the Claimant List of Documents dated June 26, 2019 and July 28, 2021. He confirmed they have been members of Respondent’s as they are from the same family. They have made necessary payment and received dividends.When the Society changed names in the year, 2000 they surrendered the old share certificates and got new ones in 2007 and got additional shares. They were never give an expulsion letters.

7. During cross-examine the Claimant stated he was born in 1958 and at the time of joining the Respondent he was only 16 years old thus did not have an Identity card. He confirmed his father Dominic Igech was their father.He started 3rd Claimant was 12 years when she joined society. He confirmed he all along attended the Annual General Meetings.He further confirmed the minutes of April 12, 2014. Minutes of management page 120-127 that registers were to be audited.Page 132 – it read the audit could not establish how the Kanani family got its shares.However on scrutiny of the registers all were in the register other than;a.Sabina Wanjiku Karanib.Peter Njuguna Karanic.Christopher Kinuthia Karanid.Perpetual Wanjikue.Andrew Wanjiku.

8. On Re-examination the Claimant confirmed the custody of the register is with the management of the Society.The Claimant’s not in the register got their shares through transfer of shares page 72 – 86. The shares were transferred by their member Bernadette Kimani which shares she got when their father Dominic Kimani passed away.He did not recall any invitation to take their documents for perusal. He has not received any demand that he did not pay the entry fee.When the Society was transitioning to Kyanyau Housing Co-operative there was no issue raised on membership.

9. Respondent case was heard on June 6, 2022 .RW1 – Michael Njuguna gave evidence. He stated he was Chairman of 1st Respondent elected in May, 2013. He adopted his witness statement dated July 30, 2019 filed on even date as his evidence in chief.He stated on April 12, 2014 during the Annual General Meeting members were informed records were not kept well and there was a lot of discrepancy. Annual General Meeting directed for management to go through the discrepancies and give a report.He stated Claimant’s were invited as per minutes in Page 120 – 124 to bring their documents and thus that were been among not genuine.

10. On cross-examination the RW1 stated during transition members were to submit certificates from family housing. Anyone with a certificate for Kyanjau Housing Co-operative had to have a certificate from Kyanjau Farming Co-operative Society.The Certificates were issued after verification from page 13- 22. He further confirmed before transferring shares the register had to be verified.R.W.1 stated – the report for the Secretary was yet to be compiled. They did not file report because matter was in court.

11. R.W.1 confirmed Dominic Kimani had shares and on his demise they were transferred to Bernadette though RW1 states there is no proof. Transfer was done with no proof how the same was acquired.RW3 – relied on his witness statement filed on July 30, 2019. On cross-examination he stated he was member of Kyanyau Housing since 2016. He stated he took over. The shares from his uncle. He did not have any transfer documents with him and for the transfer to be effected required Identity Card and Death Certificate.

Issues 12Having considered the pleadings evidence adduced by the parties and written submissions the issue for consideration are;Issue One-Whether the Claimants are legitimate members of 1st Respondent.Issue Two- Where Claimant were given an opportunity to be heard/defend themselves against claims of not being members.

Issue One- Whether the Claimant are legitimate members of the 1st Respondent? 13From the evidence adduced by both parties it is confirmed Claimant were members of Kyanjau farmers Sacco before Respondent transitions to Kyanjau Housing Co-operative Society.

14At the point of transition the members documents and membership were sensitized and Claimants all sailed through successfully.

15If there would be any questions about. The Claimant’s legitimacy it ought to have been discovered during this period and the same never came up.

16No evidence was adduced in form of By-Laws of Kyanyau farming Co-operative evidence that the Claimant’s would not have been above to have capacity as shareholders because they were minors.

17The tribunal is now being tasked to deal with an “ideal situation”.

18Whether the Claimants were minors or not, how they got their shares is something only the Claimant could explain. Their father having acquired the same for them and Respondent’s having accepted their documentation at the time of transition legitimizes any other claim against them.

19The 1st Respondent missed an opportunity if at all to clean up the in house and now cries wolf almost 15 years later.

20An alleged report against the Claimant’s family on acquisition of the shares has not been finalized nor was it produced before the tribunal.

21We wonder what then is the basis of the 1st Respondent claim against the Claimant’s.

Issue Two -Whether the Claimant were granted an opportunity to be heard or defend themselves? 22The 1st Respondent accuse the Claimants of fraudulently acquiring shares and plots.

23It is however noted no evidence of fraud has been produced by the 1st Respondent if at all to prove any of these allegations.

24The Claimants were asked to leave the Annual General Meeting held on April 20, 2019 and not granted an opportunity to defend themselves.

25Though they are a family no invitation was made by 1st Respondent to the Claimant individually to defend their membership.

26How then would an inquiry be done without listening or giving an opportunity to an aggrieved party to defend itself ? The Laws of Fair Administrative Action take effect.

27Article 5 of the Constitution – A person has a right to defend themselves and a right to represented. This was not allowed by the 1st Respondent.

28. The Respondent filed a counter-claim seeking for orders;All the aforementioned orders sought would only succeed if the Statement of Claim dated June 26, 2019 would have failed. A refund for dividends earned would have meant the Claimant’s are not members of 1st Respondent and the same failed. This tribunal find’s thus is not the case.

29. To this end the counter claim dated July 30, 2019 fails and judgment is entered in favour of Claimant against Respondent fora.A declaration that the remarks of the 2nd Respondent on the April 20, 2019 were illegal, null and void and to be expunged from the records of the 1st Respondent.b.The Claimant are legitimate members of 1st Respondent and are entitled to all rights and privileges of the 1st Respondent.c.Payment of dividend due to claimant to be paid from date of declaration within 30 days from todayd.Payments of all dividends due to the Claimants with interest from the dare of declaration of the dividends.e.Costs and interest in the suit.

Judgment, Read and delivered virtually 15th December, 2022. Hon. Beatrice Kimemia Chairperson Signed 15. 12. 2022Hon. Mjeni Mwatsama Deputy Chairperson Signed 15. 12. 2022Maria Mbeneka Member Signed 15. 12. 20224| CTC 346 OF 19 Page