[2024] KECPT 1708 (KLR)

Kariuki v Unaitus Cooperaive Sacco (Tribunal Case 920 of 2023) [2024] KECPT 1708 (KLR) (31 October 2024) (Ruling)

Neutral citation: [2024] KECPT 1708 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 920 of 2023

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

October 31, 2024

Between

Jidraph Macharia Kariuki

Claimant

and

Unaitus Cooperaive Sacco

Respondent

Ruling

1. This ruling dispenses the Notice of Motion Application dated 4th December 2023. The Application is supported by an Affidavit sworn by the Applicant JIDRAPH MACHARIA KARIUKI and brought under The Cooperative Societies Act, Sections 1A, 1B, 3, 3A and Section 63(c) of the Civil Procedure Act, and Order 40 Rule 3, Order 51 rule 1 of the Civil Procedure Rules 2010, and all other enabling provisions of the law. The Application seeks the following orders:a.Spentb.Spentc.That pending the hearing and determination of the claim herein this Honourable Tribunal be pleased to issue an injunction restraining the Respondent either by themselves, their agents, servants, personal representative andor successors in title (if any) from interfering with, attaching, selling or putting up for sale either by public auction or private treaty or otherwise transferring andor in any way disposing of the ClaimantApplicant’s property land reference number Kajiadokaputiei-north30546d.That costs of this application be provided for.

2. The Application is premised on the grounds on its face which are inter alia that: The Applicant obtained a loan facility from the Respondent in 2014, secured by land KajiadoKaputei-North30546 and has received a notice of realization of the security yet the loan term has not expired.

3. The brief background of this matter is that the Applicant filed a Statement of Claim dated 4th December 2023 in which he sought a permanent injunction against the Respondent, order for supply of statement, interest charged, order for an audit, and an order for renegotiated loan repayment plan. The current application is for interim orders pending the determination of the main claim.

4. The Respondent filed a Replying Affidavit. In their Affidavit, the Respondents aver that the Applicant is misleading this court on the outstanding loan amount. The Respondents contend that the Applicant has always had challenges paying the loan. That the loan has been restructured twice but still the challenges continue. The Respondent also states that they issued the Applicant with an arrears notice but they received no response and that is when they issued a Demand Notice. They also respond that the Applicant was to reach out with a payment plan but opted to institute the Claim instead.

5. Both parties filed their submissions regarding the Application.

6. In their submissions, the Applicants submit that the application should be allowed as prayed. They argue that they have a primafacie case, and they stand to suffer irreparable loss should the application not be allowed.

7. The Respondents, in their submissions, submitted that application should be dismissed as the Applicant has failed to establish a prima facie case, that no irreparable injury would be occasioned and further that the balance of convenience does not lie with the Applicants.

Analysis 8. This Tribunal has noted the application, response and the submissions with regards to this Application. It is not in dispute that the Applicant is a member of the Respondent and that he was advanced a loan of Kshs. 2. 400,000= secured by property land reference number KAJIADOKAPUTIEI-NORTH30546. The question before this court, therefore, is whether the Applicant is entitled to the reliefs sought, to wit an injunction retraining the Respondent from realizing the security for the outstanding loan amount.

9. The germane principles on interlocutory injunctions were stated by the Court of Appeal in East Africa in the case of Giella v Cassman Brown & Co. Ltd (1973) EA as follows:a)The Applicant must first establish a prima facie case with a probability of success.b)The Applicant must then demonstrate that he, she or it stands to suffer irreparable loss that cannot be adequately compensated through damages.c)Where there is doubt on the above, then the balance of convenience should tilt in favour of the Applicant.

10. Similarly, in the case of Nguraman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR the Court of Appeal held that:“In an interlocutory injunction application, the Applicant has to satisfy the triple requirements to; establish his case only at a prima facie level, demonstrate irreparable injury if a temporary injunction is not granted, and ally any doubts as to (b) by showing that the balance of convenience is in his favour.These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the Applicant is expected to surmount sequentially.”

11. The first question that this tribunal should address itself is whether the claimant has established a prima facie case with a probability of success. In the case of Mrao v First American Bank of Kenya Limited & 2 Others [2003] eKLR the court defined a prima facie case as one which on the material presented in court, a tribunal property directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the respondent. And so this this case, the question is whether the Applicant has pleaded a right that has been infringed or about to be infringed. The Applicant’s claim is that the Respondent threatens to sell the security that was given to secure the land. The law allows the Respondent, as chargee, to exercise its statutory power of sale in the event of default by applicant, as the borrower, to repay the loan. Section 90(1) of the Land Act, provided that if a chargor is in default of any obligation and fails to pay interest or any other periodic payment or any part thereof due under a charge or in the performance or observation of any covenant, express or implied, in a charge, and continues to be in default for one month, the chargee may serve a notice in writing on the chargor requiring him to pay the money owing, or to perform and observe the terms of the agreement.

12. Therefore, the Applicant’s rights would not be infringed if the security is realized by the Respondent. However, in the Claim, the Applicant is raising issues which if the same be true, then realizing the security at this time would infringe his right to have his property back when the loan has been paid. The Applicant is raising issues of commercialization of his loan, and lack of clarity in the loan statement. We feel that this raises serious triable issues that if well proven by the Applicant, he has a probability of success.

13. On the second question of suffering irreparable loss that cannot be adequately compensated through damages, the court in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal further held that:“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prim facie, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the Applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.

14. The Applicant has informed this Tribunal that he will suffer irreparable loss for the reason that he has already paid more than 23rd of the loan, and also that he took the loan to purchase the property that is the subject of this Application. We find that the Applicant has not demonstrated irreparable harm that cannot be compensated by damages that he will suffer should the orders not be granted.

15. On the balance of convenience, the court in case of Chebii Kipkoech v Barnabas Tuitoek Bargoria & another [20191 eKLR, the court stated thatAlthough it is called balance of convenience it is really the balance of inconvenience and it is for the Plaintiffs to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.

16. The Applicant informed this court that he bought the subject property with the loan that is in contention to be in default. The Applicant has repaid the land over a number of years before encountering financial challenges. According to the Respondent, [it has legitimate rights to enforce the terms of the loan agreement. This is not disputed. Therefore, it would be a convenience for them to realize the security. However, the inconvenience to the Applicant will be greater because, although the sale can be compensated, it is in terms of money and not in terms of the land and will be difficult to get any two similar parcels of land. We find, therefore, that the balance of convenience favors the Applicant.

17. In the upshot we find merit in the Applicant’s Notice of Motion dated 4th December 2023 and make the following ordersi.Pending the determination of this Claim, an injunction is hereby issued restraining the Respondent either by themselves, their agents, servants, personal representatives andor successors in title (if any) from interfering with, attaching, selling, or putting up for sale either by public auction or private treaty or otherwise transferring andor in any way disposing of the ClaimantApplicant’s property land reference number KAJIADOKAPUTEI-NORTH30546. ii.Costs in the cause.iii.Pre- trial directions on 6. 2.2025.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF OCTOBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 31. 10. 2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 10. 2024HON. BEATRICE SAWE MEMBER SIGNED 31. 10. 2024HON. FRIDAH LOTUIYA MEMBER SIGNED 31. 10. 2024HON. PHILIP GICHUKI MEMBER SIGNED 31. 10. 2024HON. MICHAEL CHESIKAW MEMBER SIGNED 31. 10. 2024HON. PAUL AOL MEMBER SIGNED 31. 10. 2024**Tribunal Clerk JemimahMr. Onchiri for ClaimantMs. Aguti holding brief for Wasike advocate for Respondent.Ms. Aguti – I pray for 14 days leave to appeal.Onchiri – We object