[2025] KECPT 271 (KLR)

Krauser v Tai Saving and Credit Society Limited (Tribunal Case 58/E144 of 2024) [2025] KECPT 271 (KLR) (29 April 2025) (Judgment)

Neutral citation: [2025] KECPT 271 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 58/E144 of 2024

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

April 29, 2025

Between

Irene Muthoni Krauser

Claimant

and

Tai Saving and Credit Society Limited

Respondent

Judgment

1. On the 19th day of February, 2024, the the Claimant filed her Statement of Claim of even date wherein she prayed for Judgement against the Respondent fora)Kenya shillings 60,370/=b)Cost of the Claimc)Interest on (a) and (b) herein at court rate from the date of filing the claim(d)Any other relief this Honourable Tribunal deems just and fit to grant.

2. The Claimant Claim is that at all material times ,she was a member of the Respondent under membership number 0010108357 by virtue of which she paid into the Respondent the sum of Kshs.3,349,637/=that the Claimant requested for a loan from the Respondent and was informed that her loan request would be reviewed during the upcoming board meeting .That after several board meetings the Respondent informed the Claimant that she would not be issued with the loan that the claimant decided to withdraw her membership and requested for her savings that the Respondent refunded her savings of kshs.3,289,267/=,remaining with a balance of Kshs.60,370/= that upon inquiry ,the Respondent informed the Claimant that they had carried out ‘unsanctioned valuation’ of her property (Kajiado,/Kaputei North/120247&120248) without informing the Claimant which valuation was for ,the sole purpose of due diligence and authorized by the Respondent solely that it had been agreed by the parties that no charges would be payable /incurred by the claimant prior to issuance of the loan.

3. The Claimant Claims she paid sum of Kshs. 60,370/= which she avers that the Respondent has refused to refund despite demand.

4. In response to the statement of Claim, the Respondent on the 1st July 2024, filed the statement of defence dated 25th June, 2024; wherein it denied the claimant’s that parties had agreed that no charges would be payable /incurred by the Claimant prior to issuance of the loan and stated that the Claimant was aware of the charges to the valuer as a pre -requisite to the approval of the loan and that the only way the Respondent would determine if the property was sufficient as a security is by undertaking the valuation to inform the decision to advance the loan or not, that the valuation would be at the Claimant’s expense and she was well aware ;that the claimant’s titles on her two properties were forwarded to the Respondent by the Claimant contractor for a search and valuation after which the Respondent instructed Top mark valuers which listed the property and prepared a report and issued a fee advice note for professional services rendered and that the Claimant was informed about the fee via email on 19th April 2023 .

5. The Respondents claims further in its defence that the Claimant’s loan was at the loan request stage where it had to be approved by the branch credit committee and the management credit committee.

6. When the Claimant made a request to withdraw her savings before the said approval that the kshs.60,370/= was used in ultimate Payments that the sum of kshs.58,200/=was paid to Top mark valuers as valuation fee of the Claimant’s Land Kajiado kaputei North 120247 and Kajiado kaputei North 120248 where the sum of Kshs.1,500/=was the RTGS Fees after the transfer of kshs.3,289, 267/= to the Claimant’s Kcb Bank account on 18th August 2023 ,kshs.500/=went to operation and kshs.170/= went to miscellaneous expenses that despite attempt to explain to the claimant the purpose for which the funds were expended to no avail.The Respondent prays that the Claim be dismissed with cost.

Hearings 7. At the hearing which proceeded virtually the Claimant adduced sworn evidence.

8. She adopted as her evidence in chief, her witness statement of claim dated 19th February 2024 and produced the documents attached thereto as claimant exhibits 1-4. further the Claimant stated that she was introduced to the respondent for the purpose of borrowing of a loan of kshs.4,000,000/=that she paid over Kshs.3,300,000/=towards the requested 10%but before she reached Kshs. 4,000,000/= in payment ,she was told to stop paying as she would not get the loan that her money was refunded less Kshs.60,000/=or thereabout that there was no agreement that they would take my money for valuation and they held her money for about four months and she filed the claim at the Tribunal

9. On cross examination the Claimant was asked why she gave out the titles if she knew the loan was unsecured.

10. She confirmed she gave out two titles that she becomes aware about the security, When they told her about the valuation that she was aware the board needed to review my application and that the 10% payment would guarantee her the loan that she only agreed with Margaret an employee of the Respondent about, the payment of the valuation because she wanted to secure the big amount.

Respondent Case 11. The Respondent witness Paul Gitau a branch manager of the Respondent adduced sworn evidence wherein he adopted his witness statement dated 24/6/2024 as the Respondent evidence in chief as well as the list of documents dated 25th June 2024,the documents of which he produced in evidenced and marked as the Respondent exhibit 1-5.

12. Further, the witness stated that the Claimant was aware that there would be valuation and there were email to that effect, that the deducted sum of kshs.600, 370/=made up as follows;1. Valuers fees –kshs.58, 200/=2. RTGS Cost-Kshs.1, 500/=3. Account Minimum-Kshs.500/=4. Non Withdraw able Deposits –Kshs.1005. Benevolent –Kshs.70

13. The witness stated further that the witness was impatient and initiated the cessation of the loan process and the Respondent had to refund the Kshs .4,000,000/=loan was to be secured by the claimants two properties ,that valuation was to be done on the two securities , that the process did not reached the charging stage.

14. On cross examination, the Respondent witness stated that there was email communication with claimant about the valuation and the valuers invoice was sent to her that the valuer and were limited to work together.

15. On re-examination the witness stated that the valuers’ fee is totally paid separately and not deducted from the loan amount and it is payable whether the loan is approved or not, that the claimant in this case acknowledge the service and confirm the payment.

16. As at the time of writing this Judgement, the only submissions on record were the claimant’s submissions dated 7th February 2025.

Determination 17. We have considered all the pleadings and documents filed by the parties herein in support of their respective cases and only have one issue whether or not the claimant entitled to payment of kshs.60,370/=.

18. From the evidence placed before the Tribunal it is clear that the Claimant joined the Respondent solely for the purpose of borrowing a loan hence her effort to raise the deposits .Hence her withdrawal when the loan process either took long or she believed it would not be granted.

19. It is not in dispute that the claimant was refunded the sum of kshs.3, 289,207/=leaving the sum of kshs.60, 370/=

20. It is common knowledge, and accepted undying practice that every lender who requires security by way of title, land must undertake valuation of the security it is not in doubt that it proposed loan of kshs.4, 000,000/= would have to be secured and that by providing the two title deed to the Respondent the Claimant intended the same to be utilize as security.

21. It is not clear to us whether the Claimant withdraw as result of her own impatience or whether she withdrew when somebody mention to her that she would not obtain the kshs.4,000,000/= loan. what is evident to us is that at some point the claimant was informed that the parcel of land would have to be valued before the loan could be approved in line with the valuation and it is also evident from the emails of the 15th august 2023 and 16th august 2023 between the claimant and the Respondent Damaris Githinji, that the Claimant was aware of the valuation fees, she confirmed and to the deduction of the same. Indeed the claimant admitted at the hearing that her intention was to get the big amount first.

22. It goes without saying that cost of application and processing of loan are usually borne by the applicant whether the application succeed or not.

23. We have no reason to doubt the amount of the valuers in .the absence of letter dated 19th April, 2023,any evidence that would be it would under in, the presence and ease agreed not to be charged any cost on the loan processing and value of the totality of the evidence presented ,we find that the claimant is not entitled to the valuation fee of kshs.58,200/=additionally ,the Claimant cannot claim the payment of the RTGS cost of kshs.1,500/= having acknowledged that the remaining was transferred to her account bas per the RTGS form produced by the Respondent, however we found the Claimant is entitled to refund of remaining sum of Kshs 670/=.

24. In the upshot we enter Judgement in favour of the Claimant against the Respondent for the sum of kshs.670/=with interest with the Tribunal rate from the date of filing of suit. Each party to bear own cost of claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF APRIL, 2025. HON. B. KIMEMIA - CHAIRPERSON SIGNED 29. 4.2025HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 29. 4.2025HON. BEATRICE SAWE - MEMBER SIGNED 29. 4.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 29. 4.2025HON. PHILIP GICHUKI - MEMBER SIGNED 29. 4.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 29. 4.2025HON. PAUL AOL - MEMBER SIGNED 29. 4.2025Tribunal Clerk J. KokiMs. Theuri advocate for ClaimantMs. Wanjiku advocate holding brief for Muthama advocate for Respondent