[2021] KECPT 563 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.55 OF 2021

MARY KEMUNTO MAYIEKA & 104 OTHERS .................................CLAIMANT

VERSUS

URITHI HOUSING CO-OPERATIVE SOCIETY LIMITED...1ST RESPONDENT

SAMUEL NGUNDO MAINA..........................................................2ND RESPONDENT

RULING

1. There are 2 Applications before the Tribunal for consideration as follows:

a. Notice of motion dated 27. 1.2021 and filed in court on 29th January 2021 by the Plaintiff/Applicant.

b. Notice of motion dated 12. 2.2021 filed on even date by the Respondents.

2. The Applications were directed to be dispensed off by way of written submissions.

a. Claimants filed their Further Affidavit dated 25. 2.2021 on 26. 2.2021 and their submissions dated 11. 3.2021 were filed in court on even date for both Applications.

b. The Respondents filed their Replying Affidavit dated 22. 2.2021 on even date and Further Affidavit dated 11. 3.2021 on even date.

The Respondent’s submissions are dated 23. 3.2021 and filed on 25. 3.2021.

3. FIRST APPLICATION

The Notice of Motion dated 27. 1.2021 and filed in court on 29. 1.2021 is brought under Order 39 Rule 5, Order 40 Rule 1 and Order 51 Rule 1 of the Civil Procedure Rules 2010 and Section 1A, 3A and 63 (e) of the Civil Procedure Act and all other enabling provisions of law) and seeks for several orders against the Respondent.

a. That this Application be certified as extremely urgent and one deserving to be heard ex-parte in the first instance.

b. That pending the hearing and determination of this Application interparties, the Honorable court be pleased to grant a freezing order barring any form of transactions and attaching before judgment any such sums in the following bank accounts held by the 1st Respondent as may be sufficient to satisfy any decree as may issue herein, that is to say:

(i) EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

(ii) EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii) EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

(iv) FAMILY BANK ACC.NO. 005000047564- Thika Branch

(v) SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi) NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii) UNAITAS BANK ACC. NO. 010024486- Thika Branch.

(viii) HFCK Acc. NO. 9364193201 Rehani House branch.

(ix) UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

c. That pending the hearing and determination of this suit, the Honourable court be pleased to order and direct that the 1st Respondent to produce and place at the disposal of the Tribunal all such sums in the following bank accounts held by 1st Respondent as may be sufficient to satisfy any decree as may issue herein, that is to say:

(i) EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

(ii) EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii) EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

(iv) FAMILY BANK ACC.NO. 005000047564- Thika Branch

(v) SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi) NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii) UNAITAS BANK ACC. NO. 010024486- Thika Branch.

(viii) HFCK Acc. NO. 9364193201 Rehani House branch.

(ix) UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

d. That this Honourable Tribunal be pleased to issue a temporary injunction order restraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging , transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this application interparties.

e. That this Honourable Tribunal be pleased to issue a temporary injunction order restraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging , transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this suit.

f. That costs of the Application be borne by the Respondents.

What is pending for determination are orders:

(i) Spent

(ii) Spent

(iii) That pending the hearing and determination of this suit, the Honourable court be pleased to order and direct that the 1st Respondent to produce and place at the disposal of the Tribunal all such sums in the following bank accounts held by 1st Respondent as may be sufficient to satisfy any decree as may issue herein, that is to say:

a. EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

b. EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

c. EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

d. FAMILY BANK ACC.NO. 005000047564- Thika Branch

e.SIDIAN BANK ACC.NO.01012020002623- Thika Branch

f.NATIONAL BANK investment account no. 01285093059500- Thika Branch.

g.UNAITAS BANK ACC. NO. 010024486- Thika Branch.

h.HFCK Acc. NO. 9364193201 Rehani House branch.

i.UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

(iv) That this Honourable tribunal be pleased to issue a temporary injunction order restraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging, transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this application interparties.

(v) That this Honourable Tribunal be pleased to issue a temporary injunction order restraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging, transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this suit.

(vi) That costs of the Application be borne by the Respondents.

4. The Application is supported by the Affidavits of:

(i) Elijah Isaac Mukuru

(ii) Floridah Kagendo Kithinji

(iii) Evaline wanjiru kibicho

(iv) Hezron Nganga Mbogo

As mandated and with authority of their Co-claimants sworn on 27. 1.2021.

5. The facts of the case and Application as averred by the Claimants are that the 1st Respondent is the registered owner and with exclusive possession and occupation of land known as Mavoko Town Block/3/52732 situated in Machakos County.

6. The 1st Respondent began a development project called Urithi Housing Co-operative Society Osten Terrace Gardens Apartment herein after referred to as ‘the project’.

By various written agreements made on even dates by the Claimants it was agreed the 1st Respondent would oversee development of the project.

7. The Claimants are apprehensive that since the year 2016 when they signed up for the project and have been paying for the same, there are “Rumours” that the 1st Respondent intends to apply for insolvency to defeat the current suit.

Further, the completion date of the project was 12 months from date of execution. Time was of essence as per clause 5 of the contract which was in standard form.

8. There is breach by the 1st Respondent for failure to complete the project.

Despite efforts by claimant to have amicable solutions the Respondent has been giving empty promises.

9. The Claimants are apprehensive that they may lose out or their investment and/or money.

10. The Respondents on their end filed a Replying Affidavit sworn on 22. 2.2021 and filed on even date.

In the Application therein through the 2nd Respondent they opposed the averments of the Notice of Motion.

In summary he stated the amount of money paid by Claimants as perclause4. 4of the contract it authorizes the 1st Respondent to utilize the money received Kshs.174,373,019. 10/=.

11. The Replying Affidavit further went on to blame the Claimant for the slow pace of completion of the project. Respondent stated the Claimants Paragraph 13 Replying Affidavit and went on the state the project could no longer be completed using the initial cost and that Claimant have a balance of Kshs.57,869,843/= which remains unpaid.

12. In essence the Respondents are faulting the Claimant’s for the stalling of the project because of the frustrations from the project members.

Further they instructed it would be unfair for the Tribunal to freeze all transactions on account because they (Respondents) have over 50 active land and housing projects and thus are unable to fund the projects because of the order.

13. Analysis

The Application herein raises involuted issues.

The view of the Tribunal as regards the Application dated 27. 1.2021 is that the Claimants are seeking to have or preserve their ownership to the project which project seems to have stalled.

Despite the two parties having meetings the same have not bore any fruits and now the claimants are apprehensive they are on the losing end.

14. Prayer No. 1- spent

Prayer No. 2- spent

a. Although spent the Respondents have challenged the orders of the Tribunal and want the same vacated. The substance is whether the court can grant an order freezing and barring any norm of transactions and attaching before judgment any such sums in the following bank accounts held by the 1st Respondent as may be sufficient to satisfy any decree as may issue herein, that is to say:

(x) EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

(xi) EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(xii) EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

(xiii) FAMILY BANK ACC.NO. 005000047564- Thika Branch

(xiv) SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(xv) NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(xvi) UNAITAS BANK ACC. NO. 010024486- Thika Branch.

(xvii) HFCK Acc. NO. 9364193201 Rehani House branch.

(xviii) UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

It is not in dispute there are contentious issues on uncompleted projects which result to breach of contract which ought to be determined at full trial.

To avoid complicating the matters and to have both parties at ease we find it prudent for Order No. 2 to be in place pending hearing and determination of the suit.

b. That pending the hearing and determination of this suit, temporary injunction order is hereby granted directing that the 1st Respondent to produce and place at the disposal of the Tribunal all such sums in the following bank accounts held by 1st Respondent as may be sufficient to satisfy any decree as may issue herein, that is to say:

(i) EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

(ii) EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii) EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

(iv) FAMILY BANK ACC.NO. 005000047564- Thika Branch

(v) SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi) NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii) UNAITAS BANK ACC. NO. 010024486- Thika Branch.

(viii) HFCK Acc. NO. 9364193201 Rehani House branch.

(ix) UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

15. That a temporary injunction order restraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging , transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this suit is hereby granted.

In the book of Goode on Commercial Law, 4th Edition page 1287.

“ The grant of a freezing injunction is governed by principles quite district from those laid down for ordinary interim injunctions .....before granting a freezing injunction the court will usually require to be satisfied that:

a. The Claimant has “ a good arguable case” based on pre-existing cause of action.

b. The claim is one over which the court has jurisdiction.

c. The Defendant appears to have assets within the jurisdiction.

d. There is a real risk that those assets will be removed from the jurisdiction or otherwise dispatched if the injunction is not granted; and

e. There is balance of convenience in favour of granting the injunction.

f. The court can also order disclosure of documents or the administration of requests for further information to assist the Claimant in ascertaining the location of the Defendant’s assets.”

16. The Tribunal gramples with the fact that they do not have sufficient evidence as to the audited financial statements of the 1st Respondents to determine to what extent or exact amount to which the freezing order should apply.

Thus our decision for the freezing order to apply in all the accounts as mentioned in the Application.

17. The prayers for injunction is further granted in terms of prayers to preserve not only the status quo but the project at hand.

18. SECOND APPLICATION

The Applicant is the 1st and 2nd Respondents Notice of Motion dated 12. 2.2021 filed on even date. The said Application is seeking for orders that:

1. That this application be certified urgent and heard ex-parte in the first instance;

2. That this Honourable Tribunal be pleased to discharge, vary and/or set aside the exparte orders made on 1st February, 2021 freezing the 1st Respondents Bank Accounts; and

3. That costs of this application be provided for.

All this application is seeking is to set aside the interim orders granted on 1. 2.2021.

19. Question therefore is whether there evidence in the contrary or any documentation to convince us that the said orders should be set aside.

Are there any convincing reasons for the Honorable Tribunal to set aside its orders.

The Respondents submissions dated 23. 3.2021 and filed on 25. 3.2021 state no evidence that the Claimants cash is in those accounts.

The flipside the Respondents have not evidenced either where the Claimant’s cash is being held and or how it’s been utilized.

Thus the Notice of Motion dated 12. 2.2021 fails.

20. Conclusion

The following are the orders granted in relation to the following applications:

1. The Claimant Notice of Motion dated 27. 1.2021 is allowed in the following terms:

21. Freezing of account in Equity bank Account No.

a. EQUITY BANK ACC. NO. 0340271096554 – Thika Branch.

b. EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

c. EQUITY BANK ACC.NO. Investment Account No. 0340262609391- Thika Branch.

22. An order for interlocutory injunction is hereby grantedrestraining the Defendants, whether by themselves, agents, or servants from doing any of the following acts, that is to say, disposing off, selling, charging, mortgaging, transferring or in any other manner whatsoever dealing with all that parcel of land known as MAVOKO TOWN BLOCK 3/52732 to the prejudice of the Claimants pending the hearing and determination of this suit.

23. Costs to be in the cause.

2. The Respondent’s Notice of Motion dated 12. 2.2021 is allowed in terms of unfreezing the non-equity Accounts.

a. FAMILY BANK ACC.NO. 005000047564- Thika Branch

b. SIDIAN BANK ACC.NO.01012020002623- Thika Branch

c. NATIONAL BANK investment account no. 01285093059500- Thika Branch.

d. UNAITAS BANK ACC. NO. 010024486- Thika Branch.

e. HFCK Acc. NO. 9364193201 Rehani House branch.

f. UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

3. We further order and direct for the parties to comply by filing and serving witness statement and documents within 21 days herein.

4. Mention for Pre-trial directions and fixing a hearing date on 5. 7.2021.

Judgment signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia Chairperson Signed 27. 5.2021

Hon. J. Mwatsama Deputy Chairperson Signed 27. 5.2021

Mr. P. Gichuki Member Signed 27. 5.2021

Tribunal clerk Leweri

Omondi holding brief for Gachie for Appellants: Present

Miss Gitau for Respondent.

Mention on 5. 7.2021.

Hon. B. Kimemia Chairperson Signed 27. 5.2021