[2024] KECPT 952 (KLR)

Mitei v Skyline Sacco Society Limited (Tribunal Case 312 of 2020) [2024] KECPT 952 (KLR) (27 June 2024) (Judgment)

Neutral citation: [2024] KECPT 952 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 312 of 2020

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

June 27, 2024

Between

Nicholas K Mitei

Claimant

and

Skyline Sacco Society Limited

Respondent

Judgment

1. Matter for determination is brought vide a Statement of Claim dated 21. 9.2020 filed on 28. 9.2020. The Claimant claims he was a member of Respondent Skyline Sacco Society Limited formerly worked as Baringo Farmers Sacco Limited. He joined the Respondent Sacco in December 2004. On 25. 11. 2009 Claimant and Respondent entered into a loan agreement for grant of a loan which as Baloon Advance for Kshs. 100,000/= which was to be repaid by 30. 6.2010 with an interest of Kshs. 5000/=.The loan was secured by the Claimant’s shares at BOSA and claimant’s shares at BOSA and Claimant’s deposits of FOSA in case of default.Claimant avers he was unable to repay and approached Respondent to reschedule the loan before 30. 6.2010 when the money was due.

2. Further in the year 2018 Claimant and Respondent agreed for Respondent to deduct Kshs. 2000/= per month from Claimant’s monthly income derived from his milk produce which was to cater for the development loan until payment in full.On 26. 10. 2018 when the loan balance of development loan was Kshs. 3,500,000/= the Respondent’s sent Auctioneers to Claimant’s residence without Notice for Proclamation or Warrant of Attachment.As a result, Claimant filed case in Eldama Ravine PM.CC.101 of 2018 which was struck out because of want of jurisdiction.As a result, the Respondent sold the Claimant’s cattle despite their arrangement.

3. Claimant avers because of Respondent’s illegal action the Claimant has lost his cattle as well as income from the milk.Claimant avers his cattle were worth more than Kshs. 930,000/= that is 7 female Friesian cows cost Kshs. 80,000/=.

5 heifers

1 bull (Friesian) Kshs. 20,000/=- Kshs. 30,000/=.

He further avers from the female Friesian cows 6 were milked producing 27-38 litres per day at Kshs. 20-30 per litre to Kiplombe society and or Kabimoi society while evening he would get 13 – 15 litres selling the save at Esagiri Centre at 40 per litre.In any given day the claimant would get Kshs. 1373/=.The Claimant prayers are for:a.An order of permanent injunction restraining the Respondent by itself, its agent’s servant’s and/or employees from attaching and/or selling the Claimant’s properties and/or cattle.b.A declaration that the Respondent’s actions of attaching and/or selling the Claimant ‘s cows was unlawful , illegal and void ab initio.c.An order that the Respondent do compensate the Claimant Kshs. 930,000/= being the value of the cows that were sold unlawfully and/or illegally by the Respondent Kshs. 1373/= per day until the delivery of judgment being the loss of income from the daily milk produce from the cows that were being milked before they were unlawfully sold and loss of expected income from the cows that were about to calve before they were also unlawfully sold and/or any other reasonable and fair award that this Tribunal may find fair to award in respect of what are being sought herein.d.General damages for mental torture and anguish.e.Cost of the claim and interest at court rates.f.Any other or further relief that this Honourable Tribunal may deem fit and just to grant.

4. The Claimant’s filed List of Documents dated 21. 9.2020 filed on 28. 9.2020 which included:a.Advance form dated 25. 11. 2009b.Copy of the court order issued on 30. 10. 2018c.Copy of the court order issued on 15. 1.2020. d.Bundle of claimant ‘s pay slips from Kiplombe F.CS Limitede.Bundle of photographsThe Claimant filed further List of Document dated 5. 11. 2021 filed on 9. 11. 2021 which include:a.Defendant’s List of exhibits dated 9. 1.2019 in Eldama Ravine PMCC.NO.101 of 2018. b.Claimant’s request letter for advance loan dated 25. 11. 2009. c.Advance form dated 25. 11. 2009. d.Defendant’s List of Witnesses dated 9. 1.2019 in Eldama Ravine PM.CCNO.101 of 2018. e.Defendant’s loan recovery Officer’s Zachaeus Kimosop, Statement in Eldama Ravine PMCC NO. 101 of 2018. f.Livestock Valuation Report dated 23. 7.2021 by David Keitany.

5. The Respondent filed Statement of Defence dated 2. 6.2021. they deny the Claimant’s averments however in paragraph 5 the Respondent aver Claimant repaid the loan of Kshs. 100,000/= advanced on 25. 11. 2009. The Respondent denies having been served with any injunctive order from PMCC.NO. 101 of 2018 Eldama Ravine.Other than the Kshs. 100,000/= advanced on 10. 5.2010. Claimant was advanced another loan of Kshs. 100,000/= with interest of 5% per month and Claimant was to repay on or before 10. 6.2010. In the said Loan Agreement the Claimant’s livestock would be sold to recover the outstanding loan arrears Claimant defaulted as at 27. 8.2019 the outstanding loan arrears was Kshs. 218,383/=.

6. Respondent’s filed list of documents dated 14. 10. 2021 filed on 19. 10. 2021 which included:i.Certificate of Registration dated 4. 7.1989. ii.Certificate of Change of name 21. 9.2012. iii.Certificate of Registration dated 4. 7.1989. iv.Advance form dated 10th May 2010v.Loan Agreement Advance form dated 10th May 2010vi.Statement covering period from 10th May 2010 to 31st July, 2015. vii.Interest Account Statement (baloon advance ) covering the period from 1st January 2015 to 28th October, 2020. viii.Proclamation notice dated 19th September, 2019.

7. Matter came for hearing on 6. 12. 2022 where CW1 Nicholas Mitei gave evidence. He adopted his witness statement dated 21. 9.2020 as Evidence- in-Chief and produced documents in his List Documents dated 21. 9.2020 as (exhibit 1-4) and further List of Documents dated 5. 11. 2021 marked as CEX. 5-10. On cross examination he confirmed the Proclamation Notice dated 19. 9.2018 shows 5 cows were proclaimed.CW2 Antony Kibet Mutei adopted his written statement dated 18. 6.2021 confirm the auctioneers took 13 cows.Respondent gave evidence as well. RW1 Joel Barasa Wesonga who recorded his witness statement dated 14. 10. 2021 and adopted it as his Evidence -in -Chief.He confirmed they (Auctioneers) attached 1 cow and 4 calves and sold the cows fetching Kshs. 79,000/=.On cross examination he stated there was no need for a court order to proclaim Claimant’s property. They used the Instruction Letter.He confirmed no advertisement was done for the livestock.RW2- Allan Kiplagat the Chief Executive Officer of Respondent Skyline Sacco recorded witness statement dated 14. 10. 2021 filed on 19. 10. 2021 and adopted it as his Evidence- in -Chief.He produced List of Documents dated 14. 10. 2021. He confirmed the Claimant owes them Kshs. 70,000/= and interest of Kshs. 76,792. 74/=.

8. On cross examination RW2 stated short term loans paid as a one off per month.Development Loans were long term loans with repayment period of over 12 months. Baloon Loan is a short term loan.They confirmed giving instructions to Auctioneers but was not sure if advertisement was done.

9. Parties were to file written submissions with Respondent filing written submissions dated 19. 9.2023 filed on 22. 9.2023. As at the date of writing this judgment Claimant had not filed their written submissions.Having considered the pleadings, evidence and written submissions. The issues for determination are:1. Whether the claimant had an outstanding default loan with Respondent?2. Was attachment of claimant’s cattle lawful?Issue one Whether the claimant had an outstanding default loan with Respondent?It is not in dispute the Claimant took two loans one in 2009 do Kshs. 100,000/= which both parties agree the loan repayment was due.The 2nd loan was taken in May 2010 is the one still outstanding as it were from the Respondent’s List of DocumentsREX 7 shows the Claimant’s interest Account Statement.The Respondent Statement for the Baloon Advance from 1. 1.2015 to 28. 10. 2020 shows interest closing balance of Kshs. 76,792. 93/=.Indeed, it is confirmed the Claimant had an unpaid balance which precipitate the Respondent to act by attaching his good. Claimant confirmed he had no evidence he had computed making payment of his loan.As such from the evidence adduced the Claimant indeed had a balance that he was yet to realize.

10. Issue two Whether the attachment of Claimant’s cattle was lawful?It is not in doubt now that Claimant had not paid up his loan as at 2020 despite having been advanced the loan in the year 2010. Having ‘defaulted’ as it were we ask ourselves when options did the Respondent have to get their loan repaid?When applying for the loan. We look into REX 5 the Loan Agreement form indicates the security was livestock and BOSA shares or Deposit FOSA.Further on page 2 of the REX 5 part C the repayment was to be through milk proceeds, cash and or sale of tomatoes.Upon default then the Respondent had a right to go for the security offered at the advancement of the loan.From the proclamation notice dated 19. 9.2019 the property attached were asper the schedule.Indeed from the loan form what was given as security is livestock and as such it could be attached.The question would be upon attachment how much was realized or ought to have been realized from the sale.The Respondent stated there was a sale and as such realized Kshs. 30,000/= for the Auctioneer fees and Kshs. 28,827/= went to this interest accrued.

11. We ask ourselves then what the reason value of livestock sold.It cannot be that the Claimant would still be owing the Respondent at this stage a Principal Balance of Kshs. 70,000/= and interest of Kshs. 76,792/=.The Proclamation Notice clearly shows the estimated value should have fetched at least Kshs. 288,000/= from the goods attached.All the livestock having been proclaimed and sold we are not convinced that it did not fetch enough to pay the decretal sum.

12. As such looking into the Claimant’s prayers:Prayer A- the goods /inform of livestock have been sold thus has been overtaken by events.Prayer B- fails.The sale of cows was lawful as claimant had given them as collateral.Prayer C – fails.An order that the Respondent do compensate the Claimant Kshs. 930,000/= being the value of the cows that were sold unlawfully and/or illegally by the respondent Kshs. 1373/= per day until the delivery of judgment being the loss of income from the daily milk produce from the cows that were being milked before they were unlawfully sold and loss of expected income from the cows that were about to calve before they were also unlawfully sold and/or any other reasonable and fair award that this Tribunal may find fair to award in respect of what are being sought herein.General damages for mental torture and anguish.Prayer A, B, C and D having failed, prayer for general damages cannot be sustained. UpshotClaimant’s claim dated 21. 9.2020 is found to be without merit and dismissed with no order as to costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF JUNE, 2024. Hon. B. Kimemia - Chairperson Signed 27. 6.2024Hon. J. Mwatsama - Deputy Chairperson Signed 27. 6.2024Hon. Beatrice Sawe - Member Signed 27. 6.2024Hon. Fridah Lotuiya - Member Signed 27. 6.2024Hon. Philip Gichuki - Member Signed 27. 6.2024Hon. Michael Chesikaw - Member Signed 27. 6.2024Hon. Paul Aol - Member Signed 27. 6.2024Tribunal Clerk JonahNo appearance by parties.LaterChelagat advocate for the Claimant.Skyline sacco – No appearance.Hon. J. Mwatsama - Deputy Chairperson Signed 27. 6.2024