[2024] KECPT 1689 (KLR)

Musyoka v Sumbi (Tribunal Appeal 381/E151 of 2021) [2024] KECPT 1689 (KLR) (3 October 2024) (Judgment)

Neutral citation: [2024] KECPT 1689 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Appeal 381/E151 of 2021

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

October 3, 2024

Between

Joseph Mulinga Musyoka

Claimant

and

Manasses Sumbi

Respondent

Judgment

1. This Judgement relate to the prayers that were sought by the Claimant/Respondent vide a Notice of Motion Application dated 16th June 2022. Through this Tribunal Ruling dated 27th April 2023 which was delivered on the instant date. The Tribunal made the following orders:i.That the Notice of Motion dated 16th June 2023 was allowed.ii.That a stay of the execution of the Decree issued on 19th April 2023 and the subsequent orders was granted.iii.That the ex-parte Judgement dated on 14th March 2022 was set aside.iv.That the respondent was granted leave to be heard.v.That costs of the Application were not granted.

2. Having granted the Respondents/Applicant an opportunity to be heard, The Tribunal set a Hearing date to be held on 21. 02. 2024.

Claimant’s Case 3. In his testimony, The Claimant produced and adopted his Statement of Claim, Witness Statement dated 6. 08. 2021 and Further Witness Statement and List of Documents both dated on 22. 05. 2023. Further, The Claimant stated that he guaranteed The Respondent a loan in 2014 and when he left employment with Cherron in 2015, The Respondent defaulted to repay the loan.As provided under Clause C of the Loan Application Form for Cherron Savings & Credit Society under the heading “Repayment Guarantee”, The Sacco sent several emails to the guarantors to persuade the loanee to repay the loan. When the Respondent failed, The Sacco went ahead to recover Forty Thousand Five Hundred and Forty-Two Kenya Shillings (Kshs. 40,542) from The Claimant on 31. 08. 2019 which was refunded to him by The Respondent via M-Pesa on 12. 10. 2020.

4. The Claimant contended that the Respondent owe him Fifty-Seven Thousand Six Hundred and Fifty Kenyan Shillings (Kshs. 57,650) which according to Paragraph 7 of the statement he tabulated them as follows:a.Loss of Shares worth Forty Thousand Five Hundred and Forty-Two Kenyan Shillings (Kshs. 40,542/=)b.Loss of dividends for the Year 2019 and 2020 = Eight Thousand, One Hundred and Eight Kenyan Shillings and Forty Cents (Kshs. 8,108. 40)c.Loss of opportunity cost resulting from denial of Loan of Thirty Thousand (Kshs. 30,000)d.Legal Fees for this matter Twenty Thousand Kenyan Shillings (Ksh. 20,000)Total Less 98,650. 4041,000. 00Balance Ksh. 57,650. 40

The Respondent’s Case 5. The Respondent/Applicant relied on the averments in his Witness Statement dated 25. 10. 2021 and confirmed that he was cleared by The Sacco. He stated that he continued to pay his loans and up to the time that the Sacco recovered the balance of One Million Four Hundred Thousand Kenyan Shillings (Ksh. 1,400,000) from his shares and the balance from his guarantors.Finally, The Respondent confirmed that he refunded The Claimant Forty-One Thousand Kenyan Shillings (Ksh. 41,000) as a repayment for the amount deducted by The Sacco as his guarantor.

6. A look at Paragraph 4 of The Respondent’s Statement of Defence dated 25. 10. 2021 and Paragraph 3 of The Respondent’s Witness Statement speak to the same issue where he stated:“That I do remember receiving information from The Claimant that some of his shares were deducted because of being my guarantor, an allegation that was not substantiated and that he had lost Forty Thousand Five Hundred Forty-Two Kenyan Shillings (Kshs. 40,542) as my guarantor. I was perplexed since I had repaid the Loan. However, to protect the Claimant’s interest, I refunded him by sending an amount of Forty-One Thousand Kenyan Shillings (Kshs. 41,000) [Via M-Pesa]…”

7. On this refund, The Claimant stated that the Respondent refunded only when he was served with summons and a Plaint in Cause No. 389/2020 from Milimani Chief Magistrates Court.

8. At the end of the Hearing the Tribunal directed as follows:i.The Claimant to file and serve Written Submissions within 14 days herein.ii.The Respondent to file and serve Written Submissions within 14 days upon receipt of the Claimant’s Written Submissions, failure to which either party can file his Written Submissions.

9. As at the date of writing this Judgement, The Claimant has not filed and served his Written Submissions. However, failure by The Claimant to comply with The Tribunal’s directives does not stop it from determining the matter at hand.

10. Having ruled on the prayers sought on the Notice of Motion Application dated 25. 10. 2021, which was delivered on 27. 04. 2023 what remained for determination was the claim for Fifty-Seven Thousand Six Hundred and Fifty Kenyan Shillings (Kshs. 57,650) which was scheduled for hearing at the behest of the Respondent who had argued out that the ex-parte Judgement had condemned him unheard.

11. At the Hearing, The Claimant listed the amounts stated under Paragraph 4 of this Judgement. A perusal of this list of amounts and the testimony of The Claimant, it is clear that the Respondent paid Forty-One Thousand Kenyan Shillings (Kshs. 41,000) on 12. 10. 2020 being refund of the Sacco.Whether The Respondent refunded the money after being served with summons for Case No. E380 of 2020 filed at Milimani Commercial Court OR NOT, the fact remains that The Respondent refunded The Claimant the amount.On this, we have nothing to add.

12. As for loss of Eight Thousand, One Hundred and Eight Kenyan Shillings and Forty Cents (Kshs 8,108. 40) being dividends for the year 2019 and 2020. It is a matter of Accounting that dividends are declared from declared from audited accounts of a given entity. Section 25 of The Co-operative Society’s Act Cap 490 provides how every Co-operative Society shall keep their accounts which should be audited yearly.Flowing from the audited accounts of a society Section 48 of The Co-operative Society’s Act provides for the distribution of the Net Balance and reads;“Subject to Section 46 and 47, Th Net balance of each Year with any sum available for distribution from previous years, may be distributed in the manner prescribed by rules made under this Act or by the By-Laws of The Society”

13. The claimant in this instant case did not file the Sacco’s audited accounts for the Year 2019 and 2020 or resolution of her members in an Annual General Meeting which approved the payment of dividends for the year 2019 and 2020. Failure to file or produce the balance sheet of the Sacco, the By-Laws of the Sacco and the declaration in form of a resolution by members of the Sacco makes the claim for dividends to out-rightly fail.

14. Turning to the loss of opportunity cost resulting from denial of loan by the Sacco, our attention is drawn to the Part C of the Respondents Loan Application Form dated 09. 04. 2014 under the heading Repayment Guarantee which reads:“We, the undersigned hereby accept jointly and severally liability for the repayment of the Loan in the event of the borrower’s default.We understand that the amount in default may be recovered by an offset against our deposits in the Society or by attachment of our property or salary and that we shall not be eligible for loans unless the amounts in default has been cleared in full (Emphasize ours).”In this Application Form, The Claimant is listed as Guarantor No. 3 out of 10 guarantors who signed the loan for The Respondent.

15. Given that the claimant read and understood the contents as worded in the guarantor-ship, The Claimant knew that as long as the guaranteed loan is still outstanding, each of the guarantors would not be eligible for loans until the amount is paid in full. It therefore defeats logic that The Respondent for his failure to obtain loan is a risk that he understood from the beginning and he can only blame himself for entering into a risk disenfranchised him.

16. Further, The Claimant has not filed evidence on how he arrived at The Claim for the loss of opportunity cost amounting to Thirty Thousand Kenyan Shillings (Kshs. 30,000). The Claimant would have helped The Tribunal if he had provided evidence on the basis that he used to arrive at the loss of the amount claimed.

17. Finally, we note that The Claimant added an amount of Twenty Thousand Kenyan Shillings (Kshs. 20,000) to his Claim and termed it as Legal Fees for this matter. Here The Claimant has assumed the role of a Player and an Umpire and at whatever vintage point he sits/plays in, he awarded himself Twenty Thousand Kenyan Shillings (Kshs. 20,000). It should be not lost that costs are awarded in any Court and calculated as provided under Advocates Remuneration Order. The Tribunal is at a loss to what basis and under which Law/Rules that The Claimant is claiming Legal Fees Costs of Twenty Thousand Kenyan Shillings (Kshs. 20,000). The Advocates on record are aware that “Costs follow the event” and they also know that the issue of costs are never factored in a Statement of Claim or a Defense like in the instant Application.

18. Paragraph 7(d) of The Claimants Statement of Claim dated 06/08/2021 point to this and state: Paragraph 7 “As a result of the Respondent’s action The Claimant”a.Lost his shares worth Kshs. 40,542(paid on 12. 10. 2020)b.Lost all dividends for the year 2019 &2020 totaling Kshs. 8,108. 40/=c.Was denied a loan equivalent to 3 times his savings for a loan he took in February 2020. The claimant therefore demands payment of Kshs. 30,000/= being opportunity cost; andd.Has incurred Twenty Thousand Kenyan Shillings (Kshs. 20,000) being Legal Fees for handling this matter.Indeed, we find this portion of Claim to be misplaced Legal Fees/costs are at the discretion of a Court/Tribunal and only awarded when a matter has gone through or half through the process of the court.

19. The Claimant did not file any evidence of The Court which awarded him the Twenty Thousand Kenyan Shillings (Kshs. 20,000) and as such This Tribunal cannot be dragged into costs that have not been proved. We therefore dismiss/disallow the claim.

20. Finally, with the facts as stated and the Oral Hearings that took place, we find that The Claimant has failed to provide Persuasive Evidence to support his averments. We therefore find that The Claimant’s Statement of Claim dated 6. 08. 2021 has no merit and is hereby dismissed. On the other hand, we find that The Respondent has proven his case on a balance of probability. Consequently, we hereby enter Judgement in favour of the Respondent against The Claimant with costs and interest.The claim by the Claimant is found to be without merit and is dismissed with costs to The Respondents.

JUDGEMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF OCTOBER,2024. Hon. B. Kimemia - Chairperson Signed 3. 10. 2024Hon. J. Mwatsama - Deputy Chairperson Signed 3. 10. 2024Hon. Beatrice Sawe - Member Signed 3. 10. 2024Hon. Fridah Lotuiya - Member Signed 3. 10. 2024Hon. Philip Gichuki - Member Signed 3. 10. 2024Hon. Paul Aol - Member Signed 3. 10. 2024Hon. Michael Chesikaw - Member Signed 3. 10. 2024Tribunal Clerk J. MutaiNo Appearance by Parties.Judgement Delivered in their absence.Hon. J. Mwatsama - Deputy Chairperson Signed 3. 10. 2024