[2014] KEHC 3422 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

MILIMANI COMMERCIAL & ADMIRALTY DIVISION

CIVIL CASE NO. 482 OF 2010

MUTHUI WA KARIUKI.............................................................PLAINTIFF

VERSUS

TEMBO CO-OPERATIVE SAVINGS & CREDIT SOCIETY.......DEFENDANT

R U L I N G

1. The Defendant herein lodged a Notice of Preliminary Objection dated 24th March 2014. It requested of this Court to strike out the Plaintiff’s suit as it submitted that the same was bad in law, an abuse of the Court process and offended the provisions of the Co-operative Societies Act (1997) (hereinafter “the Act”). It maintained that the suit was improperly before Court. The Notice of Preliminary Objection was filed the day before this suit was to be heard on 25th March 2014. On that day counsel for the Plaintiff felt it prudent to allow the Preliminary Objection to be heard before proceeding with the hearing of the suit proper. It was consequently agreed that the Defendant would put in its written submissions first, to be followed by those of the Plaintiff.

2. The Defendant’s submissions commenced with it referring this Court to the nature and scope of a “preliminary issue” as per the definitive statement ofLaw JA in the well-known case ofMukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696. Thereafter, the Defendant submitted as regards the jurisdiction of the Court stating that to go on with the hearing would be a waste of the Court’s time. It referred the Court to the case ofS. K. Macharia v Kenya Commercial Bank Ltd & 2 Ors (unreported) as regards a court of law exercising jurisdiction as confirmed by the Constitution or other written law. The Defendant then got to the meat of its submissions by referring to the provisions of section 76 (1b) of the Act which provides:

“If any dispute concerning the business of a cooperative society arises:-

(b) between members, past members or deceased members, and the society, its committee or any officer of the society it shall be referred to the Tribunal.”

The Defendant then submitted that the particular section of the Act had been referred to in a number of cases includingOl Kalou Farmers Sacco Savings & Credit Co-operative & Anor v Pius Njoroge (2006) eKLR, John Ayuga & 30 Ors v Garo Sacco Ltd Misc. Civil App. No. 620 of 2001 (2009) eKLR as well asGerald W. Makau v Lukenya Ranching & Farming Co-Operative Society Ltd & 8 Ors HCCC No. 80 of 2003 (Machakos). All these cases, according to the Defendant, supported the same proposition, that this Court lacked the jurisdiction to entertain a co-operative dispute under section 76 of the Act. The Defendant maintained that it was not in dispute that the Plaintiff was a member of the Defendant and the dispute giving rise to the claim was as between a member of a co-operative society and the society itself. The Defendant was of the view that such was an initial objection that ought to be taken at the preliminary stages of the case. As the Preliminary Objection raised pure points of law, such merited being entertained by this Court.

3. The Plaintiff’s submissions were filed in Court on 26th May 2014. The Plaintiff went straight to the point as to whether his claim fell within the meaning of section 76 of the Act or otherwise. In the opinion of the Plaintiff, the Defendant’s submissions in this regard were intentionally misdirecting this Court either deliberately or otherwise omitting to detail the fundamental part of the section which defines what a dispute amounts to in a matter to be determined by the Co-operative Tribunal. The Defendant set out for the benefit of the Court the provisions of section 76 (2) of the Act which he detailed as follows:

“A dispute for purpose of this section shall include –

a. A claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or

b. A claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not;

c. A claim by a Sacco society against a refusal to grant or a revocation of licence or any other due, from the Authority”.

The Plaintiff went on to say that if the Court examined the Plaint herein it would note that he was seeking judgement on the following grounds:

(a) Trespass by the Defendant

b. Loss of income with respect to the acts of trespass by the Defendant

c. That the Plaintiff would be declared as the lawful owner of the suit property

d. That an injunction do issue as against the Defendant

e. General damages

f. removal of a septic tank

g. Specific damages in the amount of Shs. 9,888,000/- for loss of user.

The Plaintiff maintained that from the above list it was quite clear that the instant suit did not fall within the meaning of “dispute” as envisaged by section 76 (2) of the Act. As to whether this Court lacked jurisdiction, the Plaintiff drew its attention to the provisions of Article 165 of the Constitution which detailed that this Court shall have unlimited original jurisdiction in criminal and civil matters. In the Plaintiff’s view the Defendant’s said Preliminary Objection lacked merit and should be dismissed.

4. At the outset, this Court has no dispute with the Defendant maintaining that its Preliminary Objection can be brought bearing in mind the provisions of theMukisa Biscuit case as above. However, as to jurisdiction, this Court must of necessity examine the issues as before it and if such are not covered by the provisions of section 76 of the Act, then it should hear the Plaintiff’s case. However, where such issues fall within the purview of section 76 (1) then it must of necessity refer the dispute to the Co-operative Tribunal. As was stated by my learned brother Mbogholi Msagha J. in theJohn Ayuga case (supra):

“Unless and until the High Court is seized of a matter between a member or members of a co-operative society on one hand and the co-operative society on the other, it has no jurisdiction to adjudicate in the matter. This is because the Co-operative Societies Act of 1997 has express and explicit provisions addressing the internal mechanisms available to resolve the internal or domestic issues in co-operative societies.”

Again as my learned brother had observed, that case, just as this, was not an appeal under section 81 of the Act which gives this Court appellate jurisdiction over the decisions of the Co-operative Tribunal.

5. I have particularly noted the findings of my learned sister Wendoh J. in theGerald Makau case (supra). I note that the plaintiff in that case was seeking an injunction to restrain the defendant co-operative society from in any way interfering with the peaceful occupation and use of the plot being the subject matter of that suit. The plaintiff therein also sought general and exemplary damages. However, my learned sister’s finding is not binding on this Court but persuasive and I accept her observations in that suit firstly, that the Co-operative Tribunal issues injunctions and secondly, that the suit belonged in the said Tribunal.

6. Paragraph 3 of the Plaint herein reads:

“At all material times to this suit, the Plaintiff was and is still a duly registered member of the Defendant and as such qualified for a plot allocation and was allocated Plot Title Number Nyeri Municipality Block 7/40 measuring 0. 0362 hectares in the Year 1998. ” (Emphasis mine).

The Plaint goes on to detail that the Plaintiff made all necessary payments to the Defendant to facilitate the processing of the Title Deed to the suit property and that the same was released to him in early November 2008. Moreover, it is the Plaintiff’s pleading that because the Defendant delayed the issuance of the Title Deed and deliberately withheld the same, he was unable to use the land for development purposes, hence his prayer for damages. Over and above that, the Plaintiff pleads that the Defendant entered onto the plot and constructed a septic tank thereon. These are all matters which are clearly dealt with in the prayers as set out above. However, and in my opinion, those prayers and the suit as a whole, do concern the business of the Defendant co-operative society and it is a dispute as between a member and the society. The Plaintiff claims title and the suit property from the Defendant; he seeks an injunction to prevent the Defendant from going on to the suit property; he seeks damages for loss of user and the removal of the septic tank that he maintains has been constructed by the Defendant society on the suit property. In my view, these are all matters concerning the business of the Defendant co-operative society in its relations/dealings with its member.

7. As a result, I uphold the Defendant’s Preliminary Objection and find that this matter is improperly before this Court. As such it is an abuse of this Court’s process and should have been filed in the Co-operative Tribunal. Accordingly, I find that this Court lacks jurisdiction to entertain this matter as filed and the same is struck out with costs to the Defendant.

DATED and delivered at Nairobi this 17th day of July 2014.

J. B. HAVELOCK

JUDGE