[2024] KECPT 1395 (KLR)

Mwangi & 2 others v Tower Savings and Credit Co-operative Society Limited & another (Tribunal Case 54/E087 of 2023) [2024] KECPT 1395 (KLR) (29 August 2024) (Ruling)

Neutral citation: [2024] KECPT 1395 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 54/E087 of 2023

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

August 29, 2024

Between

John Wacgira Mwangi

1st Claimant

Rosemary Gathomi Kamau

2nd Claimant

John Kinuthia Ngugi

3rd Claimant

and

Tower Savings and Credit Co-operative Society Limited

1st Respondent

Mary Muirigo Wainaina

2nd Respondent

Ruling

1. The Application for determination is a Notice of Motion dated 21/11/2023. The Notice of Motion is brought under Rules 7 and 11 of the Co-operative Tribunal (Practice and Procedure) Rules 2009. The Application was seeking for orders;i.That this Honourable Tribunal be leased to make an order for consolidation of this case with Tribunal case no. E012 of 2023 – Mary Muirigo Wainaina vs Tower Savings and Credit Co-operative Society Limited and the two cases be heard and determined together.ii.That the costs of this Application be provided for.The same is supported by a Supporting Affidavit of Bernard Kinyua Njogu sworn on 21/11/2023 where he stated that the 1st Respondent recovered the Applicant’s deposits of Kshs. 15,881,478. 83/= in order to repay the 2nd Respondent’s defaulted loan. The 2nd Respondent filed Tribunal Case No. E012 of 2023 against the 1st Respondent inter alia.“ that after the said recovery of the applicants’ deposits, the 2nd Respondent filed tribunal case no. E012 OF 2023 against the 1st Respondent, claiming, inter alia, a permanent injunction to stop sale of the security property, being property title no. Nyahururu municipality block 6/173, which property the 2nd Respondent had used as security for the said loan facility.”“the subject matter in the instant case and in the said tribunal case no.E012 of 2023 is the loan facility that was advanced to the 2nd Respondent by the 1st Respondent, and which was guaranteed by the Applicants, and the steps taken by the 1st Respondent to recover the said loan facility.That the applicant’s case is that the 1st respondent ought to have first recovered the said loan from the 2nd Respondent, the 2nd respondent being the borrower/principal debtor, before proceeding to recover the same from the applicants as the 2nd the 2nd Respondent’s guarantors.That the 2nd Respondent’s case in Tribunal case no. E012 of 2023 is that the 1st respondent charged illegal and unlawful interest on her loan and that the 1st Respondent intends to sell the security property without following the proper procedure and at an undervalue and hence the intended or proposed sale of the security property to recover the loan balance after recovery of the applicants’ deposits is unlawful. The 2nd respondent therefore objects and is opposed to sale of the security property. Annexed hereto and marked “BKN 3” is copy of the 2nd Respondent’s witness statement dated 12th July 2023 filed in the instant case.That the subject matter in the two cases/claims being the same, it is convenient, fair and just that the two cases /claims be heard and determined together to determine whether the steps taken by the 1st Respondent over the said loan facility were lawful and whether the acts and conduct of the 1st respondent in respect to the said loan facility were lawful and the reliefs (if any) available to the claimants in both cases/claims.”

2. The 1st Respondent filed grounds of Opposition dated 1st January, 2024 stating:i.The Said Application is vexatious, bad in law, misconceived and unmerited.ii.The issues, claims and the prayers as contained in the subject suit, CTC E087 of 2023 and CTC E012 of 2023 are predominantly different and therefore deserving to be heard and determined independently.iii.The Claimants in the subject suit/claim CTC E087 of 2023, claim against the 1st Respondent and the 2nd Respondent for inter alia, a reinstatement of the Claimants’ deposits/shares with the 1st Respondent while in contrast, in CTC E012 of 2023, the 2nd Respondent prays for inter alia, a readjustment of interest to the facility advanced to her by the 1st Respondent.As such requested for the Application is not merited and ought to be dismissed.

3. Parties filed Written Submissions with the 1st Respondent filing their Written Submissions dated 5/3/3034 filed on 20/3/2024 and Applicant filed Written Submissions dated 3/2/2024 filed on 20/3/2024. Having considered the Application, Response and Written Submissions, the matter for consideration is whether the Claim herein can be consolidated with E087 of 2023/E012 of 2023?What is consolidation?Consolidation is the combination of 2 or more lawsuits involving a common question of law or fact.The object of consolidation is to avoid multiplicity of litigation between the same parties when the matter in issue is substantially and directly the same.In the case of Abdalla –vs- Hassan and 15 others; Civil law suit no. 210 of 2021 [2022] KEELC 13582 (KLR) 5/10/2022. Paragraph 15… it stated the object of consolidation is to avoid multiplicity of litigation between the same parties whenever the matter in issue is substantially and directly the same.What the courts look into is;1. Whether the suits involve the same parties.2. Whether the subject matter is the same.

4. In the case Premlala Nahata and Another –vs- Chandi Prasad Sikaria [2007] 2 Supreme Court Cases 551 at paragraph 18;“… it cannot be disputed that the court has power to consolidate suits in appropriate cases. Consolidation is a process by which two or more cases or matters are by order of the Court combined or united and treated as one cause or matter. The main purpose of consolidation is to save costs, time and effort and to make the conduct of several actions more consequent by treating them as one action....’Also in the case of Law Society of Kenya Versus the Centre for Human Rights and Democracy Supreme Court of Kenya Petition No 14 of 2013. The Supreme Court of Kenya had this to say about consolidation of suits.“The essence of consolidation is to facilitate the efficient and expeditious disposal of disputes and to provide a framework for a fair and impartial dispensation of justice to the parties. Consolidation was never meant to confer any undue advantage upon the party that seeks it, nor was it intended to occasion any disadvantage towards the party that opposes it”

5. A suit would be amenable to consolidation if:a.There are same questions of Law and Fact that arise in both cases.b.The rights or reliefs claimed in the two cases or more arise out of the same transaction or series of transaction.c.Whether any party will be disadvantaged or prejudiced or will consolidation confer undue advantage to the other party.In E 087/23 the prayers are for:a.A declaration that the 1st Respondent’s acts of recovering and using the Claimant’s deposits/shares to repay a Fosa Flex Loan defaulted by the 2nd Respondent, without first taking reasonable and proper steps to recover the said loan from the 2nd Respondent as the principal debtor, were done in bad faith and in connivance and or collusion with the 2nd Respondent and hence unconscionable, illogical, irrational, invalid, unlawful and illegal.b.An order for reinstatement of the Claimant’s’ deposits/shares with the 1st Respondent as follows:-i.Reinstatement of deposits/shares of Kshs. 11,986,913. 15 in favour of the 1st Claimant.ii.Reinstatement of deposits/shares of Kshs. 2,480,797. 06 in favour of the 2nd Claimantiii.Reinstatement of deposits/shares of Kshs. 1,413,778. 62 in favour of the 3rd Claimant.c.An order for payment of accrued dividends and accruing future dividends on the Claimants’ deposits/shares mentioned in (b) (i) (ii) and (iii) above up to the time of reinstatement of the said deposits/shares.d.Alternatively, and without prejudice to prayers (b) and (c) above, an order for monetary compensation to the Claimants for the recovered deposits/shares by way of payment to the Claimants of Kshs. 11,986,903. 15 to the 1st Claimant, Kshs. 2,480,767. 06 to the 2nd Claimant and Kshs. 1,413,778. 62 to the 3rd Claimant together with accrued dividends thereon and interest thereon at banking lending rates from 20th December, 2022. e.Costs of this case together with interest thereon at court rates.f.Any other or further relief that this Honourable Tribunal may deem fit and just to grant to the Claimants.The Claim is guarantors who had guaranteed a loan facility and deposits deducted.While in E012/23, the prayers sought are:a.Readjustment of Kshs 10,320,020/= interest.b.Mandatory Injunction on the sale of the suit property.c.General damages.d.Costs of this suit.e.Interest on (a), (c) and (d) above from the date of filing of this suit until payment in full.The Claimants in E012/23 is the Respondent in CTC E087/23 and the Claimant states that she took a loan and defaulted, how the Respondent; that is, Tower Sacco charged excessive interest on non-performing loans.Having analyzed both cases, we then answer the following questions;a.Are there same questions of Law and Fact arising in both cases?The answer to this is in the negative.The issues raised in the two cases are not the same;One, CTC E 087/23, seeks for refund and reinstatement of Claimant’s deposits/shares.Two, CTC E012/23, seeks for readjustment of the Kshs. 10,320,020/= interest and injunction against sale of suit property.b.Whether the rights or reliefs claimed in the 2 cases or more arises of the same transaction/series of transactions?The answer to this is in the positive. The cases do arise from the same transaction, that is a loan taken by Mary Muirigo Wainaina who is the 2nd Respondent in E087/23 and the Claimant in E012/23. The distinguishing factor is the rights and reliefs sought.c.Whether any party will be disadvantaged or prejudiced or will consolidation confer undue advantage to the other party?The question of whether a party will be disadvantaged or prejudiced does arise.The prejudice to be suffered by the parties is clear. The parties in CTC E 087/23 are different with those in E012/23. The Claimant in E087/23 are guarantors of the 2nd Respondent and seek for refund of their deducted savings.To place/ to consolidate this file with one that the Claimant in E012/23 prays for a loan readjustment from the Sacco, the two have no correlation.

6. The issue of a defaulting party hoping to get a readjustment on loan repayment should not and is not connected to the guarantors.As such, the Claimants in E087/23 will suffer prejudice if the two cases are consolidated as their causes of action do not marry at all.

DIVISION - Upshot.1. Application dated 21/11/2023 is dismissed with costs to the 1st Respondent.2. Mention on 8. 10. 2024 together with E012 of 2023.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF AUGUST, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 29. 8.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 29. 8.2024HON. BEATRICE SAWE MEMBER SIGNED 29. 8.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 29. 8.2024HON. PHILIP GICHUKI MEMBER SIGNED 29. 8.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 29. 8.2024HON. PAUL AOL MEMBER SIGNED 29. 8.2024TRIBUNAL CLERK JONAHWambui advocate for the 2nd RespondentWanjiru advocate for the 1st RespondentHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 29. 8.2024