[2025] KECPT 107 (KLR)

Mwaura v Tower Savings & Credit Coop Society Limited & another (Tribunal Case E735 of 2024) [2025] KECPT 107 (KLR) (30 January 2025) (Ruling)

Neutral citation: [2025] KECPT 107 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E735 of 2024

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

January 30, 2025

Between

John Njau Mwaura

Claimant

and

Tower Savings & Credit Coop Society Limited

1st Respondent

Onyx Auctioneers

2nd Respondent

Ruling

Notice Of Motion 1. The Notice of Motion Application is brought under Sections 1A, 1B, 3A and 80 of the Civil Procedure Act, Order 45 Rule1 and Order 51 Rule 1 of the Civil Procedure Rules seeking among others Orders:a.Spentb.That the Honorable Tribunal be pleased to review or vary the order directing that the Application dated 26th September 2024 be held in abeyance and reinstate the Application for hearing thereof on merit and further direction given in respect thereofc.That the Honorable Tribunal do review the Order of injunction made on 8th October 2024 for it to be subject to and conditional upon the claimant John Njau Mwaura paying the areas of Kshs. 2,049,668. 34/= and continue to pay the monthly loan installment of Kshs. 872,559. 00/= as and when it falls due

2. The Application was supported by the Affidavit of Peter Waiganjo on the grounds that:i.Pursuant to a letter of offer dated 17th April, 2023 the 1st Respondent advanced to the Claimant a loan facility in the total sum of Kshs. 37,500,000. 00/= which was to be paid by 60 monthly installments of each Kshs. 872,559. 00/= comprising both principal and interestii.The Claimant created a security in favor of the 1st Respondent to secure the said loan facility which charge was duly registered as required by law - Land Reference Number 13136/221 (Original Number 13136/159/66)iii.The Claimant defaulted in his loan repayment obligation and as at 31st October 2023, the loan facility was in arrears to the tune of Kshs. 3, 725, 450. 00/= while the total loan balance outstanding as at the same date was Kshs. 37, 881, 658. 00/= which sum continues to accrue interest until payment in fulliv.The 1st Respondent by a letter dated 8th November 2023 issued the Claimant with a 40 days Statutory Notice, which notice was equally served upon the Claimant spouse Ruth Wanjiku Kariuki as required under Section 96 (2) and (3) of the Land Act 2012v.Despite being issued with a 40 days Statutory Notice, the Claimant failed to meet his loan obligations which prompted the 1st Respondent to instruct the 2nd Respondent to issue the Claimant with the 45 days Redemption Notice and the notification of sale of the Claimants suit property. The 2nd Respondent served the Claimant with the notification of sale on 31st August 2024 which notice indicated that the sale shall be conducted on 30th September 2024vi.The Claimant still failed to meet his loan obligations despite being served with the 45 days Redemption Notice and the 1st Respondent is entitled to exercise his statutory power of sale over the suit property and are seriously aggrieved by the Orders of Injunction granted by the Tribunal in favor of the Claimants Application dated 26th September 2024 without providing the 1st Respondent an opportunity to be heardvii.The 1st Respondent’s fundamental right to be heard was violated and this has occasioned miscarriage of justice, as the Claimant has continued to default on his loan repayment obligation to the 1st Respondent who is owed very substantial amounts of money by the Claimant as at 24th October 2024 the arrears were Kshs. 2, 049, 668. 34/= while the total outstanding was Kshs. 31, 254, 278. 34/= which sums continue to attract interest at the rate of 14. 04% per annum until payment in fullviii.The Claimant continues to be in default and consequently prejudicing the other members of the 1st Respondent who would like to obtain similar loan facilities from the 1st Respondent and it is in the interest of justice therefore that the Orders of Injunction issued on 8th October, 2024 should be reviewed.

3. On 21st November 2024 this Tribunal gave directions for the application to be canvassed by way of written submissions.The 1st Respondent first filed a Supplementary Affidavit dated 20th November, 2024 in response to the Claimant’s Replying Affidavit dated 15th November, 2024 then filed written submissions dated 22nd November 2024 with a further supplementary written submissions filed on 4th December, 2024 stating among others:i.That Order 40 Rule 7 of the Civil Procedure Rules is clear that ‘any order for an injunction may be discharged, or varied, or set aside by the Court on application made thereto by any party dissatisfied with such an order.’ii.That Order 40 Rule 7 of the Civil Procedure Rules do not limit the court’s power to discharge, vary or set aside an order made by the courtiii.That the Claimant is in arrears of Kshs. 2, 049, 668. 34/= and the orders of 8th October 2024 need to be varied or reviewed to ensure that he is paying continually the monthly loan installment sum of Kshs. 872, 559. 00/=iv.That the Claimant failing to meet his loan obligations is extremely prejudicing the other members of the 1st Respondent societyv.That the Claimant failing to continue paying the monthly installments to service the loan is sufficient reason to persuade the Tribunal to review or vary its orders and put a condition for the Claimant to continue paying the monthly installment and arrearsvi.That it is a travesty of justice for the Claimant to enjoy an injunction order and at the same time not meet his obligations under the facility lettervii.That if the orders of 8th October 2024 are not reviewed or varied to ensure that the Claimant is servicing the loan, there was a real risk of the debt over stripping the value of the propertyviii.That the Claimant obtained the injunction orders based on non-concealment of material facts to the Tribunalix.That the Claimant will not suffer any prejudice if the order was reviewed or varied to ensure that he pays the arrears and continues to pay the monthly installments

4. The Claimant filed their written submissions dated 2nd December 2024 in opposition to the Application dated 28th October 2024 stating among others:i.That the 1st Respondent has not met the threshold for review of court orders as established in Section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules by disclosing the discovery of new and important matter or evidence which was not within their knowledge after exercising due diligence at the time the order was givenii.That the 1st Respondent has also not disclosed the error apparent or mistake on the face of the record or given the Tribunal sufficient reasons to review and or vary the order of 8th October, 2024iii.That it is also not clear the ground under which the Application for review or varying of the orders of 8th October 2024 have been brought.

5. We have considered the Application, the affidavits and written submissions filed, and the only question remaining for determination is as to whether the Claimant will suffer any prejudice if the order of 8th October 2024 is reviewed, varied or set asideWill the Claimant suffer any prejudice if the order of 8th October 2024 are reviewed, varied or set aside?It is important for parties to understand that nothing, including orders already issued, can prevent a Court from doing justice to all parties - what should matter to the Court, is that it has served the interest of justice to all the parties.This issues in this case are rather straightforward on the existence of the loan facility and charging of the property as security for the loan facility. It is also not in dispute that's the terms of accessing that facility were agreed on by the parties and the Claimant is not challenging any of those terms, which some of those terms include the servicing of the said loan facility by a monthly installment of Kshs. 872, 559. 00/=

6. It is a longstanding principle of law that parties to a contract are bound by the terms and conditions of the contract they have entered into, and as such therefore, it is not the business of this Tribunal to rewrite the contract between the Claimant and the 1st Respondent as to whether he should pay the arrears and continue paying the monthly instalments. In National Bank of Kenya Limited v Pipe Plastic Samkolit (K) Ltd [2002] 2 EA 503 [2011] eKLR at 507, it was stated that:“A court of law cannot rewrite a contract between parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded or proved.”

7. The Claimant has not raised or availed any evidence to show any coercion, fraud or undue influence in his loan contract with the 1st Respondent. In fact, in the application dated 26th September 2024, the Claimant states clearly under the grounds supporting the Application at No.10 that he is willing to settle the loan repayment and the intended sale by the Respondent will deny him the equity of redemption of his property - to mean, he is not opposed to the loan repayment.

8. As such, this Tribunal is not persuaded that the Claimant will suffer any prejudice if the Orders of 8th October 2024 are varied or reviewed in the interest of justice to ensure that he meets his obligations under the contract for which he obtained the loan facility.

Final OrdersThe Notice of Motion Application dated 28th October, 2025 succeeds and the orders of 8th October, 2024 are reviewed or varied as follows:i.The Temporary Injunction issued restraining the 2nd Respondent from placing any advertisement in any local daily over the sale by public auction or otherwise of property Land Reference Number 13136/221 (Original Number 13136/159/66) and from offering it for sale or selling it by public auction or otherwise is made conditional upon the Claimant settling the arrears accrued by the date of the next mention on 10. 4.2025 for Pre-trial directions.ii.Mention to confirm status of settlement of the arrears is on 10. 4.2025.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF JANUARY, 2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 30. 1.2025HON. BEATRICE SAWE - MEMBER SIGNED 30. 1.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 30. 1.2025HON. PHILIP GICHUKI - MEMBER SIGNED 30. 1.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 30. 1.2025HON. PAUL AOL - MEMBER SIGNED 30. 1.2025Tribunal Clerk MutaiIan Nkomejimana advocate for Claimant- PresentOtieno advocate for Respondent - Present