[2023] KECPT 765 (KLR)

Ndwiga v Tuungane, Tujijenge Sacco Society Limited (Tribunal Case 275 of 2020) [2023] KECPT 765 (KLR) (28 September 2023) (Judgment)

Neutral citation: [2023] KECPT 765 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 275 of 2020

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

September 28, 2023

Between

Joseph Mwaniki Ndwiga

Claimant

and

Tuungane, Tujijenge Sacco Society Limited

Respondent

Judgment

1. The Claim for determination is brought vide a Statement of Claim dated 13/07/2020 and filed on 04/09/2020. Accompanied by a Verifying Affidavit by the Claimant dated 13/07/2020 and filed on 04/08/2020, together with a List of Documents and Witness Statement dated 13/07/2020 and filed on 04/08/2020.

2. The Respondent filed a Statement of Defense dated 15/10/2020 on 15/10/2020. The Claimant filed a Reply to the Statement of Defense dated 04/11/2020 on 09/12/2020.

Claimant’s Case. 3. The Claimant called Claimant Witness 1 who was the Claimant, Joseph Mwaniki Ndwiga, he adopted his Witness Statement dated 13/07/2020 as his Evidence- in -Chief. He further produced his List of Documents dated 13/07/2020 as Claimant’s Exhibit 1. That was all during the hearing of the suit.

4. The Claimant avers that on or about 27/01/2018, the Claimant advanced the Respondent by way of fixed deposit a loan of Kshs. 1,000,000/=, at an interest of 1. 5% per month or 18% Per annum, payable quarterly with a maturity date of 27/01/2019. He claims that on maturity, the Respondent failed to pay the amount owed as agreed.

5. The Claimant avers that there were various correspondences between the parties regarding the non-payment and proposals for payment. The Claimant claims that on 29/03/2019, the Respondent committed to pay Kshs. 100,000/= weekly commencing 06/04/2019. Further, the Respondent on 16/04/2019 committed through a letter to pay Kshs. 100,000/= every fortnight. Finally, on 18/09/2019, the Respondent acknowledged they still owed Kshs. 830,000/= and agreed to settle the amount by paying Kshs. 50,000/= at the end of every month commencing the month of September until full payment of the outstanding balance.

6. The Claimant avers that despite the admission of indebtness by the Respondent, the Claimant has only received Kshs.100,000/=. Moreover, the Respondent has never adhered to the Claimant’s request to furnish him with a report showing the total outstanding balance plus interest accrued up-to date.

Respondent’s Case. 7. The Respondent did not call any witness and prayed to rely on the already filed written statements and List of Documents produced.

8. The Respondent avers that it has never entered into any loan agreement with the Claimant. The Respondent claims that the alleged illegal loan agreement was entered into without the authority of the Respondent claiming that the officials who were in office when the alleged loan was granted were surcharged for breaching trust bestowed to them. The Respondent further avers that it has never admitted to defaulting the purported loan or to owing the Claimant any money whatsoever.

9. Through the reply to the Statement of Defense, the Claimant reiterates that he should not be punished for the misgivings of officials as he was not party to their crimes.

10. Parties were directed to file their Written Submissions. The Claimant filed theirs dated 06/01/2022 on 10/01/2022.

11. A judgement date was then diarized. However, during the writing of this Judgement, only the Claimant had filed their Written Submissions.

Analysis And Determination. 12. After perusal of all the pleadings and the Written Submissions, it is the Tribunal’s view that the following are the issues;a.Whether there existed a binding agreement between the parties.b.Whether the Respondent should pay the money owed.c.Whether the Claimant is entitled to the damages as prayed for.

13. On the first issue, under the Law of Contract, for a contract to be legally binding, it must be proved that there was offer, acceptance, consideration and intention to create legal relations. In William Muthee Muthami v. Bank of Baroda [2014] eKLR, the court stated that the aggrieved party to an agreement must, in addition, prove that there was offer, acceptance and consideration. It is only when those three elements are available that an innocent party can bring a claim against the party in breach. Further, in Charles Mwirigi v Thanaga Tea Growers Sacco Limited and another [2014) eKLR, the Court of Appeal stated that it is trite law that offer, acceptance and consideration are the essential elements for a valid contract. In the present case, the Claimant did not produce any Written agreement proving the existence of the agreement. The Respondent further denied the existence of such an agreement. In Garvey v Richards [2011] JMCA 16, the courts held that there must be positive evidence that a contractual obligation, born out of an oral or written agreement is in existence. The Claimant vide a letter dated 07/03/2019 through the Claimant’s advocate, demanded for payment of Kshs. 1,045,000/= plus interest. On 28/03/2019, the Claimant through his advocate indicating that the claimant will institute legal proceedings against the Respondent without further reference to them. However, the Respondent on 29/03/2019, wrote to the Claimant’s Advocate indicating that they commit to pay the money owed in installments of Kshs. 100,000/= every week starting 06/04/2019. The Respondent, further on 16/04/2019, vide a letter dated 16/04/2019 indicating that this undertaking comes in place as a result of a managerial resolution to make realistic offer which shall never be defaulted. The Claimant wrote to the Respondent accepting the fortnight payments and requested the same to be paid on 15th and 30th of every month. The Respondent confirmed receipt of the letter and through the letter dated 09/05/2019 requested that the Respondent continues honouring the first agreement of 1. 5% interest per month the balance.

14. The sequence of the correspondence clearly indicates that there existed a contract. Further, the contents of those correspondences indicate that indeed the contract was mutual and both parties intended to enter a mutually binding contract with intention to be bound by the same until each’s obligation was dispensed with. It is therefore, the Tribunal’s opinion that there existed a binding contract between the Respondent and the Claimant.

15. On the second issue, after scrutiny of the correspondences, the Respondent did not dispute receiving the amounts claimed by the Claimant. Further, they accepted to pay back and even gave proposals on the same. The fact that there also existed a contract, one will expect that both parties should ensure both parties execute their obligations accordingly. It is the Tribunal’s view, that the Respondent owes and should pay the amounts agreed in execution of the contract.

16. On the last issue, the courts held in Kenya Women Microfinance Ltd v Martha Wangari Kamau [2021] eKLR, that the law is that general damages are not awardable for breach of contract or breach of contractual obligations. A contract for performance of specific duties or obligations if breached, would lead to compensation of specific loss suffered as a result of the breach, but not general damages. Further, in Kenya Tourist Development Corporation v Sundowner Lodge Limited, the Court of Appeal held that general damages are not recoverable in cases of alleged breach of Contract. Damages for breach of contract are compensation to the aggrieved party and a reinstitution of what he has lost from the breach.

17. From the foregoing, it is therefore not in dispute that there existed a binding contract that required the Respondent to pay back with interest the amount lent. The fact that the payment was not done consequently means that the Respondent was in breach of the contract. However, it is the Tribunal’s view that general damages will not suffice.

Determination. 18. From the foregoing, the Tribunal finds in favor of the Claimant against the Respondent for Kshs. 835,554. 00/=

19. No award for general damages.

20. Costs and interest at Tribunal rates from the date of filing claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 28TH DAY OF SEPTEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 28. 9.2023HON. BEATRICE SAWE MEMBER SIGNED 28. 9.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 28. 9.2023HON. PHILIP GICHUKI MEMBER SIGNED 28. 9.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 28. 9.2023HON. PAUL AOL MEMBER SIGNED 28. 9.2023TRIBUNAL CLERK JEMIMAHHON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023