[2025] KECPT 290 (KLR)

Njoroge v Fortune Sacco Society Limited (Tribunal Case E640 of 2024) [2025] KECPT 290 (KLR) (29 May 2025) (Judgment)

Neutral citation: [2025] KECPT 290 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E640 of 2024

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

May 29, 2025

Between

Loise Muthoni Njoroge

Claimant

and

Fortune Sacco Society Limited

Respondent

(Coram: Hon. B. Kimemia- chairperson, Hon. J. Mwatsama- Deputy chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon.P. Gichuki- Member, and Hon. P. Aol- Member.)

Judgment

1. The Statement of Claim dated 7th August, 2024 was filed on 20th August, 2024 with the Claimant seeking among others:i.An order compelling the Respondent to execute the discharge of charge forms regarding the charge registered against the land parcel Loc5/gitura/2441ii.That in the alternative, the Deputy Registrar of the Honorable Court to execute the discharge of charge forms regarding the charge registered against the title deed to the land parcel Loc5/gitura/2441 in place of the representative of the Fortune sacco Limited.iii.An order compelling the Respondent to unconditionally release to the claimant the original title deed to land parcel Loc5/gitura/2441 immediately upon discharge of the charge.iv.In the alternative, the Honorable Court to compel the Respondent to replace the original certificate of title in land parcel Loc5/gitura/2441 at their own costs.v.Exemplary damages as a result of refusal to return and or discharge the original title deed in land parcel Loc5/gitura/2441 until the current claim was filed.

2. The Claimant is a member of the Respondent, member no. 178593 and on 3rd November, 2022 the Respondent advanced a loan to the Claimant of Kshs. 2,000,000/= which was charged against land parcel Loc5/gitura/244. As at the time of securing the loan, the Claimant deposited the original certificate of the title with the Respondent where the charge was registered. The Claimant has since cleared the said loan with the Respondent confirming the said clearance through a letter dated the 6th of June 2024, but despite the clearance, the Respondent has adamantly refused and or neglected to execute the discharge of charge and release the original certificate of title to the Claimant.

3. It is the Claimant's position that the Respondent is in gross violation of the charge instrument as clause 42 expressly mandates the Respondent to discharge the charge upon the payment of the balance of the money so secured.That despite numerous reminders to the Respondent to discharge the charge and release the original certificate of title, The Claimants efforts were ignored or neglected, which has occasioned her loss as she cannot carry out any transaction with regards to that parcel of land, and this refusal to return the original title deed and formal discharge of the title necessitated the filing of this case as she is at risk of losing her property as the Respondent has not advanced any justification or refusal as to why they are holding the original title.

4. The Respondents were served with the summons to enter appearance dated 30th August, 2024 on 5th September, 2024, but they did not enter appearance or file a Defence.On 9th October, 2024 the Claimant filed an application requesting for judgement in default of entering appearance and filing a Defence, with this Tribunal on 4th December, 2024 entering interlocutory judgement in favour of the Claimant and giving directions for the matter to proceed to formal proof.

5. During the formal proof hearing, the Claimant requested the court to intervene for her to get back her title deeds and also award her damages.This Tribunal further gave orders for the Claimant to canvass the issue of damages through written submissions, and the Claimant filed her submissions dated 13th March, 2025 stating among others:i.That despite clearing the loan payment, the Respondent has unjustifiably refused and or neglected to discharge the charge against the land parcel and to release the original title deed to the Claimant.ii.That the Claimant’s efforts to reach out to the Respondent have borne no fruits whatsoever as the discharge of charge still remains unexecuted.iii.That circumstances necessitated the seeking of court’s assistance to compel the Respondent to discharge the charge, release the certificate of title and award damages for the actions of the Respondent.iv.That clause 42 of the Charge expressly speaks to the discharge of the charge stating that:Upon the final balance of the money hereby secured having been paid off and satisfied together with all interest due thereon and upon payment of all costs, charges and expenses incurred by the bank in relation to the Premises, the Bank shall, at the request and cost of the Chargor and/or Borrower, discharge this charge.v.That on the 6th June 2024, the respondent unequivocally issued a clearance note in favour of the claimant that reads in part;-‘…The above named client has no outstanding loan balance with Fortune Sacco…’vi.That the Respondent has maliciously withheld the Claimant’s title deed to date and without any justification whatsoever. Consequently, the Claimant cannot deal with her own land parcel as she so wishes as the Respondent has her original certificate of title and worse still, has a charge registered against it.vii.That modest damages of Kshs. 250,000/= is sufficient to punish the Respondent for their malicious acts and/or omissions.

6. We have considered the Statement of Claim and the submissions filed, and the only question remaining for determination is as to whether the Claimant has satisfied the prayer to be awarded exemplary damages?Has the Claimant satisfied the prayer to be awarded exemplary damages?It is important to begin by stating that the object of exemplary damages is to punish and deter a party for breach of trust or for deceit. In Godfrey Julius Ndumba Mbogori & another v Nairobi City County [2018] eKLR the court held that:“Exemplary damages are essentially different from ordinary damages. The object of damages in the usual sense of the term is to compensate. The object of exemplary damages is to punish and deter. We are guided by the case of Rookes V Barnard [1964] AC 1129 where Lord Devlin set out the categories of case in which exemplary damages may be awarded which are: i) in cases of oppressive, arbitrary or unconstitutional action by the servants of the government, ii) cases in which the defendant’s conduct has been calculated to make a profit for himself which may well exceed the compensation payable to the plaintiff and iii) where exemplary damages are expressly authorized by statute.”In this particular case, in as much as we appreciate that there is some wrong doing by the Respondent, we are not persuaded that it was calculated to make a profit for themselves and as such we won’t award exemplary damages.

Final Orders:1. The Statement of Claim dated 7th August, 2024 succeeds and judgement is entered in favour of the Claimant against the Respondent with costs.2. The Respondent is ordered to unconditionally and immediately release to the Claimant the original title deed to land parcel Loc5/gitura/2441. 3.The Respondent is ordered to immediately execute the discharge of charge forms regarding the charge registered against the land parcel Loc5/gitura/2441.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF MAY, 2025. Hon. B. Kimemia Chairperson Signed 29. 5.2025Hon. J. Mwatsama Deputy Chairperson Signed 29. 5.2025Hon. Beatrice Sawe Member Signed 29. 5.2025Hon. Fridah Lotuiya Member Signed 29. 5.2025Hon. Philip Gichuki Member Signed 29. 5.2025Hon. P. Aol Member Signed 29. 5.2025Tribunal Clerk MutaiMs. Malungu advocate holding brief for Chimei advocate for the Claimant.Hon. J. Mwatsama Deputy Chairperson Signed 29. 5.2025