[2024] KECPT 936 (KLR)

Nyambura v Cosmos Sacco Limited (Tribunal Case 20 of 2021) [2024] KECPT 936 (KLR) (30 May 2024) (Judgment)

Neutral citation: [2024] KECPT 936 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 20 of 2021

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

May 30, 2024

Between

Paul Mwai Nyambura

Claimant

and

Cosmos Sacco Limited

Respondent

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

Judgment

1. The matter for consideration was brought to the Tribunal vide Statement of Claim dated 19. 1.2021 filed or even date.The Claimants claims while in employment of Cosmos Pharmaceutical Limited was a member of Cosmos Savings and Credit Cooperative Society Limited being member Number MINYA 539 from 1996 to 2020 when he formally withdrew his membership. At the time of resignation the Claimant avers to have savings of Kshs. 753,450/= and unpaid dividends for various years being Kshs. 9000/= for the year 2018, Kshs. 14,500/= for year 2019. Claimant avers he did not have any liabilities due and was discharged by Respondent in respect of the guaranteed loans borrowed by other members.

2. Despite demand the Respondent have failed to pay requests for:a.The principal sum of Kshs. 753,450/=.b.The declared dividends over the Claimant’s Cooperative shares (Kshs. 9000/=) for the year, 2018. c.The declared dividends over the Claimant’s Cooperative shares (Kshs. 14,500/=) for the year 2019. d.The declared dividends over the Claimant’s personal deposits/savings (Kshs. 753,450/=) for the year 2019. e.Interest on the principal sums in (a), (b), (c ) and (d) above at a commercial rate of 18% per annum from 8. 3.2020 until payment in full.f.Compensation for the illegal withholding of the due sums in (a), (b) (c) and (d) above resulting to financial prejudice on the Claimant.g.Costs of the suit together with the interest thereon at court rates from the date of filing this suit until payment in full.h.Any other or further relief(s) as this honorable court may deem proper to grant.The Claimant also filed witness statement dated 19. 1.2021 and List of Documents dated 19. 1.2021 to which are:1. The Claimant’s resignation letter dated 8. 1.2020. 2.Copies of the Claimant’s payslips dated 31. 12. 2018 and 30. 11. 2019. 3.A copy of bank cash deposit transaction slip for Kshs. 2500/= made on 30. 12. 2019. 4.A copy of the Claimant’s guarantorship status, Statement of Account5. A bundle of documents showing full clearance of the Claimant by the Respondent in respect of the loans the Claimant had guaranteed at the Respondent prior to his resignation.6. A demand letter dated 26. 5.2020 authored by M/s Stanley Henry advocates and addressed to the Respondent.7. A copy of the Respondent’s By- laws.8. Any other or further document(s) that the Claimant may with leave of the Tribunal tender in evidence at the hearing.

3. The Respondent filed Memorandum of Defence dated 5. 3.2021 where they denied claims by the Claimant and averred the claimant had never been fully discharged as he had guaranteed.Douglas Ogayo who had a repayments plan of 36 months as such the Claimant suit ought to be dismissed with costs.Respondent filed witness statements and List of Documents dated 5. 3.2021 filed on 9. 3.2021 to wit:a.Copy of Douglas Ogayo Onsinyo’s Loan Application form.b.Copy of the claimant’s guarantorship status, statement of accountc.Any other documents that Respondent may avail with leave of Tribunal (notice of which is hereby given)

4. Matter came up for hearing on 14. 6.2022 with Claimant adopting their witness statement. He adopted the witness statement dated 19. 1.2021 filed on 21. 1.2021 as his Evidence- in- chief.He produced Claimant’s List of Documents as Claimant exhibit.On cross examination he confirmed he had guaranteed some members. The loan of Andrew Okeyo ended on 1. 7.2021 and Muthoni Muasya loan ended on 1. 8.2021 and Douglas Onsiyo the guarantorship was expiring on 1. 9.2022 and he confirmed the guarantor ship was active.Claimant on further cross examination stated the members replaced him as a guarantor. He also said he did not confirm out if he had been replaced as a guarantor.

5. Further hearing of Claimant’s case was heard on 18. 7.2023 where the guarantor Douglas Ogato where he adopted his witness statements dated 23. 3.2021 filed on 28. 4.2021. he confirmed Claimant had guaranteed him a loan of Kshs. 300,000/=. He confirmed when one was leaving the company one had to look for a replacement 4 his guarantors.As per page 20 claimant’s bundle of documents, he confirmed guarantorship is usually transferred.On cross examination he confirmed other people took over his guarantorship.He confirmed he used the documents on page 20 Claimant’s document that is, the repayment guarantee form to replace Claimant as guarantor. He further confirmed before replacement the right committee had to confirm the same.He is not sure if the replacement was accepted but confirmed the form was filed.

6. The Respondent also gave evidence RW1 John Okumu who worked for cosmos Pharmaceutical and he is current chair of Respondent Sacco since September 2021. He adopted his witness statement dated 22. 2.2023 filed on 18. 7.2023 as his Evidence- in- Chief.He confirmed he knows Claimant and that Claimant was not paid his dues because he had not been discharged from his guarantorship responsibilities.He produced his documents dated 5. 3.2021 as REX. 1-7.

7. He stated at the time Claimant was resigning he had guaranteed 4 members. He confirmed Douglas Onsinyo his loan was running for 3 years from September 2019 and Claimant did not dispute the document marked REX. 1 that is, Douglas Onsinyo loan form.RW1 disputed the Claimant’s evidence and states the Documents in Claimant’s bundle page 20 called repayment guarantee he is not familiar with the said document.The document is not dated neither does it have consent from the Management Committee and cannot confirm the Claimant was replaced as a guarantor.On cross examination he confirmed an assistant is the one manning the Respondent’s office and as of 2020 the one manning the station was Joyce Mwachia.On asked why the letter was not stamped he confirmed there was no official stamp by then.He further confirmed resignation comes first then change of guarantor ship.

8. In the Respondent’s documents page 19 he confirmed the document was from their office and the handwritten names were done in the office.He confirmed the document on page 20 of Claimant’s documents handwritten is similar to the Respondent’s documents on page is not dated.He confirmed he had no problem or issue with the Claimant’s prayers.

9. Parties filed their written submissions Claimant filing written submissions and Respondent filed written submissions.Having considered the pleadings and evidence adduced in court by the parties the issue for determination.Issue oneWhether the Claimant was a guarantor for an ongoing loan?Issue twoWhether the Claimant is entitled to be refunded their savings?Issue oneWhether the Claimant was a guarantor for an ongoing loan?It is not in dispute the Claimant had guaranteed other members their loans.However, what is disputed is whether Claimant got a replacement when he resigned from the Respondent.The person in question is Douglas Ogayo who Claimant had guaranteed and whose loan was still running.The Respondent at time of trial did not intimate all if the said Douglas Ogayo had defaulted since by the time the RW1 was giving evidence the loan ought to have been repaid.

10. Further, the Claimant stated his status of guarantorship was taken up by Alice Kenyani, Ebby Kanyanga and Fredrick Kayugira- page 19 of Claimant’s documents.The Respondent’s dispute this very crucial document because it is not signed nor dated.The Respondent documents REX1 shows security for the loan as:1. Shares plus Cooperative deposits.2. Guarantors3. Their dues4. SalaryFurther Respondent’s file document that is Douglas Osinyo pay-slip which evidence his making payment for the loan meaning he was not defaulting.As at the date of trial it would be safe to state that the said Douglas Osinyo who the Claimant had guaranteed had paid up his loan and a such plus confirmed they had no issue refunding the Claimant his money.Yes, the Claimant has a guarantor for an ongoing loan. It is the Claimant’s contention he was replaced as a guarantor vide his document despite the document not being dated.We are inclined to stand with Claimant that his responsibility as a guarantor was deal with. The Respondent never raised issue with any of his replacements and as such cannot state otherwise at this point. They did not communicate to Claimant to inform him the reason why he would not get his refund is because your replacement has not gone through.

Issue twoWhether Claimant is entitled to his refund?As such with evidence adduced us to the amount of savings and dividend payable the same was not denied by the Respondent and even at cross examination stated there was no problem with the Claimant’s prayers in his Statement of Claim.We shall not delve further into this arena by the Respondent and even at cross examination stated there was no problem with the Claimant’s prayers in his Statement of Claim.We shall not delve further into this arena by the admission. Final Orders1. As such we enter judgment in favour of claimant against Respondent for prayer a refund of Kshs. 753,450/=2. Prayer b and c and d dividend for the year 2018 and 2019 as per audited account3. Costs and interest.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF MAY, 2024. Hon. J. Mwatsama Deputy Chairperson Signed 30. 5.2024Hon. Beatrice Sawe Member Signed 30. 5.2024Hon. Fridah Lotuiya Member Signed 30. 5.2024Hon. Philip Gichuki Member Signed 30. 5.2024Hon. Michael Chesikaw Member Signed 30. 5.2024Hon. Paul Aol Member Signed 30. 5.2024Tribunal Clerk JonahMutegeki advocate for the RespondentKimani advocate holding brief for Mr. Maina advocate for the Claimant.