[2023] KECPT 1056 (KLR)

Obiero v Unites Nations Sacoo Ltd & another (Tribunal Case E373 of 2023) [2023] KECPT 1056 (KLR) (Civ) (30 November 2023) (Ruling)

Neutral citation: [2023] KECPT 1056 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case E373 of 2023

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

November 30, 2023

Between

Charles Onduso Obiero

Claimant

and

Unites Nations Sacoo Ltd

1st Respondent

Felina Commercial Auctioneers

2nd Respondent

Ruling

Facts of the case. 1. Application for determination is Notice of Motion dated 4. 5.2023. The same seeks for:a.That this Application be certified urgent and service be dispensed with in the first instance.b.That a Temporary Injunction do issue restraining Respondents whether by themselves, servants, employees, agents or any of them either individually or jointly or otherwise from doing the following acts or any of them, that is to say from interfering with the Claimant’s/Applicant’s rights of ownership and possession, selling by public auction, advertising for sale by way of public auction, selling through private treaty or in any other manner whatsoever interfering with Title Number Kajiado/Kitengela/95229, unit number 139, the Riverine (hereinafter referred to as the “suit property)” pending the interparties hearing of this Application.c.That a temporary injunction do issue restraining Respondents whether by themselves, servants, employees, agents or any of them either individually or jointly or otherwise from doing the following acts or any of them, that is to say from interfering with the Claimant’s/Applicant’s rights of ownership and possession, selling by public auction, advertising for sale by way of public auction, selling through private treaty or in any other manner whatsoever interfering with Title Number Kajiado/Kitengela/95229, unit number 139, the Riverine (hereinafter referred to as the “suit property)” pending the hearing and determination of this application.d.That a Temporary Injunction do issue restraining Respondents whether by themselves, servants, employees, agents or any of them either individually or jointly or otherwise from doing the following acts or any of them, that is to say from interfering with the claimant’s/applicant’s rights of ownership and possession, selling by public auction, advertising for sale by way of public auction, selling through private treaty or in any other manner whatsoever interfering with Title Number Kajiado/Kitengela/95229, unit number 139, the Riverine (hereinafter referred to as the “suit property)” pending the hearing and determination of this suit.e.That the 1st Respondent to produce and supply the Claimant with Statements of Account for the Claimant/Applicant’s Loan Account.f.That the costs of this Application be provided for.

2. This Ruling is emanating from an Application by the above named Claimant seeking orders to permanently injunct/restrain the Respondents from selling by public auction all that piece of land and the development on Title no. Kajiado/Kitengela/95229 Unit N. 139 – The Riverine.

3. The Claimant is a member of the Respondent. Around June 2018 he was introduced to a housing development project Christined the “Riverine” which was being done by Alexander Forbes Retirement Fund in Kitengela.

4. The Claimant expressed interest and was given a letter of offer dated 5/6/218 to purchase a Town house No. 139 built on a 1/8 of an acre for Kshs. 14,630,000/=

5. Through a Loan Application and Agreement form dated 22/6/2018, the Claimant applied for a Loan of Kshs 14,000,000/= and pledged the title property on Title no. Kajiadp/Kitengela/95229 Unit N. 139 – The Riverine as security for the Loan.

6. Arising from the approved Loan Application, a charge was signed between the Claimant and the Respondent. the charge was thereafter registered over the property on 6th June 2019. Thereafter on 30/10/2019 the Claimant’s loan statement account was credited with Kshs 14,000,000/=

7. At paragraph 11 of the Claimant’s Statement of Claim, the Claimant stated that he continued to repay the loan save that he experienced some challenges from March 2020 due to Covid-19 related issues that left him with a shortfall of around Kshs. 3,000,000/= in accrued arrears and interest.

8. The Claimant state that he received Statutory Notice under Section 90 of the Land Act 2012 Laws of Kenya from the advocate of the Sacco dated 17/6/2022 which laid the ground for advertisement of the sale of property in question by public auction and which advertisement was put in Standard Newspapers on 21/2/2023.

9. In an attempt to stop the Respondent’s actions, the Claimant through a Notice of Motion dated 10/3/2023 filed under Certificate of Urgency moved the Magistrates Court at Kajiado under ELC Case No. E022 of 2023 and obtained an ex-parte Temporary Injunction order which lasted for 4 months up to 16th March 2023. In the meantime, the Respondent filed a Preliminary Objection on the same.

10. On 27th April 2023, the Kajiado Principal Magistrate delivered a ruling in favor of the Preliminary Objection regarding the jurisdiction of the Magistrate Court to hear Co-operative matters. Ruling on CMCC No. 22 of 2023 read thus; “I therefore find the Court has no Jurisdiction and dismiss the Plaintiff’s suit with no orders as to costs.”

11. Noticing that the right forum to submit Co-operative matters is the Co-operative Tribunal, the Claimant through a Certificate of Urgency dated 4/5/2023 filed a Notice of Motion dated 4/5/2023 which was filed on 7/5/2023 and sought for the following orders.i.Spent.ii.That a Temporary Injunction do issue restraining the Respondent whether by themselves, servants, employees, agents or any or them either individually from doing the following acts or any of them that is to say from interfering with the Claimant’s/Applicant’s rights of ownership and possession, selling by public auction, advertising for sale by public auction, selling through private treaty or in any othet manner whatsoever interfering with the Title no. Kajiado/Kitengela/95229 Unit N. 139 – The Riverine (herein after referred to as the suit property) pending the inter-parties hearing of the Application.iii.That a Temporary Injunction do issue restraining the Respondent whether by themselves, servants, employees, agents or any or them either individually from doing the following acts or any of them that is to say from interfering with the Claimant’s/Applicant’s rights of ownership and possession, selling by public auction, advertising for sale by public auction, selling through private treaty or in any other manner whatsoever interfering with the Title no. Kajiado/Kitengela/95229 Unit N. 139 – The Riverine (herein after referred to as the suit property)Kajiado/Kitengela/95229 Unit N. 139 – The Riverine (herein after referred to as the “suit property”) pending the hearing and determination of the Application.iv.That a Temporary Injunction do issue restraining the Respondent whether by themselves, servants, employees, agents or any or them either individually from doing the following acts or any of them that is to say from interfering with the Claimant’s/Applicant’s rights of ownership and possession, selling by public auction, advertising for sale by public auction, selling through private treaty or in any other manner whatsoever interfering with the Title no. Kajiado/Kitengela/95229 Unit N. 139 – The Riverine (herein after referred to as the suit property)Kajiado/Kitengela/95229 Unit N. 139 – The Riverine (herein after referred to as the “suit property”) pending the hearing and determination of the Suit.v.That the 1st Respondent to produce and supply the Claimant with Statement of Account for the Claimant/Applicant’s Loan Account.vi.That the costs of this Application be provided for.

Disposal of the Certificate of Urgency. 12. That on 7th May, the Tribunal acted on the Notice of Motion which was filed under a Certificate of Urgency by Issuing the following orders;1. That the Applicant to serve all the parties.2. That a temporary injunction is hereby granted against the Respondent jointly or severally in terms of prayer 2 of the Application in regard to the Property Title no. Kajiado/Kitengela/95229 Unit N. 139 – The Riverine pending the hearing of the Application on 2nd June 2023.

13. Come 2/6/2023, the Applicants Counsel requested for leave to file a Supplementary Affidavit in response to the 200 pages document that was filed by the Respondent. the Tribunal granted 14 days leave to file the Supporting Affidavit and gave the parties 14 days to file Written Submissions.

The Respondent’s Defence. 14. A Replying Affidavit, dated 31st May, 2023 was filed on 2/6/2023 by the Respondent and the Application opposed the Claimants prayers on the following grounds;i.That the Applicant withheld material facts within his knowledge from the Tribunal for the purpose of obtaining undue advantage over the Sacco.ii.That the Applicant has not provided any tangible proof on repayments yet he averred that his payment is now paid up to date.On this the Respondent stated that the Applicant’s loan account was Kshs. 14,707,993. 88/= as at 30/5/2023 and that in the year 2023 he made only two (2) payments on 26/1/23 and 3/2/23 totaling Kshs 220,000/=iii.That even before the advent of Covid-19 Pandemic, the Claimant had breached the terms of the Loan Agreement. As a proof, the Respondent referred to the Loan Statement, Loan Account and stated that for 5 months he remitted funds equivalent to one month’s installment.iv.Further, the Respondent disputed the Statement of the Claimant on Paragraph 11 where he stated that he has been repaying the loan and as at 4/5/23 he had a shortfall of around Kshs. 3,000,000/= in accrued arrears and interest.

15. While objecting to this averment of Kshs 3,000,000/= the Respondent made tacit Calculations at paragraph 11 of the replying affidavit and showed that as a result of repaying less that what was contracted, the shortfall had accumulated to Kshs. 3,612,726. 75/= as at 30/4/2023 which is different from the arrears of the monthly installments

16. The Claimant anchored his Application for the Temporary Injunction against the Respondent for the sale of the property on the Claim that neither him nor his wife were served with the notices and a valuation report of the suit property as provided under Section 90(2) and 96(2) and 96(3)(c) of the Land Act. The Respondent in their bundle of documents marked Sacco’s exhibit No. “NA (4)” provided documents evidencing compliance as follows;i.Pages 96(b) – 123 exhibit a Valuation Resport of Title no. Kajiado/Kitengela/95229 Unit N. 139 – “The Riverine” dated 28/3/2022 prepared by Crystal Valuers ltd establishing current market price.ii.Pages 137-192 exhibit a valuation report dated 11/7/2018 prior to the advancement of the Loan which was prepared by Crystal Valuers Ltd.iii.At pages 84 and 86, two (2) Statutory Notices dated 13/9/2021 and 17/6/2022 were dispatched to the Claimant.

17. Issues for determinationHaving carefully considered the documents and the arguments advanced by each party, we have formed the following issues for determination.a.Whether the Applicant was served with the Valuation report and the Statutory Notices under Section 92(2) and 96(3)(c) of the Land Act 2012. b.Whether the Applicant met the conditions set in the case of Giella v Cassman Brown [1973] E.A on:i.Establishment of a prima facie case.ii.Suffering irreparable injury.iii.Tilting the scale of balance of convenience.

Analysis of the issues. 18. On the first issue regarding whether the Claimant was served with the current Property Valuation Report and the Statutory Notices, the Claimant in his Written Submissions agreed that he was served with a Statutory Notice under Section 90(2) of the Land Act which was dated 13/9/2021. He contended that the Respondent did not serve him any Notices under Section 96(2) and 96(3)(c).On the other hand, the Respondent argued out in their Written Submissions that they had served two (2) Statutory Notices dated 13/9/2021 and another one dated 17/6/2022 of which we examined the exhibits at pages 84 and 86 of the Respondent’s bundle of documents.

19. In any event, we noted that the Applicant at paragraph 8 of his Supporting Affidavit stated thus;“that I had written to the 1st Respondent to hold on making any adverse moves towards recovery of the arrears since I had committed to regularize my account and be up to date since had received a notice in June, 2022 of intention to sell the suit property.”It is thus assumed that the notice which the Applicant admitted to have received in June 2022 is the one which the Respondents stated to have dated 17/6/2023Without delving into the details of the Land Act 2012 as argued by both parties in the Written Submissions, we rely for guidance on rule 4 of the Co-operative Tribunal (Practice and Procedure) Rules, 2009 which read as follows:“the Tribunal shall have power and discretion to decide all matters before it with due speed and dispatch without undue regard to technicalities of procedure.”Having read through the Applicant’s Claims and arguments, we did not find any statement which suggest that the Applicant did not owe money to t he Respondent. we further find this unacceptable that on one hand the Applicant agrees that he received the notices while on the other hand he argues that he was not served. It is therefore difficult to believe the authenticity of the Applicant’s arguments. On a scale of ranking as to whether the Applicant was served or not, this Tribunal hold the view of the Applicant shaky but he was served.

20. On whether the Applicant met the conditions set out in the case of Giella v Cassman Brown [1973] E.A., in order to merit the granting of injunctive orders prayed for;The celebrated case set out the conditions as follows;a.That the Applicant has to demonstrate that he has a Prima Facie case with a probability of success.In the instant case, the Applicant argued that the Respondent failed to comply with the mandatory provisions of the Land Act and that in itself qualify as a prima facie case. This argument is not persuasive to us and therefore we find that the Applicant has not established a prima facie case. More fundamentally, we rely on the court decision in Susan Adogo v Equity Bank (k) Ltd [2021] eKLR in which the Court stated that;“whereas the court was persuaded that the Statutory notice dated 4th June 2018 did not comply with the requisite law and therefore had no legal basis2, it must be noted that the issuance of invalid notice is not in itself a ground for a grant 7of injunction orders for the reasons that the omissions can be rectified. In this regard, the court found and held that the Appellant did not establish a prima facie case with a possibility of success as she did not show that there was an arguable point of Law to be argued on appeal once issuance of notice was rectified.”Given that the Applicant has had more that two (2) years since when he received a demand letter from the Respondent’s Advocates, yet he did not make any evidential efforts to sit and work out a repayment plan with the Respondents. It is our view that two (2) years is too long such that even the Applicant was issued with a mandatory notice under section 96(3)(c), he might not do anything but shift goal posts.

21. On whether the Claimant will suffer irreparable loss?This is a question that touches every human heart and even in animal Kingdom no animal would like to have his/her family subjected to a state of homelessness or destitute.Rightfully so, the Applicant stated in paragraph 18 of his Supporting Affidavit;“that my family and I reside in the said property and thus the intended illegal and unlawful sale of the suit property if allowed to materialize leaves me destitute and my entire family will be left homeless.”In his Written Submissions the Applicant went further to explain that the suit property is of intrinsic value to him and his family thus a matrimonial home.As much as we empathize with this situation, we all must follow the law since the law protects both an Applicant and a Respondent in equal measure.On sentimentality of a matrimonial property, the court stated in the case of Nairobi Civil Appeal no. 114 of 2009 that an Applicant cease to attach sentimental or intrinsic value to any property once he/she offers the property as a mortgage or a charge.In this regard, the Applicant cannot claim sentimental value anymore on the mortgaged property.The court went further to state that where the Applicant suffers loss in an appropriate case, he/she would be entitled to damages.It is our view that the United Nations Sacco is financially stable and that the Applicant could be appropriately compensated by way of damages in the event that he can prove his losses against the Sacco.

22. Tilting of balance of convenience.The Applicant argued out that because of the failure of the Respondents to follow the laid down procedures before advertising the Suit Property foe sale by public auction, the balance of convenience tilts to his favour.Whereas the Respondents argue out that their establishment of a breach caused by the Applicant tilts the balance of convenience in their favor.In the case of Reyat Trading Co. Ltd v Bank of Baroda & Tetezi house Ltd [2018] eKLR,The court held that;“it is an adage that justice delayed is justice denied and that justice is weighed on a scale that must balance….In the same rein, the Provisions of Section 1A and 1B of Civil Procedure Act obligates the parties to artist the court in the expeditious disposal of cases.”Guided by the provisions of Article 159(2)(d) of the Constitution of Kenya 2010, we uphold our fours on substantive justice rather that procedural technicalities and therefore our considered view is that the balance of convenience tilts in favor of the Respondent.

23. Conclusion.The upshot of all these that we have discussed herein is that the Applicant’s Application dated 4th May 2023 is found to be without merit dismissed with costs to the Respondent.Orders.1. Spent.2. Spent.3. Spent.4. The Applications dated 4/5/2023 is hereby dismissed.5. We order the Respondent to issue the Applicant with an up to date Statement of his Loan Account.6. That costs be in favor of the 1st Respondent.7. Mention for Pre-trial direction on 18. 4.2024.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF NOVEMBER, 2023. Hon. Beatrice Kimemia Chairperson Signed 30. 11. 2023Hon. J. Mwatsama Deputy Chairperson Signed 30. 11. 2023Hon. Beatrice Sawe Member Signed 30. 11. 2023Hon. Fridah Lotuiya Member Signed 30. 11. 2023Hon. Philip Gichuki Member Signed 30. 11. 2023Hon. Paul Aol Member Signed 30. 11. 2023Hon. Michael Chesikaw Member Signed 30. 11. 2023Tribunal Clerk JonahKarwanda advocate for the Claimant.Wachira advocate for the 1st RespondentWachira advocate – We pray for 30 days to file all our document.Karwanda advocate- No objection.Tribunal order:1. Respondent granted 30 days to comply with order II Civil Procedure Rules 2010. 2. Claimant granted 21 days upon service to file Supplementary Documents if need be upon service.3. Mention for Pre-trial directions on 18. 4.2024. Hon. J. Mwatsama Deputy Chairperson Signed 30. 11. 2023