[2025] KECPT 246 (KLR)

Osiko & 9 others v Isiolo Teachers Sacco Society & Commissioner for Coop Development (Tribunal Case E004 of 2024) [2025] KECPT 246 (KLR) (27 February 2025) (Ruling)

Neutral citation: [2025] KECPT 246 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E004 of 2024

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

February 27, 2025

Between

Christopher Osiko & 9 others & 9 others

Claimant

and

Isiolo Teachers Sacco Society & Commissioner for Coop Development

Respondent

Ruling

1. The matters coming up for determination before us are the 1st Respondent’s Notice of Preliminary Objection dated 2nd September 2024 filed on 14th September, 2024 and the Applicant’s notice of motion dated 25th March, 2024 and filed on 17th July 2024. On the 17th day of September 2024, the Tribunal directed that the Preliminary Objection would be determined first as it is in response to the Claimant’s Application.

Notice of Preliminary Objection 2. The 1st Respondent’s Notice of Preliminary Objection is that the 1st Respondent shall raise a Preliminary Objection against the Notice of Motion dated 25th March 2024 on the ground that it offends Section 7 of the Civil Procedure Act which dates “no court shall try any suit or issue in which the matter directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issues has been subsequently raised and has been heard finally decided by such court.”

3. Parties filed written submissions in respect to Preliminary Objection. The 1st Respondent’s written submissions dated 2nd September 2024 were filed on 12th November, 2024 while the Applicant’s written submissions dated 11th November, 2024 were filed on 12th November, 2024.

4. In its written submissions, the 1st Respondent states that the Applicant has filed an application to appeal lout of time, that the 1st Respondent raises an objection that these matters have already been heard and determined and are res judicata. That on 19th July, 2019, the 1st Respondent herein filed claims against the Applicants herein after they were surcharged and failed to appeal within 30 days, that the matters are now at execution stage.

5. The 1st Respondent’s advocates referred to Tribunal case numbers CTC 405 – 414 of 2019, Isiolo Teachers Sacco Society Limited Vs former official all of whom are the applicant herein, seeking leave to appeal out of time.

6. The Applicants stated in their written submissions that the law firm of B.N. Mbuthia & Co Advocate lacks the authority or capacity to address the Tribunal on behalf of the 1st Respondent and are therefore strangers to these proceedings having failed to file a notice of appointment of advocates as required under the provisions of Order 9 Rule 1 of the Civil Procedure Rules which rules also apply to the Tribunal proceedings as per Rule 6 of the Cooperative Tribunal (Practice and Procedure) Rules, 2009 and implores the Tribunal to hold that the notice of preliminary objection is improperly before the Tribunal and ought to be dismissed with costs.

7. Nevertheless, the Applicants proceed to respond to the Preliminary Objection and sets out what a constitutes a Preliminary Objection as per the decision of the Court of Appeal. In the case of Mukisa Biscuits Manufacturing Limited Vs West End Distributors Limited [1969] EA 696 and other cited authorities that the 1st Respondent Notice of Preliminary Objection dated 2nd September, 2024 raises issues of res judicata under Section 7 of the Civil Procedure Act, it does not disclose the details of any other suit between the same parties herein, other the same subject matter, filed in a court of law to demonstrate that this case is res judicata and therefore is not a proper objection as per the stated case law; that the issue of res judicata is one which must be tested by the rules of evidence where the Tribunal shall be called upon to interrogate facts and evidence, that res judicata is a disputed act and incapable of being argued as a preliminary point and asks the Tribunal to strike out the notice of Preliminary Objection with costs to the Applicants for having not met the threshold.

Analysis and Determination 1. We have considered the Notice of Preliminary filed in response to Application; together with the written submissions of the parties and have three issues that have arisen for determination;1. Whether or not the firm of B.N. Mbuthia and advocates is on record for the 1st Respondent. The Applicants moved the Tribunal by way of an application. It therefore follows that an advocate acting for a Respondent must be daily appointed and must file a notice of appointment. Advocates to that effect, before proceeding to do anything on behalf in the case of the Respondent.2. We have perused our record and confirm that there is no notice of appointment of Advocate filed by the firm of B.N. Mbuthia & Company Advocates. Further we note from the submissions filed by the firm of B. N. Mbuthia & Company Advocates, that the said firm save for referring to the issue of representation has not addressed the same at all without any document of representation filed, we must therefore hold that the firm of B.N Mbuthia & Company Advocates purported to represent the 1st Respondent without having filed the requisite notice of appointment of Advocates. It is thus our finding that the firm of B.N. Mbuthia & Company Advocates was not on record as Advocates for the 1st Respondent.3. Consequently, we find that the notice of preliminary objection dated 2nd September, 2024 is improperly filed owing to the irregular status of the Advocates who filed the same. The notice of preliminary objection is hereby struck off with no order as to costs.

The Notice of Motion Dated 25th March 2025 1. The Applicant’s notice of motion dated 25th March, 2025 is brought under Rules 3, 6, 11 and 17 of the Cooperative Tribunal (Practice and Procedure Rules 2009, Order 42, Rule 6 of the Civil Procedure Rules, Article 48 of the Constitution of Kenya 2010 and all other provisions of the Law. In the Application, the Claimant’s pray for orders;a.Spentb.That this Honourable Tribunal be pleased to grant leave to file an appeal out of time and/or attend the time within which the Applicant may appeal against the surcharge order of the Commissioner for Co-operative Development dated 18th November 2016. c.That this Honourable Tribunal be pleased to stay the execution of the respective decrees issued in favour of the 1st Respondent as against the Applicants herein pending the hearing and determination of this notice of motion applicationsd.That this Honorable Tribunal be pleased to stay the execution of the respective decrees issued in favour of the 1st Respondent as against the Applicants herein pending the hearing and determination of their appeal against the surcharged order of the Commissioner of Cooperative Development dated 18th November 2016. e.That costs of this application be in the cause.

2. The Application is based on the grounds on the face thereof and upon the affidavit of the first Applicant, Christopher Asiko sworn on 18th March 2024.

3. The grounds of the Application are that the Applicants were Board Members of the 1st Respondent Sacco up to the year 2024; that during the Applicant’s tenure as Board Members the 2nd Respondent conducted an inquiry into the affairs of the SACCO, which was concluded through an inquiry report dated 28th April 2016, with recommendations that the Applicant’s herein be surcharged various amounts in the sum of Kshs 11,820,848. 76/=.

4. That the second Respondent thereafter issued a notice of intention to surcharge dated 22nd August, 2016 against the Applicants, inviting them to show cause why they should not be subjected to the recommended surcharge. That the Applicant in response to the notice wrote to the 2nd Respondent vide letter dated 28th August, 2016 giving reasons why they should not be subjected to the recommended surcharge.

5. That the Respondent thereafter issued surcharge orders dated 18th November, 2016 adopting the recommendation in the inquiry report that the Applicants pay various amounts in the sum of Kshs 11,820,848. 76/-. That the Applicants feeling aggrieved by the decision of the 2nd Respondent on 20th December, 2016 reiterating their initial submissions and stating why they thought the surcharge orders were out of place. That being without counsel, the Applicants inadvertently made an appeal against Surcharge Order to the 2nd Respondent as opposed to the Tribunal.

6. That the Applicant’s pleadings in the respective cases filed by the 1st Respondent before the Tribunal were struck out and the Tribunal adopted the surcharge orders on 15th December 2022 and decrees were issued in March 2023 against the Applicants for the surcharged amounts. That the Applicants are apprehensive that the respective decrees issued against them may be executed at any moment, despite the surcharged amounts therein being subjected partly to loans and other arrears that have since been settled.

7. That the amounts on the surcharge order and the decrees are erroneous and do not reflect all payments made by the Applicants subsequent to the impugned surcharge order. That the Applicants request the Tribunal to intervene and stop the Applicants from being subjected to the payment of loans and/or arrears that have since been paid.

8. The supporting affidavit reproduces the grounds of the application and exhibits the documents therein.

9. The first Respondent’s notice of preliminary objection having been struck off the Claimant’s application remained undefended. In the submissions dated 11th November, 2024 the Applicant’s advocates have submitted that the preliminary objection being improper the Application stands unopposed and that the Respondents are deemed to have admitted al averments and allegations of fact contained therein and that the orders sought in the application should be granted as prayed.

Analysis and Determination 1. We have considered the notice of motion application dated 25th March, 2024, the Affidavit in support thereof and the documents annexed thereto and the submissions of the Applicant’s advocates. We have also perused the case files Tribunal Case Numbers CTC 405 – 414 of 2019 and confirm that indeed the cases were concluded and decrees have since been issued against the judgements debtors therein who are the Applicants herein.

2. In the amounts contained In the surcharge order produced herein the Applicants we also note that the Applicants participated in the said cases as admitted by them herein. Whereas the application herein is unopposed, we are called upon by the Constitution to look into each matter before us in its own merits and circumstances. We therefore must determine the application herein on the basis of the applicable law as well as the circumstances surrounding the case.

3. Section 74 of the Cooperative Tribunal Act, Cap 490 of the Laws of Kenya provides for appeal against a surcharge order.

4. Section 74(1) provides that any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.

5. The Applicants have admitted that they did not file the appeal to the Tribunal but out of ignorance applied instead to the Commissioner. Ignorance is no Defence and the Applicants I fact purportedly filed the said appeal to the Commissioner after the lapse of the thirty days laid out by the Act.

6. Thereafter, the Applicants participated in the recovery case filed by the 1st Respondent until conclusion thereof. The mandate of the Tribunal on appeals against surcharge is in respect to the procedure leading to the surcharge. The Tribunal was not moved by the Applicants for the said purpose within the requisite time limit and the cannot now seek the Tribunal’s assistance merely to defeat the regularly issued judgement and decrees of the Tribunal.

7. Consequently, we find and hold that the Applicant’s notice of motion application dated 25th March, 2024 lacks merit and the same is hereby dismissed with no order as to costs.

In SummaryWe make the following orders; 1. Preliminary Objection dated 2nd September 2024 is dismissed with no orders as to costs.

2. On the Notice of Motion Application dated 25th March 2024, the same is dismissed with no orders as to costs.

3. File ordered as closed.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF FEBRUARY, 2025. HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 2.2025HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 2.2025HON. BEATRICE SAWE MEMBER SIGNED 27. 2.2025HON. FRIDAH LOTUIYA MEMBER SIGNED 27. 2.2025HON. PHILIP GICHUKI MEMBER SIGNED 27. 2.2025HON. MICHAEL CHESIKAW MEMBER SIGNED 27. 2.2025Hon. Paul Aol Member Signed 27. 2.2025Tribunal Clerk JonahMutende Kip for ApplicantMbuthia for RespondentHON. B. KIMEMIA CHAIRPERSON SIGNED 27. 2.2025