[2023] KEHC 26961 (KLR)

Osugo v Mogaka & 2 others (Civil Appeal E031 of 2023) [2023] KEHC 26961 (KLR) (14 December 2023) (Judgment)

Neutral citation: [2023] KEHC 26961 (KLR)

Republic of Kenya

In the High Court at Nyamira

Civil Appeal E031 of 2023

WA Okwany, J

December 14, 2023

Between

Benard Nyakundi Osugo

Appellant

and

Enock Onyancha Mogaka

1st Respondent

Jennifer Ojengo

2nd Respondent

Nyaata Multi-Purpose Co-Operative Society

3rd Respondent

(Being an Appeal from the Judgment/Decree in Nyamira Civil Suit No. 123 of 2016 in the Chief Magistrate’s Court at Nyamira by Hon. W.K. Chepseba, Chief Magistrate delivered on the 20th day of June 2023)

Judgment

1. The Appellant herein, was the Plaintiff before the trial court where he sued the Respondent seeking the following orders: -1. An order compelling the defendants to return the Plaintiff’s motor cycle registration No. KMCB 324D Jincheng, Band Saw machine and cash of Kshs. 7,000/= on 27th April 2014.

2. General damages as may be assessed by the honourable court.

3. Costs incidental to the suit

4. Any other remedy.

2. The Respondents filed a defence wherein the denied the Appellant’s claim on the basis that it discloses no cause of action. They however conceded that the Appellant secured the loan which he had partly repaid leaving a balance of Kshs. 16,530.

3. The Respondents also made a counter claim against the Appellant for Kshs. 70,000 being unpaid interest/principle sum advanced to the Appellant on 6th June 2011.

4. It was the Respondents’ case that they only claimed Kshs. 70,000 even though the interest that had accrued as at the time of filing the Defence was Kshs. 538,512. 1.Payments of Kshs. 70,000/=

2. Interests

3. Costs of the suit.

The Appellant’s Case 5. The Appellant’s case was that he was a member of the 3rd Respondent herein, Nyaata Multipurpose Cooperative Society. He claimed that sometime in 2011, he borrowed the sum of Kshs. 40,000/= from the said society which he was required to repay at a daily rate of Kshs. 290 until payment in full. He conceded that he defaulted in the loan repayments and had an outstanding balance of Kshs. 16,530/= which he instructed the 3rd Respondent to offset from his savings of Kshs. 16,600/=.

6. The Appellant contended that on 27th April 2015, the 3rd Respondent’s agents and an auctioneer came to his workshop with a view to attaching his property in order to recover the outstanding loan amount after which he paid the sum of Kshs. 7,000/=. He claimed that the Respondents then asked him to sign an agreement to the effect that he would pay Kshs. 60,000/= within 7 days. He declined to execute the agreement and they attached his motor cycle. He reported the incident to the police who advised him to seek court redress.

7. The Appellant testified that he discovered that the 3rd Respondent was charging him interest at 5% contrary to the agreed rate of 1%. He added that the Respondents owed Kshs. 70/= if they were to offset the loan from his savings and that they therefore had no basis for attaching his property.

8. The Appellant called 2 witnesses namely; Jane Nyarangi Nyakundi (PW2) and Andrew Guto Mecha (PW3) who confirmed that auctioneers attached his motor cycle on the basis of an alleged unpaid loan.

The Respondent’s (Defence) Case 9. The 1st Respondent (DW1) confirmed that the Appellant was a member of the 3rd Respondent co-operative society. He stated that the society’s activities were governed by its by-laws. DW1 further confirmed that the Appellant applied for a loan of Ksh. 40,000/= on 6th June 2011 vide Application form (D. Exh1) which he was to repay within 6 months at an interest of Kshs. 290/= daily. He stated that the Plaintiff did not clear the loan which stood at Kshs. 56,000/= that they counter-claimed before the trial court.

10. The trial court rendered a judgment in which it found that both the Appellant and the Respondents did not prove their cases to the required standards. The said court dismissed the suit and the counter claim thus triggering the filing of the instant appeal in which the Appellant listed the following grounds of appeal in the Memorandum of Appeal: -1. That the trial magistrate erred in law and fact in abdicating his mandate as an impartial and passive arbiter by giving judgment in favour of the Respondents and accused the Appellant of not proving his case on a balance of probability even after the Respondents confessed in their written submissions as to the entire cause of action that they seized the said properties i.e.a.Motor Bike KMCB 324D;b.Band Saw machines; andc.Cash of Kshs. 7,000/= on the 27th day of April 2014 as alleged in the Plaint.

2. That the trial magistrate erred in law and fact in his judgment by not considering the Appellant’s statement and the evidence of the two witnesses Jane Nyarangi Nyakundi and Andrew Guto who had testified during the hearing of this matter before the trial court on the hearing date.

3. That the trial magistrate erred in law and fact by not awarding the Appellant the sought orders even after indicating in his judgment that the Respondents never proved their counter claim.

4. That the trial magistrate failed or ignored the fact that the counter claim was intentionally filed by the Respondents to justify their unlawful illegal action of seizing the aforementioned properties as there was no unpaid loan balance.

5. That the trial magistrate erred in law and fact by not directing that the Respondents supply the Appellant with copies of their written submissions even after the Appellant made several requests in the open court.

6. That the trial magistrate erred in law and fact by not taking into consideration that the Respondent’s submissions were written and filed in court by an advocate who was not duly appointed as he never filed any appointment notice in court and never served the Appellant, therefore the Respondents submission was filed in Court by a stranger to the Appellant.

7. That trial magistrate erred in law and fact by dismissing the Appellant’s claim together with the sought orders even after demonstrating in his judgment that the Respondents neither raised any grounds of opposition nor were they able to produce any sworn evidence before the trial court, therefore the court’s findings had no objective (sic) and were largely speculative and not founded on any solid evidence or fact at all.

8. That trial magistrate erred in law and fact in that, even after the Respondents confessed to the Appellant’s claim of seizing the properties by auctioneers and agents from Nyaata Cooperative Society unlawfully and illegally, it failed or ignored to establish whether the Respondents had complied with the Auctioneer’s Act by confirming the following: -a.The letter of instructions to auctioneersb.The auctioneer’s proclamation attachment noticec.The auctioneer’s sale noticed.The court’s decree of executione.Mode of any returns to the court.

9. That the trial magistrate erred in law and fact by failing to establish that the seizure of the properties was unlawful and illegal and had already caused both general and special damages with other incidentals for a period of 9 years since 2014 and further failed to give directions as to the entire Appellant’s claim and in fact favoured the Respondents who never proved their counter claim.

10. That the trial magistrate erred in law and fact by allowing the Respondents to be the custodians of properties seized unlawfully orchestrating a serious financial loss to the Appellant indefinitely.

11. The Appellant seeks the following orders: -a.The judgment and decree of the trial court be set aside.b.The Respondents be compelled to return the band saw machine, Motor cycle KMCB 324D and cash of Kshs. 7,000/= be refunded with interests at court rate.c.General damages and loss of business be awarded as follows:i.Motor bike income at Kshs. 300/= per day until the date of the judgment.ii.Band saw machine Kshs. 800/= per day until the date of the judgment.d.Costs of the Application to be provided by the Respondents.e.Any other reliefs that the court might deem fit in the interests of justice.

12. The Appeal was canvassed by written submissions which I have considered.

13. The duty of a first appellate court was succinctly stated in Selle vs. Associated Motor Boat Company (1968) EA 123 as follows: -“This court must consider the evidence, evaluate it and draw its own conclusions. Though in doing so it should always bear in mind that it neither heard witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he had clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”

14. I have considered the record of appeal and the submissions. I find that the main issue for my determination is whether the trial court had the jurisdiction to entertain the Appellant’s case and depending on the finding on the issue of jurisdiction, the court will consider if the instant appeal is merited.

Jurisdiction 15. It is trite that jurisdiction is everything without which the court must down its tools and make no further step. (See Owners of the Motor Vessel “Lillian S” vs Caltex Oil (Kenya) Ltd [1989] eKLR).

16. In the instant case, I note that the Respondents raised the issue of jurisdiction in its submissions before the trial court even though no objection was raised on jurisdiction in the Defence. The trial court did not address itself to the subject of Jurisdiction but went ahead to dismiss both the Appellant’s claim and the Respondents’ counterclaim without giving any reasons or analysis leading to the dismissals.

17. The Respondents argued that since it was not disputed that the Appellant and the 1st and 2nd Respondents were members of the 3rd Respondent cooperative society, the claim fell within the jurisdiction of the Cooperative Disputes Tribunal by dint of the provisions of Section 76 of the Co-operative Society’s Act which stipulates as follows: -(1)If any dispute concerning the business of a co-operative society arises—a.among members, past members and persons claiming through members, past members and deceased members; orb.between members, past members or deceased members, and the society, its Committee or any officer of the society; orc.between the society and any other co-operative society,it shall be referred to the Tribunal.(2)A dispute for the purpose of this section shall include—a.a claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; orb.a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not;c.a claim by a Sacco society against a refusal to grant or a revocation of licence or any other due, from the Authority.

18. Having noted the common ground that the Appellant and the 1st and 2nd Respondents belonged to the same co-operative society, the 3rd Respondent, from which the Appellant secured a loan of Kshs. 40,000, it follows that the Appellant’s claim ought to have been filed before the Co-operatives Disputes Tribunal in line with the dictates of the above provisions. The section is clear that where there is a dispute between members of the society and the society as in this case or between members themselves, it is mandatory that such disputes be referred to and dealt with by the tribunal.

19. My finding is that the trial court lacked the jurisdiction to hear and determine the dispute and it should have accordingly downed its tools.

20. I find that, in the circumstances of this case and having found that the trial court was bereft of the jurisdiction to entertain the case, it will not be necessary to venture into determining the merits of the appeal.

21. Accordingly, I find that the appeal is not merited and I therefore dismiss it with no orders as to costs.

22. Orders accordingly.

JUDGMENT DATED, SIGNED AND DELIVERED VIRTUALLY VIA MICROSOFT TEAMS THIS 14TH DAY OF DECEMBER 2023. W. A. OKWANYJUDGE