[2024] KEHC 11529 (KLR)

Republic v Commissioner of Cooperative Development & another; Njau & 3 others (Exparte) (Application E013 of 2023) [2024] KEHC 11529 (KLR) (Judicial Review) (20 September 2024) (Ruling)

Neutral citation: [2024] KEHC 11529 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Application E013 of 2023

J Ngaah, J

September 20, 2024

Between

Republic

Applicant

and

Commissioner of Cooperative Development

1st Respondent

Honourable Attorney General

2nd Respondent

and

Duncan Chege Njau

Exparte

Samuel Kamunya

Exparte

Boniface Gachoka

Exparte

Rosemary Chege

Exparte

Ruling

1. The motion before court is dated 14 February 2022 and is expressed to be brought under section 8 (2) of the Law Reform Act, cap. 26 and Order 53 rules 1, 2 and 3 of the Civil Procedure Rules. The applicant seeks the following orders:“1. That this Honorable court be pleased to issue orders of certiorari directed to the 1st, 2nd and 3rd respondents, by themselves their servants and/or agents or any other officer acting under their authority to bring before this court for the purpose of being quashed the inquiry order dated 20th April 2022, for the dissolution of the management and supervisory boards of Metropolitan National Sacco, all administrative actions, decisions or measures initiated or put in process/motion by the Respondents or their agents and hinged or founded on the impugned inquiry report of the servants and/or the1st Respondent.

2. That this Honorable court be pleased to issue orders of prohibition directed to the 1st , 2nd and 3rd (sic) respondents , by themselves their servants and/or agents or any other officer acting under their authority from dealing in any way with the impugned inquiry report, decision, finding/recommendations in whatsoever manner detrimental to the applicants.”The applicant has also sought for an order on costs.The application is based on a statutory statement dated 2 February 2023 and an affidavit verifying the facts relied on sworn on even date by Mr. Duncan Chege Njau.

2. According to these documents, vide Kenya Gazette No. 4558 Vol. CXXIV-No. 71 dated 22 April, 2022, the Respondents commenced an inquiry into the affairs of a cooperative society called Metropolitan National Sacco. The inquiry order made specific reference to the co-operative Society's by-laws, working and financial conditions and the conduct of the society’s present and past directors in the management of the cooperative society. The team conducting the inquiry was drawn from the office of the 1st Respondent and from the Sacco Societies Regulatory Authority.

3. The inquiry commenced on 26 April 2022 and continued past September 2022 which, according to the applicants, was beyond the period of fifteen days prescribed by the Gazette Notice No. 4558 and also beyond the sixty days' maximum period expressly provided for by Rule 46(1) of the Co­ operative Society Rules of 2004. A summary of the inquiry report was presented to the Metropolitan National Sacco's General Meeting held on the 29 October 2022.

4. According to the applicants, the scope of the inquiry was to cover a period of ten years but what was presented to the meeting covered the period between the year 1997 – 2022; a period of twenty-five years, yet there were no records which were provided in the meeting covering this period. The aspect of the report covering the period commencing 1997 is said to be illegal since it is alleged to have been an abuse of the terms provided by the Co-operative Societies Act, cap 490. A summary of the inquiry report implied that the financial statements of the co-operative Society were fictitious.

5. The applicants are aggrieved by the report because, although members of the management committee who apparently, included the applicants, were adversely mentioned in the report, they were not given an opportunity to defend themselves and were, therefore, condemned unheard. Further, no deliberations by the general meeting were conducted on the summary of the report. According to the applicants, the County Director of Co-operatives had already indicated the 1st Respondent's intention to implement the inquiry report even before its presentation to members. This, the applicants argue, demonstrates that a predetermined decision had been made and, therefore, the applicants were not given a fair hearing. In the circumstances, it is the applicants’ case that the management committee together with the supervisory board were dismissed unfairly.

6. In response to the motion, the respondents filed a preliminary objection on the ground:“1. That the proceeding of Certiorari fatally violates the mandatory provisions of Section 9(3) of the Law Reform Act (Cap 26) and Order 53 Rule 2 of the Civil Procedure Rules, 2010, being the six-month limitation period imposed by above Laws.”

7. Besides the preliminary objection, the 1st respondents also filed a replying affidavit sworn by Mr. David K. Obonyo. Paragraphs 2 to 6 of the affidavit appear to be missing from the affidavit uploaded on the portal but from what I gather in what is left of that affidavit is the contention that the impugned inquiry was conducted lawfully and procedurally and, at any rate, in accordance with the law. Contrary to the applicant’s allegations, the applicants were given opportunity to be heard.

8. According to Mr. Obonyo, the Co-operative Societies Act, provides that all officers and members of the Society shall produce such cash, accounts, books, documents and securities of the Society and furnish such information in regard to the affairs of the Society, as the person conducting the inquiry may require. In this regard, summons were duly issued to the requisite persons to furnish such information in respect to the affairs of the Society to aid in the inquiry.

9. Section 58(3) of the Act provides that the Commissioner shall report the findings of the inquiry at the general meeting of the Society and shall give directions for the implementation of the recommendations of the Inquiry Report.Accordingly, upon conclusion of the inquiry, the findings of the inquiry were reported to the members of the Society in a General Meeting held 29 October 2022. The inquiry determined, among other things, that the Board members and Senior Management of the cooperative society, both current and past had and still conducted the business of the Society in a manner that is contrary to the provisions of Cooperative Societies Act, cap. 490, Sacco Societies Act, 2008 and the Regulations made thereunder.

10. The report also determined that the society was being run in a manner that is detrimental to, and not being in the best interests of Society members and members of the public at large within the meaning of Section 51 of the Sacco Societies Act as read with Reg. 67 of the Regulations 2010 made thereunder which put to risk the continued sustainability and financial stability of the Sacco.

11. The Applicants, it is alleged, were always aware of the inquiry and, as matter of fact, they attended the meetings including the General Meeting convened for the purpose of presentation of the Inquiry Report to the members of the cooperative Society. Upon presentation of the Inquiry Report to the members of the Society and pursuant to Section 58 (3) of the Act, the report became a public document, accessible to all persons including the Applicants.

12. Further, the respondents have been advised by their counsel, which advice they believe to be true, that Section 58(4) of the Act provides that where the Commissioner is satisfied, after due inquiry, that the Committee of the Society is not performing its duties properly, he may dissolve the committee and cause to be appointed an interim committee consisting of not more than five members from among the members of the Society for a period not exceeding ninety days. It is for this reason that the Board or Management and the Supervisory Board of the Society were dissolved. According to Section 28(4) (k) of the Act, no person shall be a member of a Committee if he has been adversely mentioned by the Commissioner in an Inquiry Report adopted by a general meeting.

13. The respondents’ case is that the inquiry was conducted lawfully and procedurally and in particular, the rules of natural justice were adhered to. Thus, the report findings were legally and rationally arrived at.

14. The respondents also contend that they have been advised by their counsel, which advice they verily believe to be true that the applicants’ application offends the mandatory provision of section 9(3) of the Law Reform Act according to which leave to file proceedings for an order of certiorari can only be granted if the application for such leave is made within three months of the date the cause of action arose. In the instant application, the order which the applicants seek to impeach was contained in a gazette notice published on 22 April 2022 yet the application was filed in February 2023.

15. It is clear from the prayer 1 in the applicant’s application and, indeed there should not be any doubt that the impugned order, central to the applicant’s application is the “inquiry order” published in gazette notice no. 4558 on 22 April 2024. The notice reads as follows:“Gazette Notice No. 4558Republic Of KenyaThe Co-operative Societies Act(cap. 490)Inquiry OrderWhereas, on my own accord have ordered for an inquiry into the affairs of Metropolitan National Sacco Limited (C.S 2628) and whereas I am of the opinion that an inquiry be carried into-(i)the by laws;(ii)working and financial conditions; and(iii)the conduct of present or past directors and management of Metropolitan National Sacco Limited (C.S 2628).And in accordance with section 58 as read together with section 73 of the Co-operative Societies Act, Cap. 490, laws of Kenya.Now therefore, I authorize; (1) Javel M. Murira, Director·of Co­ operative Audit, (2) David Gitonga Kahuthu (Dr.), Manager, Regulations, (3) Kennedy Ottachi, Principal Co-operative Officer and (,4) Daniel Mue Mwatu, Senior Compliance Officer, to hold an inquiry within fifteen (15) days from the date thereof at such place and time as may be expedient and duly notified by them.The attention of all officers and members of the society is directed to the following sections of the Co-operative Societies Act.Section 60 (I)- Cost of InquirySection 60 (2) -Recovery of Costs of ExpensesSection 94 -OffencesSection 73 -SurchargesDavidk.obonyo.Commissioner for Co-operative Development.”

16. Section 9(3) of the Law Reform Act prescribes six months as the period within an application for the judicial review relief of certiorari is to be made after the impugned order, judgment decree conviction or other proceedings have been made. It reads as follows:(3)In the case of an application for an order of certiorari to remove any judgment, order, decree, conviction or other proceedings for the purpose of its being quashed, leave shall not be granted unless the application for leave is made not later than six months after the date of that judgment, order, decree, conviction or other proceeding or such shorter period as may be prescribed under any written law; and where that judgment, order, decree, conviction or other proceeding is subject to appeal, and a time is limited by law for the bringing of the appeal, the court or judge may adjourn the application for leave until the appeal is determined or the time for appealing has expired.

17. The applicants do not, and indeed cannot dispute the import of this provision of the law with respect to when to file an application for the order of certiorari. However, what they have attempted to do in their submissions is to run away from the inquiry order duly gazetted on 22 April 2022 and, instead alluded to the inquiry report which was presented to the cooperative society’s meeting of 29 October 2022 as their target of the judicial review relief of certiorari. This, of course, cannot be true and, in any event, the argument betrays the applicant’s own pleadings, in particular prayer 1, of the motion which states, in no uncertain terms that:“That this Honorable court be pleased to issue orders of certiorari directed to the 1st, 2nd and 3rd respondents, by themselves their servants and/or agents or any other officer acting under their authority to bring before this court for the purpose of being quashed the inquiry order dated 20th April 2022, for the dissolution of the management and supervisory boards of Metropolitan National Sacco, all administrative actions, decisions or measures initiated or put in process/motion by the Respondents or their agents and hinged or founded on the impugned inquiry report of the servants and/or the1st Respondent.” (Emphasis added).

18. Without belabouring the point, the applicants are bound by their own pleadings and cannot purport to substitute, in their submissions, the prayer to quash the inquiry order of 20 April 2022 with that of the inquiry report of 29 October 2022.

19. Besides the applicants being bound by their pleadings, section 9 (1) ( c) of the Law Reform Act is to the effect that no relief can be granted other than that which was specified when the application was made and for which, of course leave was sought and granted. The section reads as follows:9. (1)Any power to make rules of court to provide for any matters relating to the procedure of civil courts shall include power to make rules of court—(c)requiring that, where leave is obtained, no relief shall be granted and no ground relied upon, except with the leave of the court, other than the relief and grounds specified when the application for leave was made.It follows that the impugned order having been made 22 April 2022, the application for the relief of certiorari ought to have been filed on or before 23 October 2022 when the six months limitation period lapsed.

20. Unlike the first prayer which is targeted at the inquiry order, the second prayer for the relief of prohibition is targeted at the inquiry report. As far as I understand this prayer, it is to bar the respondents from implementing the report.

21. In order to clear the air on whether the report has been implemented or not and, therefore, whether the relief of prohibition is available to the applicants, I would be enjoined to interrogate the competing evidence which has been presented before court by way of affidavits. Evaluation of evidence goes beyond what a preliminary objection entails. As was held in Mukhisa Biscuit Manufacturing Co Ltd versus West End Distributors (1969) EA 696, a preliminary objection is concerned about a point of law which has been pleaded or which arises by clear implication out of pleadings and which, if argued as a preliminary point, may dispose of the suit. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct and, it cannot be raised if any fact has to be ascertained.

22. In the same breath, the court may also wish to consider the question of non-disclosure of material facts, among other issues that may arise in the applicants’ application. To the extent that these questions involve interrogation of evidence, they cannot be determined in the context of a preliminary objection; instead, these questions can only be determined at the hearing of the substantive motion.

23. For the reasons I have given, I hereby sustain and uphold the respondent’s preliminary objection only to the extent that the applicant’s prayer for the order of certiorari is not sustainable. The application shall proceed for hearing on the prayer for prohibition only. Costs shall be in the cause. It is so ordered.

SIGNED, DATED AND DELIVERED ON 20 SEPTEMBER 2024NGAAH JAIRUSJUDGE