https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10620

Tembo Sacco Society Ltd v Gichohi (Civil Appeal E030 of 2025) [2026] KEHC 10620 (KLR) (Civ) (16 July 2026) (Judgment) Neutral citation: [2026] KEHC 10620 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E030 of 2025 D Mburu, J July 16, 2026 Between Tembo Sacco Society Ltd Appellant and Linus Gichohi Respondent (Being an Appeal from the Ruling of the Cooperatives Tribunal delivered on 24th July 2025 in Cooperative Tribunal Case No. E1163 of 2023) Judgment Introduction 1.This appeal arises from the Ruling of the Cooperatives Tribunal at Nairobi delivered on 24th July 2025 in Cooperatives Tribunal Case No. E1163 of 2023. 2.By a statement of claim dated 5th June 2023, the respondent averred the appellant issued him with a share certificate no. 596 for plot no. 9 which he had purchased from the appellant. However, the appellant had allegedly failed to issue him with a title deed and as such, he lodged a suit against the appellant seeking various orders including immediate handover of his title deed and in the alternative, compensation for the property at the current market value. 3.The appellant denied the claim through a statement of defence dated 9th April 2024 and equally filed a notice of preliminary objection dated 11th April 2025 challenging the Tribunal’s jurisdiction on 2 prongs: one, that the dispute was a land matter and that the claim was time-barred under Sections 4 and 7 of the Limitation of Actions Act, the cause of action having arisen in 1997 and the suit was only filed in 2023. 4.By a Ruling delivered on 24th July 2025, the Tribunal dismissed the preliminary objection holding that the dispute was contractual in nature and not with respect to the recovery of land. The Tribunal continued to hold that while the respondent had specifically pleaded when the balloting was done and whether he took possession of the plot or not, this could only be elaborated during trial. The Tribunal also expressed its desire to understand why the appellant had not processed title deeds for other members with respect to L.R. No. 654/52 (654/12), 654/1A, which begot the respondent’s plot. The Appeal 5.Aggrieved with the Tribunal’s decision, the appellant filed a Memorandum of Appeal dated 5th August 2025 raising various grounds of appeal, that the Learned Tribunal erred in law and fact:i.In dismissing the appellants’ preliminary objection.ii.In failing to take into consideration all the facts and points of law submitted in support of the appellant’s preliminary objection.iii.In holding that the appellant had failed to prove that the Honourable Tribunal lacked jurisdiction to hear and determine the dispute, being a land matter, that should only be heard and determined by the Environment and Land Court.iv.By failing to hold that the suit was barred under the Limitation of Actions Act in that the cause of action arose in 1997 and the suit had been filed in 2021 (sic), thirty years later, well beyond the 12 years limitation period for claims over land under Section 7 and well beyond the 6 years limitation period for claims under contracts under Section 4 of the Act. 6.Accordingly, the appellant prayed that the appeal be allowed, the Ruling of the Tribunal be dismissed and for costs of the appeal. The Appellants’ Submissions 7.In support of their appeal, the appellant filed their submissions dated 19th February 2026. Relying on Nanasi Housing Co-operative Society Ltd. & Anor. vs Njore (Civil Appeal 22 of 2020) [2023] KEHC 2257 (KLR), they submitted that while a co-operative society may own and subdivide land, a dispute over the said property rightly lies with the Environment and Land Court and the Magistrates’ Court. In their opinion, such a dispute falls outside the parameters set out in Section 76(1) of the Co-operative Societies Act. 8.As to whether the claim was time-barred, the appellants posited that the property was purchased between 2nd May 1979 and 30th April 1998 and as such, the cause of action arose on 2nd May 1998. In its view, the respondent’s claim was well out of time having been filed almost 25 years later. In support, they cited Monica Wakaria Mwangi vs Mahiira Housing Company Ltd. [2018] eKLR. Furthermore, it claimed that the suit was time-barred contrary to Section 3 of the Law of Contracts Act since the instrument passing the interest of the land was not in writing, neither was it signed or witnessed. The Respondent’s Submissions 9.The respondent opposed the appeal vide its submissions dated 13th March 2026. It was their case that the Tribunal has jurisdiction where a co-operative society acquires land on behalf of its members, and subsequently subdivides it among the said members as this constitutes the business of a co-operative society under Section 76 of the Co-operative Societies’ Act. In support, they cited the cases of Chege Kabita vs Kariobangi Housing & Settlement Co-operative Society [2011] KEHC 4312 (KLR) and Madeline Ndete Mulwa Brown & Another vs Katelembo Athiani Muputi Farming & Ranching Co-operative Society Ltd. & 2 Others [2019] KEELC 2108 (KLR). They drew contrast with Wamburu vs Kyanjau Housing Co-operative Society [2025] KECPT 192 (KLR) where the dispute, while involving land purchased by the co-operative society, was allocated to 2 different members which fell outside the Tribunal’s jurisdiction as it required a determination of ownership of the subject property. 10.More to this, the respondent argued that the claim constituted a continuing breach and hence, the cause of action did not accrue on the date of allocation or payment. Moreover, the act of refusing to issue the title deed was not pleaded and could only be established through evidence. 11.The respondent further argued that Section 26 of the Limitation of Actions Act provides for extension of limitation in cases of fraud, concealment or mistake which, according to the respondent, apply to his case, specifically since he pleaded that the appellant concealed his title and refused to account. 12.With respect to the Law of Contracts Act, the respondent contended that the special nature of a member-SACCO relationship is prescribed and regulated by the Co-operative Societies Act and transcends the precepts of the Law of Contract Act. As such, the appellant’s by-laws, the membership contributions and the Share Certificate are sufficient proof of the land purchase and allocation project. ANALYSIS AND DETERMINATION 13.This being a first appeal, this court’s duty is to analyze and re-assess the evidence on record and reach its own conclusions in the matter, as set out succinctly in Selle v. Associated Motor Boat Co. [1968] EA 123. 14.The locus classicus on preliminary objections is Mukisa Biscuit Manufacturing Co. Ltd. vs West End Distributors Ltd. [1969] E.A. 696 where Law, JA stated:“I agree that the application for the suit to be dismissed for want of prosecution should have taken the form of a motion, and not that of a ‘preliminary objection’ which it was not. So far as I am aware, a preliminary objection consists of 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. Examples are an objection to the jurisdiction of the Court, or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration .” 15.Newbold, P, on his part, added:“The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way of preliminary objection. A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points by way of preliminary objection does nothing but unnecessarily increase costs and, on occasion, confuse the issues. This improper practice should stop.” 16.I have considered the appeal in light of the evidence on record and written submissions filed on behalf of the parties herein. I am of the considered opinion that the following issues arise for determination:a.Whether the dispute relates to ‘business’ of the co-operative society under Section 76 of the Co-operative Societies Act.b.Whether the claim is time-barred.c.Whether the claim runs afoul the Law of Contract Act. 17.On the first issue, Section 76 of the Co-operative Societies Act provides thus:76.Disputes(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; or(b)between members, past members or deceased members, and the society, its Committee or any officer of the society; or(c)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; or(b)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.While the respondent sought issuance of a title deed, the substance of the dispute did not invite the Tribunal to determine competing claims to ownership or title to land. Rather, it concerned the appellant’s alleged failure to fulfil its obligation, arising from the internal business of the society, to process and transmit title to a member whose entitlement is not in dispute. To buttress this, the Court of Appeal in Ernest Muiruri Njoroge & 28 Others vs Kabiru Karanja & 4 Others [1997] KECA 10 (KLR) held that the allocation of plots purchased by a co-operative society to its members, indeed constituted the business of the society. 19.Accordingly, it is my finding that the dispute relates to the business of the appellant and therefore the Tribunal had jurisdiction to hear and determine the dispute. 20.However, with respect to whether the claim was time-barred, this Court must first interrogate when the cause of action arose. I disagree with the appellant that the cause of action arose in 1998. It is settled law that a cause of action does not necessarily arise on the date that contractual obligations arise, but on the date of the breach of the same. I am in this regard guided by the Court of Appeal’s decision in Attorney General & Another vs Githinji & Another (Civil Appeal 21 of 2015) [2016] KECA 817 (KLR) where it was held that “8. A cause of action is an act on the part of the defendant, which gives the plaintiff his cause of complaint.” In this case therefore, this Court is duty-bound to reflect on the pleadings as filed to determine when the cause of action arose. 21.Although the statement of claim does not expressly plead the date on which the cause of action accrued, vide a letter dated 28th June 2019, the respondent wrote to the Commissioner for Co-operative Development protesting as to the appellant’s failure to issue them with title deeds despite paying the purchase price and being allocated with the plots. Indeed, the respondent refers to two previous letters dated 16th May 2016 and 24th July 2018 addressed to the appellant on the same issue, which drew no responses. Attention is to be had on the first letter dated 16th May 2016, which in my view, discloses that the respondent considered the appellant to have breached its obligation to issue title deeds. However, the statement of claim dated 5th June 2023 was only filed on 12th February 2024. Therefore, the claim was filed over 7 years after the cause of action arose. 22.I have considered the respondent’s claim that the option of applying for extension of time under Section 26 of the Limitation of Actions Act was still available to him and alluded to a continuing obligation. However, upon filing the preliminary objection, the respondent neither amended his statement of claim nor pleaded any facts capable of postponing or extending the limitation period. Furthermore, the issue of fraud was only raised in this appeal and does not reflect in the statement of claim. It appears to be an afterthought by the respondent. Besides, there is no acknowledgment of liability, fresh promise to perform, continuing negotiations, fraud, disability, or other circumstance recognized under the Limitation of Actions Act was pleaded. 23.In those circumstances, the plea of limitation falls for determination on the basis of the claimant's own pleadings and documents. The Court is not required to resolve contested questions of fact or evaluate conflicting evidence. Since the suit was instituted in 2024, more than six years after the cause of action had, on the claimant's own showing, accrued, it is statute-barred under section 4(1) of the Limitation of Actions Act. 24.On the issue of violation of the Law of Contracts Act, it is notable that this issue was not presented before the Tribunal for determination. Having failed to render its mind to the same, it is a new issue for which this Court cannot properly sit on appeal. The same is dismissed. 25.Before I pen off, I note that in its Ruling, the Tribunal made some concerning remarks. Despite the appellant having filed a defence denying the claim and the matter still being live before it, the Tribunal stated that it was under the assumption that other members took possession of the plots emanating from L.R. No. 654/52 (654/12), 654/1A (Tembo Housing Estate) Kisumu and was therefore keen on establishing why the appellant had not processed titles for its members and specifically why the respondent had not been issued with a title deed for his plot. It is important that a court or tribunal refrain from making conclusive observations on disputed facts at an interlocutory stage, as this preserves the integrity of the proceedings and maintains confidence in the adjudicative process. ORDERS 26.In the result, while the Tribunal was properly seized of jurisdiction, the claim as presented fell short of the applicable limitation framework. Accordingly, and for the reasons set out above, the instant appeal is partially successful with respect to the objection on time limitation. The objection on time limitation is upheld with the result that the decisionof the Tribunal on this issue is hereby set aside and substituted with an order striking out the suit for having been filed out of time. 27.In view of the nature of the present dispute, parties shall bear their own costs. It is so ordered. DATED, DELIVERED AND SIGNED AT NAIROBI THIS 16TH DAY OF JULY 2026.D.W. MBURUJUDGEIn the presence of:Mr. for the AppellantMr. for the RespondentCourt Assistant