https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3453

Ufundi Savings & Credit Cooperative Society Ltd v Obara & 191 others (Environment and Land Appeal 37 of 2014) [2026] KEELC 3453 (KLR) (5 June 2026) (Ruling) Neutral citation: [2026] KEELC 3453 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Environment and Land Appeal 37 of 2014 JG Kemei, J June 5, 2026 Between Ufundi Savings & Credit Cooperative Society Ltd Appellant and Titus E Obara & 189 others Respondent and Cooperative Bank of Kenya Interested Party and Commission for Cooperatives Development Proposed Interested Party Ruling Notice of Motion dated 2/12/25 filed by the 2nd Respondent/Applicant 1.The motion before the Court is brought under Section 5 of the Judicature Act, Sections 1A, 1B, 3 and 3A of the Civil Procedure Act, and Orders 40 Rule 1 and 50 Rule 1 of the Civil Procedure Act, and all other enabling provisions of the Law, seeking the following orders that the Court;a.Spentb.grant leave to enjoin the proposed interested party.c.Restrain the appellant and its directors, herein, their agents or employees, or anyone claiming through them, from further collecting the rental income from 209/2571 (Ufundi Coop Plaza) [suit land] pending the hearing and determination of this application inter parties.d.Grant the 2nd Applicant, their agents, employees, or anyone claiming through them, the full legal authority to collect the rental income from the suit land and disposal of the said premises, having declared joint owners of the said premises.e.Cite the appellant and its board of directors herein, the agents/employees or anyone claiming through them for contempt of Court for failing to comply with the judgment delivered on 20/12/2021 and order that they are liable for punishment for contempt of Court.f.Declare the Caveat Emptor published in the Daily Nation of 27/11/25 null and void.g.Compel the appellant to provide proof of documents used to prepare the financial reports for the year 2022-2023 and provide proof for the election of members as stated on page 1 of the financial report and proof of membership statuses provided for on page 3 of the financial report, including the entire financial report.h.Costs of the application. 2.The application is founded on the grounds annexed thereto and on the supporting affidavit of Titus Obara, sworn on 2/12/25. The deponent asserts that the appellant has disobeyed the judgment of this Court delivered on 20/12/21, and that the appellant is likely to suffer irreparable loss and damage. Furthermore, the appellant has engaged in illegal and unilateral rent collection from the tenants of the suit property, thereby exposing the property to mismanagement and resulting in loss and damage to the Applicants and other joint owners. 3.It was further averred that the appellant and its board of directors are now defunct and deregistered, and therefore operating unlawfully in office and incapable of implementing the current judgment. 4.That the intended joinder of the Interested party in these proceedings is for the purpose of explaining and clarifying the legal status of the appellant and its directors, and why no action has been taken to implement the judgment. 5.That, in an effort to frustrate compliance with the judgment and the sale of the suit land as ordered by the Court, the appellant placed a caveat emptor on the suit property on 27/11/25, an action intended to scare away potential buyers interested in purchasing the suit property. 6.He stated that unless the Applicants and the proposed interested party are restrained, the judgment of the Court will be rendered a mere academic exercise. 7.The application is challenged by the Appellant through the replying affidavit of Alphonce Maragia Makori, who states that he holds the position of the Acting Chief Executive Officer of the Appellant society and is duly authorised to swear the affidavit. He characterises the Applicant’s application as incompetent, defective, and invalid in law, arguing that the Court is functus officio, having rendered its judgment on 20/12/21, which determined the ownership of the suit land between the Appellant and the Respondents at 50.88% and 49.12% respectively. Further, the Court determined that the suit property be sold and the proceeds used to offset the outstanding loan with the Cooperative Bank of Kenya, with the balance shared between the appellant and the Respondents' investment members. 8.Noting that the total membership of the appellant, as per the register, stands at about 9887, the deponent questioned the locus of the Applicant in filing the current application. 9.Further, he contended that the appeal, having been determined by a three-judge bench, cannot be placed before a single judge, as purported by the Applicants. 10.Moreover, the deponent contested the orders to enjoin the Commissioner for Cooperatives in a suit that has been heard and determined, terming it an attempt to reopen the appeal, which constitutes an abuse of the Court's process. 11.That the Applicant has prepared a valuation of the suit property without the authority of the owners of the property, namely the Respondent society or the general body of the members of the investment group, thereby rendering his actions suspicious. As a result of the Applicant's conduct, the appellant was prompted to lodge a caveat emptor against the Applicant and his agents' dealings with the suit property to protect the suit land from fraud and unauthorised transactions. 12.That, in an attempt to implement the judgment, the Respondent society has advertised the property for sale twice in the newspapers, and that it is not true that no action has been taken. 13.The 1st Respondent and the interested parties have not opposed the application. 14.The Applicants submitted that the application sought to hold the appellant's directors in contempt and was therefore improper for Mr Makori to swear an affidavit on their behalf without any express authority from those directors. Hence, the affidavit has no merit and is fatally defective. 15.On joinder of the interested party, the Applicants submitted that the reason for joinder is to expedite the implementation of the judgment, since it has been discovered that the appellant society is now defunct and therefore not in a position to implement the said judgment of the Court. The second reason for the joinder of the Commissioner for Cooperatives is to explain why they are approving the appellant's annual returns, filed by a defunct Sacco, being the appellant. 16.Regarding rent collection, the Applicants submitted that the appellant is collecting rent without the co-owners' authority and that the manner of expenditure of the rent is prejudicial to the co-owners of the property. The appellant was also found to have issued a caveat emptor without the joint owners' authorisation. 17.On contempt, the appellants submitted that there is no evidence that the Court's judgment has been implemented. Further, there is no evidence that the funds held in Court have been used to offset the outstanding loan facility with Cooperative Bank. The appellants have failed to account for the annual rent collected from the suit land, amounting to Kshs 50 Million. The appellants' conduct should be punished by way of contempt of Court orders. The effort, as a co-owner, to advertise the property for sale was met with a caveat emptor, an action intended to frustrate the implementation of the judgment and the enjoyment of the fruits of the said judgment by the other joint owners of the suit land. 18.The appellants submitted that the Court is functus officio and hence devoid of jurisdiction to hear and entertain the application, having rendered its judgment on 20/12/21. That the order of joinder and the authority to the appellants to collect rent from the suit land are merely new attempts to relitigate the appeal. That, in any event, a similar application had been made by the appellants on 26/1/24, which was dismissed by the three-judge bench. 19.It was further submitted that the deponent of the supporting affidavit, Mr Obara, lacks authority from the appellant's members to file the application, particularly as the Court's judgment was delivered by a three-judge bench and therefore any new application cannot be heard by a one-judge bench. 20.The appellant submitted that it has made efforts to implement the Court’s judgement by placing two newspaper advertisements for the unsuccessful sale of the building. It further submitted that the unilateral actions of the Applicants, such as carrying out the valuation and sale of the building without the members’ authority, have created suspicion and confusion in the implementation of the judgement. Further, in strict compliance with the Court orders, the appellant is still paying the outstanding loans to Cooperative Bank and is therefore not in contempt of the Court. Analysis and determination 21.Having considered the application in its entirety, the rival affidavit evidence and the submissions on record, the issues for determination are;a.Whether the interested party, the Commissioner for Cooperatives, should be joined in the appeal.b.Whether the appellant/Respondent and its directors are in contempt of the Court orders dated 20/12/21.c.Whether the Applicants and their employees and agents should be granted authority to collect rent from the said premises as well as dispose of the said premises.d.Whether the Court should compel the appellants to provide proof in the form of financial reports for 2022-2023 in support of membership status and the election of members.e.Should the Court declare the caveat emptor advertised in the daily Nation null and void?f.Costs of the application. 22.It is not in dispute that the judgment of this Court was delivered by a three-judge bench on 20/12/21 in the following terms;“a)The Award of the Co-operative Tribunal in Nairobi Tribunal Case Number CTC 375 of 2010 dated 9/12/2014 is hereby set aside and replaced with the orders hereunder.(i)It is hereby declared that L.R. No. 209/2571 together with the developments thereon (Ufundi Co-op Plaza) is co-owned by Ufundi Savings and Credit Co-operative Society Limited (the Sacco) on one part and the Investing Members of the Sacco who contributed money towards the purchase of L.R. No. 209/4291 and the developments thereon (Ufundi House) on the other part in the ratio of 50.88% to 49.12% respectively.(ii)The Sacco is hereby allowed to dispose L.R. No. 209/2571 together with the developments thereon (Ufundi Co-op Plaza);(iii)The proceeds of the sale shall first be utilised to redeem the title over L.R. No. 209/2571 by paying the outstanding loan owed to the Co-operative Bank of Kenya Limited and the net balance shall be shared out in the ratio of 50:88% to 49:12% in favour of Appellant and Investment Members respectively.(iv)The portion of 49.12% of the sale proceeds belonging to the Investment Members shall forthwith be paid to the Sacco members who contributed money for the purchase of L.R. No. 209/4291 (Ufundi House).(v)Parties shall bear their respective costs relating to Nairobi CTC No. 375 of 2010.b)All the rental income deposited in Court shall be forthwith released to the Co-operative Bank of Kenya Limited towards redemption of the title charged to it.c)Parties shall bear their respective costs of this appeal.” 23.From the above judgement, it is clear that the ownership of the suit land was determined in favour of the appellant and the Investing Members of the Sacco who contributed money towards the purchase of L.R. No. 209/4291 and the developments thereon (Ufundi House), on the other hand, in the ratio of 50.88% to 49.12% respectively. 24.It is the Applicants' case that the Court's judgment has not been implemented since 2021. They further contend that the appellants have disobeyed the Court's orders, frustrated the implementation of the judgment, and that its members, some of whom are senior citizens, are unable to enjoy its fruits. They have accused the appellants of various infractions, including mismanaging the property, rendering it unattractive for rental; failing to utilise the rental income to offset the loans owed to the Cooperative bank, as directed by the bank; refusing to sell the suit property to pay the members their dues; and denying the Applicants the opportunity to sell the suit land by publishing a caveat emptor on the suit land and by failing to account for the collection and utilisation of the rent. 25.Before delving into the issues for determination, I wish to address a few points raised by the Applicant. The first is that the affidavit of Mr Makori, sworn on behalf of the appellant's directors, should be struck out on the ground that the appellant lacks authority to swear it. The gist of the application is that the appellant has disobeyed the Court's orders issued on 20/12/21, and that the appellant and its directors ought to be held in contempt. The appellant opposed the application by the Replying affidavit of Mr Makori, which is now under attack. The Court has perused the record, and it is evident that Mr Makori has been swearing affidavits on behalf of the appellant as the acting Chief Executive, and there is no evidence [ even now] that the deponent's position is untrue or unauthorised. The Court therefore finds the argument flawed and without merit. 26.The second issue raised by the Applicants concerned an order restraining the appellants from collecting rent pending the hearing and determination of the application inter partes. The Court finds that this prayer lapsed and is therefore overtaken by events.Whether the interested party, the Commissioner for Cooperatives, should be joined in the appeal. 27.The starting point is the definition of who an Interested Party is? Order 1 Rule 10(2) of the Civil Procedure Rules states as follows: -“The Court may at any stage of the proceedings, either upon, or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as Plaintiff or Defendant be struck out, and that the name of any person who ought to have been joined, whether as Plaintiff or Defendant or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon or settle all questions involved in the suit, be added.” 28.Black’s Law Dictionary defines an Interested Party as “a party who has a recognizable stake (and therefore standing) in the matter.” 29.The Supreme Court of Kenya in Communications Commission of Kenya and 4 Others –vs- Royal Media Services Limited & 7 held as follows:“An interested party is one who has a stake in the proceedings, though he or she was not party to the cause ab initio. He or she is one who will be affected by the decision of the Court when it is made, either way. Such a person feels that his or her interest will not be well articulated unless he himself or she herself appears in the proceedings, and champions his or her cause. Similarly, in the case of Meme v. Republic, [2004] 1 EA 124, the High Court observed that a party could be enjoined in a matter for the reasons that:i.Joinder of a person because his presence will result in the complete settlement of all the question involved in the proceedings;ii.Joinder to provide protection for the rights of a party who would otherwise be adversely affected in law;iii.Joinder to prevent a likely course of proliferated litigation.We ask ourselves the following questions:a)what is the intended party’s state and relevance in the proceedings andb)will the intended interested party suffer any prejudice if denied joinder.?” 30.The law on joinder of interested parties to suits has been settled by the Supreme Court of Kenya in the case of Francis K. Muruatetu and Another vs. Republic & 5 Others (2016) eKLR, the Court set out identifiable key elements for consideration in an application for joinder as an Interested Party. The elements are as follows: -“a.The Personal interest or stake that the party has in the matter must be set out in the application. The Interest must be clearly identifiable and must be proximate enough, to stand apart from anything that is merely peripheral.b.The prejudice to be suffered by the intended Interested Party in case of non- joinder, must also be demonstrated to the satisfaction of the Court. It must also be clearly outlined and not something remote.c.Lastly, a party must, in its application, set out the case and/or submission it.” 31.It is the appellant's case that the Commissioner for Co-operatives should be enjoined to clarify the legal status of the appellant and its board of directors, and to explain why no action has been taken against the appellant for non-implementation of the Court orders. The interested party was also found at fault for accepting the appellant's annual returns, even though the appellant is alleged to be defunct. 32.The general rule is that joinder of a party depends on the stake or interest that he demonstrates in the pending litigation, whose proceedings are still alive in the Court. There are, however, limited instances when joinder may be allowed post-judgment, such as in cases of substitution of parties for execution, in the event of the death or incapacity of a party, where damages are yet to be assessed, and where constitutional rights have been violated, such as the right to be heard in a matter where the party is adversely affected. 33.The Court agrees with the appellant's position that it is now functus in relation to joinder of the interested party. It has not been shown that the Court's judgment adversely affects the interested party so as to enjoin him for the purposes of being heard. The office of the Commissioner of Cooperatives has powers to register cooperatives, regulate and oversee, including audit and financial oversight, conduct inquiries and inspections, carry out the dissolution and liquidation of cooperatives, approve borrowings, and formulate general sector policy. It is not clear why the Applicants are approaching the office through this suit. The Cooperative Act is clear on the mechanisms that ought to be followed in the event the appellant is found to be defunct for whatever reason. In addition, the Commissioner for Cooperatives has the power to conduct audits and/or financial inspections as needed. The appeal was heard and determined, and the Court finds no good cause has been brought to its satisfaction to reopen it. Whether the appellant/Respondent and its directors are in contempt of the Court orders dated 20/12/21. 34.The constitutional imperative of contempt was captured in the case of Kenya Human Rights Commission V Attorney General and Another (2018) eKLR, the Court observed as follows:“Article 159 of the Constitution recognizes judicial authority of the Court s and tribunals established under the Constitution. Court s and Tribunals exercise this authority on behalf of the people and for that reason they must not only be respected and obeyed but must also be complied with in order to enhance public confidence in the Judiciary which is vital for our Constitutional democracy. The Judiciary acts in accordance with the laws (Article 160) and exercises its authority through its judgments, decrees and orders or directions to check government power, keep it within the Constitutional stretch, hold the Legislature and Executive to account and thereby secure the rule of law, administration of justice and protection of Human rights. For that reason, the authority of the Court s and dignity of their processes are maintained when Court orders are obeyed and respected thus Court s become effective in the discharge of their Constitutional mandate…” 35.It is well-established law that any person subject to a Court Order has an unqualified duty to comply with the Order, regardless of how unpalatable it may be, until the Order is discharged or set aside. See the case of Hadkinson –vs- Hadkinson, (1952) ALL ER 567, where the Court stated as follows;“It is the plain and unqualified obligation of every person against, or in respect of, whom an order is made by a Court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void. 36.For an application for contempt to succeed, the Applicant is duly bound to prove the following 4 elements; -a.the terms of the Order (or injunction or undertaking) were clear and unambiguous and were binding on the Defendant;b.the Defendant had knowledge of or proper notice of the terms of the Order;c.the Defendant has acted in breach of the terms of the Order; and 37.Section 29 of the ELC Act empowers this Court to punish for contempt of Court. It states as follows;“Any person who refuses, fails or neglects to obey an order or direction of the Court given under this Act, commits an offence, and shall, on conviction, be liable to a fine not exceeding twenty million shillings or to imprisonment for a term not exceeding two years, or to both” 38.In this case, the Applicants' grievance is that the appellants have refused to implement the Court's judgment. They claim the appellants have frustrated their efforts to sell the property or to collect rent. The appellants, on the other hand, insist that they have not disobeyed the Court order and have detailed their efforts to advertise the property despite the Applicants' interference. 39.Whoever alleges disobedience of an order must prove that the opposite party has deliberately disobeyed the Court orders. I have perused two advertisements by the appellant for the sale of the property in 2022 and 2024, and I have no reason to doubt the appellant's actions. The appellant has informed the Court that it is still paying the loans owed to the bank. The Applicants have not adduced any evidence to the contrary. It is to be noted that the appellant was allowed to dispose of the property and share the proceeds, less the amount owed to the bank, among the joint owners of the property. It is to be appreciated that selling a property like the instant one takes time, and, moreover, the Court did not give a time limit within which the property ought to have been sold. 40.For the above reason, I find no reason to hold the appellant and its directors in contempt of Court. 41.With respect to issues c), d) and e), I find that these are new causes of action that were not before the Court and cannot be entertained at this point, given that the Court would be functus. 42.In the end, I find the application is unmerited. It is dismissed with costs to the appellants. 43.Orders accordingly. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 5TH DAY OF JUNE THROUGH MICROSOFT TEAMS.J G KEMEIJUDGEDelivered in the presence of;Ms. Weyimi H/B for Gitonga Muriuki for the AppellantsMs. Wamboi H/B for Matunda for the 1st RespondentMr. Odhiambo Guda for 2nd RespondentMr. Buyengo H/B for Ms. Wahibengo for Interested PartyC/A – Ms Yvette Njoroge