[2023] KECPT 442 (KLR)

Wambua v Ufundi Sacco Society Limited (Tribunal Case 252 of 2019) [2023] KECPT 442 (KLR) (27 April 2023) (Ruling)

Neutral citation: [2023] KECPT 442 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 252 of 2019

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

April 27, 2023

Between

Francis Mutunga Wambua

Claimant

and

Ufundi Sacco Society Limited

Respondent

Ruling

1. The facts of the case are that the Claimant was a member of the Respondents Sacco and around August 2018 he resigned and withdrew his membership.In accordance with the Laws and Regulations of the Respondent’s Saccos the Claimant was entitled to a refund of his shares within (60) days which at the time stood at Kshs 237,600/=.

2. The Respondent did not settle the amount within 60 days and the Claimant moved to court to seek redress. Even after moving the court and serving the Respondent, he again failed to enter appearance upon which the Claimant made an application for judgment in default of filing a Defence.The Tribunal issued a decree on July 29, 2019 awarding the Claimant a sum of Kshs 242,352/= plus party to party cost bringing the total decretal amount to Kshs 284,944/=. The Claimant later moved to court for Notice to Show Cause on March 3, 2021 seeking the Personal Arrest and Committal to Civil Jail of the Respondent’s Chief Executive Officer. (CEO).

3. The Respondents filed an application claiming that they had given instructions to a firm to represent them, and they did not know until their Chief Executive Officer (CEO) was served with a Notice to Show Cause, that the matter proceeded undefended. As such, they are requesting the court in the interest of justice to give them a right of hearing and to allow them to instruct another advocate.

4. The court agreed, and during the hearing of the application, the Respondent told the court that its not only one case of this nature that they are dealing with, and given that the cases are numerous, one of their Annual General Meetings, the 38th held on April 29, 2010 unanimously voted to sell one of their assets Ufundi Cooperative Plaza. That this should have been done, but they have faced numerous cases the latest being a review application in the High Court scheduled to be mentioned on November 11, 2022. That these numerous cases have frustrated their efforts to sell some of their assets and raise funds to settle the so many outstanding claims, and if they are able to have the review application determined, they will be able to sell plot LR 209/2571 and pay the Claimant among many others.

5. The Claimant later amended his claim and latter added more issues which include the claim that plot LR No Nairobi 209/2571 does not belong to the Sacco but to some 15,000 member and investment venture (Gateway House) him being a member of that group of 15,000/= they have never agreed to the sale of the said property and to go ahead and sell the property will be fraudulent.The Claimant makes the following prayers:a.Permanent injunction against the sale of plot No LR Nairobi 209/2571. b.A declaration that the Claimant and other members of Gateway House Investment are the rightful owners of the plot LR No Nairobi 209/2571. c.Respondents to be compelled to transfer LR No 209/2571 to an independent entity comprising of the rightful shareholders or members of gateway house investment.d.Respondent to furnish the Claimant with proper accounts of all the rental proceeds received on their behalf.e.Respondent to be compelled to pay rent for the premises currently under their occupation at prevailing market rates.

6. The Tribunal has considered the issues raised and issues the following directions .Some of the issues raised by the Claimant, there is a well enumerated procedure on how they should be dealt with before they get to the Tribunal. Section 58 of the Cooperative Societies Act is clear on how an inquiry concerning issues like rent should be done, who should do it, and where the Commissioner reports after doing the inquiry.“The Commissioner may, of his own accord, and shall on the direction of the Minister, as the case may be, or on the application of not less than one-third of the members present and voting at a meeting of the society which has been duly advertised, hold an inquiry or direct any person authorized by him in writing to hold an inquiry, into the by-laws, working and financial conditions of any co-operative society. (2) All officers and members of the co-operative 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 holding the inquiry may require. (3) The Commissioner shall report the findings of his inquiry at a general meeting of the society and shall give directions for the implementation of the recommendations of the inquiry report. (4) Where the Commissioner is satisfied, after due inquiry, that the Committee of a co-operative society is not performing its duties properly, he may— (a) dissolve the Committee; and (b) 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. (5) A person who contravenes subsection (2) shall be guilty of an offence and shall be liable to a fine not exceeding two thousand shillings for each day during which the offence continues.”

7. If the Claimant is still dissatisfied by orders given by the Commissioner, Section 74 (1) provides on how now the Tribunal can act on the matter exercising an Appellate jurisdiction.Section 74 (1):“(1)Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.”In Alfayo Nyairo vs Nyabomite Farmers Cooperative Society Limited [2021]eKLR Hon. E.N.Maina dealt extensively with the doctrine of exhaustion where she states that:“where there is a clear procedure for redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure must be followed , strictly before parties come to court…”The same position is reiterated on East Africa Pentecostal Churches Registered Trustees and 1754 others Versus Samuel Muguna Henry and 4 others [2015] KLR, where the court at paragraph 72 said that:“it is trite law where a statute establishes a dispute resolution procedure, then the procedure must be strictly followed in resolving the dispute.”It is also important to note, that the court system has a hierarchy chain and the Cooperatives Tribunal falls below the High Court.Section 74 (2):“2)2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.”

8. So, once some matters have gone to the High Court, the Tribunal is functus officio and no longer has jurisdiction on those very matters. From the evidence presented before this court, issues such as seeking a permanent injunction against the sale of Plot LR No Nairobi 209/2571 have already been canvassed before the High Court and as such we may no longer have an opinion even if we wanted to. We are not the right forum as a result of timelines and the chain of hierarchy as the issue is already at the High Court.

9. Last, we are persuaded and we believe as a Tribunal that the reasons given by the Respondents that they are trying to sell some of their assets to enable them settle this claim and others like this is genuine, we take Judicial Notice of time case in High Court No 37 of 2014 and as such as Tribunal we give them some benefit of doubt to first do that and settle the claim.This benefit of doubt is only for three (3) months.

Upshota.Application dated March 18, 2022 is allowed in terms of prayer b. A declaration that the Claimant and other members of Gateway House Investment are the rightful owners of the plot LR No Nairobi 209/2571. Firm of Orina Riech are to come on record for Respondent.b.No orders as to costs.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF APRIL, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 27. 4.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 4.2023HON. BEATRICE SAWE MEMBER SIGNED 27. 4.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 27. 4.2023HON. PHILIP GICHUKI MEMBER SIGNED 27. 4.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 27. 4.2023HON. PAUL AOL MEMBER SIGNED 27. 4.2023TRIBUNAL CLERK JEMIMAH/JONAH