Bat Sacco Limited v Nicholas Mruttu [2021] KECPT 577 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

MISC. TRIBUNAL CASE NO.5 OF 2019

BAT SACCO LIMITED................................CLAIMANT

VERSUS

NICHOLAS MRUTTU...........................RESPONDENT

RULING

Vide the Application dated 27. 5.2019 the Applicant, BAT Sacco has moved this Tribunal seeking for Orders inter alia:

a. That the Honourable Court be pleased to grant it leave to commence suit out of time; and

b. Costs to abide the results of the intended suit.

The Application is supported by the grounds on its face and the Affidavit sworn by Patrick Kiogora Muriira on 26. 5.2019.

The Respondent has opposed the Application vide the Statement of grounds of opposition dated 11. 7.2019.

Vide the directions given on 6. 2.2020, the Application was canvassed by way of written submissions. The Applicant filed its submissions on 26. 10. 2020 while the Respondent did so on 3. 8.2020.

Applicant’s Case

It is the Applicant’s case that its claim against the Respondent has been caught up with limitation of actions. That the Respondent took a loan of Kshs.1,600,000/= on or about August and October, 2007 and stopped repaying the same in August, 2009. That the said loan was repayable within a period of 48 months on monthly installments of Kshs.42,134/=.

That at the time of default, his loan balance stood at Kshs.735,286. 74.

That upon default, the Applicant instructed a firm of Advocates to commence legal proceedings but the said firm did not do so. That the mistake of the said firm should not be visited upon it.

Respondent’s Case

Vide the grounds of opposition dated 11. 7.2019 the Respondent contend that we do not have jurisdiction to grant leave to the Applicant to commence civil proceedings against him.

Written Submissions

Vide its written submissions dated 26. 10. 2020, the Applicant has urged us to grant the prayers sought on the ground that the delay in commencing suit against the Respondent was occasioned by the Respondent’s act of dilly-dallying and undue dalliance at concluding negotiations.

It submitted that it took reasonable diligence to protect its interest by engaging in negotiations with the Respondent little did it know that the Respondent was buying time for the claim to be caught up with limitation of Actions. It then went ahead to submit that we have jurisdiction to grant the Orders sought by dint of Section 76 of the Co-operative Societies Act (Cap 490) Laws of Kenya. It then cited the following cases in support of the Application:

a. In re- John Mwangi Ng’ang’a alias John de Mathew [2010]eKLR; and

b. Aviation Cargo Support Limited – vs- St. Mark Freight Services Limited, Civil Applications No. 98/13.

Respondent’s Submissions

Vide his written submissions filed on 3. 8.2020, the Respondent has vehemently opposed the Application on grounds that:

Firstly, the Tribunal does not have jurisdiction to grant the Applicant leave to commence civil proceedings out of time. He then referred us to the decision of the court in the following cases:

a. Rift Valley Railways (Kenya)Limited - vs- Hawkins Wagunza Musonye & Another[2016]eKLR;

b. Michael Benhardt Otieno – vs- NCPB[2017] eKLR;

c. Muiru Mwangi Muita - vs- Green Park Water Services [2016]eKLR.

That enabling provision of the Law relied upon by Applicant do not extend to causes of Action founded on the law of contract. That the Applicant has founded the Application on Section 28 of the Limitation of Action Act (Cap 22) Laws of Kenya, which Section can only be read alongside section 27 of the said Act.. That Section 27 relate to extension of time on causes of action founded on tort.

Issues for determination

This Application has presented the following issues for determination:

a. Whether the Tribunal has jurisdiction to extend time for commencing a claim founded on contract;

b. What Orders are available in the circumstances.

Extension of time

No doubt the subject matter of these proceedings is founded on the law of contract. The Applicant alleges that it advanced the Respondent a loan of Kshs.1,600,000/=. That the same was repayable within a period of 48 months at a monthly rate of Kshs.42,134/=. That the Respondent repaid the loan until the year 2009 when he stopped repaying.

This being the case, what then is the time limit within which to found a claim based on contract. Secondly, if such time has elapsed, do we have jurisdiction to extend it?

We found the answer to this question on Section 4 of Limitation of Actions Act (Cap 22) Laws of Kenya. It provides to the pertinent part:

“ The following actions may not be brought after the end of six years, from the date on which the cause of action accrued”

(a) Actions founded on contract

It is thus apparent that a claim founded on contract should be commenced within a period of six years from the date the cause of action accrued. It is thus apparent that the said period has lapsed in the circumstances of the present case.

This being the case, do we have jurisdiction to extend the said period?. The law on extension of Limitation of Actions is Section 28 of the Act. The Section relates to extension of  time to originate a claim under Section 20 of the Act.

The Marginal Note reads; “ Application for leave of court under section 27”

Section 27 of the Act relates to extension of limitation of actions in case involving negligence. The Marginal Note reads, “ Extension of Limitation period in case of ignorance of material facts in actions for negligence.....”

Clearly therefore, Sections 27 and 28 of the Limitation of Actions Act do not refer to claims founded on contract.

Having set out the dictates of the law, we now turn and look at the court’s interpretation of the Limitation of various actions.

In the case of Rift Valley (Kenya) Railways Limited -vs- Hawkins Wagunza Musonye & Another [2016]eKLR, the Court of Appeal had this to say about Limitation of Actions ; “ Where statute limits time for bringing an action, no court has the power to extend that time, unless the statute itself allows for extension of time”.

The court in this case referred to the decision of the court in the case of Divecon vs Samani (1995-1998)/EA 48 at page 54 as follows:

“ That is what the court stated in Divecom- vs- Samani (1995-1998)/EA 48. ..

“ No one shall have the right on power to bring after the end of six years from the date on which a cause of action accrued, an action founded on contract. The corollary to this is that no court may or shall have the right on power to entertain what cannot be done namely; an action that is brought in contract six years after the cause of action arose or any Application to extend such time for the bringing of an action. A perusal of part III shows that its provisions do not apply to actions based on contract.”

We could not agree more with the holding of the Court of Appeal in this case. The Applicant vide the instant Application want us to grant it leave for it to commence a claim whose cause of actin accrued over 10 years ago. We do not have jurisdiction to grant such leave. The Limitation of Actions Act has not given us such a leeway.

Conclusion

The upshot of the foregoing is that we do not find merit in the instant Application and hereby dismiss it with costs to the Respondent. Orders accordingly.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 28TH DAY OF JANUARY, 2021.

Hon. B. Kimemia   Chairperson  Signed  28. 1.2021

Mr. B. Akusala   Member    Signed  28. 1.2021

Mr. R. Mwambura   Member   Signed  28. 1.2021

Miss Kalulu holding brief for Ratemo for Claimant/Applicant: Present

Sandra Kavanji for Respondent : Present

Hon. B. Kimemia   Chairperson  Signed  28. 1.2021