Charo v Bandari Sacco Society Limited & 2 others; Sacco Society Regulatory Authority (Affected Party) [2023] KECPT 1069 (KLR)

Charo v Bandari Sacco Society Limited & 2 others; Sacco Society Regulatory Authority (Affected Party) (Tribunal Case 535/E388 of 2021) [2023] KECPT 1069 (KLR) (30 November 2023) (Judgment)

Neutral citation: [2023] KECPT 1069 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 535/E388 of 2021

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

November 30, 2023

Between

Sidi Sulubu Charo

Claimant

and

Bandari Sacco Society Limited

1st Respondent

Kenya Ports Authority

2nd Respondent

Kenya Ports Authority Pension Cheme

3rd Respondent

and

Sacco Society Regulatory Authority

Affected Party

Judgment

1. The Claimant brought her Claim to the Tribunal vide the Statement of Claim dated 26th November 2021, filed on 29th November 2021 which was later amended. The amended Statement of Claim was filed on 18th July 2022. In the amended Statement of Claim, the Claimant prays for judgement against the Respondent for:a.A mandatory injunction compelling the Respondent either by its agents and/ or servants to release the Claimant a total sum of Kshs 2,103,342/= being the full monthly pension payments they have previously and currently held.b.Mandatory Injunction compelling the Respondent to issue certified audited financial accounts in account no. [particulars withheld] to the Claimant from the year 1985-2021. c.An order of mandamus compelling the affected party to take lawful action against the Respondent for breach of statutory duties against the Claimant.d.A mandatory Injunction compelling the Respondent to issue the Claimant all the monies held in FOSA, BOSA Accounts, savings, shares and dividends to the Claimant.e.General damages for mental anguish, suffering and loss economic livelihood.f.Costs of this suit.The Respondent on 15th July, 2022 filed a response to the Statement of Claim dated 20th June, 2022. the Respondent thereafter filed an amended response to the Statement of Claim on 8th September, 2023.

Claimant's Case.In the Amended Statement of Claim, the Claimant states that: -1. She was employed by the Kenya Ports Authority on a permanent and pensionable terms with effect from 4th January, 1982 to 1st October, 2004, when she retired with benefits and monthly pensions.

2. She became a monthly share contributing member of the Respondent, holding account no. L01-31105, and that having been contributing monthly towards her share capital and savings through her salary and now her pension through the check-off system.

3. In the year 2006, she visited the Respondent's offices to apply for a school fees loan which would be serviced by her deposits and she was informed that she did not yet qualify for any loan advancement.

4. She visited the Respondent's offices again in 2018, seeking to apply for a school fees loan and was informed that she had already been advanced a loan of Kshs. 500,000/= and that she was in arrears but she was not given any details or financial statement despite her inquiry.

5. She wrote a letter dated 23rd August 2021 to the affected party herein (SASRA) and the head of banking fraud unit seeking assistance to no avail.

6. On computing her monthly pension and Sacco contribution, she found that the Respondent had irregularly and in breach of trust been reducing, deducting and withholding the Claimant's pension for over 17 years without justifiable course, and denying the Claimant access to her savings, shares, dividends and financial statements for over 17 years.

7. She issued a written demand on 10th September, 2021, to be supplied with copies of financial statements, list of guarantors and default of the loan in respect to her account number [particulars withheld] but despite receipt, the Respondent failed to avail the information sought.

8. The Respondent stopped remitting the Claimant's monthly pension on the ground that the Claimant made a complaint of fraud, theft and financial opaqueness against the Respondent. That as a result of the Illegal acts she has suffered irreparable loss and financial distress.

9. The Respondent committed financial fraud against her. The Claimant set out her particulars of fraud and breach of trust by the Respondent, under paragraph 16 of the amended Statement of Claim.

10. Her pension remittals from the Kenya Ports Authority Pension Scheme to the Respondent from March 2004 - December 2021 totals to Kshs. 2,103,342/= which amount the Respondent has refused to release despite demand.

11. In her oral evidence when the case came up for hearing, the Claimant stated that she joined the Respondent in 1995 and that she retired from her employment in 2004; that after retirement, she took a loan of Kshs. 20,000/= which she paid up; that when her child was admitted to Bandari College, she went for her refund but she was told she did not have any funds that her pension was also not being paid and she was informed that she had a loan for which deductions were being made; that she has never received any dividend from Bandari and she does not know the amount of her savings; that she has not guaranteed any borrower, neither has she taken any loan, having been told she is not eligible; that she prays for refund of her contributions.

12. On Cross-examination, the Claimant stated that she did borrow the loan of Kshs. 20,000/= when her son was in form 3; that she could not remember the years that she had works as a messenger at the Ports Authority; and that she has not been withdrawing money from her account. The Claimant further denied taking a loan of Kshs.20,000/= on 1st October, 2017, a loan of Kshs. 19,000/= on 5th September 2016 or a loan of Kshs, 485,000/= in July 2016; That she applied for a loan of Kshs. 500,000/= but was not granted as she was told she did not qualify

13. The Claimant further stated on her re-examination that her pension was Kshs. 10,000/=; That she did not take a loan of Kshs. 900,000/= that she wrote a letter to Respondent to request for her statement but it was not given to her.

Respondent's Case1. In its amended response to the Claimant's Amended Statement of Claim, the Respondent denies the Claimant's claims and denies further that its officials treated the Claimant with contempt; that it has acted irregularly and in breach of trust as pleaded; that it has been receiving the Claimant's monthly pension remittance and thereafter reducing, deducting and withholding the same for a period in excess of 17 years as alleged by the Claimant.

2. The Respondent avers further that all the remittances made on the Claimant's account are all accounted for.

3. the Respondent denies the particulars of fraud set out by the Claimant and puts the Claimant to strict proof.

4. The Respondent further it its response denies that it is indebted to the Claimant in the sum of Kshs. 2,103,342/= and avers further that the Claimant has conceded the various loans that she took during the period in question and which are variously shown in the Claimant's statements.

5. The Respondent further denies that it is holding the Claimant's sum of Kshs. 2,103,342/= and prays that the Claim be dismissed with costs.

6. At the hearing of the case, the Respondent’s witness was Joseph Otieno, who stated that he worked as Chief Executive Officer of the Respondent.

7. The said witness stated that; he knows the Claimant as a member of the Respondent from 5/12/1988; That the Claimant has been receiving loan facilities upto the year 2017; That in 2021, the Claimant requested for another but it was declined.

8. The witness further stated that the Respondent used to give the Claimant top up loan for education; that the Claimant reported the Respondent to Anti Banking Fraud Unit who cleared the Respondent of any wrong doing.

9. The witness stated that the pensioners are only given one loan, they were not allowed to have concurrent loans; that the Claimant has not cleared her loans; that when she retired, she was having a running loan and she took up a top up loan. The witness referred the Tribunal to the Claimant’s membership form, Statements of Accounts and cash withdrawal forms, Loan Application and Loan guarantee Forms among other documents produced as exhibits 2-11 on the Respondent's list of documents dated 4th July, 2022 filed on 18th June, 2022. The Respondent's exhibit 1 audit report thereto having been recalled hence left out of the evidence; the Respondent's witness stated that he wished to also produce and mark as exhibits the documents 12-14 as per List of Documents dated 4th August 2022.

10. The witness averred that there was no fraud.

11. On Cross-examination, the witness stated that he became the Respondent's Chief Executive Officer in the year 2018, and that he was conversant with the Sacco By-laws; He admitted that the Respondent has not produced the documents concerning the Claimant from the year 1988 and also that the Respondent received the sum of Kshs. 2,103,342/= for the period between 2004 to December 2021; that the loan of Kshs. 10,000/=, and Kshs.485,000/= were approved and disbursed; that the loan of Kshs. 485,000/= was applied for on 28th July, 2016, approved on 17th November 2016, and disbursed on the same day.

12. The witness further testified that the Claimant owed the Respondent Kshs. 409,592. 85/= as at 28th July, 2016 which was paid out from the amount of Kshs. 485,000/=, leaving a net amount of Kshs. 22,554. 25/=; paid out to the Claimant.

13. That in 2012, the Claimant had BOSA shares of Kshs. 30,965. 30/= and the loan balance was Kshs. 144,855. 76/=; That in the year 2013, the Claimant's loan balance was zero; for normal loan; that the withdraw receipts had the Claimant's signatures, that she signed the receipts.

14. The Witness stated further on cross examination that the Loans which were being guaranteed were additional loans in the year 2017 as per exhibit 11 of the Respondent’s further list of Documents; The information was keyed in in 2017; That the Claimant never took a normal loan but had other loan balance

Submissions of Parties Claimant's SubmissionsThe Claimant filed Written Submissions dated 12th September 2023. The Claimant submitted that the Respondent owed a duty of care to the Claimant as all Saccos have a duty to ensure that the customer’s account and matters relating to it are reflecting correct Financial Statements appearing legally applied and so forth; That the Respondent breached its fiduciary duty to the Claimant by conducting the Claimant’s account with material arithmetical and mathematical errors as reflected in various adjustments and un-applied loans in the statement of account; by compounding the arithmetical errors on a monthly and yearly basis to reflect irregular loan purportedly issued to the Claimant within a short period of time; that the Respondent fraudulently caused the Claimant’s account to reflect arrears which were not due to the Respondent and the Claimant has accused the Respondent for causing unauthorized withdrawal and deduction on the Claimant’s account. The Claimant submitted at length on this claim of fraud against the Respondent, relying on case law.The Claimant’s counsel further submitted that the Claimant never applied and was never granted the series of loans; that the cash withdrawal forms as presented were not signed specifically, the forms at page 15-21 of the Respondent’s bundle of Documents; That the Respondent acted in nefarious and careless manner with their marauding officials to disenfranchise the Claimant’s rights to access her financial savings.Further, on the issue of whether or not the Claimant has proved her Claim on a balance of probability, the Claimant’s counsel submitted that the Claimant demonstrated that Claimant’s account was irregularly and unlawfully purported to be credited with the following loans which were not applied for: -9th July, 2012 – Kshs. 150,000/=,30th July, 2012 – Kshs. 20,000/=,20th December, 2012 – Kshs. 20,000/=13th January, 2013 – Kshs. 60,000/=12th February, 2013 – Kshs. 10,000/=26th February, 2013 – Kshs. 260,000/=

Respondent's SubmissionsThe Respondent’s Written Submissions are date 7th September, 2023. The Respondent’s counsel submitted that the Claimant borrowed loans which she has failed to disclose; that the Claimant did report to the anti-banking fraud unit and the Interested party who upon scrutinizing the statements, took no actions against the Respondent; the Claimant has no basis for her Claim of Kshs. 2,103,342/= and has not proved the claim. Further the Respondent’s counsel has set out a list of loans taken by the Claimant from the Respondent and refutes the Claimant’s claim that she only applied for a loan of Kshs. 20,000/= which she fully paid and did not get any other facility from the Respondent; that the Claimant has not brought to the Tribunal any document in support of the Claim for Kshs. 2,103,342/= pension but that there is evidence that the Claimant made cash withdrawals over the counter and made mpesa transaction totaling to Kshs. 618,977/=The Respondent’s counsel further submitted that the Claimant had failed to discharge her burden of proof against the Respondent, as she has failed to prove that the facts she asserts exist, hence there is no basis for the Claim and the same ought to be dismissed with costs.On the Claimant’s prayer for mandatory injunction, the counsel for Respondent submits that the Claimant’s claim does not meet the threshold warranting its grant and does not disclose the existence of special circumstance necessitating grant thereof, that a prayer for mandatory injunction as an equitable remedy is misplaced as the suit is for a liquidated claim. Counsel for the Respondent has cited case law in support of their submissions on burden of proof and on the mandatory injunction.The Respondent’s counsel further submits that the prayer for mandamus is in the cadre of judicial revision as provided for in Articles 22 and 23 of the Constitution. The Subordinate Courts have no jurisdiction; further, that order of mandamus can only be issued by the High court which has original jurisdiction.On the Claim for General damages, the Respondent’s counsel submits that the claim herein being that of liquidated amount, no premise has been laid upon which the Claim for general damages can be built by the Claimant; neither has the specific law on which the Claim is based is pleaded, and no evidence was produced in court to prove the Claim.

Analysis and DeterminationWe have considered the pleadings of the parties, the evidence adduced at the hearing, the Written Submissions and cited authorities. As at the date of mention to take Judgement date, the Respondent had only filed its Written Submissions without the certified Financial Statements as had been directed without any explanation.The Claimant later filed her Written Submissions. In our discretion, we consider the submissions of both parties as duly filed. THE ISSUESHaving considered all the documents aforesaid, we shall determine the following issues: 1. Whether or not the Claimant was paid pension of Kshs. 2,103,342/= through the Respondent from the yeas 2004 to 2021. It is not in dispute that the Claimant was an employee of Kenya Ports Authority and a member of the Respondent. In her pleadings and evidence, the Claimant states that from the year March 2004, to December 2021, her pension amounting to Kshs. 2,103,342/= was remitted by the Kenya Ports Authority Pension Scheme to the Respondent. To support her said claim, the Claimant produced on exhibit 1 described in the Claimant’s further list of documents dated 22nd February, 2021 as Kenya Ports Authority Pension Scheme Financial Payment History from March 2004 to December 2021. We have looked at the said document and it appears to us as a tabulation of pension amount from March 2004 to December 2021. The Document is not a Statement of Account and neither is it in evidence of transfer of any money to any pension entity. The Claimant has thus not produced as evidence or document to show that her pension amounting to Kshs. 2,103,342/= was transmitted to the Respondent by the pension scheme over the said period of time.It is trite law that he who alleges must prove. We find that the Claimant has not proved payment of the cumulative sum of Kshs. 2,103,342/= to the Respondent. That is not to say that no pension was remitted, but for the purpose of the amount stated herein, no evidence of remittance has been put forth by the Claimant.

2. Whether or not the Claimant was advanced loans by the Respondent on the basis of her savings in her member account number [particulars withheld].It is the Claimant’s case that she has never been granted a loan by the Respondent since the year 2006 as all her Applications were rejected and she was turned away whenever she attempted to borrow money. The Claimant stated in her oral evidence, that she borrowed only Kshs. 20,000/= and repaid the same; that the Respondent has withheld her pension illegally for 17 years and yet she has no loans. The Respondent has strongly opposed the Claimant’s allegations and produced numerous documents by way of loan application forms, account statements, cash withdrawal slips in support of its position that the Claimant did have a monthly pension remitted from the pension scheme but was advanced loans through the period in question.We have considered the Claimant’s claim as against the voluminous documentary evidence produced by the Respondent to show that the Claimant did borrow the loans over the said period of time in question.During the hearing, the Claimant did admit to applying for some of the loans for instance the amount of Kshs. 485,000/= which left her with a balance of Kshs. 22,000/= which she confirmed. The record of withdrawal slips, the loan Application forms and other documents, though not perfectly filed or completed, are sufficient for us to hold that on a balance of probability, the Claimant did borrow loans from the Respondent between the year 2004 and 2021; that the loans were frequent and the larger amounts would offset arrears and the Claimant would continue in a vicious of borrowing small amounts for school fees or emergencies and larger amounts to offset the arrears of the smaller loans.We fault the Respondent for failing to explain to the Claimant who admitted to being illiterate, the effect of loans on her pension account and savings. On the Claimant’s admission at the hearing, it was clear that she used to make cash withdrawals from her account, a position evidenced by the signed cash withdrawal slips.The Claimant has therefore failed to convince us on her claim that she did not borrow the loans or receive money from the Respondent for 17 years.

3. Whether or not the Respondent committed breach of trust ad fraud on the Claimant’s account and allocated her fictitious loans.It is trite law that a claim of fraud or breach of trust must be pleaded and proved specifically. Whereas the Claimant has pleaded fraud and particularized accusations of the same, the Claimant has failed to specifically prove any of the particulars, no evidence has been placed before us to show that the Respondent illegally withheld the Claimant’s pension or failed to remit her pension. The evidence before us suggests that the Claimant had access to her account throughout the relevant period. Further we do not have evidence to convince us that the Respondent was malicious or that a dividend was declared and the Claimant was denied the same. Indeed, the Respondent has refuted the Claimant’s claims by production of documentary evidence on the status of her account and we find that the Claim on breach of duty is unsustainable.The upshot is that the Claimant has not proved the elements of fraud against the Respondent that is to say; misrepresentation of information or that she was persuaded to act on misrepresented information and therefore the claim on fraud also fails.

4. Whether the Claimant has suffered mental anguish, anxiety and suffering entitling her to compensation.Whereas the Claimant has prayed for an award of damages in the Statement of Claim, she did not provide any particulars thereof, neither did she adduce any evidence to prove the same. Similarly, the Claimant has not provided any evidence to the effect that the Respondent was responsible for any action which may have caused her to suffer damages.

5. Costs of the suitSection 27 of the Civil Procedure Act provides that the costs shall be in the discretion of the court and shall follow the event unless the court or Judge for good reason shall otherwise order. While exercising its discretion, the Court must take into account factors such as the events which led to the case, the relationship of parties, the circumstances of the case, the conduct of parties, the effect of the award of costs. We shall rely on the numerous authorities on the topic of costs including The Halsbury’s Law of England, 4th Edition (Re-issue), (2010) Vol. 10 Paragraph 16. In exercising our discretion herein, we find from the evidence that had the Respondent availed to the Claimant the right information in the right manner to enable her clear what appears to have been a misunderstanding about the status of her account, the Claimant would not have had any reason to move the court.We also consider the effect of an order of costs against the Defendant as stated in a citation in the ruling of Justice Karanja in Nyahururu High Court Civil Case No. E002 of 2021. In the present case, it is our position that an order for costs would have far reaching effects on the Claimant who is already at a disadvantaged position; albeit unwittingly.

6. Whether or not the Claimant is entitled to the prayers made under the Amended Statement of Claim.While we sympathize with the predicament of the Claimant, we are called upon to make a decision on the basis of evidence before us. Having considered the totality of the evidence adduced by both parties and the submissions filed, we find that the Claimant has not discharged the burden of proof placed on her to the required standard to entitle her to all the orders sought.In conclusion we enter Judgement as follows:1)Prayers (a), (c) (d)and (e) of the Amended Statement of Claim of claim amended on 22nd February, 2021 are dismissed.2)Prayer(b) of the Amended Statement of claim is allowed to the extent that the Respondent is ordered to issue to the Claimant certified audited financial accounts on account number [particulars withheld] for the years from March 2004 to December 20213)Each party to bear its own costs of the suit

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF NOVEMBER, 2023. HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 30. 11. 2023HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 30. 11. 2023HON. BEATRICE SAWE - MEMBER SIGNED 30. 11. 2023HON. FRIDAH LOTUIYA - MEMBER SIGNED 30. 11. 2023HON. PHILIP GICHUKI - MEMBER SIGNED 30. 11. 2023HON. PAUL AOL - MEMBER SIGNED 30. 11. 2023Tribunal Clerk - JonahMs. Gatimu advocate holding brief for Mr. Odeng for the Claimant.Wameyo Advocate for the 1st RespondentMs. Gatwiri advocate for the Affected Party.HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 30. 11. 2023