Concord Savings & Credit Co-operative Society Limited v Janette Rubadiri, Agnes Shikungu, Agnes Wairimu, Duke Mayaka, Remick Muga, Patricia Onsando, Alfred Musachi & Florence Ombwwa;Stephen Kisaka (Intended Interested party) [2021] KECPT 493 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI.

TRIBUNAL CASE 231 OF 2020

CONCORD SAVINGS & CREDIT CO-OPERATIVE SOCIETY LIMITED ..............CLAIMANT

VERSUS

JANETTE RUBADIRI..............................................................................................1ST RESPONDENT

AGNES SHIKUNGU...............................................................................................2ND RESPONDENT

AGNES WAIRIMU.................................................................................................3RD RESPONDENT

DUKE MAYAKA...................................................................................................4TH RESPONDENT

REMICK MUGA .................................................................................................5TH RESPONDENT

PATRICIA ONSANDO........................................................................................6TH RESPONDENT

ALFRED MUSACHI............................................................................................7TH RESPONDENT

FLORENCE OMBWWA.....................................................................................8TH RESPONDENT

STEPHEN KISAKA.......................................INTENDED INTERESTED PARTY/ APPLICANT

RULING

1. There are two Applications consideration before the honorable Tribunal. The first Notice of Motion is dated 5/8/20 and the second is dated 10/12/19. The Application dated 5/8/20 filed by the Respondents is seeking the following orders; -

i. THAT this application be certified urgent and service of the application be dispensed with the first instance

ii. THAT this honorable court do issue an order restraining the interested party from in any way whatsoever participating in decision making and attending any meeting of the management committee of the claimant pending the hearing and determination of this application.

iii. THAT the costs of the incidentals of the application be in the cause.

2. The application was supported by the Affidavit of Alfred Musachi Kadagi; the 7th Respondent giving analysis and pin pointing reasons why the Applicant`s right to be allowed of interest before introducing an Interested Party, one Stephen Chase Kisaka whose membership at the claimant`s management level was questionable.

3. The claimant filed their response vide Replying Affidavit served on 15/9/20 by one Rosemary Aseka, the chairperson of the management board of the claimant`s society. In her Response she claims the application dated 5/8/20 is unfounded and abuse of court process. For reasons she acknowledges the Interested Party was said to no longer be a member of the management committee of the Claimant.

They actioned the report by the Commissioner of Cooperatives, however, they were served with an order from the employment court staying the decision of the commissioner. Thus the said interested party remained a member of the management committee of the claimant.

4. The said order was attached therein and we note it had the following orders; -

i. THAT this matter be certified urgent and the same be placed before a duty judge for hearing expert in the first instance.

ii. THAT leave be granted to the applicant to institute proceedings in the nature of judicial review seeking for orders of prohibition and certiorari as set forth in the statutory statement and verifying affidavit filed herewith.

iii. THAT the grant of leave do operate as stay of the decision in its letter dated 20th September 2019 of the 1st Respondent directing the 2nd Respondent to remove the applicant from management committee of the 2nd Respondent directing the 2nd Respondent to implement the inspection report presented to the 2nd Respondent on 29th August 2019 and / or staying the decision the 2nd Respondent the applicant from its management committee based on the recommendation given in the inspection report to the 2nd Respondent on 29th August 2019 of the 1st Respondent.

iv. Costs of this suit to be provided for.

It is important to note that the said Judicial Review was not successful as it was dismissed on 19/12/19.

5. The Interested party also filed a response to the application dated 5/8/20 vide a Replying affidavit served on 10/9/20 and filed on 11/9/20. In the said Replying Affidavit he claims to be a member of the claimant`s Sacco and serves in the management committee which is an election position for a term of 3 years

6. He gave history of the nomination process which process which was contended by many offices and officials, however his name was included in the election slated on 23/3/19. He was however nomination certificate as required by law. Be it as it may, he was elected chairman of the claimant’s management committee.

7. The Commissioner of Cooperatives on 20/5/2019 conducted an impromptu inspection on affairs on affairs of the Claimant and vide the letter date 20/9/29, the Commissioner of Cooperatives recommended removal of the Interested Party as committee member. The Interested Party states that he was not given an opportunity to defend himself as the rules of natural justice would care for.

8. Parties were directed to file written submissions in order to dispose the Application.

Interested Party`s written submissions are dated 14/4/21 and filed on 21/4/21.

Claimant filed their submissions dated 27/20/20 on 28/10/20.

The Respondent did not file their submissions despite the matter being mentioned on several occasions 24/3/21, 30/3/21, 14/4/21 and 3/5/21

9. The issues arising from the Application dated 5/8/20.

Is the Interested Party a member of the management committee?

From the evidence adduced by parties, they all agree that there is a report by the Commissioner of Cooperatives dated ………May 2019 and letter dated 20/9/19 by the commissioner for cooperative department stating that the Interested Party is no longer a party of the management committee and thus cannot transact.

10. The attempts to have the report challenged by the Employment & Labour Relation Court Judicial Review application failed and thus in essence the report and the finding of the commissioner stands.

11. To this end, the application dated 5/8/20 is allowed and the Interested Party is restrained from participating in the activities of the claimant`s management committee.

12. The Application dated 16/12/19 sought the following orders; -

i. THAT the Application be certified urgent and service be dispensed with in the first instance.

ii. THAT pending the hearing and determination of the claim herein this honorable Tribunal be pleased to grant an order of injunction restrained the respondents from reinstating JAMES ODERA from entering the offices of the claimant and restraining the said JAMES ODERA from entering the offices and/ or acting as its chief executive officer.

iii. THAT an order of injunction be issue against the Respondent restraining them from interfering with the management and/ or administration of the claimant until the next annual general meeting.

iv. THAT the honorable Tribunal do grant such further or other orders it deems fit in the interest of Justice.

v. THAT the cost of the application be on cause.

The same is Supported by Affidavit of Rosemary Aseka served on10/12/19.

13. The Respondent filed Replying Affidavit served on 23/12/19 and filed on the same day. In the said Replying Affidavit is detailed owing how the Respondent were duly elected as members of the Management Committee at a Special General Meeting on 30/11/19. They state that requisite notice was given and relevant stakeholders invited for a meeting. It is further averred that the Board named in Paragraph 9 of the Replying Affidavit was replaced.

14. The Respondents after their elected revoked suspension of the CEO James Odera who they state was unlawfully suspended.

15. Vide a letter dated 11/12/2019, the Commissioner of the Cooperatives acknowledges the Special General Meeting and approved the changes of the bank signatories.

16. The court directed that the application be canvassed by way of written submissions.

The claimant filed their submissions on 28. 10. 2020. Respondent did not file theirs despite several dates slated for the same.

17. The issues arising from this application are; -

Was the Special General Meeting legal and valid?

Who are the office bears of the claimant`s management committee

When is an Special General Meeting called?

As per the claimants ( Rules and Regulations) and constitution, an Special General Meeting can be called upon when by-laws 33. 3(ii) of Concord Saving and Credit Cooperative Society Limited.

33. 3 A special general meeting of the Sacco society may be held when convened by the;-

(i) Board

(ii) Commissioner

(iii) Board within 15 days of receipt of a written request by at least 50 members or one quarter of the members which is less. Provided the request is deposited by registered mail at the Sacco society`s address or delivered to the chief executive officer at the Sacco society`s offices within normal working hours.

18. Was the Special General Meeting legal and valid.

Section 27 of the cooperative Societies Act provides; -

General meetings

(1) The supreme authority of a co-operative society shall be vested in the general meeting at which members shall have the right to attend, participate and vote on all matters.

(2) Subject to subsection (3) a co-operative society shall hold an annual general meeting within four months after the end of each financial year.

(3) In the first year after registration of a co-operative society, the general meeting shall be held not later than one month after receipt of the certificate of registration of the co-operative society and during such meeting, the members shall—

(a) elect the co-operative society’s office bearers for the ensuing year;

(b) determine the maximum borrowing powers of the co-operative society;

(d) appoint the co-operative society’s bankers and auditors; and

(e) receive reports and decide upon such other matters as may be necessary for the conduct of the co-operative society’s business.

(4) A general meeting of a co-operative society shall be convened by giving at least fifteen days written notice to the members.

(5) At the annual general meeting of a co-operative society, the members shall—

(a) consider and confirm the minutes of the last general meeting;

(b) consider any reports of the Committee or the Commissioner;

(d) determine the manner in which any available surplus is to be distributed or invested;

(e) elect the co-operative society’s office bearers for the ensuing year;

(f) determine, where necessary, the maximum borrowing power of the society;

(g) appoint an auditor for the ensuing year; and

(h) transact any other general business of the co-operative society of which notice has been given to members in the manner prescribedin the by-laws of the co-operative society.

(6) A special general meeting of a co-operative society may be convened—

(a) by the Committee for the purpose of approving annual estimates or discussing any urgent matter which in the Committee’s opinion is in the interest of the co-operative society; or

(b) on receipt of a written notice for such meeting signed by such number of the members of the co-operative society as may be prescribed in the rules and stating the objects and reasons for calling the meeting.

(7) If the Committee fails to convene a meeting within fifteen days of receiving the notice under subsection (6)(b), the members demanding the meeting may themselves convene the meeting by giving notice to the other members of the co-operative society, stating the objects and reasons for the meeting and the fact that the Committee has failed to convene the meeting.

(8) The Commissioner may convene a special general meeting of a society at which he may direct the matters to be discussed at the meeting.

(9) The chairman or in his absence the vice-chairman or such other person as may be prescribed in the by-laws of the co-operative society shall preside at a general meeting of a co-operative society.

(10) The Commissioners may preside at any meeting convened under subsection (8).

Did the Special General Meeting follow all the guidelines required for the meeting to be held? We note that the requisite notice was given within the prescribed time. What is in issue is; -

i. Agenda notice; this was given as per Replying Affidavit annexture “AKM2”

ii. Venue of the Special General Meeting; was changed.

Change of Venue.

If a company is unable to hold the Annual General Meeting on a scheduled date and venue which notice has already been sent to the members (stakeholders) it is allowed in law to reschedule the meeting to a later date at the same or changed venue.

Members must be informed of the change thus another notice must be served.

Was there a mischief in the change of venue of the SGM?

How did it affect the attendance?

We note that the radius within which the Special General Meeting took place is within the city and the change was quite minimal.

We note that the meeting was well attended and peaceful to the best of our knowledge as per the evidence before us. It is with this in mind and all factors being taken into consideration that we find and hold that the Special General Meeting was lawful.

Who are the office bearers of the claimant`s management committee?

Those elected in the Special General Meeting in November 2019 are the lawful office bearers.

The upshot of the above is that;

The prayers for orders of injunction fails restraining the Respondent from acting as a member of management board and interfering with the management and administration and or changing the signatories of the claimant.

Prayer 2 and 3 fails.

The Tribunal notes with concern the turmoil and bad blood between w...... parties and the Sacco is the one that is very affected to the detriment of the members.

To this end, we order for the Annual General Meeting to be held within the next 3 months on or before September 2021.

The officials elected in the Special General Meeting on 30. 11. 2019 are to ensure the orders are complied with in collaboration with the office of Commissioner of Cooperatives.

Judgment signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia Chairperson ....................................

Hon. J. Mwatsama Deputy Chairperson ....................................

Mr. P. Gichuki Member ....................................

Tribunal Clerk ................................