Dickson v Pressfine Savings & Credit Cooperative Society Limited [2024] KECPT 244 (KLR)

Dickson v Pressfine Savings & Credit Cooperative Society Limited (Tribunal Case 577 (E397) of 2021) [2024] KECPT 244 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 244 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 577 (E397) of 2021

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

March 7, 2024

Between

Suzanne Munanie Dickson

Claimant

and

Pressfine Savings & Credit Cooperative Society Limited

Respondent

Judgment

1. The matter before the tribunal is a claim by the Plaintiff/Claimant which was filed through a Notice of Motion Application dated 1st December, 2021 seeking for the following orders:a.That the Application be certified as urgent and dispensed with in the first instance.b.That the Plaintiff/Claimant be refunded Kshs. 175,500/= by the Defendant.c.That costs be provided for.

2. The Notice of Motion is anchored under Section 76 (2) (b) 77, 78 and 87 of the Cooperative Society’s Act and all other enabling provisions of Law. It is supported by witness statement of Suzanne Munanie Dickson dated 1. 12. 2021, verifying affidavit and Supporting Affidavit dated 1. 12. 2021 together with member share contributions and loan account statement.

3. At a mention date of 16. 12. 2021, the Tribunal ordered that the Claimant/Plaintiff should serve the Respondents/Defendants with the pleadings and further ordered the Respondents to file a response to the Plaint/Claim within 14 days after service.

4. In conformity with the above, orders the Claimant/Plaintiff served the Respondents/Defendants and later filed an Affidavit of Service dated 19th January 2022.

5. In response, the Respondents/Defendants filed a Statement of Defence Application dated 7. 3.2022 together with the Respondent’s Replying Affidavit Application dated 7. 3.2022 and a Witness Statement dated 4. 7.2022.

6. On 8. 3.2022 the Tribunal ordered that the Claimant’s application dated 1. 12. 2021 be held in abeyance to enable to parties to accelerate the exchange of documents in order to enable the matter to be fixed for hearing.

7. By consent of the parties on 5. 7.2022 the matter was fixed for hearing on 7. 10. 2022 in Kisumu. On the hearing date in Kisumu open court, the advocate of the Claimant advised the Tribunal that he was not ready to proceed because the claimant had given birth and was on maternity leave, therefore unable to attend the court.

8. To mitigate the Respondent’s inconveniences the Tribunal ordered the Claimant/Plaintiff to pay Kshs. 5000/= to the Respondent before the next hearing date. This amount was to cover travelling and subsistence.

9. On 18. 7.2023, both parties by consent agreed that the matter being one seeking for refund of money, be dispensed off by way of written submissions. The Tribunal concurred with the parties and directed that the Claimant to file and serve written submissions on the main claim within 14 days from today.Further, the Respondent to file and serve written submissions upon service by the Claimants as well as Statement of Account.Thereafter judgment will be delivered on 29. 2.2024.

Claimant’s Case 10. The Claimant stated that she was a member No. 1068 of the Respondent. she therefore moved this Tribunal by filing a plaint dated 1. 12. 2021 and a Notice of Motion dated 1. 12. 2021 both sought orders for:a.Refund of Kshs. 175,500/=b.Costs to be provided for.The Claimant founded these reliefs on the fact that upon exiting from being a member of the Defendant, she applied for refund of her savings amounting to Kshs. 175,500/= from the Respondent. the Respondent declined/refused to refund the said savings. At paragraph 6 of her Plaint. She stated that: “despite demand and notice of intention to sue having been issued to the Defendant, it has refused to refund the amount sought by the plaintiff which has necessitated the filing of this suit.”

Respondent’s Case 11. The Respondent acknowledges that the Claimant was their member No. 1068 and state that the member did not formally issue notice to withdraw her membership from the Sacco as provided under Rules 16 and 19 of the Respondent’s by-laws.Further, the Respondent contend that the Claimant had guaranteed several loans which was advanced to other members of the Respondent who have defaulted on their loan repayment which made the Respondent to off-set the Claimant’s Savings against the loan defaults as a guarantor of those loans.

Issues for Determination 12. Having considered the Statement of Claim/Plaint by the Claimant, the Claimant’s Witness Statement, Supporting, Verifying Affidavits and her Statement of Shares/Loan Account together with the Respondent’s Statement of Defence, Witness Statement and Written Submissions of the parties, we have framed the following issues for determination.i.Whether the Claimant followed the right procedure to withdraw her membership from the Sacco?ii.Whether the Claimant warrants as order for refund of her savings?iii.Who should meet the costs of this claim?

Analysis Whether the Claimant issued procedurally a withdrawal notice of her membership from the Respondent. 13. The Respondent confirm that the Claimant was a member of the Respondent and argue out that she did not issue a proper notice as provided in the Respondent’s by-law Rules No. 16 and 19 which in the written submissions paragraph 7 state that:“…any member who wants to withdraw from the Sacco is required to formally write to the management and upon the expiry of 60 days, the consideration will be allowed and the same refunded less any statutory deductions and any liabilities owed to the Sacco.”

14. While the Tribunal has no problem with Sacco’s /Cooperative Societies by-laws which promote the internal management of the societies and cognizant of Section 13 of the Cooperative Societies Act Cap 490 the Tribunal would not wish to prescribe how Sacco’s or societies would run their internal affairs but we advise against complex technicalities of procedures.However, different Sacco’s or Cooperative Societies have different by-laws and it would have been prudent for the Respondent to file a copy of their by-laws in order for the Tribunal to flow with their argument.

15. In the absence of the certified copy of the Respondent’s by-laws, we are unable to ascertain the validity of the contents of Rule 16 and 19 as alluded by the Respondents under paragraph 7,8 and 9 of the written submissions.

16. In the same view, the Claimant under paragraph 3 of her supporting affidavit state that:“…as at the date of my exit from the Defendant, I had saved Kshs. 175,500/= with the Defendant”This is the Claimant introduced her exit/withdrawal of membership from the Defendant.At the same time, in paragraph 8 of the same Supporting Affidavit, she stated that she needed her savings having lost her employment income. This may be interpreted to imply that she can remain as a passive member or exit the Sacco. The fact that she instituted this suit means that she no longer wish to remain as a member of the Sacco.

17. As a member of the Defendant, the Claimant was bound by the by-laws of the Sacco. We did not find any written letter or notice addressed to the Defendant regarding her wish to withdraw and subsequently be refunded her savings.On this issue it is our view that the Claimant failed to issue a proper notice as provided in the Sacco’s by-laws.

Issue No.2 Whether the Claimant warrants an order for refund of her savings. 18. Both the Claimant and the Respondent submitted on the provision of Rule 19 of the Respondent’s by-laws and admitted that a member who withdraws or expelled shall be repaid after deductions of debts owed.

19. The Respondent argued out that the Claimant guaranteed several loans advanced to other members of the Respondent. this was disputed/contested by the Claimant under paragraph 13 of the Claimant’s written submission where it is stated thus:“…….the Claimant asserts that she is not aware of any alleged arrears related to guaranteed loans for her friends as claimed by the Respondent.”

20. With the above denial, it would have been prudent for the Defendant to furnish the Tribunal with evidence of copies of the Loan Application Forms for the members or friends whom the Claimant guaranteed and the amounts.

21. Regarding the argument by the Respondent that “The principal debtor had gone ahead and defaulted on their loan repayments thus necessitating the offsetting of the Claimant’s savings against the loan arrears by the Respondent”We find that this argument is loose and doubtful without proof.How do we know that these was any default by Principal Debtors?Moreso, the practice of offsetting guarantor’s savings without exhausting the process to recover the defaulted sum from the principal debtor must not be entertained.On this issue, we find that the Claimant has exercised her rights to demand the refund of her savings from the Defendant.

22. On the amount due for refund, we have perused the Claimant’s Statement of Account as filed with the Tribunal from 2016 to December 2019 and find that the net amount in the shares account stood at Kshs. 162,500/= as opposed to the amount claimed of Kshs. 175,500/=.

CONCLUSION 23. Having analyzed the foregoing and with the guidance of the provisions of Article 159 (2) (d) of the Constitution and Section 1A and 1B of the Civil Procedure Act in administering justice, our focus is on substantive justice rather than technicalities, we find that the Claimant has established her case on the balance of probability.Accordingly, we enter judgment in favour of the Claimant against the Respondent for Kshs. 162,500/= plus cost and interest at Tribunal rates.Interest to be calculated from the date of filing the claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF MARCH, 2024. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 7. 3.2024HON. BEATRICE SAWE MEMBER SIGNED 7. 3. 2024HON. FRIDAH LOTUIYA MEMBER SIGNED 7. 3.2024HON. PHILIP GICHUKI MEMBER SIGNED 7. 3.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 7. 3.2024HON. PAUL AOL MEMBER SIGNED 7. 3.2024Tribunal Clerk JemimahKemunto holding brief for Chimei for RespondentNo appearance for ClaimantHon. Beatrice Kimemia Chairperson Signed 7. 3.2024Kemunto- I pray for 30 days stay of executionOrder: 30 days stay of execution granted.HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 7. 3.2024