Henry Mathembo Muindi, Tom Olwe Aketch & Wilson Gitahi Muchoki v Commissioner for Co-operative Development [2017] KEHC 7734 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW

MISCELLANEOUS APPLICATION NO.  576 OF 2016

IN THE MATTER  OF THE  1ST  SPECIAL  GENERAL MEETING    OF THE  CBET  MATATU  OWNERS  SAVINGS  AND  CREDIT   CO-OPERATIVE  SOCIETY LIMITED  HELD ON  THE  29TH  AUGUST, 2016

AND

IN THE MATTER  OF THE  REFUSAL BY THE  COMMISSIONER FOR THE CO-OPERATIVE  DEVELOPMENT  TO RECOGNIZE  THE RESOLUTIONS  OF THE AGM  HELD ON  29TH AUGUST  206  TO ISSUE A LETTER  OF INTRODUCTION FOR  OPENING  BANK ACCOUNT   AND  OFFICIAL SEARCH   ON  SACCO OFFICIALS

BETWEEN

HENRY MATHEMBO MUINDI (CHAIRMAN)

TOM OLWE AKETCH (SECRETARY)

WILSON GITAHI MUCHOKI (TREASURER) OF

CBET MATATU OWNERS SAVINGS AND CREDIT

CO-OPERATIVE SOCIETY LIMITED ………....…………......…....APPLICANTS

VERSUS

COMMISSIONER FOR CO-OPERATIVE DEVELOPMENT ….…RESPONDENT

RULING  NO.1

1. Vide an application under certificate of urgency dated   6th December 2016 the interested parties sought from this court orders:

1) Spent

2) Spent

3) Pending  hearing    and  determination of this application this Honourable  court  be pleased   to stay Order  No. 3   issued on  24th   November 2016   and  Order  No. 2 , issued   on   25th  November   2016.

4) Spent

5) The interested parties  be at liberty  to apply for  further orders and or directions as the Honourable  court may  deem fit  to grant

2. The application is predicated  on the  14 grounds on the face of the  notice of motion   among them  and  more importantly, that the  interested  parties are  the incumbent  executive  committee members of CBET Matatu  Owners Savings  and  Credit Co-operative  Society  Ltd duly elected  at the at the special  general meeting of 22nd July 2016; that the exparte  applicant’s  chamber summons  dated  8th November  2016 and  notice of motion  dated  25th November  2016  sought  orders that  are adverse  to the interests of  the  intended interested   parties  including  the question  as to who  are bona fide officials of  CBET Matatu Owners  Savings and  Credit Society  Ltd;  That the  orders  were  obtained  without   material disclosure  that the applicant sought  similar  orders   against the intended  interested  parties   at the Cooperative  Tribunal Cause( Nairobi) No. 456  of 2016- Henry  Mathembo Muindi  Vs Francis  M. Muchiri  & 4 Others; Tribunal  Cause  ( Nairobi)  421/2016  - CBET    matatu  Owners  Sacco  Society Ltd  Vs Francis  M. Muchiri   & 4 Others and Tribunal Cause  No. 518/2016 CBET Matatu  Owners Sacco Society  Ltd vs  Francis  M. Muchiri  & 4 Others; That the applicant  failed to  disclose  to this court  that the Co-operatives   Tribunal  made a ruling  in  Tribunal case   No. 528/2016, and that there   are pending  proceedings  between  the applicant  and the  interested  parties; among  other grounds  which support   the prayer No. 4 for enjoining of the interested parties  to these proceedings  and which prayer for joinder  was granted by  consent   of both applicant   and  interested parties’  counsels  on 7th December   2016.

3. The application  is further supported by   the sworn affidavit of Joseph Muchiri Gitonga   on  6th December  2016   annexing several   exhibits  including ruling  of  20th August 2016  in Tribunal  Cause  No. 518/2016; minutes  of Cbet  Sacco  meeting   held on  22nd  July  2016,  letter to Director General  of NTSA  submitting   resolution   of meeting   held on  22nd July  2016;  CBET Sacco members  list cheques  drawn  on Chase  Bank  in favour  of Henry Mathembo  Muindi; letter from DCI to co-operatives  Tribunal  on the ongoing  investigations against Henry  Muindi for alleged theft (dated   5th October 2016; bank statements from chase Bank- for  Cbet Sacco; audited  accounts  for Cbet  Sacco; letter of  3rd  August  2016   recognizing  the interested   parties – by the Sub county   Co-operative  Officer; list  of  vehicles  in  CBET Sacco; Order of the Tribunal dated  10th November  2016   lifting the  registration of Henry Muindi, Tom Olwe Akech  and  Wilson  G. Muchoki  as  elected  Chairman, Secretary and  Treasurer, with in National  Transport Safety Authority; and profile  for issuance  of National  Transport Safety Authority Road Service Licence for CBET Saccos  pursuant to the annual general meeting   held on  29th August   2016.

4. The application   was opposed by    the  exparte applicants   who filed their replying  affidavit sworn by Henry Mathembo Muindi on an undated  day but   filed in court  on 19th December  2016  wherein the deponent  deposes   that he is  the chairman of Cbet Sacco having been  elected  on  29th August  2016 as per   the attached   minutes.

5. Further, that the interested  parties   never held   any meeting  on 22nd  July  2016   at Rainbow   Hotel  as shown  by letter   from the said hotel, dated  18th August  2016  disowning  that meeting; that the Tribunal   disallowed  their application in  Tribunal Cause  No. 518/2016 because the respondent gave a search  recognizing   the  interested  parties  as officials of the Sacco based  on the meeting of  22nd July 2016; that these proceedings are compelling  the  respondent  to perform  a public duty  of recognizing the applicants; that proceedings  before   the tribunal are distinct   from those proceedings; that the interested parties have not challenged  the  meeting  of  29th September  2016  wherein  the  applicants  were elected   as  officials  of Cbet  Sacco;That the interested parties are mere impositors seeking to lead the Sacco without the mandate;That  Tribunal case No. 421/2016   and  456/2016 were  withdrawn; that it  was falsely alleged  that he defrauded Cbet Sacco since Joseph  Muchiri Gitonga  was the Treasurer  thereof  and signatory  to the account   at Chase Bank which is  inoperative; that the  respondent  must explain  why it   has not  recognized  the meeting of 29th August  2016; and that  the application  dated  6th December  2016  lacks  merit and  should be   dismissed  with  costs.

6. The parties’ advocates argued the application orally this morning   and therefore   this expeditious ruling.  Mr Omollo counsel for the interested parties/applicants submitted, relying   on the grounds, supporting affidavit   and annextures   thereto   and urged   the court to allow   the motion  and stay  the orders issued   by this court   exparte.  Counsel for the interested parties emphasized  that the  applicants  came to court  with unclean   hands and  failed to  disclose that they had been   denied  orders by the  Co-operatives  Tribunal   hence  they were  undeserving  of the orders sought from this court.

7. Further, that there is  tremendous  hardship   as the orders of  this court   put in  office people who  were not  elected  to hold office  by Cbet  members  of Cbet Sacco.  Further, that   it is   the interested parties who were elected in office, and were recognized by the respondent.

8. Mr Omollo  submitted   that the test   as to materiality  of what   is to be disclosed  is that  had the court  known  of the officials  being in  office and  the pending  Tribunals  cases,  it would   not have   issued the   orders that it  did.

9. In response, Mr Ombwayo   submitted inter alia, that there   was full disclosure   of all material  before the court  and that what was not disclosed was not material.  He relied on HCC 125/2015.  Counsel for the applicant Further maintained, relying  on his client’s  replying    affidavit that  it   was his clients   who were   elected  into office  but that   the  respondent  refused  to recognize  them and gave no  reasons.  That only this court can give the remedy of mandamus to compel a public body to perform a public duty.  That the interested  parties never  held any   meeting as alleged on 22nd July 2016 as Rainbow Hotel since the hotel  disowned that meeting and  that  there is no  evidence  of banking of funds  in Chase Bank by the interested   parties   since May  2016.

10. Further, that there   is no prayer for setting   aside orders of this court or for stay until the proceedings herein are   heard and determined.  That the applicants notified of withdrawal  of  Tribunal cause  and  that the Interested parties   were  never enjoined  because they were never   officials of  Cbet  Sacco  as the alleged meeting that elected  them into office never  took place.  Mr Ombwayo urged the court to disallow the interested parties’ motion with costs.

Determination

11. I have carefully considered the interested parties’ notice of motion dated 6th December   2016.  I have also  considered  the opposition  thereto  through  a  replying affidavit   of the exparte   applicants  and the parties’  advocates respective  rival submissions.  What is not  in dispute  is that   there are   two factions  of Cbet  Sacco, each of  whom claim to be  bona fide elected officials and each    have minutes showing when  they were   elected in  office.

12. However, when the exparte   applicant   approached   this court with  chamber summons  dated 18th November  2016, they never disclosed  to this court that   they had not  been recognized  by the respondent  because there  was another  faction   which is the  interested parties  herein  who were  in office, whether  legally  or illegally.  They withheld   that material from   this court.

13. Further, the exparte  applicants never  disclosed   to court that  vide an  order of   10th November   2016   the  Co-operatives  Tribunal  in Tribunal Case  No. 518/2016  had dismissed    the exparte applicants’application  and lifted  the registration  of the  exparte applicants    by the National Transport  Safety Authority as officials  of the Cbet  Sacco.

14. Although   the exparte applicants   claim that  they did not  enjoin the Interested parties   because the  latter   were not   officials   of Cbet   Sacco and   that  because  the   alleged meeting   that   put the interested parties  into office   never took place, with utmost  respect, I find that  the applicants    were mischievous   before this court.  The applicants   having been   deregistered by the Tribunal, they ought to   have disclosed those proceedings before this court.

15. Furthermore, as the exparte applicants’ dispute was with the interested  parties, there  is no reason  why the applicants  failed in the first instance  to enjoin the interested  parties  and  or disclose  the  existence  of that  dispute.  In my  humble view,  the dispute  is not between the applicants and  respondents, but  with the  interested parties  as to who  is lawfully  in office  as officials  of  Cbet  Sacco.  The fact that the issue of who is lawfully in office is   subject of the Cooperative Tribunal proceedings was not placed before this court.  Had those   facts and the ruling  of  10th November   2016   been placed   before me,  I would obviously  not have  granted the  orders of 24th November   2016  and  25th November   2016.  Those orders were issued per incuriam or in ignorance   of material   facts which have now been fully disclosed before me.

16. In addition, the ruling  of  10th November   2016  was  amenable to an appeal  before this Honourable   court   as  stipulated  in Section  76 of   the Co-operative  Societies   Act Cap  490  Laws of  Kenya  but    the  applicants instead   came  before   this court by  way of  Judicial Review, and failed  to disclose those proceedings.  They   instead   enjoined  the Commissioner   of Co-operatives   who was  never  a party in the Tribunal Case  528/2016 and who   was only  acting on  advise  of the Tribunal to recognize  the interested  parties as  the duly  elected   officials  of the Cbet  Sacco Society  Limited.

17. Judicial Review remedies   are discretionary   and therefore   parties seeking discretionary orders   must fully disclose all material   before the court.  Failure to disclose  invites  the court to  invoke  its  inherent   powers to vacate   the  orders issued in favour  of the   guilty party   even if  the  court is not  moved.  The court can  on its own   motion act   to ensure that   court process   an   legal process   is not abused.

18. In this case, I have no doubt in my mind that the exparte applicants  have abused court process   and  although the  prayers by  the interested  parties  in the application are generalized  this court finds that generalization  to be a  procedural technicality   which is curable by application of Article 159(2) (d) of the Constitution.

19. A party   who lies to the court to grant it orders cannot be allowed to continue enjoying   those orders.  The court, on  discovery   that it   was  misled  into issuing  such substantive  orders which have the effect of creating   confusion  among Cbet  Sacco  membership and  to embarrass  the court, must of necessity  vacate  those orders.

20. This  court has been embarrassed  by the orders  of  24th November  2016   and  25th November   2016  which as I have   stated herein, were   made per  in curiam.

21. In the premises, I find the notice of motion dated   6th December 2016 merited.  And on  my own  motion, I would, in the  circumstances  proceed to vacate   and set   aside the   orders of  this court made on  24th November 2016 and  on  25th November  2016, specifically  relating to the prayer   for the leave  operating as  stay  and  for the  assistance  of police in the  enforcement  or  implementation  of the said stay.

22. The prayer   for  leave to apply  for  Judicial Review  as  granted on  24th November  2016  was conditional  upon the  substantive motion  being filed   and  served within 10 days  from that date.  Ten days lapsed on 4th December 2016 and no such substantive   motion has been filed and served upon the respondents.  Accordingly, that leave as granted has lapsed automatically and therefore there are no more pending   proceedings before this court for consideration at the substantive stage.

23. Orders accordingly.

Dated, signed and delivered in open court at Nairobi this  22th day of February 2017.

R.E. ABURILI

JUDGE

IN THE PRESENCE OF;

Mr Omollo for the applicant interested parties

Mr Ombwayo for the exparte applicant

CA: Lorna