Karanja v KMA Housing Cooperative Sacco Limited [2025] KECPT 245 (KLR)

Karanja v KMA Housing Cooperative Sacco Limited (Tribunal Case 753 of 2019) [2025] KECPT 245 (KLR) (27 February 2025) (Judgment)

Neutral citation: [2025] KECPT 245 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 753 of 2019

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

February 27, 2025

Between

Boniface Karanja

Claimant

and

KMA Housing Cooperative Sacco Limited

Respondent

Judgment

1. The matter for determination is a Statement of Claim dated 13/12/2019 and supported by Claimants witness Statement of Claim, the Claimant is claiming among others Kshs. 855,000/= being deposit for a house in the Respondent’s housing project.The Claimant avers that he deposited the Kshs.855,000/= on 2/5/2013 and communicated his decision to pull out of the project on 16th June, 2013. This position is reaffirmed by the Claimant through his witness statement of 13/12/2019.

2. In the Claimants buddle of documents dated 13/12/2019, the Claimant has filed documents to support the payment of the Kshs. 855,000/= which is acknowledged by the Respondent and the withdrawal notice dated 20/5/2013. The matter came up for hearing of the Claimant’s case on 16/5/2022 where the Claimant adopted his statement and documents as his evidence in Chief.The claimed admitted that there was no sale agreement and that he a member of the Respondent for about one month.He averred that there was a Annual General Meeting on 16/5/2017 which approved the drawings and architectural plans for the Mtwapa Housing Project by the Respondent.He admitted that the houses were completed and that the Respondent advised that he could not be refunded his deposit but can look for an alternative buyer.He admitted that he is bond by membership resolutions.

3. In their written submission dated 17/10/2024, the Claimant, highlights the issue for determination as whether the Claimant is entitled to the Kshs.855,000/= refund as claimed.The Claimant avers that the Respondent has not filed its by-laws as a sale agreement to support the housing project.He sites Section 38 of the Land Act No.6 of 2012 which provides that: -“other than as provided by this act or by any other written law no suit shall be brought upon a contract for the disposition of an interest in landa.The contract upon which the suit is founded.a.is in writingb.is signed by all the parties thereto andc.The signature of each party signing has been attested to by a witness who was present when the contract was signed by such a party”.The Claimant avers that there was no transaction of sale of property between himself and the Respondent, only an implied contract.He plays that for this matter, legal principles on implied contracts apply.

4. The Claimant admits paying for the Mtwapa Project but after 2 ½ weeks he sought to withdrawal from the project.He avers that the Respondent’s position that the Claimant can only transfer his contribution to the project to another member as having no legal basis either in the by-laws or AGM resolutions.

Respondent’s Case 5. The Respondent’s case is based on the Defence dated 21/1/2020 and supported by the Respondent witness statement of 27/10/2020. Respondent documents of 16/10/2020 and hearing of the case on 16/5/2022.

6. In their defence, , the Respondent states that the respondent resolved to purchase Land in Mtwapa for a housing project in between 2012 and 2014. The Respondent admits that the Claimant was interested in the pursuant to members’ unanimous decision to invest in the Mtwapa land and that the Claimant paid a deposit of Kshs. 855,000/= towards the project.The Respondent denies Claimants averments that he made numerous claims on his deposit.He states that the Mtwapa project was completed on 17/6/2016 and that the Claimants deposit was used/invested in the project to purchase the land and advises Claimant to seek an alternative purchaser to buy out the Claimant share in the project.The Respondent avers that the Claimant had earliest instituted proceedings over the same matter against the Respondent before Nairobi Chief Magistrates Court vide civil suit N0. 2999 of 2019 but he withdrew it on 18/11/2018. The above position is articulated by the witness through the Respondent witness statement.The Respondent has filed documents in support of their case vide list dated 16/10/2020. The documentations from the Respondent to the members.The Respondent case came up for hearing on 5/9/2024 there the witness Josephine Atieno adopted the statement and documents as her evidence in Chief.She averred that she was the Hon. Secretary up to 2024. She admitted knowing the Claimant who was a member of the SACCO. She averred that the Annual General Meeting of 18/5/2013 was attended by around 77 members where the office was mandated to buy affordable houses for the members. She averred that Kshs. 5,000/= was registration fees and non-refundable. She stated that Kshs.855,000/= paid by the Claimant was for purchase of land.She admitted receiving both payments by the Claimant is Kshs.5,000/= and Kshs.855,000/=. She stated that once funds were received from the members they were consolidated to purchase the land. She avers that the land in Mtwapa was fully paid for and building of houses completed in 2017. She stated that they communicated to the Claimant on getting another member to buy him out. She stated that there were still 15 units available to the Claimant to buy. She admitted of not providing Respondent’s by-law to the Tribunal. She admitted that there was no sale agreement for the Mtwapa houses.It was clarified that payment of Mtwapa land was done before the Claimant sought to withdraw.

7. In their written submissions the Respondent state that the Claimant is bound by the Respondents by-laws and decisions taken in Annual General Meeting.The Respondent avers that the housing unit allocated to the Claimant is still available for purchase and advised the Claimant to source for an alternative purchaser to buy him out.She averred that the deposit paid by the Claimant was used to buy the Mtwapa land and thus there is no money to be refunded to the Claimant.

Analysis 8. We note that both parties are in agreement that the Claimant paid Kshs.855,000/= being deposit to buy land at Mtwapa for the Respondent to build houses for the members.

9. We also observe that there was no sale of land or property to the Mwapa housing project. Further we note that there was no letter of offer for this project. The only indication of the project details was the discussion during the Respondent Annual General Meeting on 18/5/2013. The issue for this Tribunal to determine is whether the Claimant is entitled to the Kshs.855,000/= as prayed in his Statement of Claim.We agree with the Respondent that the Kshs.855,000/= paid by the Claimant was to buy land for house development Kwale as passed by Respondent Annual General Meeting.

10. We also note that the Respondent confirmed that the land was bought and houses built. We similarly agree with the ascertain by the Respondent that they don’t collect money to keep, rather they collect member’s money for land purchase or development.In essence the Respondent is saying that the Kshs.855,000/= paid by the Claimant is already used to buy the Mtwapa land.In the interest of justice to both parties and having looked at the facts and evidence filed in this case, we observe that the request is overtaken by events of the filed contract.

11. In our considered opinion we observe that the Claimant has two options as offered by the Respondent viza.Top up the purchase price and get a house as offered the Respondent.b.Get a member of the Respondent co-operative to buy him out.In view of the foregoing the claim as contained in the statement of claim dated 13/12/2019 is hereby dismissed with each party to bear their own cost.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF FEBRUARY, 2025. HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 2.2025HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 2.2025HON. BEATRICE SAWE MEMBER SIGNED 27. 2.2025HON. FRIDAH LOTUIYA MEMBER SIGNED 27. 2.2025HON. PHILIP GICHUKI MEMBER SIGNED 27. 2.2025HON. MICHAEL CHESIKAW MEMBER SIGNED 27. 2.2025HON. PAUL AOL MEMBER SIGNED 27. 2.2025TRIBUNAL CLERK JONAHNone appearance by the parties.HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 2.2025