Kinatwa Sacco Corporative Ltd & another v Joel & 14 others [2023] KEHC 24590 (KLR)

Kinatwa Sacco Corporative Ltd & another v Joel & 14 others (Civil Appeal E678 of 2021) [2023] KEHC 24590 (KLR) (Civ) (3 November 2023) (Judgment)

Neutral citation: [2023] KEHC 24590 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E678 of 2021

AN Ongeri, J

November 3, 2023

Between

Kinatwa Sacco Corporative Ltd

1st Appellant

Joseph Kitheka

2nd Appellant

and

Javies Ngui Joel

1st Respondent

Florence Ndinda Silia

2nd Respondent

Gideon Mumo Mwaluku

3rd Respondent

Esther Nguru

4th Respondent

Isaiah Ikindu

5th Respondent

John Bosco Muutu

6th Respondent

Peter Musyoka

7th Respondent

George Munyoki Mutisya

8th Respondent

Patrick Daniel Mutua

9th Respondent

Peter Muthui

10th Respondent

Collins Musyoka

11th Respondent

Francis Mugane Mwangi

12th Respondent

Francis Kasina

13th Respondent

Kinatwa Prestige Ltd

14th Respondent

Clinton Wambua

15th Respondent

(Being an appeal from the ruling of Hon. Kagoni E. M. (PM) in Milimani CMCC No. E915 of 2021 delivered on 01/09/2021)

Judgment

1. The appellants in this appeal were the 1st and 2nd defendants in Milimani CMCC no. E915 of 2021 where they were sued by the thirteen (13) respondents vide plaint dated 01/07/2021 seeking the following orders;i.That an order of permanent injunction do issue restraining the defendants by themselves, their servants and/or agents from convening, holding or chairing any meetings to the exclusion of the plaintiffs or otherwise interfering with the daily affairs of the plaintiffs’ sacco.ii.Costs of the suit.iii.Any other or further relief that the court may deem fit and just to grant.

2. The 1st and 2nd appellants raised a preliminary objection dated 15/07/2021 on the basis that the court did not have jurisdiction to entertain the suit.

3. The 1st and 2nd appellants stated that the respondents were members of the 1st appellant and the grievance was that a special general meeting had been convened without giving the respondents sufficient notice.

4. The appellants submitted that the matter should have been filed in the cooperative tribunal since the matter involves members of the cooperative society (the 1st appellant) and the same was to do with the business of the society.

5. The respondents opposed the preliminary objection and submitted that the case was properly before court and they placed reliance on Section 7(k) of the Magistrates’ Court Act.

6. The respondents also submitted that the preliminary objection did not raise pure points of law but was premised on facts that required to be determined through adducing evidence.

7. The trial court dismissed the preliminary objection in the impugned ruling dated 01/09/2021.

8. The 1st and 2nd appellants filed this appeal on the following grounds;That the learned Magistrate erred in law and fact by:a.Failing to appreciate that a preliminary objection may arise by clear implication out of the pleadings;b.Failing to appreciate that a preliminary objection can arise by ascertaining the undisputed facts from the pleadings;c.Holding that the preliminary objection by the Appellants was blurred by factual matters;d.Failing to appreciate that the suit was null ab initio for want of jurisdiction and the court should have put down its tools;e.Failing to apply the sub-judice Rule;f.Failing to consider, evaluate and analyze the submissions put forth by the Applicants;g.Failing to consider, evaluate and analyze the authorities put forth by the Applicants;

9. The Appellants prayed that the orders issued by Honourable E.M. Kagoni (P.M) in Milimani CMCOMMSU E915 of 2021 be set aside and the Cost of this Appeal be borne by the Respondents.

10. The parties filed written submissions in the appeal as follows:

11. The Appellants submitted that what constitutes a preliminary objection was well set out in the case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 where the Court held that:“. . . A preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication of the pleadings and which if argued by a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court or a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration”

12. The Appellant submitted that a preliminary objection may arise from pleadings on assumption that all the facts pleaded by the other party are correct.

13. In their pleadings, the respondents had described themselves as members of the Sacco, and that the Sacco was duly registered.

14. It was also clear from the pleadings that the dispute had arisen between the 1st Appellant and its members and it was thus a “co-operative dispute” whose jurisdiction was vested in the Co-operative Tribunal. The issue of jurisdiction could therefore be raised as a Preliminary Objection and it was not blurred by factual matters.

15. The Appellants submitted that the second issue raised by the Preliminary Objection was that there had been a similar suit, Nairobi Cooperative Tribunal Case Number 98 of 2021 filed by the 1st to the 11th Respondents where the Appellants were the 1st and 5th Respondents. The Appellants had annexed the pleadings to that case to prove the foregoing and it had not been contested.

16. On the question of jurisdiction, the appellants submitted that a court cannot arrogate itself jurisdiction exceeding that which is conferred upon it by law.

17. They relied on the decision in Gatanga Coffee Growers Co-operative Society Ltd vs Gitau (1970) EA 361 which cited the Ugandan decision of Wakiro and Another v Committee of Bugisu Co-operative Union [1968] EA 523 pg 527 which considered the definition of the expression “Business of the Society” under the Ugandan Co-operatives Act with similar provisions with the Kenyan Co-operatives Societies Act, which held that:“The expression “Business of the Society” is not confined to the internal management of the society but covers every activity of the Society within the ambit of its by-laws and rules”.

18. The Appellant submitted that the dispute being a “Business of the society”, the jurisdiction to hear and determine it was vested in the Co-operatives Tribunal and not the Magistrates Court which was bereft of Jurisdiction.

19. On the question of the matter being subjudice, the Appellant submitted that Section 6 of the Civil Procedure act provides that:“No court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit or proceeding is pending in the same or any other court having jurisdiction in Kenya to grant the relief claimed.”

20. The Appellant submitted that there being a matter filed at the Co-operative Tribunal between the same parties, the matter before the Magistrates Court was sub-judice.

21. The Respondent submit that the issue of the matter in the Magistrates court being sub-judice was not raised at the Appeal stage, neither pleaded in the Preliminary objection nor on the submissions, and the court should not render itself on it.

22. The Respondents submitted that despite being brought at Appeal stage, the conditions for sub-judice had not been met since the parties in the two matters are different, the causes of action are different, the issues for determination and the orders sought were different.

23. The Respondents also submitted that the Preliminary Objection did not raise pure points of law, evidence would need to be examined as it concerned key disputed matters that needed to be ascertained which were: process of convening the Special General Meeting, Perusal of the Inquiry Report, and Orders of the Co-operative Tribunal.

24. On the question of Jurisdiction, the Respondents submitted that they filed the suit alongside the 14th Respondent which is a Limited Liability Company which made the dispute beyond the jurisdiction of the Co-operative Tribunal.

25. They further said that the Tribunal also lacks jurisdiction to issue orders off permanent and mandatory injunctions which was a remedy sought by the Respondents. The Respondent prayed that the Appeal be dismissed.

26. This being a first appeal, the duty of the first appellate court is to re consider and re-evaluate the issues raised before the trial court.

27. In the matter of Peter M. Kariuki v Attorney General [2014] eKLR ,the court held inter alia as follows:-“We have also, as we are duty bound to do as a first appellate court [to] reconsider the evidence adduced before the trial court and re-evaluate it to draw our own independent conclusions and to satisfy ourselves that the conclusions reached by the trial judge are consistent with the evidence.

28. The sole issue for determination in this interlocutory appeal is whether the trial court is seized of the jurisdiction to hear this case.

29. I find that the Cooperative Tribunal is clothed with the jurisdiction to hear the following under Section 76 of the Cooperative Societies Act which provides as follows:(1)If any dispute concerning the business of a co-operative society arises—(a)among members, past members and persons claiming through members, past members and deceased members; or(b)between members, past members or deceased members, and the society, its Committee or any officer of the society; or(c)between the society and any other co-operative society,it shall be referred to the Tribunal.(a)among members, past members and persons claiming through members, past members and deceased members; or(b)between members, past members or deceased members, and the society, its Committee or any officer of the society; or(c)between the society and any other co-operative society,it shall be referred to the Tribunal.(2)A dispute for the purpose of this section shall include—(a)a claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or(b)a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not;(c)a claim by a Sacco society against a refusal to grant or a revocation of licence or any other due, from the Authority.

30. In the celebrated case of the Owners of the Motor Vessel “Lillian” v Caltex Oil (Kenya) Ltd [1989] KLR 1 Justice Nyarangi said that:“I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”

31. I therefore find that jurisdiction is a creature of the constitution or relevant statute.

32. When a court realizes that it does not have jurisdiction, it should down its tools and take no further state.

33. The court or tribunal devoid of jurisdiction cannot even transfer a matter that is wrongly filed before it.

34. In the matter of Adero Adero & another v Ulinzi Sacco Society Ltd [2002] eKLR, Ringera J. held that:“And jurisdiction is such an important matter that it can be raised at any stage of the proceedings and even on appeal. Having taken the view that this court had no jurisdiction to entertain the matter, it follows that it could not transfer the same to another court. In that regard it is trite law that where a cause is filed in court without jurisdiction, there is no power in that court to transfer it to a court of competent jurisdiction. “

35. I find that the court does not have jurisdiction to handle a matter involving members of a Cooperative society and which is in the business of the cooperative society.

36. There was no dispute that the respondents are members of the 1st appellant and that this case concerns convening of a special general meeting where the respondent were alleging they did not have sufficient notice.

37. The respondents are seeking injunctive orders against the 1st appellant and or its agents.

38. I find that the proper forum for this case is the Cooperative Tribunal and not the trial court.

39. I set aside the order dismissing the preliminary objection and I replace it with an order allowing the preliminary objection.

40. I accordingly strike out the respondents’ suit for want of jurisdiction with costs to the appellants.

41. The respondents are at liberty to file a fresh suit at the Cooperative Tribunal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 3RD DAY OF NOVEMBER, 2023. ..................................A. N. ONGERIJUDGEIn the presence of:……………………………. for the Appellant……………………………. for the 1st – 13th Respondents……………………………. for the 14th – 15th Respondents