Kinyua v Biashara Sacco Society Limited [2024] KECPT 1169 (KLR)

Kinyua v Biashara Sacco Society Limited (Tribunal Case 02 of 2012) [2024] KECPT 1169 (KLR) (25 July 2024) (Judgment)

Neutral citation: [2024] KECPT 1169 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 02 of 2012

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

July 25, 2024

Between

Michael Mwangi Kinyua

Claimant

and

Biashara Sacco Society Limited

Respondent

(Coram: Hon. B. Kimemia-Chairperson, Hon. J. Mwatsama- Deputy Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon.P. Gichuki- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)

Judgment

1. Matter for determination is amended claim dated 14/4/2023. The claimant avers he was member of the Respondent. He claims to have borrowed an amount of money from the Respondent and secured his loan with Title No. Nyeri/Mweiga/659 as security. The Claimant had guarantors as Ann Mwangi and Charles Muthigani.As at 6/1/2012, the outstanding loan stood at Kshs. 3,856,371/=. The Respondent stated that the claimant had no savings and only Kshs. 42,664. 54/= could be used to offset the loan. The claimant avers this was not the true position as he had savings amounting to Kshs. 3,995,856/= as at 1/1/2009 and had not made any withdrawals.As a result, as auction was scheduled for 18/5/2012 upon default. The Claimant states that he had not been served with any statutory notice and thus the purported sale was illegal, null and void.

2. An order for injunction was denied by the Tribunal however on appeal, the High Court granted temporary injunction against the property sale and directed the Claimant to deposit Kshs. 3,856,371/= in a joint interest earning account to be held by both counsel which the Claimants did.The Claimant further avers the amount therein was transferred to the Respondent’s Advocates by his former advocate on record without his knowledge despite there being an undertaking the same would have been discharged upon Claimant’s land transferred.The Respondent despite payment has neglected to discharge the Claimant’s land and take over account which led to this suit.The Claimants prays for;i.An order for a permanent injunction restraining the Respondent, its agents from advertising, selling by public auction or any other way alienating or interfering with property Title Number: Nyeri/Mweiga/659;ii.An order for discharge and release of the Claimant’s title deeds in respect of Nyeri/Mweiga/659 the subject property, Nyeri/Mweiga/669 and 1048;iii.An order directing the Respondent to release the Claimants shares plus dividends amounting to approximately Kshs. 25,615,876. 00/= pursuant to the Valuation Report dated 12/04/2023 plus interest.iv.An order directing the Respondent to refund the excess deposit made by the Claimant of Kshs. 1,356,969. 18/= to the valuation report dated 12/04/2023 plus costs and interest.v.An order directing the respondent to refund the claimant money paid to providence auctioneers for their fees of Kshs. 688,488. 40/= in the illegal notice of sale.vi.Costs of the Claim and interest at court rates.vii.Any other orders the court deems fit to grant.

3. The Claimant filed Written Statement by the Claimant Michael Mwangi Kinyua and Supplementary List of Documents dated 14/4/2023 to which included;1. Letter to offset loan with shares dated 27/01/2012. 2.Order of the Tribunal dated 10/05/2012. 3.Proceedings of the Co-operative Tribunal.4. Ruling of the Tribunal delivered on 15/11/2012. 5.Memorandum of Appeal dated 21/11/2012. 6.Claimant’s Application dated 21/11/2012. 7.RTS copy from Consolidated Bank dated 31/12/2012. 8.Letter from Consolidated Bank to Sichangi Partners dated 08/10/20149. Letter from Sichangi partners to Consolidated Bank dated 09/10/2014. 10. Judgement of the High Court Delivered on 14/04/2015. 11. Notification of sale by Providence Auctioneers dated 21/09/2015. 12. Letter from Sichangi Partners to Ng’ang’a and Co. Advocates dated 22/09/2015. 13. Letter from Ng’ang’a and Co. Advocates to Sichangi Partners dated 23/09/2015. 14. Letter from Sichangi Partners to Ng’ang’a & Co. Advocates dated 7/10/2015. 15. Letter from Ng’ang’a and Co. Advocates to Sichangi Partners dated 07/10/2015. 16. Letter from Sichangi partners to Ng’ang’a and Co. Advocates dated 22/10/2015. 17. Letter from Sichangi Partners to Consolidated Bank dated 22/10/201518. RTGS copy from Consolidated Bank dated 10/11/2015. 19. Audit report from Maringa Mwaura & Associates dated 09/05/2019. 20. Bill of costs drawn by Providence Auctioneers filed on 31/08/2016. 21. Member statement of Michael Mwangi Kinyua as at 31/08/2016. 22. Forensic Document Examination Report dated 23/05/2017. 23. Biashara Sacco Society Ltd Financial Statements for the years 2011, 2012, 2013, 2014, 2015 and 2018. 24. Ruling of the Co-operative Tribunal dated 10/09/2018. 25. Ruling of the High Court delivered on 24/11/2019. 26. Claimant’s valuation report dated 12/04. 2023.

4. The Respondent filed a Statement of Defence dated 24/4/2023 filed on 25/4/2023 to which they admit the Claimant had a loan amounting to Kshs. 3,856,371/= as at 6/1/2021 but deny that the Claimant had enough savings to offset the same. They further state that the Claimant’s shares have never been at any one time more than Kshs. 153,900. 00/= and put the Claimant to strict proof.The Respondent also denies that an amount of Kshs. 3,900,000/= was transferred by consent of the upon judgement in Nyeri Appeal no. 130 of 2012; Michael Mwangi Kinyua -vs- Biashara Sacco.

5. The Respondent filed a List of Documents dated 14/4/2022 filed on 4/5/2022 which include;1. Title deed (Nyeri/Mweiga/659)2. Bundle of letters dated 24/11/2009, 03/05/2011, 21/05/2011, 21/05/2011, 24/10/2011, 11/01/2012 and 27/01/2012. 3.Loan letter of Offer and Acceptance dated 22/9/2009, 10/3/2011 and 4/7/2011. 4.Loan Application forms dated 12/7/2011 and 22/8/2011. 5.Correct Statements of Account and the corresponding receipts.6. Minute extracts.7. Schedules dated 6/01/2012 and 27/01/2012. The Respondent further filed Respondents Further List of Documents dated 24/4/2023 on 25/4/2023, which include;1. Letter dated the 22nd October, 2015 by Sichangi and Partners.2. Consent dated the 22nd October, 2015 signed by the firm of Sichangi and Partners and Ng’ang’a Munene and Co. Advocates.3. Judgement dated April 14, 2015 in Nyeri Civil Appeal No. 130 of 2012; Michael Mwangi Kinyua –vs- Biashara Society Limited by Honourable Justice J. Wakiaga delivered on May 8, 2015 by Honourable Justice J. Ngaah.

6. It is important to note that at the time of hearing of the case, there was a judgement from the High Court for Parties to open a joint interest Account and the Claimant was to deposit an amount of Kshs. 3,900,000/= pending hearing and determination of the matter.As such, there is only one issue to be determined by the Tribunal upon the decision by the High Court. The issue is whether the accounts have been taken and how much is at all is still owing to the Respondent.

7. The Claimant gave evidence on 6/6/2023, Claimant Witness 1 Michael Mwangi Kinyua and adopted his Witness Statement dated 14/4/2023 as his evidence in Chief and produced his List of Documents dated 14/4/2023 and produced the Documents in Claimant Exhibit 1-26. He confirmed that he deposited Kshs. 3,820,991. 00/= as per the High Court order and that money was released to the Respondent an amount of Kshs. 21,376,951. 60/= without his Knowledge.The amount transferred to the Respondent was in excess of the orders yet accounts were to be taken first the money released.The title deed is yet to be released to the wife as it belongs to her.The Claimant called two other witness Claimant Witness 2 a Forensic Document Examiner whose evidence stated;A1 - A3 were signed by the same auditors. B2- impressions were done by the same instruments. He produced his report on 23/5/2017 together with the exhibits.

8. The Respondent’s case came up on 9/11/2023 and the Respondent Witness 1 – Joseph Kamau gave evidence. He adopted his Witness Statement on 26/4/2022 as his Evidence in Chief and produced his List of Documents dated 14/4/2022. Respondent exhibit 1-7. He confirmed money Kshs. 3,856,000. 00/= was transferred to their account but it would not tell if it was inclusive of interest.The Respondent wrote to the Claimant on 21/9/2015 to recover the difference. He stated the interest was still accumulating even during the pending of the case.He confirmed the claimant has been paid his dividends since 2012. Further he stated all the claimant’s loans were consolidated.

9. Parties were directed to file Written Submissions with Respondent’s Submissions dated 15/2/2024 on 22/2/2024 and the Claimant filed their Written Submissions on 20/2/2024 on even date.Having considered the pleadings, the evidence by the parties and Written Submissions by the parties, we do not forget the judgement of the High Court Civil Appeal 130 of 2012 – Nyeri where it pronounces itself on this matter.We still believe the issue at hand is one.Whether accounts between the Claimants and Respondents have been taken?It is not disputed between them that the Claimant made a deposit of Kshs. 3,820,995. 00/= in a joint deposit account and the said amount was transferred to the Respondent’s Account before accounts were taken.This now is the bone of contention as at the date of remitting the deposited amount to the Respondent, what was owing to the Respondent?Unfortunately, the Claimant’s Advocate and Respondent’s Advocates acted contrary to what was directed by the High Court vide Judgement of Justice Wakiaga delivered by Justice J. Ngaah on 14/4/2015 Paragraph 22 which reads;“the initial amount that had been deposited in the joint account was the sum of Kshs. 3,900,000/=; as at the time the determination was made this amount had accrued interest and as at 10/11/2015 the amount stood at Kshs. 4,433,355/=;”

10. It beats logic that the parties were to undertake accounts for the purpose of Knowing the amounts owing but chose to release the monies held in a joint interest account before undertaking their accounts as directed.The parties cannot go cry wolf and expect this Tribunal to embrace on an expedition of expecting parties to file accounts yet that is what they had been directed to do.The Respondent cannot claim any further monies at this time, late in the day.At the point of the money being held in a joint earning account was released to them, they ought to have undertaken an audit and confirm if there were any outstanding amounts the interest notwithstanding.We take it the Respondent’s approach is an afterthought. The Respondent cannot have their cake and it it.The opportunity for taking/calculating accounts has long sailed and as such the Tribunal refuses to be used as a rubberstamp for their own failures.The same goes to the Claimant who at the point of realizing monies was released without their knowledge, did not raise the issue with the relevant authority.The Tribunal shall not be drawn to the intricacies of the same.

11. The issue of permanent injunction has already been dealt with by the High Court and as such is no longer an issue wince the monies have been paid to the Respondent.The Claimant’s claim on shares and dividends , it was clear from the Respondent’s evidence adduced by the Tribunal that the Claimant was paid his dues.

12. We thus upshot as follows;Judgement is entered in favour of the Claimant against the Respondent for;a.Prayer a – Spentb.Order for discharge and release of the Claimant’s title deed in respect of Nyeri/Mweiga/659 and Nyeri/Mweiga/669 and 1048. c.Prayers c, d and e fails.d.Costs to the Claimant

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 25TH DAY OF JULY, 2024. Hon. B. Kimemia Chairperson Signed 25. 7.2024Hon. J. Mwatsama Deputy Chairperson Signed 25. 7.2024Hon. Beatrice Sawe Member Signed 25. 7.2024Hon. Fridah Lotuiya Member Signed 25. 7.2024Hon. Philip Gichuki Member Signed 25. 7.2024Hon. Michael Chesikaw Member Signed 25. 7.2024Hon. Paul Aol Member Signed 25. 7.2024Tribunal Clerk JemimahNganga advocate for RespondentNo appearance for ClaimantHon. B. Kimemia Chairperson Signed 25. 7.2024