Kiptoo v Kenya Union of Savings & Credit Co-operatives Union Limited (KUSCCO) [2024] KECPT 1531 (KLR)

Kiptoo v Kenya Union of Savings & Credit Co-operatives Union Limited (KUSCCO) (Tribunal Case 930 (E1178) of 2023) [2024] KECPT 1531 (KLR) (26 September 2024) (Ruling)

Neutral citation: [2024] KECPT 1531 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 930 (E1178) of 2023

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

September 26, 2024

Between

David Kiptoo

Claimant

and

Kenya union of Savings & Credit Co-operatives Union Limited (KUSCCO)

Respondent

Ruling

1. This ruling dispenses with the Notice of Preliminary Objection dated 5th March 2024. In the Notice of Preliminary Objection, the Respondents raise an issue with the jurisdiction of this Tribunal on the following grounds:a.That the substratum of the suit before this Honourable Tribunal relates to a charged property known as L.R.NO.NAIROBI/BLOCK 78/786/BURUBURU PHASE IV, as well as the reconciliation of accounts towards repayment of a loan advanced to the claimant by the respondent. further that such issues have been found by superior courts to lie within the jurisdiction of the High court pursuant to article 165 (3) of the constitution. In Thomas Mutuku Kasue versus Housing Finance Company Limited (HFC) (2021) eKLR. The learned Justice Angote of the Environment and Land Court held thus:“in matters involving charged property , the proper forum is the High Court and that the jurisdictional dichotomy of which court should hear disputes where charged properties are concerned was laid to rest by the court of appeal in Cooperative Bank of Kenya versus Patrick Kang’ethe Njuguna & 5 others (2017) eKLR.b.That this Honourable Tribunal is divested of jurisdiction to hear and determine the suit filed herein.c.The Notice of Motion Application and Statement of Claim dated 21st December, 2023 are thus misconceived, bad in law and ripe for dismissal with costs to the Respondent.

2. The Preliminary Objection is premised on the grounds on its face which are inter alia that: the substratum of the suit before this Tribunal relates to a charged property as well as reconciliation of accounts towards payment of a loan advanced to the Claimant by the Respondent. The Respondent argues that such issues have been found by superior courts to lie within the jurisdiction of the High Court.

3. The Preliminary Objection was canvased by way of written submissions and both parties filed their submissions.

6. In the Applicants submissions, they opined that the relationship established between a chargor and a chargee are commercial in nature and has nothing to do with a dispute between a member and a Co-operative Society and hence should be determined at the high court. 5. The Respondents, in their submissions, opined that the dispute squarely lies with the Cooperative Tribunal pursuant to section 76 of the Co-operative Societies Act.

Analysis 6. This Tribunal has considered the Application and the Submissions of the parties. The question that this Tribunal has to answer is whether the Applicant’s application is merited and whether this court has no jurisdiction to handle that matter.

7. The Jurisdiction of this Tribunal is drawn from the Cooperative Societies Act, at section 76(1) which provides as follows;If any dispute concerning the business of the Cooperative society arises:a.Among members, past members and persons claiming through members, past members and deceased orb.Between members, past members or deceased members and the society, its committee or any Officer of the society.c.Between the society and any other Cooperative Society.

8. Therefore, to answer this question we have to ask ourselves whether the dispute subject to this Claim falls is between parties contemplated under section 76(1) above, and whether these disputes concern the business of a cooperative society.

9. According to the Claim, the Claimant is a member of the Respondent member number 03205. This is a fact that the Respondents did not dispute and we are therefore inclined to believe that he was indeed a member of the Respondent. The Respondent indeed aver that they extended a loan facility to the Claimant, implying that the Claimant was its member.

10. On the second issue of whether this is a dispute concerning the business of a cooperative, this court will proceed to look at the dispute that is subject of this matter. According to the statement of claim and the submissions of the Applicants, the Claimant was advanced a loan by the Respondent, and the loan was secured by the subject property, NAIROBI/BLOCK 78/386/BURUBURU PHASE IV, NAIROBI.

11. The Claimant claims that he had made substantial repayments, and when he requested for a reconciliation of the loan by the Respondent, the Respondent informed him that he had a loan balance of Ksh. 5,221,993/- and sought to enforce the security.

12. The prayers in the statement of claim is for this court to find that the Claimant has since cleared the loan facility and for the Respondents to discharge the Claimant’s property. However, the Respondent’s contend that the loan has not been fully paid.

13. This court finds that the dispute relates to whether the loan facility has been fully settled or not, and this will have a bearing on whether the security can now be discharged. For this dispute to be solved, there will be need to look into the accounts of the Respondent and also the evidence submitted by the Claimant. The parties have not disputed the existence of the charge, and whether the same was irregular.

14. This court believes that the looking into the accounts of a cooperative to determine whether a member has satisfied a debt is a business of a cooperative. The applicant submitted that this matter is of a commercial nature and therefore does not fall within the ambits of the cooperative Tribunal. However, it is important to note that most of the businesses of cooperative and its members are of commercial nature, to wit, deposits, loans, guarantees etc.

15. In the upshot of the foregoing, we find that this Tribunal has jurisdiction to handle this matter, and hereby dismiss the Preliminary Objection dated 5th March 2024 with costs to the Claimant/Respondent.

RULINGSIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF SEPTEMBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 26. 9.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024HON. BEATRICE SAWE MEMBER SIGNED 26. 9.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 26. 9.2024HON. PHILIP GICHUKI MEMBER SIGNED 26. 9.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 26. 9.2024HON. PAUL AOL MEMBER SIGNED 26. 9.2024TRIBUNAL CLERK JEMIMAHNo appearance for parties.Ruling delivered in absence of parties. Mention for Pre-trial directions on 21. 1.2025. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024