Kitarian & 6 others (Legal Representatives of the Estate of Kitarian Ololtuno) v Liquidator Keekonyokie Farmers Co-Operatives Society Limited [2022] KEHC 17253 (KLR)

Kitarian & 6 others (Legal Representatives of the Estate of Kitarian Ololtuno) v Liquidator Keekonyokie Farmers Co-Operatives Society Limited (Civil Appeal E015 of 2021) [2022] KEHC 17253 (KLR) (7 November 2022) (Judgment)

Neutral citation: [2022] KEHC 17253 (KLR)

Republic of Kenya

In the High Court at Kajiado

Civil Appeal E015 of 2021

SN Mutuku, J

November 7, 2022

Between

Jackson Kapaiko Kitarian

1st Appellant

James Sapayian Kitarian

2nd Appellant

Moses Keen Kitarian

3rd Appellant

Zakayo Lelerio Kitarian

4th Appellant

Moses Salau Kitarian

5th Appellant

Daniel Karatina Ole Kitarian

6th Appellant

Titus Santamo Kitarian

7th Appellant

Legal Representatives of the Estate of Kitarian Ololtuno

and

The Liquidator Keekonyokie Farmers Co-Operatives Society Limited

Respondent

(An Appeal from the judgment of the Honourable Co- ooperative Tribunal at Nairobi (Hon. B. Kimemia – Chairperson, Hon. Mjebi Mwatsama – Deputy Chairperson and P. Gichuki – Member dated 25th March, 2021 in Tribunal Case No. 122 of 2018)

Judgment

Introduction 1. The appellants are sons of Kitarian Ololotuno, deceased. They filed a claim before the Cooperative Tribunal claiming a shares (land) meant for their late father by virtue of being a member of Keekonyokie Farmers’ Cooperative Society Limited (the Society). The sought from the Tribunal a declaration that share number 33 in the Society belonged to their deceased father and that the share be transferred to the Appellants as well as costs.

2. In a judgment delivered on March 25, 2021, the Tribunal found that the deceased, Kitarian Ololotuna had sold his shares to one Ashiayo Ole Polei and therefore did not have any claim on the land. It is this finding that necessitated this appeal.

3. The appellants were aggrieved and dissatisfied with that judgment of the Honourable Co-operative Tribunal at Nairobi and preferred this Appeal to this court. They have raised the following grounds:i.That the Honourable Tribunal erred in holding that Kitarian Olulotuno did sell his shares to one Ashiayo Ole Polei without any clear evidence being tendered before the tribunal.ii.The Honourable tribunal erred in holding that a failure by Kitarian Olulotuno to attend the respondent’s meeting was concomitant to his sequestration of membership and sale of his shares.iii.The Honourable Tribunal erred in failing to consider the evidence of the appellants in totality.iv.The Honourable Tribunal erred in making assumptions and erroneous principles in reaching its decision.

2. The appeal is opposed by the respondent.

3. This court directed that the appeal be canvassed by way of written submissions. The appellants filed thier submissions dated January 17, 2022. They have submitted that there was insufficient evidence to support the Tribunal’s position that Kitarian Olulotuno did sell his shares to Ashiayo Ole Polei; that there was no positive evidence to prove that the shares were transferred; that the review of the Respondent’s evidence at the Honourable Tribunal fails to demonstrate that the minutes constituted the entire minutes of all meetings held by the Co-operative Society since 1991 when the shares were alleged to have been transferred; that this could therefore not make an unimpeachable conclusion that the late Kitarian Olulotuno was no longer a member of the co-operative society.

4. The appellant submitted that the issue of membership is not pegged on the attendance of meetings but on the register of members. They cited section 2 of the Co-operativesSocieties Actthat provides that defines “member” to include a person or a co-operative society joining in the application for the registration of a society, and a person or co-operative society admitted to membership after registration in accordance with the by-laws. They also cited the case of Boston Wachira Kamangu -vs- Taifa Society Ltd & another[2016] to support their submissions on that point.

5. The Appellants further submitted that the society drew an inference from the fact that the late Katarian Olulotuno transferred his shares because he did not participate at the inquiry stage while the commissioner of co-operative was on the ground and argued that no sufficient evidence was tendered to demonstrate that the late Katarian Olulotuno was aware of such inquiry and that the allegations of fraud made both in the pleadings and the evidence have not been proved.

6. They submitted that, the respondent and its witnesses could not state with certainty when the shares were sold and therefore, the purported contract giving rise to the alleged transfer of shares is shrouded in mystery and fraud and that the transfer lacks the essential elements of a basic contract.

7. It is appellant’s case that there was no enforceable contract of sale of the shares entered between Katarian Olulotuno and Ashiayo Poleni.

8. The respondents filed submissions dated March 15, 2022. The Respondent submitted that the first witness testified on his mandate as a liquidator for Keekonyoike Farmers Co-operative Society Limited following Gazette Notice Number 11916 and enumerated the procedure as it is on the face of the submissions on the transfer of the shares; that the 2nd witness, the Secretary of the Society, testified on the procedure that the Society and the officials followed in transferring the shares and that the 3rd witness, the eldest son to Ashiayo Polei, testified that the claimant never challenged the transfer of his share to his late father during his life time.

9. It was the respondent’s submission that from the documents produced in court including the claimant’s death certificate, showing that he died on July 12, 2014, leads to the question as to why he did not attend the enquiry and validation exercise in the year 2007; that the society would have required the attendance of a member of the society to attest to the issue of the transfer or better still any official member of the society; that in this case this did not happen and therefore the Tribunal was right in holding that the failure to attend the validation exercise by Katarian Olulotuno was proof that he was no longer a member and had sold his shares to Ashaiyo Polei.

10. They argued that the Appellant failed to tender evidence to convince the Tribunal that the transfer of share number 33 was fraudulent. They stated that following meetings and court cases the society was tasked with coming up with a list of members of the society; that the said list indicates members who transferred their shares, and that is the true position of the society; that the Appellant is on a fishing expedition for allocation of shares not owned and alleges fraudulent transfer of shares yet the allegations were not pleaded at the tribunal and that a party is bound by their pleadings. On this point they relied on various authorities including Enos Edago Machayo & Another -vs- Tembo Sacco Limited [2020] eKLR.

Determination 2. I have read the entire record of the Tribunal with a view to re-evaluating all the evidence and re-considering the same. From the proceedings of the tribunal I have noted that the Appellant called one witness, Moses Kitarian. He testified that it was untrue that his late father had transferred his shares to Ashiayo Ole Polei. He testified that Ashiayo was a neighbour, Chief of the location, a friend of his late father’s friend and a member of the Sacco and chairman. He testified that the letter of transfer dated 5/9/1987 does not have any name of a witness and also that it is not possible to know whose thumbprint is affixed on that letter. He testified that his father died in 2014, was illiterate and did not know Kiswahili. He denied that his father was paid for the shares.

3. On cross – examination he stated that he was not aware of any verification exercise by the liquidator.

4. The respondents called 3 witnesses to testify. The 1st witness, Methusela Oncheku, stated that he was the liquidator and acting commissioner of the society; that a verification was done in 2007 and Katarian Olulotuno never appeared or challenged the transfer documents; that at the time it was difficult to get information as most members had died and only 11 members were left.

5. On cross-examination he stated that the transfer letter is not witnessed by anyone and that it was not his responsibility to verify. That there was also no evidence of payment.

6. The 2nd witness, William Kioko, stated that he was the secretary of the society and knew the 2 members, Kitarian and Ashiayo, that his responsibility was to take minutes of society on 12/4/2017 and 16/3/1991 and that Katarian Ololotuno transferred his shares to Pulei.

7. He testified, on cross-examination, that Kitarian was illiterate and that he did not know who wrote the letter. He stated that there are no witnesses to the document.

8. The 3rd witness was Robert Sipoi Pulei, the son of Ashiayo. He testified that the family of Katarian Ololotuno was paid 45,000/- and 10 cows.

9. To my understanding, the grounds of appeal mainly revolve around whether there was sufficient evidence to prove that a transfer of the shares took place.

10. From the recorded evidence, the society originally had 40 members including Katarian Olulotuno and Ashaiyo Pulei. The said list is on page 17 of the record of appeal. The liquidator of the society testified that an enquiry was conducted sometime in 2007 to establish the membership of the society. That it was during the exercise that they discovered some members had sold their shares. The Respondents attached a copy of the receipt of transfer for payment of Kshs. 1600/- as share capital. They also stated that the society had a list of members who had transferred their shares as indicated on page 34 of the record of appeal.

11. I have also seen a copy of the minutes of meetings held by the society’s members who were still alive. Several meetings were held to address disputes. I have read the minutes held on March 16, 1991 where it is indicated the names of the members present. Under Min. 6/91 the members discussed the share that Ashiayo Pulei had bought from Katarian Ololotuno and that the same would be transferred to his son Sipoi Ole Pulei.

12. The Tribunal found that Katarian Olulotuno did not attend meetings because he was not interested in the meeting because he had transferred his shares. I have gone through the bundle of documents by the Respondents on the minutes of various meetings held and note that only a handful of members would attend at any particular time. Given that the minutes do not indicate that all the members attended the meetings at any given time, it is my considered view that failure to attend meetings by a member cannot be used as evidence that a member was not interested because a transfer of shares had occurred.

13. There is no evidence as to who the author of the letter of transfer is. There are no witnesses to that letter of transfer and there is no evidence to confirm whose thumbprint is affixed on the letter. There is no evidence to prove the exact amount paint for the shares. I find the evidence surrounding the letter of transfer and the payment of the shares insufficient to support the case that the appellants’ late father transferred his shares to Ashiayo.

14. I have noted that the only share certificate on record is a copy on page 10 of the record of appeal and it is in the name of Kitarian Ololotuno. There is no share certificate in the name of Ashiayo

15. I note that the respondent’s witness number 2 testified on the procedure that the society and officials followed in transferring shares to the effect that a member was required to write a letter, present himself to the officials and make requisite payments as agreed; that thereafter, the changes would be effected on the Societies Register. But I find no evidence that this is what happened in respect of this case.

16. I note, further, that the Respondent in their submissions stated that the letter had the official stamp of the society. I have reviewed the said letter and note that the same does not have a stamp. The only proof of payment shown was the receipt number 169216 for the amount of kshs. 1600/-. This is contrary to what the Respondents witness have testified that the amount agreed upon was 45,000/-. I find no proof that the latter amount was paid and to whom.

17. I have also gone through the minutes of April 12, 2017 under the sub-topic ‘’Disputed Share’’ where Kitarian Ololotuno’s son raised the issue of the transfer letter. The same was deliberated on. One of the members even made a proposal that Ashaiyo Ole Polei family surrender back 4 acres to the family of Kitarian Ololotuno. The society recommended that the issue would be discussed later. It is clear from this record that the society was aware of the allegations brought by the appellants..

18. The totality of the evidence adduced at the Tribunal leads me to the conclusion that the standard of proof, proof on a balance of probabilities, was not met by the Respondent in proving that indeed a transfer of shares was done. It is my view that the evidence tendered was not sufficient to demonstrate that Kitarian Ololotuno transferred his shares.

19. I agree with the appellants in their grounds of appeal raised in this appeal. It is my view that the Tribunal misapprehended the evidence and the issues before it and arrived at a wrong conclusion. I find that the appeal is merited. Consequently, I allow the appeal, reverse and set aside the judgment of the Tribunal in the Cooperative Tribunal Case No. 122 of 2018 with costs to the appellants.

20. Orders shall issue accordingly.

Dated, signed and delivered this 7th day of November, 2022. S. N. MUTUKUJUDGE