Kitita v Minas Savings & Credit Co-op. Soc. Ltd. [2023] KECPT 1054 (KLR)

Kitita v Minas Savings & Credit Co-op. Soc. Ltd. (Tribunal Case 202/E161 of 2022) [2023] KECPT 1054 (KLR) (30 November 2023) (Ruling)

Neutral citation: [2023] KECPT 1054 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 202/E161 of 2022

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

November 30, 2023

Between

Paul Maingi Kitita

Claimant

and

Minas Savings & Credit Co-op. Soc. Ltd.

Respondent

Ruling

Ruling of the Tribunal 1. This ruling is in respect of a preliminary objection application dated May 17, 2022 which was anchored under section 4(3) of the Limitations of Actions Act and seek to dismiss with costs the Application dated January 31, 2022 and filed by the claimant on April 4, 2022

2. On December 9, 2022, the Tribunal ordered the parties to canvass the preliminary objection by way of Written Submissions and that the ruling would be delivered on November 30, 2023.

Background 3. The claimant filed a statement of claim dated 31/1/2022 and seek orders for;a.A refund of his savings/ deposit of Kshs. 87,000/= held by the respondent together with interest from the date of filing this suit.b.A refund of his shares which stood at Kshs. 75,095/= in 2007 together with dividends/ interest.c.Any other Relief.The Claimant's Application Is Supported By A Witness Statement, A Verifying Affidavit, Claimant's List Of Witnesses And Documents all dated 31/1/2022.

4. The Respondents on their part filed their Defence Statement dated 2/5/22 and denies the existence of the Claim made by the Claimant save for some balance of Kshs 1,066. 43/= which remained in his account in 2007. Concurrently, the Respondents stated that they would raise a Preliminary Objection because the duration of 16 years since the time the Claimant retired from active teaching without following his claims up to 2022 is time barred by the Limitations of Actions Statute.

5. In the same Defence Statement, the Respondents made a Counter-Claim of Kshs. 150,00/= which was later amended to Kshs.139,200/= against the Claimant through an amended Defence and Counter-Claim Application dated 17/5/2022.

6. In support of the Defence, the Respondents filed two (2) Witness Statements, List of Documents, Loan amount of the Claimant, its analysis and other annextures.

7. In the Preliminary Objection Application dated 17/5/2023, the Respondents provided the following one (1) ground as the basis;a.A period of six years has lapsed since the cause of action herein arose.The respondents supported the ground by stating that the cause of action taken by the Claimant is time barred by section 4(3) of the Limitations of Actions Act which state:“"No action of an account may be brought in respect of any matter which arose more than 6 years before the commencement of the action."

8. It is evidence of the Respondents in their Defence statement and the written submissions that the period from 2007 to 2022 is 16 years and that this claim is time barred by the statute of Limitations of Actions Act.

Determination 9. We have read the preliminary objection and the written submissions by the Respondent and isolated two (2) issues for determination.a.Whether being a member of a Sacco is contractual or not?b.Whether refund of members shares and deposits in a Sacco are subjected to time limitation?

10. In analyzing these issues, we are guided by the decision of Supreme Court of Kenya in the case of Hassan Ali Joho & Another versus Suleiman Said Shahbal & 2 others where the court discussed the tenets of a Preliminary Objection as:“A Preliminary Objection consists of a point of Law which has been pleaded or which raises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit….It cannot be raised if any fact has to be ascertained or if what is sought in the exercise of judicial decision.”

11. With this in mind, we note from paragraph 2 of the Claimant’s witness statement that the Claimant was a member of the Respondent and held membership No. 2866. All Sacco’s registered in Kenya like the Respondents have by-laws/rules which regulate the admissions of its members and are guided by the seven (7) Cooperative Principles.Section 4 of the Cooperatives Act Cap 490 cite one of these principles as “voluntary and open – membership.”

12. A plain interpretation of the principle of voluntary and open-membership is that any person who meets the requirements stipulated in the by-laws of a Sacco or a cooperative society may be admitted any time without discrimination and may withdraw anytime at will. This is the point at which a member enters into a contract to abide by the by-laws of the Sacco.The contract remains in perpetuity unless the member withdraws. However, in the instant case, we have not seen any evidence on record from the Respondents which show that member No. 2866 resigned from the Sacco.It is therefore our view that Mr. Philip Maingi is still a member of the Respondent until he resigns and be cleared by the Sacco.

13. On the second issue as to whether refund of a member’s shares and savings/deposits in Sacco is subject to the Limitation of Actions Act.First, we will consider the issue of shares before we move to savings/deposits.

14. The Claimant is seeking for refund of his shares that stood at 75,095 while the Respondent denied the existence of such shares in the analysis of the member’s loan account.On the other hand, the Respondent admitted in paragraph 2 of Witness Statement that the claimant had 75,000 shares.“The Claimant had shares of 75,000/= as of 1st January 2007 as is evident from the Respondents document No. 1”

15. For clarity purposes Sacco’s Act No. 4 of 2012 interpreted the meaning of shares as:“units of equity ownership or interest in a Sacco that qualify a member to be a shareholder and to enjoy dividends when they are declared”By- laws of Sacco provide that a member’s shares remain under his/her membership number as long as it has not been refunded or transferred to the next of kin and be sanctioned in an Annual General Meeting or Special General Meeting.

16. Having not been furnished with the clause of the By-law, minutes of Annual General Meeting or Special General Meeting which liquidated the shares of the Application, we are of the view that the shares of the Claimant cannot be wished away by subjecting it to the Limitations of Actions Act.

17. On savings the Sacco Act interpreted to mean an amount that a member deposits in his/her account anytime or every month and a deposit is a sum of money received or paid on terms under which it shall be repaid with or without interest on demand or at anytime or in circumstances agreed by the parties.The Claimant seek for refund of Kshs.87,000/= which was held in his savings/deposit account in 2007 and the Respondent and the Respondent denied and provided an analysis of the member’s loan account.Despite the denial, the Respondents went ahead to state that 6 years has lapsed since the cause of action herein arose.We consider this unplausable because the Claimant at paragraph 5 of his Witness Statement stated that:“I have severally visited the respondents offices and written follow-up letters”……Although the several visits may not have documented so that it can establish the dates when these visits were done, we belief that the Claimant may clarify at the time of hearing and present the written follow ups.

18. In conclusion, we hold that in the interest of justice, the application for preliminary objection dated May 17, 2022 is without merit and fail.

On the same view, the claimant be given an opportunity to present his facts.

Ordersi.The preliminary objection application dated 17*thMay 2022 fail thus dismissed.ii.Cost to be in cause.iii.Mention date on 18. 4.2024 for Pre-trial directions.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF NOVEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 30. 11. 2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 30. 11. 2023HON. BEATRICE SAWE MEMBER SIGNED 30. 11. 2023HON. FRIDAH LOTUIYA MEMBER SIGNED 30. 11. 2023HON. PHILIP GICHUKI MEMBER SIGNED 30. 11. 2023HON. MICHAEL CHESIKAW MEMBER SIGNED 30. 11. 2023HON. PAUL AOL MEMBER SIGNED 30. 11. 2023Mbuthia advocate for Respondent/ApplicantN. Kaleli advocate for Claimant/Respondent- No appearanceMention for Pre-trial direction on 18. 4.2024. Notice to issue.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 30. 11. 2023