Komothai Coffee Growers Society Limited v Nelson Njuguna Njoroge & 5 others [2020] KECPT 75 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 319 OF 2019

KOMOTHAI COFFEE GROWERS SOCIETY LIMITED.........................................CLAIMANT

VERSUS

NELSON NJUGUNA NJOROGE & 5 OTHERS....................................................RESPONDENTS

R U L I N G

What is before us for consideration and determination are the following   Applications;-

a) The Claimant’s Application dated 17/6/2019; and

b) The Respondent’s Application dated 16/8/2019.

The Claimant’s Application dated 17/6/2019.

This Application is supported by the ground on its face and the following affidavits;

a) Supporting Affidavit sworn by Daniel Njuguna Kiunyu on 17/6/19; and

b) Further Affidavit sworn by the said Daniel Njuguna Kiunyu on 30/8/2019.

The Application has been opposed by the Respondent vide the following Affidavits;

a) Replying Affidavit sworn by Nelson Njuguna Njoroge on 13/8/2019; and

b) Further Replying Affidavit sworn by the said Nelson Njuguna Njoroge on 11/9/19.

It is the Claimant’s case that in May, 2019, and early June, 2019 the Respondent renewed their campaign to chart their destiny away from the Claimant and that in the process, they sought to illegally and unlawfully acquire the Claimants properties and in particular, Githongo Coffee Factory which factory is owned by Komothai Coffee Growers Co-operative Society Limited.

That the Interested party is in the process of paying the Coffee proceed delivered to it by the Claimant to the Respondents.

That the Claimant has various loans owing to Co-operative Bank and that any proceeds from coffee should be used for the said loan.

That the Claimant owns 13 factories which are their properties and are held for the benefits of all members.

That the Respondents have on several occasion harassed and prevented members of the Claimant from delivery of their coffee to Githongo Coffee factory on the pretence that factory belonged to them.

That on several occasions coffee delivered by the Claimant to the said factories have been stolen and sold by the Respondent to unauthorized dealers.

Vide the Replying Affidavit sworn on 13/8/19 the Respondent have opposed the Application on the following grounds ;

Firstly, that they have not, in their individual capacities unlawfully or illegally attempted to acquire the Claimants property.  That they are also owners of the properties as farmers as they contributed to the purchase of the same and thus entitled to all accruing benefits.

That on or around October, 2018, the claimant’s workers went on strike over non-payments of their salary thus resulting in member famers suffering great losses, as their delivered produces was not processed but instead left to waste away.  That being dissatisfied with the services offered by the Claimants to farmers, including them opted to start processing their coffee.  They have annexed minutes of the meeting held on 28/2/2019 and mark an annexture MNN-11.

That the Claimant is merely blowing hot and cold and seeking sympathy with the Tribunal by insinuating that there was harassments of their members and theft of their produce.  That at no point in time have they harassed any of the Claimant’s members. That the factory is secured with guards and few employees.

That ever since the Claimant’s workers went on strike, the Claimant has been in grave violation of its duties and responsibilities.  That it has failed to keep proper books of accounts showing sales and purchases of goods and services.  That despite raising their said concerns in various meetings, the Claimants failed and/or neglected to remedy the situation.

That Contrary to the contention that they have stolen coffee, no such coffee has been stolen and that they have kept clear records to demonstrate this.

That Contrary to the Claimant’s contention no farmer has been denied access to Githongo coffee factory.  That their allegations are merely meant to hoodwink the Tribunal into issuing adverse orders which may result in crippling the operations of the factory.

That as regards the allegations that they (Respondents) have denied them unrestricted access to the factory, the Respondents contend that no member of the society is denied access to it.  That since there were no workers in the factory, the farmer members took it upon themselves to process their own produce as opposed to letting the same to go to waste.

That as regards the contention that they requested to be paid individually, the Respondents contend that at no point in time have they requested to be so paid in person.  That member farmers after the strike by the workers, took it upon themselves to process the coffee beans which were at risk of going to waste and after processing, escorted them to Sasini Company Limited which company had been appointed to purchase the said coffee and that the only farmer entitled to the payment from Sasini are those farmers who delivered coffee to the said factory.

That from the foregoing it is in fact the Claimant which is acting in detriment to the members of Githongo Coffee Factory and not the Respondents.  That they have the support of majority of the members in any action that they undertake as regards Githongo coffee factory.

That, there were several meetings held and attended by the District Cooperative Officer to allow the Respondents and other members of the Claimant that wanted to withdraw from the Claimant to do so and a Resolution to that effect was passed.  That the Deponent of the Affidavit in support of the Claimant’s case,  Daniel Njuguna Kiunyu attended one of the said meetings held on 20/2/2019.

That, the parties herein have held meetings with Kiambu CEC for trade and Co-operatives.

That, there was a meeting held on 4/4/2019 chaired by the Director of Co-operatives, Kiambu County.  That the said meeting directed the Claimant to prepare assests and liabilities of Githongo Coffee factory and specify the debts owed by the individual farmers so as to allow the setting up of Githongo Coffee Factory as a separate Co-operative Society but the Claimant has refused to do so but instead filed the suit.

That, in the alternative and being dissatisfied in the manner in which the Claimants run the affairs of Githongo Coffee factory, the members of the said factory, as requested by the District Cooperative Officer Kiambu, elected the Respondents as the interim officals and mandated them to take the necessary action as regards the factory that would protect the interests of farmers.  That vide their letter to the Commissioner, they proposed to register a new Society called “ New Githongo Coffee Growers Co-operative Society Limited”.  That vide the letter dated 22/5/2019, the Director of Co-operatives directed the split of and registration of the above Company.

The Claimants reiterated its averments in the Supporting Affidavit above vide its further Affidavit sworn on 30/8/2019.  Similarly, the Respondents refuted the contention raised by the Claimant in the aforesaid further Affidavit vide its further Replying Affidavit sworn on 11/9/2019.

Respondents Application dated 16/8/19

Vide this Application, the Respondents seek for the Tribunal to discharge, vary or set aside the orders issued on 17/6/2019.  Further, they farmers of Githongo Coffee Factory to be paid their dues, vide an arrangement to be agreed upon by the farmers and the Director of Co-operatives.

The Respondents have based this Application on the grounds enumerated in the Replying and further Affidavit of Nelson Njuguna Njoroge sworn on 13/8/19 and 11/9/19 respectively. These grounds are further contained in the Supporting Affidavit sworn by the said Nelson Njuguna Njoroge on 16/8/19 and further Affidavit sworn by him on 11/9/2019.

The Claimant has opposed the application vide a Replying Affidavit sworn by Daniel Njuguna Kiunyu on 30/8/2019.  Vide the said reply, the Claimant has reiterated the averments in the Supporting Affidavit sworn by the said Daniel Njuguna on 17/6/19 and further affidavit again sworn by him on 30/8/19.

Written submission

Vide the directions given on 12/9/19, the Claimant filed its submission on 24/11/19 while the 1st- 5th Respondents filed their on 27/9/2019.

Issues for determination.

We have framed the following issues for determination;-

a) Whether the Claimant has laid a proper basis to warrant the grant of an injunction restraining the Respondents from claiming, acquiring, transferring, selling, interfering with the ownership, operations and/or management of Githongo Coffee Factory;

b)  Whether the Tribunal should issue an order restraining the Interested Party and persons acting at it’s behest from paying the proceeds of coffee delivered to it from the Claimant’s 13 factories and in particular, Githongo Coffee Factory; and

c) Whether the orders issued on 17/6/2019 should be discharged, varied and or set aside.

Injunction

The Claimant has pleaded for injunctive orders at two levels, firstly, against the Respondent from claiming, acquiring, transferring, selling, interfering, with the ownership, operations and/or management of the Githongo Coffee Factory and  Secondly, against the Interested Party, Sasini Company Limited from paying the Respondents the proceed of coffee delivered to it from any of its 13 factories.

The graveman of the Claimant’s contention is that the Respondents championed and/or led by the 1st Respondent have began the process of disassociating themselves from it and in the process, have sought to illegally and unlawfully acquire its properties, in particular, Githongo Coffee Factory which it lawfully owns.  That whilst doing so, the Respondents have harassed and prevented farmers from delivering their coffee to Githongo Coffee Factory on the pretext that the said factory belongs to them.  That any of its member who have attempted to deliver his/her coffee to the said factory has been attacked by goons or have their coffee stolen.

Vide its written submissions dated 22/10/2019, the Claimant contend that the Respondents do not have proprietary rights over Githongo Coffee Factory.  That the said factory together with 12 other factories are built on land owned by the Claimant i.e Kiambu Gatamaiyu/Kamuchege /271 “A”.  That it owns the property for its benefit and also for the benefit of its members. That the said property contain fields whereupon coffee is grown.  That it is the one which provides seeds and all the tools used to maintain coffee.  That the Respondents do not own the said factory and thus it would be unconstitutional, illegal, malicious and unfair for them to claim right over the said factory.

Further, the Claimant submits that it is illegal for the Respondents who do not have proprietary rights over the said factory to sell their coffee to unauthorized dealers without its consent. That the contract between Githongo Coffee Factory and Sasini Company Limited is illegal.  That in case there is a breach of contract between Sasini Company Limited and Githongo Coffee Factory, it is the Claimant who would be sued and not Githongo Coffee Factory.  It has cited in this regard, the case of Joseph Muthuri Ikanyua & 32 others –vs- Co-operative Bank of Kenya Limited 814 others [2018]e KLR.

On their part, the Respondents have opposed an order for the grant of the said injunction on the grounds that they have not unlawfully attempted to acquire the Claimant’s property.  Instead they aver that as farmers, they are also owners of the said property as they contributed towards its purchase and thus entitled to accruing benefits.

That in October, 2018, the Claimant’s workers went on strike over non-payment of their salaries thus resulting in members suffering great losses as their delivered produce was not processed but left to waste.  That being dissatisfied with the service offered by the Claimants, the farmers including themselves opted to start processing their coffee.

That ever since its employees went on strike, the claimant has not kept proper books of accounts showing the sales and purchase of goods and services.

That as regards the contention that the Githongo Coffee Factory owed outstanding loans as per the annexed statements, the Respondent contend that the said statements are for the period 1997/1998.  That the said statements are obsolete as they are for debts which accrued over 22 years ago.  That the Claimant has not furnished documentary evidence of existence of the alleged loans.  That the said loans did not accrue from the current and active members alone as the list attached contain names of persons who have since died.  That by consent of parties, the Claimant was to identify individual farmers with outstanding loans but has again presented the loan portfolio of the Claimant which already has a system of settlement in place .  That the said loan portfolio does not involve the individual farmers.  They therefore submit that the Claimant has failed, neglected and/or refused to identify the individual farmers with outstanding loans and that they contend that there are no loans owed by individual farmers.  That they have availed several slips to demonstrate that no deductions have been made to the farmer of Githongo Coffee Factory.

The law on interlocutory injunction is settled.  For such a claim to succeed a party must satisfy the condition laid down in the case of Giella –v-cassman Brown  & Another ( 1973) EA 35.  They include ;-

a) The plaintiff must show that he has a prima facie case with a probability of success;

b) That he stands to suffer irreparable damage if the injunction is not granted.

c) That if the court is in doubt, it will decide the matter on a balance of convenience.

The dispute in the present case relate to the ownership of Githongo Coffee Factory. The said factory is erected on L.R. No. Kiambu Gatamaiyu/Kamuchege/271 “A”.

The Claimant contend that it owns the said property and the factory.  It contends that the Respondents are in the process of illegally acquiring, claiming, transferring, selling, interfering with its ownership, management and/or operations.

On the other hand, the Respondents contend that by dint of being members of the said Sacco, they have a stake in it in terms of ownership.

The court in the case of Mrao –vs- First American Bank of Kenya Limited (2003) eKLR held as follows as regards a prima facie case;

“Aprima faciecase is more than an arguable case.  It is not sufficient to raise issues.  The evidence must show an infringement of a right and the probability of the Applicant’s case upon trial… It is a case, which, on the material presented to a court, a tribunal properly directing itself will conclude that there exists it right which has apparently been infringed by the opposite party as to can for an explanation by the cafer.”

Considering, the instant Application on the basis of the principle ‘prima facie case’  we find that the Claimant has not satisfied that it has a prima facie case with a probability of success.  Its case is anchored on the proprietary right of Githungo Coffee Factory and the property upon which it is constructed.  However, the evidence on record speaks otherwise.  It is apparent that the Respondents are members of the said factory and that they own shares and also supply their produce to it.  It is thus not the case that the Claimant has absolute proprietary rights over the factory.

Irreparable loss.

It is the Claimant’s case that it will lose irreparably if the injunction is not granted as members of the said factory have loans for which recovery was made through supply of produce.  However from our perusal of the statements of account furnished by the claimant, it is apparent that the same does not show if the Respondent and other individual farmers have outstanding loans. In the absence of evidence linking the Respondent to outstanding loans, we find that the Claimant has not demonstrated the loss it will suffer if the injunction will not be granted.

Claim against the Interested party

The Claimant has sought orders barring the interested party from paying farmers the produce supplied to it by Githongo Coffee Factory.

We refer the Claimant to section 76 of the Co-operative Societies Act (Cap 490) Laws of Kenya and find that we do not have jurisdiction to issue orders or make any findings against the said interested party.

Conclusion

The upshot of the foregoing is that we find that the Claimant has not laid a proper basis to warrant as to grant the orders sought.  In the circumstances, we do not find merit in its Application dated 17/6/2019 and hereby dismiss with costs.  Consequently, the interim orders made on 17/6/2019 are hereby set aside.

Respondents Application dated 16/8/19.

In light of our finding above, we find that the Respondent’s Application dated 16/8/19 succeed and hereby allow it with no orders as to costs.

Ruling read, dated and delivered in accordance with the directions given by the Honourable , the Chief Justice on 15/3/2020, this 30th day of April, 2020.

Prepared by Hon. B. Kimemia – Chairman, Hon. F. Terer – Deputy Chairman and P. Gichuki – Member, with the consent of the parties.

The final orders to be delivered via email in accordance to the prevailing measures during the COVID-19.

B. KIMEMIA

CHAIRMAN                         ……………………

F. TERER

DEPUTY CHAIR                 ……………………

P. SWANYA

MEMBER                           ……………………