Macharia v Stima Investment Co-operative Society [2023] KECPT 815 (KLR)

Macharia v Stima Investment Co-operative Society (Tribunal Case 387 of 2020) [2023] KECPT 815 (KLR) (31 August 2023) (Ruling)

Neutral citation: [2023] KECPT 815 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 387 of 2020

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

August 31, 2023

Between

Henry Macharia

Claimant

and

Stima Investment Co-operative Society

Respondent

Ruling

1. This Ruling dispenses with the issue of Costs and Auctioneers Fees that was brought up by the Claimant on April 7, 2023 in open court.

2. The brief background of this matter is that the Claimant filed a Statement of Claim dated 5th October 2020 and filed on the 8th October 2020. In the Statement of Claim, the Claimant prays for a refund of Kshs, 980,055/= being a payment made towards the purchase of Plot No. 52 Rangau Phase II, cost of the suit, interests, and general damages.

3. On 5th February 2021, the Claimant files a Request for Judgment on the basis that the Defendant did not Enter an Appearance or file a Statement of Defence. This was supported by an Affidavit of Service of one Jackson Mutinda.

4. Accordingly, judgment in default was entered for the Claimant against the Respondent on 9th February 2021 for a sum of Kshs. 980,055/=, on the basis that there was no Memorandum of Appearance or a Defence on record. A Notice of Entry of Judgment was duly served on the Respondent on 25th February 2021. Warrants of Attachment were issued on 26th February 2021.

5. The Respondent filed a Notice of Motion seeking the judgment entered in default to be set aside. The grounds relied upon by the Respondent are that there was a Memorandum of Appearance and Statement of Defence filed on the 3rd November 2020 and copies of the same were attached. Receipts confirming payment for the same were also attached.

6. In its Ruling dated 15th July 2021, the Tribunal found merit in the Respondent’s application and accordingly set aside the judgment in default.

7. The case was to proceed, however, the parties came into an agreement on the claim amount of Kshs. 980,055/- in which the Respondent agreed to settle and indeed settled the same. However, the parties failed to agree on the costs of the Claimant’s suit together with the Auctioneers costs, the basis of the ruling herein.

8. The Respondent put in his written submissions while the Claimant filed a Bill of Costs. In the Respondent’s submissions, the Respondent briefly lays down the facts of this matter as they are, and then asks two questions, one whether the Respondent should bear the costs of suit, and two, whether each party to bear their own costs. In answer to the first question, the Respondent contends that it would be unjust to burden the Respondent with the Auctioneer’s costs since the judgment was entered as a result of a clerical error and not on the failure of the Respondent to respond to its claim. It is their position that Rule 7 of the Tribunal Rules does not apply to them since when the judgment was set aside the warrants were also set aside. Rule 7 provides for when a debtor should meet the Auctioneers fees but the Respondent contends that the same should only apply when there is a lawful sale and attachment.

9. With regard to the costs of the suit, the Respondent relies on section 27 of the Civil Procedure Actwhich gives the court full discretion over who should bear the costs of the suit. The Respondent also points out that the tradition is that the cost should follow the cause unless there is good reason to order otherwise.

10. The Tribunal has considered the submissions of the Respondent. On the issue of costs, the Tribunal is guided by the case ofRepublic v Rosemary Wairimu Munene, Ex-Parte Applicant v Ihururu Dairy Farmers Co-operative Society Ltd where the court held as follows:-“The issue of costs is the discretion of the court as provided under the above section. The basic rule on attribution of costs is that costs follow the event....... It is well recognized that the principle costs follow the event is not to be used to penalize the losing party; rather it is for compensating the successful party for the trouble taken in prosecuting or defending the case”.The matter did not end with a determination of the court, but through the consent of the parties. The question that this Tribunal asks itself is whether the consent entered into by the parties, is so detached from the proceedings of this case, such that they can be independent of the proceedings that were initiated by the Claimant herein. The Tribunal has noted that there is a demand letter on record in which the Claimant demanded for the payment of the ‘consented’ sum before initiating the matter herein. The consent has also been adopted as an order of the Tribunal in this same matter and not another matter initiated just for the consent. The tribunal is therefore inclined to agree that the consent was gotten in the course of the claim, and it is unlikely that the consent would have been reached at this particular point had this claim not been initiated. As such the costs herein will compensate the Claimant for the trouble taken in initiating this suit. This might have been different if no demand was served on the Respondent by the Claimant before instituting the claim.

11. On the issue of the auctioneer’s costs, this court seeks counsel in the case ofKenya Oil Company Limited v Jovan H. Kariuki T/A Moran Auctioneers[2020] eKLR in an application that addressed the pertinent issue of who is liable to meet the Auctioneer’s fees and costs, where Onkwany J. held as follows:-“15. ....In the impugned ruling of 25th May 2019, the Taxing Officer stated as follows on the subject of the party liable to pay the auctioneers costs: “From the proceedings the auctioneer could have recovered the fees from the debtor if the sale went through. He is entitled to fees for work done. The sale was called off meaning that the instructing party was to pay for the instructions given out.”The Auctioneer’s fees, in this case, arose when a Warrant of Attachment was issued against the Respondent’s property following an Interlocutory Judgment entered against the Respondent. The judgment was entered in error since the Respondent had entered appearance and filed a Statement of Defence. In the ordinary course of events, it would have been the Judgment Debtor to pay the Auctioneer’s fees. However, this is a unique case in which the warrants were issued based on an erroneous judgment. From the file, it is clear that the Claimant’s advocate was duly served with the Memorandum of Appearance and Statement of Defence in November 2020. The Claimant seems to have requested for judgment based on the fact that they perused the court file and did not find the filed Memorandum of Appearance and Statement of Defence. The Claimant should have brought this fact to the attention of the court.

12. In the upshot of the foregoing, the Claimant is to bear the Auctioneer’s costs while the Respondent is to bear the costs of the suit.

13. It is hereby ordered.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 31. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 31. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 31. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 31. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 31. 8.2023HON. PAUL AOL MEMBER SIGNED 31. 8.2023TRIBUNAL CLERK JEMIMAHHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023