Makhulo v Stima Sacco Limited [2022] KEHC 16404 (KLR)

Makhulo v Stima Sacco Limited (Civil Appeal 459 of 2019) [2022] KEHC 16404 (KLR) (Civ) (15 December 2022) (Judgment)

Neutral citation: [2022] KEHC 16404 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal 459 of 2019

JN Mulwa, J

December 15, 2022

Between

Benedict Ogutu Makhulo

Appellant

and

Stima Sacco Limited

Respondent

(Being an Appeal from the Judgment of the Co-operative Tribunal at Nairobi in Tribunal Case No. 109 of 2015 delivered on 9th November 2018)

Judgment

1. The appellant filed a claim against the respondent in the Co-operative Tribunal alleging that the latter had issued him with an account statement containing unexplained errors and recoveries. The same had never been addressed despite the fact that he was a member of the respondent with contributions totaling Kshs 661,197. 50 that continued to accrue on a monthly basis. In his statement of claim dated March 5, 2015, he therefore sought judgment against the respondent for:i.Provision of an up to date record of the claimant’s contribution to the respondent.ii.Provision of the statement of all loans taken by the claimant and how they were repaid.iii.Explanation of the unlawful and unauthorized deductions from the claimant’s shares.iv.Continuous provision of the annual statement of account.v.Costs.

2. The respondent denied the appellant’s claim in its response thereto stating that the claim was premature, unsubstantiated and an abuse of the court process.

3. Upon hearing, the tribunal dismissed the appellant’s claim and ordered each party to bear own costs.

4. Aggrieved by the said decision, the appellant instituted the instant appeal vide a memorandum of appeal dated August 5, 2019 in which he raised the following 5 grounds:1. The tribunal erred in law and in fact in finding that the appellant failed to particularize and or specifically claim or even itemize the figures claimed when in fact head itemized the figures in his statement of claim that he claimsKshs 661,197. 50.

2. The tribunal erred in law and in fact in finding that the appellant failed to show any issue with the continual provisions of statements and the procedure for acquisition of accounts by theSACCO yet the appellant in his statement of claim categorically explained his statements which were full of erroneous figures necessitating him to make several trips to the head office with no avail.

3. The tribunal erred in law and in fact in holding that the appellant did not prove to the required standards that KPLC had any shares with the respondent, yet the appellant proved he was a member of the respondent whose members were KPLC employees and former employees.

4. The tribunal erred in law and fact by not relying on the evidence of the appellant which support his claim.

5. The tribunal erred in law and fact in failing to award the appellant costs and yet the appellant proved that he was the one compelled to come to the tribunal due to the conduct of the respondent.

5. The appeal was canvassed through written submissions.On ground 1, the appellant submitted that at paragraph 4 of his statement of claim, he specifically stated that he contributed in excess of Kshs 661,197. 50 which continues to accrue on monthly basis. He submitted that prayers (i) (ii) and (iii) in his statement of claim were prompted by the fact that the respondent furnished him with an account statement which did not capture and/or account for the shares that he received from the Kenya Power and Lighting Company (KPLC) Sacco. He contended that in the premises, it was not necessary for him to particularize his claim because he was not claiming any special damages.

6. On ground 2, it was the appellant’s submission that he was supplied with erroneous and incomplete statements by the respondent. He submitted that his advocate on record requested to be furnished with statements of his contributions from 1999 but the respondent failed to do so. Further, he argued that the letters he wrote to the respondent herein which were duly tendered in evidence, were sufficient proof that the errors complained off indeed existed. It was his view that had the issues raised in the letters been addressed, he would not have not moved to the tribunal.

7. On ground 3, the appellant asserted that the fact that the respondent did not dispute that he was a former employee of KPLC and its witness’s confirmation on cross examination that it receives payment of long service awards through FOSA, sufficiently proved that KPLC had shares in the respondent. On ground 4, he faulted the tribunal for failing to give any consideration to the documents he produced in evidence during trial. He submitted that had that been done, the tribunal would have found that he proved his claimed to the required standard. On ground 5, it was his submission that he ought to have been awarded costs in the tribunal since he had a legitimate claim against the respondent.

8. On the other hand, the respondent submitted that the appellant did not discharge its burden of proof as required under section 107 of the Evidence Act. It argued that the appellant’s alleged loss is a mere allegation as no proof was tendered to show that the sum of Kshs. 661,197. 50 was his contribution to the respondent. It submitted that in any event, the appellant despite claiming that there were errors in his account statement did not seek to elaborate the nature and origin of the same. The respondent urged that there were no errors as alleged since the entries on the account statements are system generated based on the credits and debits made in the account.

9. Further, it was the respondent’s submission that the appellant failed to prove that indeed he was an employee of the KPLC. It was also its view that the appellant failed to fully ascertain that his former employer held any shares in the respondent company purchased on his behalf. It argued that the mere making of a blanket statement that all employees of his former employer were members of the respondent does not prove his own membership in the Sacco neither does it ascertain the number of shares he owns, if at all, in the said Sacco. According to the respondent therefore, the claim was not supported by the requisite documents. in support of its submissions, the respondent relied on the case of Samuel Gachie Kamiti v Equity Bank Limited & 6 others[2018] eKLR where Tuiyott J. stated that:“This court has combed through the evidence presented by the plaintiff and is unable to find any evidence presented as to whether dividends declared for the year ended December 31, 2009 was at the rate of 40cts per share as he had sought. This claim was denied by the defendants and the onus was on Kamiti to prove every aspect of it. it is sad that the plaintiff is unable to obtain a favorable outcome on this limb because it seems just that he should have been paid a dividend for the year 2009 when he still held shares in the ESOP. But such is the nature of civil litigation, you only get what is proved or admitted.”

Evidence 10. This being a first appeal, this court is under a duty to re-evaluate and assess the evidence and make its own conclusions. It must, however, keep in mind that unlike the trial court, it did not have the advantage of observing the demeanor of the witnesses and hearing their evidence first hand; see the case of Selle v Associated Motor Boat Company Limited[1968] EA 123.

11. CW1, Benedict Ogutu, the appellant herein testified that he is a retiree who worked with the Kenya Power and Lighting Company. He was a member of the respondent. He was awarded long service awards twice by his employer in the form of shares valued at Kshs 10,000/= and 15,000/= respectively but the same are not reflected in the Sacco statement. There was an over deduction of loan repayments which was never refunded and is not reflected in his member account statement. He was overcharged on insurance. He paid a total of Kshs 43,200/-. He was charged Kshs 1,000/= monthly instead of Kshs 100/=. He paid all his loans.

12. On cross examination, he admitted that he received a statement when he retired. He confirmed that his letters dated March 20, 2006 ad April 17, 2007 do not bear any receiving stamps. In re-examination, he stated that he posted his letters from Kisumu. His lawyers also wrote to the respondent but there was no reply.

13. RW1, Arnold Okello Agina was a Credit Officer from Stima Sacco, the respondent herein. He produced a counter service statement detailing the status of the appellant’s account including all credits and balances and showing that the appellant had saved Kshs 320,570. 90/= as per date of statement. RW1 also produced the appellant’s member statement showing monthly credits and debits as well as contributions and loans.

14. On cross examination, RW1 stated that they do not issue annual statements unless requested. The last time the appellant requested he was provided. he explained that long service award is a payment by Kenya Power paid through FOSA Stima Sacco. The statement shows contributions from May 31, 2006 to April 13, 2016. It shows opening and closing balances at Kshs 320,570. 90/=. The last entry is a loan recovery. The statements show payments on interest and principal. The negative entries show that the loan is not being paid. It is on a reducing balance basis. The appellant finished paying his loan in September 2011. A member can get a statement to show the payment from Kenya Power to Stima Sacco. They can provide the information.

Analysis and Determination 15. The court has carefully considered the grounds and record of appeal as well as the parties’ respective submissions in support and in opposition of the appeal. The only issue for determination is whether the appellant proved his claim before the tribunal on a balance of probabilities.

16. It is a cardinal principle of law that he who alleges the existence of a certain set of facts and wishes to have the court believe him must prove them. This principle is well captured under section 107 to 109 of the Evidence Act cap 80 of the Laws of Kenya

17. Section 107 of the Act provides that: -“Whoever desires any court to give Judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove those facts.”

18. Section 108 of the Evidence Act further provides that: -“The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side”

19. Lastly, section 109 of the same Act states as follows: -“The burden of proof as to any fact lies on the person who wishes the court to believe its existence, unless it is provided by any law that the proof of that fact lies on any particular person”

20. The main basis of the appellant’s claim was that the respondent issued him with an account statement containing unexplained errors and recoveries. Notably however, the appellant did not give the exact particulars of the alleged errors and unauthorized deductions in his statement of claim to enable the respond provide any specific explanation for the same. Further, the account statement containing the alleged errors was not tendered in evidence so as to enable both the court and the respondent appreciate the errors referred to. Simply put, the allegations were not supported by any evidence. What was produced by the appellant are copies of letters addressed to the respondent but which have nothing to show that they were ever received by the respondent so as to enable it respond to or address the issues raised therein. The appellant claimed that he sent the letter to the respondent through post but did not produce any certificate of postage.

21. Additionally, the appellant alleged that he received long service awards from his former employer in the form of shares which ought to have been reflected in his account statement. Not only was this allegation not pleaded in his statement of claim, but it was also unsupported by evidence. The appellant did not state the dates and years when the alleged long service awards of shares amounting to Kshs 10,000/- andKshs 15,000/- were made to him by his employer. He also did not provide any proof in the form of documentation or otherwise from his employer in that regard. As rightfully held by the tribunal, the appellant did not prove that Kenya Power had any shares with the respondent which it could transfer to or gift its employees.

22. The evidential burden of proof could not shift to the respondent before the appellant discharged his legal burden of proof through adduction of evidence. The court finds persuasion in the case of Bwire v Wayo & Sailoki (civil appeal 032 of 2021) [2022] KEHC 7 (KLR) (24 January 2022) (Judgment) where Justice Mativo held that:“Burden of proof” is a legal term used to assign evidentiary responsibilities to parties in litigation. The party that carries the burden of proof must produce evidence to meet a threshold or “standard” in order to prove their claim. If a party fails to meet their burden of proof, their claim will fail. The general rule in civil cases is that the party who has the legal burden also has the evidential burden. If the plaintiff does not discharge this legal burden, then the plaintiff’s claim will fail. In civil suits, the plaintiff bears the burden of proof that the defendant's action or inaction caused injury to the plaintiff, and the defendant bears the burden of proving an affirmative defense. If the claimant fails to discharge the burden of proof to prove its case, the claim will be dismissed. If, however the claimant does adduce some evidence and discharges the burden of proof so as to prove its own case, it is for the defendant to adduce evidence to counter that evidence of proof of the alleged facts. If after weighing the evidence in respect of any particular allegation of fact, the court decides whether (1) the claimant has proved the fact, (2) the defendant has proved the fact, or (3) neither party has proved the fact.

23. Notably, the record shows that the respondent tendered in evidence and up to date counter service statement detailing how much the appellant had saved with the Sacco as at date of statement and the appellant’s up to date member statement showing monthly credits and debits as well as contributions and loans. The entries thereon were accordingly explained by RW1. In the premises, it became unnecessary for the tribunal to order the respondent to yet again furnish the appellant with the similar statements after trial.

24. On continual provision of annual statements, this court agrees with the tribunal that the procedure for acquisition of the same has been explained byRW1 and the appellant has not shown whether there is anything wrong with that process. As explained by RW1, all the appellant has to do is to request to be furnished with the same. This being an avenue that is open to him by virtue of being a member of the Sacco, no court order is required for that.

25. The upshot is that the appellant did not prove its claim on a balance of probabilities.

26. On costs, it is well settled that costs follow the event or is determined by the result of the proceedings. It is also an issue of the discretion of the court and this is clear from the provisions of section 27 of the Civil Procedure Act which provides as follows:“27 (1) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and give all the necessary directions for the purposes aforesaid; and the fact that the court has no jurisdiction to try the suit shall be no bar to the exercise of those powers;provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise direct.”

27. In the instant case, the tribunal dismissed the appellant’s claim and ordered each party to bear own costs. The appellant has not laid any basis for interference with the tribunal’s discretion on costs.

Conclusion 28. Accordingly, the appeal lacks merit and is hereby dismissed with no order as to costs.

Orders accordingly.DELIVERED, DATED AND SIGNED THIS 15TH DAY OF DECEMBER 2022. J.N. MULWAJUDGE