Mary Kemunto Mayieka &104; others v Urithi Housing Co-Operative Society Limited & Samuel Ngundo Maina [2021] KECPT 563 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.55 OF 2021

MARY  KEMUNTO MAYIEKA &  104  OTHERS .................................CLAIMANT

VERSUS

URITHI HOUSING  CO-OPERATIVE  SOCIETY  LIMITED...1ST RESPONDENT

SAMUEL  NGUNDO MAINA..........................................................2ND RESPONDENT

RULING

1.  There are  2 Applications  before  the Tribunal  for consideration  as follows:

a. Notice of motion  dated 27. 1.2021 and filed  in court  on 29th  January  2021 by the Plaintiff/Applicant.

b. Notice  of motion  dated  12. 2.2021 filed  on even  date  by  the Respondents.

2.  The Applications were  directed  to be dispensed  off by way of  written submissions.

a. Claimants filed  their Further Affidavit  dated  25. 2.2021  on  26. 2.2021 and their submissions  dated 11. 3.2021 were filed  in court  on even date  for both  Applications.

b. The Respondents  filed their  Replying  Affidavit  dated  22. 2.2021 on even date  and Further  Affidavit  dated  11. 3.2021 on even  date.

The Respondent’s submissions  are dated  23. 3.2021 and filed  on 25. 3.2021.

3.  FIRST APPLICATION

The Notice of Motion  dated 27. 1.2021 and filed  in court  on  29. 1.2021 is  brought  under Order  39 Rule 5, Order 40 Rule 1  and Order 51 Rule  1 of  the Civil  Procedure Rules  2010 and Section  1A, 3A and 63 (e) of the Civil Procedure  Act and  all other  enabling  provisions  of law) and  seeks  for several  orders  against  the Respondent.

a. That this Application  be certified  as extremely  urgent and one deserving  to be heard  ex-parte  in the first  instance.

b. That pending  the hearing and  determination  of this Application  interparties,  the Honorable  court be pleased  to grant  a freezing order  barring  any form  of  transactions  and attaching  before judgment  any such  sums  in the  following  bank accounts  held by  the 1st Respondent  as may be  sufficient  to satisfy  any decree  as may  issue  herein,  that is to say:

(i) EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

(ii) EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii)  EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

(iv)  FAMILY BANK  ACC.NO. 005000047564- Thika Branch

(v)   SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi)   NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii)   UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

(viii)  HFCK  Acc. NO. 9364193201 Rehani  House branch.

(ix)    UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

c. That pending   the hearing  and determination  of this suit, the Honourable  court be pleased  to order  and direct  that  the 1st Respondent  to produce  and place  at the disposal  of the Tribunal  all such  sums  in the following  bank accounts  held by  1st Respondent  as may be sufficient  to satisfy  any decree  as may  issue herein, that  is to say:

(i)   EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

(ii)   EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii) EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

(iv)   FAMILY BANK  ACC.NO. 005000047564- Thika Branch

(v)  SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi)   NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii)  UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

(viii)  HFCK  Acc. NO. 9364193201 Rehani  House branch.

(ix)   UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

d. That this  Honourable  Tribunal  be pleased  to issue a  temporary  injunction  order restraining  the Defendants, whether by  themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging ,  transferring  or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this application interparties.

e. That this  Honourable  Tribunal  be pleased  to issue a  temporary  injunction  order restraining  the Defendants, whether by  themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging ,  transferring  or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this suit.

f.   That costs of the Application be borne by the Respondents.

What  is pending  for determination  are orders:

(i)  Spent

(ii)   Spent

(iii) That pending the hearing and determination of this suit, the Honourable  court be pleased  to order  and direct  that  the 1st Respondent  to produce  and place  at the disposal  of the Tribunal  all such  sums  in the following  bank accounts  held by  1st Respondent  as may be sufficient  to satisfy  any decree  as may  issue herein, that  is to say:

a. EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

b. EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

c. EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

d. FAMILY BANK  ACC.NO. 005000047564- Thika Branch

e.SIDIAN BANK ACC.NO.01012020002623- Thika Branch

f.NATIONAL BANK investment account no.  01285093059500- Thika Branch.

g.UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

h.HFCK Acc. NO. 9364193201 Rehani  House branch.

i.UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

(iv)  That this  Honourable  tribunal  be pleased  to issue a temporary injunction order restraining  the Defendants, whether by themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging,  transferring or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this application interparties.

(v)  That this  Honourable  Tribunal  be pleased  to issue a  temporary  injunction  order restraining  the Defendants, whether by  themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging,  transferring or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this suit.

(vi)  That costs of the Application be borne by the Respondents.

4.  The Application   is supported  by the Affidavits of:

(i) Elijah  Isaac Mukuru

(ii)   Floridah Kagendo  Kithinji

(iii)    Evaline  wanjiru  kibicho

(iv)   Hezron  Nganga Mbogo

As  mandated  and with  authority  of their  Co-claimants  sworn  on 27. 1.2021.

5.  The facts  of the case  and Application  as averred  by the Claimants  are that  the  1st Respondent  is the registered  owner and with exclusive  possession  and occupation  of land known  as Mavoko Town  Block/3/52732 situated  in Machakos  County.

6.  The 1st Respondent  began  a development  project  called Urithi Housing  Co-operative  Society Osten Terrace  Gardens  Apartment herein  after  referred  to as  ‘the project’.

By various written  agreements  made  on even dates  by the Claimants  it was agreed  the 1st Respondent  would oversee development  of the  project.

7.  The Claimants are  apprehensive  that since  the year  2016  when  they signed  up for the project  and have been  paying  for the same, there  are “Rumours”  that  the 1st  Respondent  intends  to apply  for insolvency  to defeat  the current  suit.

Further,  the completion  date of  the project  was  12 months  from  date  of execution. Time  was of essence  as per  clause  5  of the contract  which was in  standard  form.

8. There is  breach  by the  1st Respondent  for  failure  to complete  the project.

Despite  efforts  by claimant  to have amicable  solutions the  Respondent  has been  giving empty  promises.

9. The Claimants are apprehensive  that they  may  lose  out or  their investment and/or money.

10. The Respondents  on their  end filed  a Replying Affidavit  sworn  on 22. 2.2021 and filed  on even date.

In the  Application therein  through  the 2nd Respondent  they  opposed   the averments  of the Notice of Motion.

In summary he stated the amount of money  paid by Claimants as perclause4. 4of the contract it authorizes the 1st  Respondent to utilize  the money received Kshs.174,373,019. 10/=.

11.  The Replying Affidavit  further  went on to  blame  the Claimant  for  the  slow pace  of completion  of the project. Respondent stated the Claimants Paragraph 13 Replying Affidavit and went on the  state  the project  could no longer  be completed  using  the initial  cost  and that  Claimant  have a balance  of Kshs.57,869,843/=  which  remains  unpaid.

12.   In essence  the  Respondents are faulting  the Claimant’s  for the stalling  of the project  because  of the frustrations from  the  project  members.

Further  they instructed  it would  be unfair  for the Tribunal  to freeze all transactions on account because they  (Respondents)  have  over  50  active land  and housing projects and thus  are unable  to fund the projects because  of the order.

13.  Analysis

The Application  herein  raises  involuted  issues.

The  view of the Tribunal  as regards  the Application  dated  27. 1.2021 is that the Claimants are seeking  to have  or preserve  their ownership to the project  which  project  seems  to have stalled.

Despite   the two parties  having  meetings  the same have  not bore  any fruits and now  the claimants  are apprehensive  they  are on the losing  end.

14.   Prayer  No. 1- spent

Prayer  No.  2- spent

a. Although  spent  the Respondents have  challenged  the orders  of the Tribunal and want  the same vacated. The substance  is whether  the court  can grant  an order  freezing  and barring  any  norm  of transactions  and attaching before judgment  any such  sums  in the  following  bank accounts  held by  the 1st Respondent  as may be  sufficient  to satisfy  any decree  as may  issue  herein,  that is to say:

(x)   EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

(xi)   EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(xii)   EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

(xiii)  FAMILY BANK  ACC.NO. 005000047564- Thika Branch

(xiv)  SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(xv)  NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(xvi)   UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

(xvii)  HFCK  Acc. NO. 9364193201 Rehani  House branch.

(xviii) UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

It is not in dispute there are contentious issues  on uncompleted  projects which  result to  breach  of  contract  which ought  to be determined  at full trial.

To avoid  complicating  the matters  and to have  both  parties  at ease  we find  it  prudent  for Order  No. 2 to be  in  place pending  hearing  and determination  of the suit.

b. That pending   the hearing  and determination  of this suit, temporary  injunction order is hereby granted directing  that  the 1st Respondent  to produce  and place  at the disposal  of the Tribunal  all such  sums  in the following  bank accounts  held by  1st Respondent  as may be sufficient  to satisfy  any decree  as may  issue herein, that  is to say:

(i)  EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

(ii)   EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

(iii)  EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

(iv)  FAMILY BANK  ACC.NO. 005000047564- Thika Branch

(v)   SIDIAN BANK ACC.NO.01012020002623- Thika Branch

(vi)  NATIONAL BANK investment account no. 01285093059500- Thika Branch.

(vii)  UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

(viii)   HFCK  Acc. NO. 9364193201 Rehani  House branch.

(ix)  UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

15.  That a temporary injunction order restraining  the Defendants, whether by  themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging ,  transferring  or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this suit is hereby granted.

In the  book  of Goode  on Commercial  Law,  4th  Edition  page  1287.

“ The  grant  of a freezing  injunction  is governed  by principles  quite  district  from  those  laid down  for  ordinary  interim  injunctions .....before  granting  a  freezing  injunction  the court  will usually  require  to be satisfied  that:

a. The Claimant  has “  a good  arguable case” based  on  pre-existing  cause  of  action.

b. The claim  is one over which  the court  has jurisdiction.

c. The Defendant  appears  to  have  assets  within  the  jurisdiction.

d. There is a real  risk  that those assets  will be removed  from  the jurisdiction  or  otherwise  dispatched  if the injunction  is not  granted; and

e. There  is balance  of convenience in favour  of granting  the injunction.

f.   The court  can also  order disclosure  of documents  or the administration  of requests  for further  information  to assist  the Claimant  in ascertaining  the location  of the Defendant’s  assets.”

16.   The Tribunal  gramples with the  fact that  they do not  have sufficient  evidence  as to  the audited  financial  statements of the  1st  Respondents to determine  to what  extent  or  exact  amount  to which  the freezing  order should  apply.

Thus  our decision  for the freezing  order to apply  in  all the  accounts  as mentioned  in the Application.

17.  The prayers  for injunction  is further  granted  in terms  of prayers  to preserve  not only  the status quo but  the project  at hand.

18.   SECOND  APPLICATION

The Applicant is  the  1st and  2nd Respondents Notice of Motion  dated  12. 2.2021 filed  on even date. The said  Application  is seeking  for orders  that:

1.  That this application  be certified  urgent  and heard ex-parte in the first  instance;

2.  That  this Honourable  Tribunal  be pleased  to discharge,  vary and/or  set  aside  the exparte  orders  made on  1st February, 2021 freezing  the 1st  Respondents  Bank  Accounts; and

3.  That  costs  of this application  be provided for.

All this  application  is seeking is to set aside the interim orders  granted  on 1. 2.2021.

19.  Question  therefore is whether there evidence  in the contrary  or any documentation to convince  us that the said  orders should  be  set aside.

Are there  any convincing  reasons  for the Honorable  Tribunal  to set aside  its orders.

The Respondents  submissions  dated  23. 3.2021  and filed  on  25. 3.2021  state no  evidence  that the  Claimants  cash  is in those accounts.

The flipside  the Respondents  have not  evidenced  either where  the Claimant’s cash  is being  held and  or how  it’s been utilized.

Thus  the Notice  of Motion  dated  12. 2.2021 fails.

20.   Conclusion

The following  are the orders  granted  in relation  to the following  applications:

1.  The Claimant  Notice of Motion  dated  27. 1.2021 is allowed in the following  terms:

21. Freezing  of account  in Equity  bank  Account No.

a. EQUITY  BANK ACC.  NO. 0340271096554 – Thika Branch.

b. EQUITY BANK ACC.NO.034029998 7977- Thika Branch.

c. EQUITY BANK ACC.NO. Investment Account  No. 0340262609391- Thika Branch.

22.  An order for  interlocutory  injunction  is hereby grantedrestraining  the Defendants, whether by  themselves, agents,  or servants  from doing  any of the following acts, that  is to say,  disposing  off,  selling, charging, mortgaging, transferring or in any other manner  whatsoever dealing  with  all  that parcel  of land known  as MAVOKO TOWN  BLOCK  3/52732 to the prejudice  of the Claimants pending  the hearing  and determination  of this suit.

23.  Costs  to be  in the cause.

2.  The Respondent’s Notice of  Motion  dated 12. 2.2021  is allowed  in terms  of unfreezing  the non-equity  Accounts.

a. FAMILY BANK  ACC.NO. 005000047564- Thika Branch

b. SIDIAN BANK ACC.NO.01012020002623- Thika Branch

c. NATIONAL BANK investment account no. 01285093059500- Thika Branch.

d. UNAITAS  BANK ACC. NO. 010024486- Thika Branch.

e. HFCK  Acc. NO. 9364193201 Rehani  House branch.

f.   UHCS LTD PRIME BANK ACC.NO.3000105560- Thika Branch

3.  We further  order  and direct  for the parties  to comply  by filing  and serving  witness  statement and documents within  21 days  herein.

4.  Mention  for Pre-trial  directions  and fixing  a hearing date  on 5. 7.2021.

Judgment signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia                  Chairperson                Signed       27. 5.2021

Hon. J. Mwatsama              Deputy Chairperson  Signed       27. 5.2021

Mr. P. Gichuki                       Member                       Signed       27. 5.2021

Tribunal clerk                        Leweri

Omondi  holding brief  for Gachie  for Appellants: Present

Miss Gitau  for Respondent.

Mention  on  5. 7.2021.

Hon. B. Kimemia             Chairperson                    Signed         27. 5.2021