Mathiu v Universal Sacco Society Limited [2023] KECPT 413 (KLR)

Mathiu v Universal Sacco Society Limited (Tribunal Case 305 of 2018) [2023] KECPT 413 (KLR) (27 April 2023) (Judgment)

Neutral citation: [2023] KECPT 413 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 305 of 2018

BM Kimemia, Chair, J. Mwatsama, Vice Chair, Beatrice Sawe, Fridah Lotuiya, P. Gichuki, Michael Chesikaw & Paul Otieno Aol, Members

April 27, 2023

Between

Paul Kirimi Mathiu

Claimant

and

Universal Sacco Society Limited

Respondent

Judgment

1. The claim for determination is statement of claim dated July 2, 2018 filed on July 4, 2018. The claimant avers by an agreement entered in the year 2012 between claimant and respondent. The claimant applied for a loan of Kshs 600,000/= to purchase a motor vehicle.The claimant was to repay the loan via monthly instalment of Kshs 23,191. 44/= from June 24, 2012 till payment in full.Claimant identified motor vehicle registration number KAX 869 J Toyota Lite Ace and had entered into an agreement of sale dated May 14, 2012 between himself and the registered owner of the Motor Vehicle.

2. On January 29, 2013 the said motor vehicle KAX 869J was stolen in Nairobi and same was reported at Mlolongo Police Station.On March 28, 2013 motor vehicle was spotted in Busia and on reporting there he was told the motor vehicle could not be released as the log book was held as security for the loan advanced by the respondent. The claimant requested the respondent to release the original log book or requisite consent to have motor vehicle released but respondent rejected and refused.The said motor vehicle still remains abandoned at Busia Police Station.As a result the motor vehicle has been rendered useless and has lost value.

3. On February 6, 2017 the respondent procured and induced claimant to sign acknowledgement of debt by undue influence and under duress.The claimant claim to have lost.Particulars of special loss:a.Total of the value of motor vehicle registration KAX 869Jb.Loss of income at the rate of Kshs 3,000/= after all expenses per day from April 2013 upto date.The claimant thus prays for judgment against the respondent for:a.A declaration that the claimant is not liable to pay the respondent any sum or at all towards the loan advanced to him for the purchase of motor vehicle registration KAX 869J.b.An order directing the respondent to execute all such documents as to clear the claimant of any liabilities or waiver of loan repayment, interest and penalties.c.Special damages as pleaded in paragraph 14 of the plaint.d.General damages.e.Costs of this suit and interest .f.Any other relief that this honourable court may deem fit and just in the circumstances.

4. The respondent filed a defence and a counter claim dated December 11, 2018. The defence denied the claim and stated claimant did not repay the loan and has come to court with dirty hands.The respondent denies being privy to the information that motor vehicle KAX 869J was stolen and is a stranger to the same.Further when the respondent set in motion the legal recovery process the claimant voluntarily made undertakings to honor his obligations.The respondent claims the claimant had filed another suit in Machakos that is CMCC No 305 of 2018 and the same was dismissed for want of prosecution.The respondent further filed a counter claim to which they admit the claimant is thus member and that she was loaned Kshs 600,000/=.The claimant neglected to make payment and as such the respondent claim is for Kshs 432,848/= with interest as from August 2013. The respondent’s prays for judgment against claimant for:a.The sum of Kshs 431,848/= plus interest at rate of 12% per annum with effect from August 2013. b.Costs of the suit.

5. Matter came for hearing on September 12, 2022 when claimant adopted his witness statement dated July 2, 2018 filed on July 4, 2018 as his evidence- in- chief.He further produced his list of documents dated July 2, 2018 as CEX.1-10 which included:a.Agreement of sale dated May 14, 2012 and log book.b.Loan acceptance and repayment guarantee from Universal Traders Sacco society Limited dated June 24, 2012. c.Account statement from Universal Traders Sacco dated January 26, 2012d.Occurrence book extract dated January 29, 2013. e.Letter dated February 6, 2017 to the CEO Universal Traders Sacco Society Limited.f.Letter from Busia Police Station dated March 28, 2013. g.Letter from JM Mutua & Company advocates dated 23. 8.2013. h.Letter to the Credit Manager Universal Traders Sacco Society Limited dated September 4, 2013. i.Statement from Universal Traders Sacco Society limited dated May 26, 2017. j.Demand letter to Universal Traders Sacco Society Limited dated June 21, 2017. k.Any other documents that may be relevant at the time of the hearing herein.On cross examination he confirmed he had a loan of Kshs 600,000/= and Kshs 40,000/=.He confirmed he had not repaid the loan. His letter dated February 6, 2017 proved he had a loan.The claimant stated he was unable to pay the loan when motor vehicle was stolen and respondent did not assist when stolen motor vehicle was not traced.

6. The respondent called Dominic Mutunga as RW1 and he introduced himself as Chief Executive Officer of the respondent.He adopted his witness statement dated August 14, 2020 filed on September 21, 2020 and produced the same as evidence- in- chief.He further produced list of documents dated August 14, 2020 as REX.1-4. He started the respondent knew of the stolen motor vehicle when the claimant defaulted in payment.There was no evidence from their end that the motor vehicle was the only source of income to service the loan. They offered an officer to present the log book but claimant declined. The last repayment was received in 2017. On cross examination when asked if claimant requested for the log book his answer was in the affirmative.He also stated they did not release the log book.He confirmed the security for the loan was the log book and claimant’s deposits.He further confirmed as part of recovery the deposit.He stated claimant declined to facilitate an officer to Busia for motor vehicle to be released.After clarification from tribunal the motor vehicle was never released.

7. Parties filed written submissions with claimant filing their written submissions dated October 13, 2022 filed on December 14, 2022 and respondents filed their written submissions dated December 13, 2022 on December 14, 2022. Having considered the pleadings, evidence of parties and written submissions we find the issues for discussions are:Issue oneWhether claimant is liable to pay the loan balance?Issue TwocostsIssue oneWhether claimant is liable to pay the loan balance?It is not in dispute the claimant was advanced a loan facility of Kshs 600,000/=.It is not in dispute that the claimant started making payments and his motor vehicle got stolen.It is further not disputed the claimant was using proceeds of motor vehicle to repay the loan as adduced and when it was stolen there was no means he had challenges paying the said loan.The question therefore is if the respondent had assisted in getting the motor vehicle KAX869J would the claimant have been in this predicament?Also another question is the respondent had used the motor vehicle KAX869J as security in case of default?How would they have recovered their loan in the event of default as is the case without the subject motor vehicle?

8. During trial RW1 confirmed having the log book and claimant requesting them to assist in getting the motor vehicle and did not do so because they were not facilitated.At this instance we wonder who was to go at a loss if the said motor vehicle is not got from Busia Police Station if not the respondent. It was the security used as a loan the claimant followed up and got to know the whereabouts of motor vehicle and could not get or motor vehicle KAX 869J could not be released to him without a log book in the custody of the respondent.We find the respondent were negligent in this bit as it was in their interest for the motor vehicle to not only be released to the claimant but also that is what they were to use as security. Their counter -claim is for :a.The sum of Kshs 431,848/= plus interest at rate of 12% per annum with effect from August 2013. b.Costs of the suit.How can this be then?

9. The claimant is in default and as per evidence of rw1 the contributions of claimant have been used as part payment for the loan.The rest of the loan default can only be from the motor vehicle KAX 869J which was security.As such we find the claimant had acted prudently and attempted to make payments by following upon the stolen motor vehicle but got no assistance from the very person who would assist and for their gain.As such we find the claimant as much as he is liable to pay for the loan advanced to him, the respondent had a role to play in this one more so to assist the claimant recover the motor vehicle for their mutual benefit.The respondent in their wisdom or not did not do so and yet they held on to a log book as security for their loan.As such we find the respondent played a role in the loan default as they are yet to release the log book or go for motor vehicle KAX869J from Busia Police station.

10. We find that claimant would not have been in the precarious position they are in if the respondent had assisted in getting the motor vehicle.We thus find in favour of claimant against respondent in terms of :a.A declaration that the claimant is not liable to pay the respondent any sum or at all towards the loan advanced to him for the purchase of motor vehicle registration KAX 869J is hereby granted.b.Special damages as pleaded in paragraph 14 of the plaint is not allowed.c.General damages is not allowed.d.Costs of this suit and interest it is allowed.e.The counter -claim is dismissed with costs to the claimant for the reasons cited above.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF APRIL , 2023. Hon. Beatrice Kimemia Chairperson Signed 27. 4.2023Hon. J. Mwatsama Deputy Chairperson Signed 27. 4.2023Hon. Beatrice Sawe Member Signed 27. 4.2023Hon. Fridah Lotuiya Member Signed 27. 4.2023Hon. Philip Gichuki Member Signed 27. 4.2023Hon. Michael Chesikaw Member Signed 27. 4.2023Hon. Paul Aol Member Signed 27. 4.2023Tribunal Clerk Jemimah/Jonah