MNK Savings and Credit Sacco Limited v Kimani [2024] KECPT 1379 (KLR)

MNK Savings and Credit Sacco Limited v Kimani (Tribunal Case 825/E866 of 2022) [2024] KECPT 1379 (KLR) (29 August 2024) (Ruling)

Neutral citation: [2024] KECPT 1379 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 825/E866 of 2022

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

August 29, 2024

Between

MNK Savings and Credit Sacco Limited

Claimant

and

Alphonzo Waweru Kimani

Respondent

Ruling

1. There are two matters coming up for determination before the Tribunal, being the Respondent’s Application dated 27th March, 2023 and the Respondent’s Notice of Preliminary Objection dated 27th March, 2023.

BACKGROUND 2The Claimant claims in the Statement of Claim filed on 14th October, 2022 for payment of a liquidated surcharge amount of Kshs. 721,948/= is prayed for under prayer (d) of the Statement of Claim. Upon request for interlocutory judgement by the Claimant, Summary judgment was entered in favour of the Claimant against the Respondent in the said liquidated amount of Kshs. 721,948/=. The remaining prayers on the Statement of Claim being prayers (b), (c) and (e) to proceed to hearing by way of written submissions to determine issues that are not related to the surcharge amount together with costs and interest.

2. Notice of Preliminary Objection 3In the Notice of Preliminary Objection dated 27th March, 2023, filed on the same date, the Respondent raises objection to this suit on grounds inter-alia that this Tribunal does not have prediction to hear and determine this suit pursuant to Section 6 of the Civil Procedure Act which provides that ‘No Tribunal shall proceed with the trial of any suit or proceedings in which the matter in issue is directly and substantially in issue is pending in the same Tribunal having jurisdiction in Kenya to grant the relief claimed’ that prior to the filing of this suit on 23rd September, 2022 there was a pending appeal on surcharge before this Tribunal under file member CTA E011 of 2022 ALPHONZO WAWERU & 226 OTHERS – VS- COMMISSIONERS FOR CO-OPERATIVES AND MNK SACCO SOCIETY LIMITED in which the Respondent is the 1st Appellant that in so far as there’s a suit challenging the validity, legitimacy and legality of the surcharge order, this Tribunal is barred from entertaining hearing and determination of any matter touching on payment of the surcharge by the Respondent, that it is incumbent upon the Tribunal to down its tools immediately and await the determination of validity, legitimacy and legality of the surcharge order as challenged in CTA E001 of 2022 ALPHONZO WAWERU 226 OTHERS – VS –COMMISSIONER FOR CO-OPERATIVES AND MNK SAVINGS & CREDIT SOCIETY LTD; THAT the Tribunal cannot entertain the present suit which involves the same parties and the same subject matter as CTA E011 of 2022 which was filed earlier, on 28th July, 2022.

4. The Claimant responded to the Respondent’s Preliminary Objection vide the Replying Affidavit sworn on 2nd June, 2023 by James Mathenge Gatumuta who response that he is the current Chairman of the Claimant’s Credit Committee; that the prayers sought in this suit and those sought in Tribunal Appeal No.E011 of 2022 are district therefore the doctrine of sub-pudice rule cannot apply and the Tribunal has the requisite jurisdiction, that the Claimant has openly admitted that he is remorseful for occasioning the claimant the surcharged amount, that the Respondent’s Preliminary Objection is therefore a non-starter and the same should be dismissed with costs. The parties were directed to file written submissions however as at the time of writing this ruling, the Respondent, had not filed any Submissions on the notice of Preliminary Objection.

5The Claimant, however filed its submissions dated on 23rd February, 2024 on 16th April, 2024. In its submissions, the Claimant states literates the contents of its Replying Affidavit and submits in regards to the preliminary objection that the orders sought in the appeal and the orders sought in the matter are very distinct and as such sub-judice does not arise as such the Preliminary Objection has no basis and the same should be dismissed with costs.

4. Analysis and Determination 6We have considered the Respondent’s notice of Preliminary Objection, the Claimant’s Replying Affidavit and the Claimant’s Written Submissions and find the following issue for determination;

Whether or not this case is sub-judice CTA E 011 of 2022 ALPHONZO WAWERU 226 OTHERS – VS- COMMISSIONER FOR CO-OPERATIES AND MNK SACCO SOCIETY LIMITED: 7Section 6 of the Civil Procedure Act provides that “No Court shall proceed with the trial of any suit proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit is pending in the same or any either court having jurisdiction in Kenya to grant relief claimed”. We note that in Appeal case No. E011 of 2022 filed by the Respondent and 26 others on 1st July, 2022 seeking to set aside the surcharge order issued against them on 3rd June, 2022, ordering the Respondent herein and the other 26 Appellants therein to pay various sums of money to the 2nd Respondent who is the Claimant herein in the appeal, while the Claimant in the current suit seeks against the Respondent Judgement for the sum of Kshs. 721,948/= surcharged by the Commissioner. We note that the Appeal subject matter is the legality of the surcharge order, while the claim herein is for payment of the liquidated sum payable in terms or Section 75 of the Co-operative Societies Act. The Claimant in this case prays for Judgement for the said amount together with other prayers on account of recovery of a loan allegedly advanced to the Respondent herein by the Claimant.

8We find that the course of action and prayers herein are not the same as the course of action in the appeal hence the matter in this must is not distinctly the issue in the appeal case.

9. Further, the claim herein seeks to adhere the Tribunal’s original jurisdiction for a liquidated sum, whereas the Appeal is against the decision of the Commissioner of Co-operatives and seeks the appellate jurisdiction of the Tribunal.

10Further and in any event, we note that the Tribunal, on 23rd May, 2021 delivered in Appeal No. E011 of 2022 a Ruling wherein the 1st Appellant therein who is the Respondent in this claim was struck out of the appeal with costs to the Claimant herein, hence the appeal no longer exists as regards the Respondent herein.

11. In the upshot, we find that the Notice of Preliminary Objection dated 27th March, 2023 lacks merit and the same is hereby dismissed with costs.

7. NOTICE OF MOTION APPLICATION DATED 27TH MARCH, 2023 12The Respondent’s Notice of Motion Application dated 27th March, 2023 filed on even date seeks the following orders: -1. Spent2. That the firm of NDICHU KIHAMYA & CO-ADVOCATE be and is hereby granted have come on record for the Respondent.3. That this Honourable Tribunal be pleased to stay the execution of the interlocutory judgement and all consequential orders and decrees Issued by Hon. Janet Mwatsama, the Deputy Chairperson on 3rd February 2023 pending the hearing and determination of this application.4. That this Honourable Tribunal be pleased to stay the execution of the interlocutory and all judgment and all consequential orders and decrees issued by Hon. Janet Mwatsama, the Deputy Chairperson on 3rd February, 2023 pending the hearing and determination of this suit.5. That this Honourable Tribunal be pleased to review, quash, vary, Set aside the ex-parte interlocutory Judgement issued by Hon. Janet Mwatsama, the Deputy Chairperson on 3rd February, 2023 and all consequential orders therefrom pending the hearing and determination of this application.6. That this Honourable Tribunal be pleased to review, quash, vary and set aside the ex-parte interlocutory judgement issued by Hon. Janet Mwatsma, the Deputy Chairperson on 3rd February, 2023 and all consequential orders therefrom pending hearing and determination of this suit.7. That this Honourable Tribunal be pleased to grant leave for the Respondent to file his notice of Change of Advocates and statement of defence.8. That the Claimant’s suit to proceed to hearing interparties.9. That cost of this application be provided for.

13The Application is supported by the affidavit of the Respondent sworn on 27th March, 2023 and is premised on the grounds set out thereon. Understanding that the interlocutory judgement was issued sub-judice on account of a pending case CTA E011 of 2022: that the firm of Namada and Company Advocated was instructed to represent the Respondent but failed to file a statement of Defence; that the failure should not be visited upon the Respondent; that the Respondent has an arguable Defence raising triable issues. The Respondent, in his Supporting Affidavit produced as exhibit ALK2 the Draft Statement of Defence and seeks to be allowed to defend the suit.

14. The claimant responded to the Respondent’s Application vide its Replying Affidavit sworn by James Mathenge Gatumata on 16th February, 2024. In the said affidavit the Claimant sets out the respective prayers in the present case and there in the Appeal case and states further that the Claimant duly served the Respondent who then entered appearance on 9th November, 2022 and went to slumber. As a result of which the claimant obtained default judgment; that the claim that the case is sub-judice is misleading as the present suit and the appeal have different prayers, that the Respondent took out a loan which currently stands at Kshs. 1,781,462/= and has not shown how he is servicing the same; that the Respondent’s application has not met the Threshold for setting aside a regular judgement that the Respondent seeks to deny the Claimant the fruits of its judgement and with costs. That he should be inclined to grant the application, the Respondent should be condemned to pay throw away costs of Kshs. 50,000/= in addition to depositing security for costs of the judgment sum. The parties were directed to proceed by way of Written Submissions. Only the Clamant had filed submissions at the time of writing this Ruling.

15In the Submissions states on the issue of sub-judice, that the prayers sought in the appeal and those sought in this matter are very distinct, as such the issue of sub-judice does not arise.

16. On the issue of whether the Tribunal should not set aside the interlocutory judgment, the claimant submits that the Respondent was properly served with the claim and he duly appointed Advocates who entered appearance and failed to file a response as expected.

Analysis and determination 17We have considered the Respondent’s Application and the Supporting Affidavit together with the Claimant’s Replying Affidavit and the Written Submissions and have one issue to determine, that is whether or not the Respondent is entitled to the orders sought in the Notice of Motion Application dated 27th March, 2023.

1. Prayers 2 and 7We see no reason why the firm of Ndichu Kihamya Associates & Co-Advocates should not represent the Respondent in the matter henceforth. Prayers 2 and 7 are therefore granted,2. Prayers 3 and 5 are Spent3. Prayers 4 and 6: Whether or not the Tribunal should vary and set aside the interlocutory judgement entered by this Tribunal on 3rd February, 2023, we find as follows”-i.The issue of sub-Judice has been duly addressed and determined by this Tribunal in the Ruling on the Notice of Preliminary Objection dated 27th March, 2023 and as such the same fails as ground for varying or setting aside the interlocutory judgment herein.ii.As to whether or not the judgment herein is a regular judgment; we find that the Respondent was duly served as his Advocate entered appearance but failed to file the Response to the claim within the requisite period of time. The interlocutory judgment entered being on the liquidated sum in terms of Section 75 of Co-operative Society Act and the Tribunal having found in determining the Preliminary Objection that the case is not sub-judice the Appeal Case No. E011 of 2022 and in any case there being no appeal pending as at the time of writing this Ruling; the summary judgement in the sum of Kshs. 721,948/= is a regular judgment; and there being no other reason or ground put forth to seek or set it aside, we decline to vary or set aside the Interlocutory Judgment entered on 3rd February, 2023 and prayers 4 and 6 of the Notice of Motion dated 27th March, 2023 fail.Consequently, we order that :- the parties proceed to file and serve Written Submissions in respect to prayers (b), (c) and (e) of the Statement of claim, written twenty one (21) days from the date hereof. The case shall be mentioned on September, 2024 to confirm filling of written submissions and take a judgement date. Costs are in the cause.

.Upshot1. The Preliminary Objection dated 27/3/2023 is dismissed with costs to the Claimant/Respondent.2. Application dated 27/3/2023 is found to be without merit and affirm the Interlocutory. Judgment entered on 3/2/2023. Prayer 4 and 6 fail.3. Parties to file submissions in response to prayer b, c, and e of the Statement of claim 21 days from today.4. Mention to confirm filing of written Submissions and to get a judgement date on 4/12/2024. Notice to issue.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF AUGUST, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 29. 8.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 29. 8.2024HON. BEATRICE SAWE MEMBER SIGNED 29. 8.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 29. 8.2024HON. PHILIP GICHUKI MEMBER SIGNED 29. 8.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 29. 8.2024HON. PAUL AOL MEMBER SIGNED 29. 8.2024J. MUTAI TRIBUNAL CLERKDelivered in absence of parties.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 29. 8.2024