Mugambi v H&M Cooperative Saving & Credit Society Limited & 4 others [2023] KECPT 57 (KLR) | Trusts Investment | Esheria

Mugambi v H&M Cooperative Saving & Credit Society Limited & 4 others [2023] KECPT 57 (KLR)

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Mugambi v H&M Cooperative Saving & Credit Society Limited & 4 others (Tribunal Case 287 of 2021) [2023] KECPT 57 (KLR) (Civ) (16 February 2023) (Judgment)

Neutral citation: [2023] KECPT 57 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 287 of 2021

BM Kimemia, Vice Chair, J. Mwatsama & M. Mbeneka, Members

February 16, 2023

Between

Hon. James Gichuki Mugambi

Claimant

and

H&M Cooperative Saving & Credit Society Limited

1st Respondent

Gray Mwamunye

2nd Respondent

Nancy Mwamkuu

3rd Respondent

Mary Thuku

4th Respondent

Lucy Muchiri

5th Respondent

Judgment

1. The matter for determination is a Statement of Claim dated 14. 7.2021 seeking the following prayers:a.An order directing the Respondents to remit, pay and/or facilitate payment of all the dividends of Kshs. 114, 225,693. 60 to the claimant’s bank Account Number 01013780007 held at Bank of Africa Kenya Limited.b.An order directing the 1st Respondent’s officials to execute the Deed of Rectification sent to the 1st Respondent on 28th may 2021 by the Claimant.c.An order directing the Respondents herein to remit, pay and/or facilitate payments of all monies paid as dividends and/or investments belongings to the claimant.d.A permanent injunction restraining the Respondents, by themselves, agents or assigns from withholding and/or refusing to remit the dividends due to the claimant.e.Interest on the total outstanding sum of Kshs. 114,225,693. 60 at the rate of 14% from the date of receipt of the dividends till payment in full.f.Costs of the suit.g.Such further relief as the tribunal may deem fit to grant.

2. The Respondents filed their Defence and Counter -Claim on 30. 7.2021 and sought the following prayers in the Counter- claim:a.A declaration that the Claimant’s purported appointment as the sole beneficiary of Coop Holdings Cooperative Society Limited Dividends payments was marred with illegalities and irregularities and therefore flawed.b.A declaration that the dividends paid out to the Claimant were done so irregularly and contrary to the provisions of the Cooperatives Societies Act.c.A declaration that the 1st Respondent is entitled to a full refund of all payments made out to the Claimant as a result of the illegal share transfer.d.Cost of the suit.e.Interest on (c) and (d) above from the date of filing suit until payment is made in full.f.Any other orders that this court may deem just and fair to grant.

The Claimant’s Case 3. The Claimant stated that he was a Member of Parliament for Othaya Constituency and a member of the 1st Respondent.He adopted his witness statements dated 14. 7.2021 and the 2nd witness statement dated 3. 11. 2021 as his Evidence- in- Chief.He also produced the 1st list of documents dated 14. 7.2021 (bundle of 10 documents) 2nd list of documents dated 15. 11. 2021(bundle of 10 documents) as (C Exhibit 1 and 2 respectively.The CW1 in the witness statement dated 14. 7.2021 stated that he had been a member of the 1st Respondent since 1996. That during Annual General Meeting of 7. 3.2009, it was resolved that the 1st Respondent would purchase shares on behalf of members through funds contributed by individual members for that purpose as per the Annual General Meeting minutes (Exhibit 1 (1).That as the Chairman of the 1st Respondent, he was mandated to negotiate suitable terms with the cooperatives willing to sell their shares and conclude contracts on behalf of the interested members. He therefore entered into several Trust agreements /deeds with the 1st Respondent being the trustee, to buy for, and on his own behalf, shares of Co-op Holdings Cooperative Society.That pursuant to the said Trust Agreements the 1st Respondent bought class ‘A’ shares, in trust and on his behalf amounting Kshs. 125,247,471 shares.

4. That since 2009 to the year 2020, he received dividends without any issues being raised by the 2nd to 5th Respondents, being the officials of the 1st Respondent.That on 19. 4.2021, a dividend notice was issued for a net sum of Kshs. 114,225,693/60 as per the exhibit (4). That the said amount was deposited into the account of the 1st Respondent and there were instructions to transfer the amount to his account, being the dividends held in his trust. That the bank requested for the supporting documents as per (C Exhibit 1(6) letter dated 23. 4.2021 and 18. 5.2021.

5. That the 1st Respondent’s officials (2nd -5th Respondent) through sheer malice neglected and/or refused to forward the said documents to the bank for purposes of processing the payment.

6. That to resolve the stand off between the Claimant and the Respondents, they held a tripartite meeting on 12. 5.2021 where it was resolved that the said dividends be paid to him (CExhibit 1(7).

7. That the 2nd Respondent wrote to him on 25. 5.2021 (CExhibit 1(8) requesting for him to amend the Trust Deed to cover all the shares held in trust for him by the 1st Respondent. He forwarded the amended Trust Deed as requested.

8. That despite follow-up, the Respondents neglected to facilitate the release of the paid dividends and neglected to rectify the breaches.

9. In the further witness statement dated 3. 11. 2021, the Claimant further stated that the Annual General Meeting passed a resolution that he would purchase shares on behalf of individual contributing members. That he indeed bought the shares for members who contributed for purchase of CIC Insurance Group Limited Shares through the 1st Respondent, and also land parcels at Mavoko as per (CExhibit 2 (1 and 2). That the minutes of the said Annual General Meeting were in the custody of the 1st Respondent and the Ministry of Cooperatives as mandated by law.

10. That the Respondents have always issued communication and correspondences to confirm that the 1st Respondent held the shares in trust for him and other beneficiaries. On 9. 3.2021, the 1st Respondent wrote to Equity Bank confirming the said status (CEXHIBIT2).

11. That owing to the trust agreement, the said shares have never reflected in the accounts as assets of the 1st Respondent owing to the fact that they did not belong to the 1st Respondent.

12. CW2 James Gathitu Gikera stated that he was employed by Laborex, the parent company of 1st Respondent. That he was a member of the 1st Respondent and the Treasurer from 1985-2016. He confirmed that the Claimant was the Finance Director and the Chairman of the 1st Respondent. He recorded his witness statement dated 4. 11. 2021 filed 20. 1.2021 which he adopted as Evidence- in-Chief.

13. In the witness statement, he stated that shares were bought from individual member contributions and that the 1st Respondent entered into trust agreements with the Claimant for purchase of class ‘A’ shares. That he executed the Trust agreements as the treasurer, and that the 1st Respondent was to hold the said investment on behalf of the Claimant as a trustee. After the purchase, the necessary instruments were executed.

14. The 1st Respondent also purchased CIC Insurance Group Limited Shares on behalf of and in Trust of individual members who contributed funds for the purchase of the shares. That the 1st Respondent had always paid the dividends arising out of the said shares since the same started being issued.

15. CW3 Welma Ajema stated that she was the Secretary to the Board when the Claimant was the Chairman. That she was a member of 1st Respondent since 1994. She recorded and filed her witness statement dated 4. 11. 2021 which she adopted as her Evidence- in- Chief.

16. That as the Secretary, she would record the minutes during the meetings. On 7. 3.2009, she recorded the minutes of the 25th Annual General Meeting. That in the said meeting, the agenda of purchase of Cooperative Bank Shares was discussed and it was resolved that:a.The shares of H&M Cooperative Savings & Credit Society Limited held with Cooperative Bank of Kenya were bought through pool funds to be sold out to individual members and the proceeds to be distributed to the members who purchased them in the year 2009 and before.b.Further purchasing of shares to be done directly from the funds contributed by individual members for that purpose.c.The Chairman of the 1st Respondent was further mandated to negotiate suitable terms with the Cooperative willing to sell and to conclude the purchase contract accordingly on behalf of interested members.

17. That after the said resolutions, the Claimant entered into Trust Agreements with the 1st Respondent on 23. 7.2009 and 24. 2.2014 to purchase class ‘A’ shares of Coop Holdings Cooperative Society Limited. That she executed the Trust Agreements as the Secretary that the 1st Respondent was to hold the investment in Trust.

18. That the 1st Respondent also purchased CIC Shares on behalf and in Trust of the individual members who had contributed. The two investments have never formed part of the assets of the 1st Respondent in the books of accounts. That she handed over on 16. 10. 2020 to the 1st Respondent and incoming management.

4thRespondent’s Case 19. The 4th Respondent RW1 Mary Thuku filed a witness statement dated 13. 4.2022 filed on 21. 4.2022. She stated that she relied on the Replying Affidavit deponed 30. 7.2021 and witness statement to defend herself and adopted them as her evidence-in-chief.

20. In the Replying Affidavit she stated that she was a member of Management Committee from April 2021- June 2021. That she was a signatory of the 1st Respondent accounts for a period of two months only.

21. That she was absent during the meeting of 12. 5.2021 when the parties deliberated on the issues herein. That she resigned vide her letter dated 29. 6.2021 and her resignation was accepted vide letter dated 6. 7.2021.

22. In her witness statement dated 21. 4.2022, she narrated similar evidence as contained in the Replying Affidavit deponed on 30. 7.2021.

1,2,3 and 5thRespondent’s Case 23. The 1,2,3 and 5th Respondent filed the Statement of Defence and Counter -claim on 30. 7.2021 dated 30. 7.2021 seeking the following orders:a.A declaration that the Claimant’s purported appointment as the sole beneficiary of Coop Holdings Cooperative Society Limited Dividends payments was marred with illegalities and irregularities and therefore flawed.b.A declaration that the dividends paid out to the Claimant were done so irregularly and contrary to the provisions of the Cooperatives Societies Act.c.A declaration that the 1st Respondent is entitled to a full refund of all payments made out to the Claimant as a result of the illegal share transfer.d.Cost of the suit.e.Interest on (c) and (d) above from the date of filing suit until payment is made in full.f.Any other orders that this court may deem just and fair to grant.

24. Their witness RW2 Raphael Musau stated that he filed the witness statement dated 20. 9.2022 which he adopted as his Evidence- in -Chief and produced list of documents dated 30. 7.2021. The RW2 stated during cross -examination that he was a member of the 1st Respondent and that he was not in the Management Committee and neither had he ever been in the Management Committee.

25. That in the meeting of 7. 3.2009, he was present in the 25th Annual General Meeting and there was an agenda for sale and purchase of shares by contribution of individual members. That he did not record or present any contra- minutes in regard to the said meeting.

26. That he was aware of the land parcels which were bought for the 39 members who had contributed for the same. That he was also aware of the CIC shares for 7 members who contributed. That he did not contribute for the purchase of land or for the CIC shares nor for the Cooperative shares. That the financial statements of the Cooperative Society (1st Respondent) do not reflect the Cooperative shares in the assets list.

27. RW3 Jackson Mwangi Njomo stated that he recorded his witness statement dated 20. 9.2022 which he adopted as his evidence- in -chief. During cross examination he stated that he joined the Sacco in 2004 and attended all the Annual General Meetings since then.

28. That the Sacco bought land for members on Kangundo Road and that not every member got the land because it was on the basis of contribution by individual members. That he did not know about the purchase of CIC shares since there was a list of the members who contributed to buy.

29. That during the Annual General Meeting of 7. 3.2009, there was no discussion of sale of shares however, he did not have any contra-minutes. That he was a beneficiary of the land parcels bought since the Sacco assisted the members who had contributed to purchase the same.

30. That the land parcels, the Coop Holdings shares and CIC shares are not listed as part of the assets in the financial statements of the 1st Respondent. That he would not know which money was used to purchase the Cooperative shares he had not lost any of his contribution held in the Sacco. He further stated that he had no evidence to show that the Sacco money or his money was used to buy the Cooperative shares. That none of his deposits were lost but he was aware of Kshs. 14,000,000/= embezzled by Yusuf Rashid.

31. RW4 Grey Mwamuye stated that he recorded his witness statement dated 20. 9.2022 which he adopted as his Evidence - in -Chief and he produced the list of documents dated 30. 7.2021 and 20. 9.2022 as REXH. 1&2.

32. In cross examination he stated that he was the chairman of the 1st Respondent. That he joined the Sacco in 2012 and he joined the board in 2016 and as the Chairman in 2018 having taken over from the Claimant.

33. He stated that he had the handing over minutes and the records of the Sacco. That he did not have the audited accounts of 2009, 2010 when shares were brought using pool funds. That he did not file any audited accounts as part of his evidence but only had the audited account for the period when he was the chairman.

34. That the shares in this claim are not in any of the audited accounts of the society and indeed, he had nothing to show that the Coop Holding Cooperative shares belonged to the Sacco. That when members pool for resources to acquire a property, the said property becomes the property of the members not of the society, therefore, it is never listed as a property of the society in the accounts of the Sacco.

35. That there were 39 members who purchased land parcels and the members assets register does not include those land parcels.

36. That there were members who pooled resources for the purchase of the CIC shares Kshs. 24,732,000/= and those shares do not appear in the Sacco’s list of assets of the society. The said members have share certificates.

37. That the Kshs.124,247,471 shares of Coop Holdings Cooperative Shares have a share certificate and they do not appear in the audited accounts as assets of the society. That the auditor requested for the proof of the ownership of the assets by the Sacco.

38. That there was a resolution that shares would not be purchased by the Sacco but for individuals who would contribute to the said purchases. Money was deposited into the account by members and other people and about 90 million was contributed, Kshs. 11,500,000/= was contributed by Mwaniki Gachoka & Company Advocates.

39. That there was a forensic audit ordered by DCI and the DCI did not call the members to account for the money. There was another Audit Report which he signed for the years 2017, 2018, 2019, 2020, 2021, the accounts of the 1st Respondent had no issues. That the Claimant had been receiving the payments of the dividends from 2009 to 2019.

40. That he was not a member of the society in 2009 and he did not know of the existence of the trust deed of 23. 7.2009.

41. That the minutes mandated the Chairman to negotiate suitable terms and conclude the contracts on behalf of the interested members and there was a Trustee Agreement to that effect. That there are no CIC Shares, no land parcels and no Coop Holdings shares listed in the audited accounts of the Respondent presented to the ministry or to KRA.

42. That Yusuf embezzled Kshs. 14,000,000/= and there is no Counter- Claim for it. That there was no inquiry carried out for the 1st Respondent, but the County Commissioner of Cooperatives ordered them to pay the Claimant the dividends of the Co-op Holdings shares.

43. That on 20. 1.2022, he wrote a letter stating that the Claimant owned the shares of Co-op Holdings when there was a split of the shares in the market.

PARA 44.

SubmissionsThe Claimant filed written submissions dated 26. 8.2022 and further written submissions dated 27. 10. 2022. The 1,2,3,and 5th Respondent filed written submissions on 16. 12. 2022 .The 4th Respondent filed written submissions on 10. 11. 2022 dated 5. 9.2022. 45. Issues For Determination(i)Whether the Claimant is entitled to receive dividends from Coop Holdings limited.(ii)Whether the Claimant is entitled to the reliefs sought in the claim.a.Issue (I) Whether the Claimant is entitled to receive dividends payments from coop holdings limited.This matter is centred around the dividends of the Co-op Holdings Cooperative Society Limited.

46. Claimant’s Case/submissionsThe Claimant’s case is that in the 25th Annual General Meeting of 7. 3.2009, there was a resolution passed by the society for the chairman to negotiate suitable terms with Cooperatives willing to sell their shares, and to conclude the purchase agreements on behalf of the interested members. That the resolutions led to the Claimant entering into trust Arrangements/Agreements on 23. 7.2009, 18. 11. 2009 and 24. 2.2014 with the 1st Respondent where the Claimant was to deposit his own funds into the accounts of 1st Respondent.

47. That the 1st Respondent was to purchase the shares on his behalf and to remit any dividends accrued to the Claimant upon maturity. That from 2009 to 2020, the Claimant had been receiving the dividends without any issues.

48. That what is to be determined is the alleged Trust Relationship between the Claimant and the 1st Respondent based on the Resolution passed by the members of the 1st Respondent on 7th March 2009.

49. That the 1st Respondent and Claimant therefore entered into a Trust Relationship, for the 1st Respondent to purchase and hold investments on behalf of the Claimant and thereafter forward any dividends accruing from the said investment to the Claimant when it accrues(d). The trust agreements dated 23. 7.2009 and 24. 2.2014 were produced as exhibits and that they are clear that the beneficiary was to provide the funds to the trustee (1st Respondent) to purchase “Class A” shares in Coop Holdings Coop Society Limited.

50. That the trustee was to have no interest on the shares bought by it on behalf of the beneficiary but to hold the investments and all the dividends and interest accrued in trust for the beneficiary and his personal representatives. (under clause 2). That under clause II the Trustee was to pay/remit to the beneficiary all monies paid as dividends in the investment within 7 days of receipt by the trustee. That the total amount of investment is Total Kshs. 125,247,471 Class A Shares in Coop Holdings Cooperatives Society Limited as at 1. 4.2021 and which also included bonus shares offered by the issuer.That the 1st Respondent has consistently without fail been remitting the respective dividends to the Claimant as a beneficiary of the trust arrangement from the year 2009-2020.

51. That the investment and pay-outs have never appeared in the 1st Respondents books of accounts therefore, just like the land parcels purchased and the CIC shares never formed part of the assets of the Respondent then it is implied that the monies used to purchase the said shares was never part of the 1st Respondent’s monies as per the audited accounts filed page 18-39 and Claimant’s supporting list of documents.

52. That from the submissions and the evidence on record, its clear that there was established a trust between the 1st Respondent and the Claimant. That the Respondents did not controvert the evidence of the Claimant as they did not produce any evidence to counter the evidence of the Claimant.

53. In the further Claimants written submissions dated 27. 10. 2023, that pursuant to the resolutions passed at the 25th Annual General Meeting of 7. 3.2009, the members of the 1st Respondent did in fact derive the benefit from the same by contributing funds for the purchase of shares and instructing the officials to purchase the same. That some of the members contributed and purchased CIC shares and coop holdings as per the Claimant’s list of documents page 9-11. That some members even contributed and the 1st respondent purchased land parcels at Mavoko (as per the list of documents page 9-15. )

54. That pursuant to the said resolution, the claimant, being a member of the 1st Respondent and exercising his rights as a member contributed his funds on various occasions towards the purchase of the Co-op Holdings Cooperative Society shares through the 1st Respondent. That this trust was established and formalised vide the Trust Agreements as per the list of documents dated 14. 7.2021.

55. That the trust relationship has been existing since 2009 and it would be a breach of duty of good faith by the trustee to deny the existing relationship.

56. That the chairman, the 2nd Respondent did not dispute the letters signed on 25. 5.2021 advising the Claimant that the new Trust Deeds had errors and needed to be corrected but that also the 1st Respondent was holding shares on behalf of the Claimant. That the letter dated 9. 3.2021 addressed to Equity Bank the 2nd Respondent confirmed that the 1st Respondent held the shares of Co-op Holdings Cooperative Society on behalf of the Claimant (page 7 Claimant’s list of documents).

57. That the minutes of 12. 5.2021 meeting held between the claimant, and the Respondents and the Director of Cooperatives, there was a confirmation that the Director of Cooperatives was aware that the 1st Respondent had purchased the shares on behalf of the Claimant and accordingly advised the Respondents to pay the dividends for the year 2021 by 17. 5.2021 as per the minutes

58. 1,2,3 and 5th Respondent’s Case/SubmissionsThe Respondents submitted that the prayers a, c, d and e are spent and/or overtaken by events since the dividends for the year 2020 were already remitted pursuant to the Ruling of the Tribunal. That the dividends for the year 2021 were deposited into a joint account pursuant to the orders of the Tribunal.

59. That the minutes of 7. 3.2009 indicate that:“it was further resolved that further purchasing of shares to be done directly from the funds contributed by individual members for that purpose.”That the chairman was mandated to negotiate suitable terms with those Cooperatives willing to sell and to conclude the purchase contract on behalf of the interested members.That the said minutes are highly contested and the Claimant has not provided documents, evidence or otherwise of any agreements and/or other shareholders. That the Claimant did not discharge the burden of proof.

60. That the Respondents filed the Statements of Account for the period 18. 9.2009 to 29. 4.2020 for account 01120000556700 document number 7 “GM9” and the Respondent has provided a summary of the Statement of Account filed together with submissions.

61. That in regard to the declaration of trust dated 23. 7.2009 and 24. 2.2014, that the two documents were executed by the Claimant in his capacity as the chairman of the 1st Respondent and also in his individual capacity as the beneficiary. That this represented a conflict of interest. Since any other member of the Executive Committee could have signed the same.

62. That the Trust Agreement was executed 5 years (24. 2.2014) after the 1st meeting of 7. 3.2009 in favour of the Claimant. That there were no further minutes authorizing the further purchase of shares by the 1st Respondent.

63. That the documents may have been backdated to suit the Claimant and they were presented to the Registrar of Trusts on 30. 4.2021 and stamp duty stamp of 30. 4.2021 therefore the Trust Deeds could not have been prepared before 30. 4.2021. That therefore the two documents are irregular, illegal and invalid therefore should be dismissed.

64. 4th Respondent’s Written SubmissionsThe 4th Respondent submitted that she had been a member since 1996. That she became part of the Management Committee and later resigned. That there was no malice or negligence on the part of the respondents since none was proved.

65. That the delay in the payment was genuine and it was anchored on the legal duty of the Executive Committee to verify the source of the money as provided under Section 28 (1) Cooperative Society Act.That the Claimant has not established any breach of statutory duty.

PARA 66. AnalysisWe have carefully considered the pleadings, the evidence on record, the written statements and documents filed by the parties. The gist of the case is the trust deed and purchase of the shares of Coop holdings. 67. In this matter, we had noted in the previous ruling that the orders sought in the matter were Injunctive orders.(see Application dated 14. 7.2021 and Ruling of 2. 9.2021). The Applicant/Claimant had sought Injunctive orders against the Respondents herein and the said orders were granted pending the hearing and determination of the main claim.

68. In the Statement of Claim dated 14. 7.2021, the Claimant sought a permanent injunction restraining the Respondents, by themselves, agents or assigns from withholding and/or refusing to remit the dividends due to the Claimant (prayer d) among other prayers therein. The claim therefore is premised on the shares of Coop Holdings Cooperative Society held by the 1st Respondent. Its on this prayer that we address the whole claim.

69. In Kenya Power and Lighting Company Limited versus Sheriff Molana Habib[2018]eKLR,“It was held that a permanent injunction/perpetual injunction is granted upon hearing of the main suit. That it fully determines the rights of the parties before the court and it is therefore a decree of the court. It restrains the commission of an act by the defendant in order for the rights of the plaintiff to be protected.A temporary injunction is only meant to be in force for a specified time or until the issuance of further orders from the court.A permanent injunction perpetually restrains the commission of an act by the defendant.”

70. In Lucy Wangui Gachara – versus- Minudi Okemba Lore[2015]eKLR,“A court will not grant mandatory injunction if the damage feared by the plaintiff is trivial, or where the detriment that the mandatory injunction would inflict is disproportionate to the benefit it would confer. Save in the clearest of cases, where there are compelling circumstances and where the injury complained of is immediate and pressing and is likely to cause extreme hardship.”The principles of granting an injunction as held in Giella -versus Cassman Brown and Company Limited [1973] EA 338. The Applicant must show a prima facie case:(1)with a probability of success.(2)irreparable injury which would not adequately be compensated by damages.(3)on a balance of convenience these 3 pillars are the foundation for an order for injunction.In the instant suit, it was established in the Ruling dated 2. 9.2021 that the Claimant had established the principles of granting an injunction and the matter was ordered to proceed to hearing on merits. The parties called their respective evidence as discussed above.

A. In Regard To The Minutes 71. We note that in the minutes of 7. 3.2009, being 25th Annual General Meeting there was a resolution passed by the members in regard to purchase of shares. Minutes 8/09 at page 6 of the minutes reads:Quote{startQuote “}Sale Of Shares…that further purchasing of shares to be done directly from the funds contributed by individual members for that purpose .. proposed by Geoffrey Kondi, seconded by Jacob Kodo.”

72. The Claimant contends that the purchase of the Coop Holdings Cooperative shares was authorized by the resolution of the members in the 25th Annual General Meeting.

73. The 1,2,3 and 5th Respondents at paragraph 55 and 56 of their written submissions averred that the Claimant:“….has not presented evidence, documentary or otherwise of any agreements and/or contracts with third parties…”

74. We note that the Respondent’s witness RW4 Grey Jilani Mwamuye stated in evidence during cross examination that he was the current chairman and that he joined the 1st Respondent as a member in 2012 and became the chairman of the 1st Respondent in 2018. That there was a handing over from the Claimant and the former officials. The Management Committee was comprised of :Claimant - ChairmanCharles Kilonzi - Vice chairmanAlex Nduli - TreasurerWilma Ajema - Secretary

75. The handing over Report page 40 Respondent list of documents. Catherine Kamau acknowledge receipt of the handing over report and it is countersigned by 2nd Respondent. The 2nd Respondent has challenged the said minutes that the minutes did not represent the true position of what transpired in the 25th Annual General Meeting and the Resolutions therein passed. We note that the 2nd Respondent was neither a member of the 1st Respondent in 2009 nor present in the said 25th Annual General Meeting.

76. The RW2 Raphael Musau stated that he was a member then and that he attended the 25th Annual General Meeting. That despite the minutes with the resolutions, he stated that at the Annual General Meeting there was a light of discussion on shares and that he did not record the minutes and neither did he produce any “contra” minutes.

77. He stated that indeed there were CIC shares and land parcels bought for the members who had contributed. That he did not contribute as a member for any purchases and he had never lost his money held by the 1st Respondent.

78. RW3 Jackson Mwangi Njomo stated that he contributed and purchased a land parcel through the 1st Respondent and this land parcel belonged to him and it was not amongst the assets of the 1st Respondent. He stated that his money held as shares by the 1st Respondent was never lost. That the Coop Holdings shares the CIC shares and the land parcels were not in the assets list of the 1st Respondent therefore.

79. RW1, the 4th Respondent Mary Thuku stated that she was a member of the 1st Respondent and resigned from the Management Committee on 29. 6.2021. That she joined the 1st Respondent in 2016 as a member. During cross examination she stated that the Coop Holdings Cooperative society shares belonged to individual members who had contributed and specifically the Claimant, James Gichuki Mugambi.

80. RW1 further stated that she saw the minutes of the 25th Annual General Meeting and the Resolution of the said 25th Annual General Meeting. That the Claimant was the beneficiary who had been receiving the dividends of the Coop Holdings Cooperative Society Shares.

81. The Claimant’s witnesses CW1 James Gichuki Mugambi stated that he was the Chairman of the 1st Respondent and that he was mandated by the members to make the purchase on behalf of any members who contributed to any specific purchase of shares.

82. CW2 James Gathito Gikera stated that he was the treasurer of the 1st Respondent during the said period 1985-2016. That the 1st Respondent had Coop Holding cooperative society shares. In 2009, there was a resolution for the sale of shares to any interested member and the proceeds were to be distributed to the members who were present before 2009. That thereafter the 1st Respondent bought other Coop Holding Cooperative shares from other saccos, the CIC shares and land parcels.

83. Claimant’s further list of documents page 11 for CIC shows the list of members who owned the CIC shares, with the Claimant owning 24,240,000/=, Eunice Muriithi, Yusuf Rashid, Welma Ajema Lulenya, James Gikera, Irene Kaimuri and Charles Kilonzi.

84. The Letter dated 25. 5.2021 shows shares for Coop Holdings Cooperatives Shares being the Claimant and Eunice Wamaitha Mureithi.

85. CW3 Welma Ajema confirmed that she was the secretary of the Management Committee of 1st Respondent and she recorded the minutes of the 25th Annual General Meeting. That she was a member of 1st Respondent since 1994 upto 2020. That the 1st Respondent invested on behalf of its members. That the 1st Respondent bought the Coop Holdings Cooperative society shares on behalf of Claimant and Eunice as per the letter dated 25. 5.2021.

86. CW3 confirmed that she signed the Trust Deeds in 2009 and 2014 in her capacity as the secretary pursuant to the 25th Annual General Meeting members resolution in 2009. That the 1st Respondent also bought CIC Shares of which she was a beneficiary and also land parcels. That the individual members contributed to purchase the said investments through the 1st Respondent.

87. The evidence on record is clear that in 2009, the 2nd Respondent was not a member of the 1st Respondent in 2009. The RW2 and RW3 were members and they attended the 25th Annual General Meeting. They have disputed the minutes produced but have not availed any contra-evidence/minutes to controvert the minutes produced by the claimant containing the resolutions made during the 25th Annual General Meeting in 2009. The RW1 was not a member of 1st Respondent in 2009. The CW1, 2, and 3 confirmed that they were the Chairman, Treasurer and Secretary respectively of the 1st Respondent in 2009 and signed the minutes. The CW3 confirmed that she was the secretary who recorded the minutes of the 25th Annual General Meeting by virtue of being the Secretary and also signed the Trust Deeds to effect the Trust.

88. A. (1) Findings On The MinutesIn the circumstances, we find that indeed the minutes of the 25th Annual General Meeting held on 7. 3.2009 a Resolution was passed authorizing the chairman to purchase shares on behalf of individual members who were to contribute for the same. We find therefore that the minutes produced by both parties for 7. 3.2009 as the true reflection of what transpired on 7. 3.2009.

89. The Cooperative Society Act is clear that the authority to make decisions in any Cooperative Society is vested in the members. This power is exercised by the Management Committee.Section 27 Cooperative Society Act“(1)The supreme authority of Cooperative Society shall be vested in the general meeting at which members shall have the right to attend, participate and vote on all mattersSection 28 Cooperative Society Act(3)The Committee SHALL be the governing body of the society and SHALL, subject to any direction from a general meeting or the by-laws of the Cooperative Society, direct the affairs of the Cooperative Society with powers to:(a)enter into contracts.(b)institute and defend suits and other legal proceedings brought in the name of or against the Cooperatives Society; and(c)do all other things necessary to achieve the objects of the Cooperative Society in accordance with its by-laws.(6)in the conduct of the affairs of a Cooperative Society the Committee shall exercise the prudence and diligence of ordinary men of business and the members shall be held, jointly and severally liable for any losses sustained through any of their acts which are contrary to the Act, rules, by-laws or the directions of any general meeting of the Cooperative Society.”From the above provisions, it is clear that the resolutions in the Annual General Meeting are implemented by the Management Committee. In the instant case, the chairman was mandated to negotiate and purchase shares for individual members who were interested and contributed for the purchase. The Claimant in exercise of the said powers purchased the shares of CIC, Coop Holdings Cooperatives society and land parcels for the individual members who had contributed for the particular investments

90. In totality, in regard to the authenticity of the minutes, we find that the minutes produced for the 25th Annual General Meeting are a true reflection of the Resolution of the members of the 1st Respondent and implemented by the chairman and management committee.

91. (B) The Trust DeedsThe CW3 confirmed that she signed the Trust Deeds of 23. 7.2009 and 24. 2.2004 together with the Treasurer CW2 and the Chairman CW1. That the Trust Deeds established the relationship between the Claimant and the 1st Respondent as the beneficiary and trustee respectively.

92. The 2 Declaration of Trusts documents were duly signed by both parties and therefore established the TRUST under which the individual members contributed funds and the 1st Respondent purchased the shares for and on behalf of the members who had contributed individually. (page 41-59 Claimants list).(I). Under the 1st Trust document dated 23. 7.2009, a share certificate number 003819 dated 23. 7.2009 serial number 003894 was issued for Kshs. 14,000,000/=.(II). Under the 2nd Trust Agreement dated 24. 2.2014 page 51 was also duly signed by the 3 officials for 11,311,500 shares in share certificate number 007954 serial number 008146 and 8,688,500 shares in certificate number 007961 serial number 008155.

93. The 1,2, 3 and 5th Respondent submitted that the Declaration of Trust dated 23. 7.2009 and 24. 2.2014 were executed by the Claimant as the Chairman and beneficiary. That there were 4 members of the Management Committee and 3 of them signed, and that the chairman should not have signed the same.

94. That the trust deeds were executed on 24. 2.2014, 5 years after the meeting of 7. 3.2009 by the same people and that there was no further resolution authorizing further purchase of shares by the 1st Respondent. That the Trust deeds were back dated to suit the convenience of the Claimant and the documents were not availed or handed over to 2nd Respondent by the Secretary CW3 Welma Ajema. That the duty was paid on 30. 4.2021 as per the stamp duty and therefore did not exist before then. The Respondent therefore contend that the trust Deeds are illegal, invalid and irregular.

95. We have looked at the Trust Agreements presented by both parties. We note that they were signed by 3 of the Management Committee members being the Chairman, Treasurer and Secretary. The Respondent aver that the Claimant should not have signed the said trust agreement as the chairman since he was also a beneficiary of the said trust.Looking at the minutes of 7. 3.2009, the minutes clearly indicate;“the Chairman was further mandated to negotiate suitable terms with …..and to conclude the purchase contract on behalf of interested members.”

96. The resolution was clearly indicated that it was the responsibility of the CHAIRMAN “ to negotiate…..conclude the purchase contract”. This resolution is clear and we do not see any reason why the chairman could not perform this mandate as per the resolution, on his own behalf as a beneficiary/member, and also on behalf of the members.

97. When specific resolutions and mandates are issued at an Annual General Meeting, the person authorized by the resolution has been given a task to perform as a chairman and bearer of that office unless the contrary is stated. In the instant case, we note that this task could not have been delegated to any other person but could only be performed by the chairman as per the Resolution of the 25th Annual General Meeting.

98. If the members had envisioned the task being handled by the Management Committee, they would have expressly stated that the mandate was given to the Management Committee as opposed to the express mandate to the Chairman.

99. In the circumstances therefore, we find that this task was specific in the Resolution, and the mandate was to the Chairman as opposed to the Management Committee. If the Chairman was someone else other than the Claimant and the Claimant went ahead to perform, then that is when we would impute liability. In this case, the chairman happened to be the Claimant who also contributed to the said purchase and bought the shares on his own behalf and on behalf of individual members.

100. The Respondents cited:1. Paramount Bank limited - versus- Mohammed Ghias Qureshi & Another [2005]eKLR

2. Tabitha Atsinga Musambi – versus- Standard Limited & Another [2019]

3. Makula International Limited - versus- His Eminence Cardina Nsubuga & Another [1982]KCBII

101. In the paramount Bank case, (supra) it was an employment case in which the appellant appealed citing that he was being paid Kshs. 240,000/= within which Kshs. 200,000/= was paid “under the table” hence the court of appeal held that “courts do not sanction illegality” it is therefore on this basis that the appeal was dismissed, I do not see the relevance of this citation to the current matter.In the Tabitha Atsinga case (supra) involves a lottery game for which the deceased had bought a lottery coupon but the UK lottery was not licensed to promote that lottery, therefore the deceased could not win what was not winnable therefore the transaction was on its face manifestly illegal…..

102. In the instant case there is no evidence of any illegality or invalidity of the transactions of the purchase of the shares, noting that the Chairman was clearly mandated by the members to do this specific task. The Respondent has not availed any evidence to point out the illegality of the Claimant purchasing the shares for himself as a beneficiary and a member, and executing the said documents. The members gave the mandate in the 25th Annual General Meeting and the members being the supreme authority execution of the resolution of the member of the society cannot be deemed as an illegality.

103. Indeed there is no evidence called to show that the Chairman was excluded from purchasing the said shares for himself. What is cited by the Respondent as conflict of interest therefore cannot stand in the light of the clear mandate in the 25th Annual General Meeting to the Chairman specifically. Such a task, we deem is not to be delegated as it is clear on what was required to be done and who was to do it”.

104. Was it proper for the claimant being the chairman to also be a beneficiary in the purchased shares?A Trustee is defined as an “entity or a person formally appointed to manage the assets of a trust for the benefit of its beneficiary in accordance with the terms of the trust deed”.Under, the Trustee Act Cap 167 a ’trust’ and ‘trustee’ extend to implied and constructive Trust and in cases where the Trustee has a beneficial interest.

105. The main duties of a Trustee are: (a). Duty to the termsA trustee must know and adhere to the terms of the trust which are prescribed by the trust deed.

(b) Duty of loyaltyTrustees have a fiduciary duty towards beneficiaries. A trustee must administer the trust solely in the interest of the trust beneficiaries and cannot place his or her interest in conflict with beneficiaries. Trustees should not profit personally from their role as trustees other than a fee which they may receive for their trusteeship.

(c). Duty to manage the trust efficientlyTo manage a trust efficiently, a trustee must be very familiar with the terms of the trust, the trust’s assets and liabilities, the circumstances of the beneficiaries and the purpose of the trust. Effective management systems should be in place to ensure that the appropriate decisions are made in a timely manner and taking into account the terms of the trust and the interests of the beneficiaries. This also includes effective communication with related parties and proper record keeping. A trustee also has a duty to invest prudently on behalf of the trust and should diversify the investment of trust assets in the interest of beneficiaries.

(d). Duty to act personallyTrustees act personally and must be involved in decision making in respect of a trust. While trustees are typically permitted to engage advisers such as lawyers and financial advisers, the final decision on trust matters should be made by the trustee. In certain circumstances, trustees may delegate powers to third parties by power of attorney or deed of delegation. This must be permitted by the trust deed. For example, delegating powers to an agent to purchase or sell property overseas. The trustee is still obliged to properly instruct and supervise the agent. Where there is more than one trustee, decisions must be made unanimously unless otherwise permitted by the trust deed.

(e). Duty to consider the beneficiariesA trustee must act impartially with respect to the beneficiaries by considering all beneficiaries in their decision making. They should also not follow the instructions of the settlor but may give consideration to the wishes of the settlor which are not binding unless included in the terms of the trust.

(f). Duty to accountUnless otherwise provided by a trust, a trustee must keep trust accounts and other records. They must also respect beneficiaries’ rights with regard to requests for trust information. Generally, beneficiaries have a right to receive information about the trust but not the decisions of the trustee.

106. It is trite law that trustees stand in a fiduciary position on matters running of the trust. In other words, a trustee owes a duty and an obligation towards the named beneficiaries of the trust and the overriding obligation being the duty to comply with the terms of the trust and, subject thereto, to act honestly, diligently and in the best interests of the beneficiaries. The duty to act honestly, diligently and in the best interest of the beneficiaries is the basic minimum which cannot even be excluded by exclusion clauses in the trust document.

107. In Armitage versus Nurse [1997] 3 WLR 1046. Millett LJ made the following observations:“I accept the submission….that there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust. If the beneficiaries have no rights enforceable against the trustees, there are no trusts. But I do not accept the further submission that these core obligations include the duties of skill and care, prudence and diligence. The duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries is the minimum necessary to give substance to the trusts, but in my opinion it is sufficient. It is, of course, far too late to suggest that the exclusion in a contract of liability for ordinary negligence or want of care is contrary to public policy. What is true of a contract must be equally true of a settlement. The trustees are further not entitled to show favour to a beneficiary or group of beneficiaries, but are required to act impartially and in the best interests of all the beneficiaries.[emphasis added]”.In the above duties, we find that trusts are managed and ran in accordance to the deed creating the trust.

108. On the Respondent’s claim of conflict of interest of the Claimant, its noted that parties are bound to the contract entered into by themselves. The Claimant executed together with the other two members, the Trust Agreement as the Chairman and as the beneficiary. In executing this duty, it has not been shown that there was any bad faith or ill will.

109. The Chairman had the full mandate to execute the agreement as the chairman in furtherance of the resolutions of the 25th Annual General Meeting. He also had a right as a member to contribute and purchase shares on his own behalf. There is no evidence that this duty was not performed fairly.

110. On the issue raised the execution of the Trust Deeds 5 years after the agreement, the respondents have submitted that it was illegal but did not go further to demonstrate the illegality of such registration. It is clear that the committee members signed the trust deed on behalf of the 1st Respondent. Its curious to note that the 2nd Respondent was not a member of the 1st Respondent then and therefore is not able to testify on the occurrences of that particular period and documents. The 3rd ,4th and 5th Respondent were also not members of the Management Committee. However, the CW1, CW2 and CW3 were the members Management Committee and they have confirmed having signed the minutes and the Trust Deeds.

111. In the circumstances, the makers of the document therein are therefore the best witnesses of the contents of the said documents.Section 35 Evidence Act states:“Admissibility of documentary evidence as to facts in issue (1) In any civil proceedings where direct oral evidence of a fact would be admissible, any statement made by a person in a document and tending to establish that fact shall, on production of the original document, be admissible as evidence of that fact if the following conditions are satisfied, that is to say—(a)if the maker of the statement either—(i)had personal knowledge of the matters dealt with by the statement; or(ii)where the document in question is or forms part of a record purporting to be a continuous record, made the statement (in so far as the matters dealt with thereby are not within his personal knowledge) in the performance of a duty to record information supplied to him by a person who had, or might reasonably be supposed to have, personal knowledge of those matters; and(b)if the maker of the statement is called as a witness in the proceedings: Provided that the condition that the maker of the statement shall be called as a witness need not be satisfied if he is dead, or cannot be found, or is incapable of giving evidence, or if his attendance cannot be procured without an amount of delay or expense which in the circumstances of the case appears to the court unreasonable”.

112. It is clear that the makers of a document are the best witnesses to give evidence in regard to the authenticity and correctness of the document, together with the facts surrounding the making of the document. CW1, CW2, and CW3 signed the trust deeds and they testified and confirmed the correctness of the trust deeds. There was no evidence to show malice on their part and also no evidence of any incentive to conceal or misrepresent facts.

113. The 2nd Respondent has challenged the authenticity of the said Trust Agreements, however, we still note that in 2009, he was not a member of the 1st Respondent hence was not even aware of the terms and conditions or the circumstances that surrounding the entering of the said Trust Agreements. The 2nd Respondent did not sign or even attend the meetings during the making of the said documents hence the issue raised on the authenticity of the Trust Agreements do not hold water.

114. CW1 and CW3 executed the deed and indeed testified about its contents and the intention of the members of the 1st Respondent. It is therefore clear that they were exercising their mandates under Section 28(6) Cooperative Society Act as persons of diligence. The 2nd Respondent challenged what transpired in the 25th Annual General Meeting. We find that also in the 28th Annual General Meeting, the members further discussed the issue of purchase of Co-op Holdings Cooperatives Shares. The mandate of the committee members is therefore strengthened by the fact that this was a continuous process which the 1st Respondent members were very well aware of and had mandated the CW1, CW2 and CW3 to carry out this duty.

115. In the management of the affairs of the members of 1st Respondent the minutes of the 28th Annual General Meeting held on 24. 3.2012 confirms the position that indeed, the individual members were contributing to buy the shares.In “Minute 11/12 the Chairman informed members that some Cooperatives had approached him to buy Co-op Holding Cooperatives shares. The members mandated the Management Committee to proceed with the purchase of these shares as long as members contribute money separately for the purchase of these shares”.

116. The 2nd Respondent alleged in his witness statement that the minutes of the 25th Annual General Meeting were not handed over yet he has counter signed the handover report dated 16. 10. 2020 page 86 item 38 indicating that the signed minutes were handed over.

117. There was no enquiry conducted to implicate those particular Management Committee members in their individual capacities. The Respondent made reports to the EACC and DCI in regards to the said Trust Agreements and we note that no criminal negligence has been imputed against the Claimant or the CW1, CW2 and CW3 who were the executors of the deed.

118. (B) (i) Findings on Trust DeedsBy claiming conflict of interest and denying the Claimant the dividends, we find that the Trustee (1st Respondent) may be involving itself in position of breach of trust against the beneficiaries through the actions of the 2nd, 3rd and 5th Respondent in failing to keep the terms of the Trust Deed.It is trite law that parties are bound to the terms of the contract entered as held in CA 209/2005 Nation Media Group Limited- versus Busia Teachers Cooperative Sacco.

119. We therefore find that the trust agreements created between the 1st Respondent and the Claimant are valid instruments.In the circumstances, we declare that there was a valid Trust and Beneficiary Relationship established between the claimant and the 1st Respondent, with the 1st Respondent being the Trustee and the Claimant being the beneficiary in this light therefore, it was expected that the 1st Respondent was to fulfil all its duties and obligations as enshrined in the Trust Agreements between the parties. The makers of the documents have testified and established this fact by virtue of being members of the management committee, members of the 1st Respondent and by having executed the said Trust Deeds.

120. This prayers of the 1st, 2nd 3rd and 5th Respondents in their counter- claim therefore fails having inter-alia declared that the 1st Respondent is the trustee of the Claimant.

121. The Claimant used his finances and contributions as a member to purchase the Coop Holdings Cooperatives Shares. There was no evidence called by the Respondents that there was requirement/resolution that there had to be more than 2, 3, or particular number of members contributing to the purchase of the shares in order for the investment or purchase to be valid.

122. In the circumstances, the prayer (a) in the 1st, 2nd ,3rd and 5th Respondent’s Counter-Claim cannot stand in the light of the evidence on record. The Respondents have not demonstrated any illegalities and/or irregularities to show that the ownership of the Coop Holdings Cooperatives Shares by the claimant is illegal or that it has not met any required threshold. There was no such requirement/resolution/threshold established during the purchase of the Coop Holdings Cooperatives Shares or in execution of the Trust Agreements.

123. Similarly for prayer (b) of the Counter- claim, there was no evidence called to establish any violations of the Cooperative Society Act.

124. (c)Rectification of Trust DeedsThe Claimant sought the order of the Tribunal to rectify the Trust Deeds as per the Deed of Rectification dated 28. 5.2021. We note the letter dated 25. 5.2021 by 2nd, 3rd and 4th and 5th Respondent to the Claimant advising the Claimant to draw up a legally binding Trust Deed.

125. This matter of the rectification of errors was discussed in the tripartite meeting held on 12. 5.2021 page 52 (Claimant’s list of documents) and the parties discussed the errors in the Trust Deed which needed to be corrected/rectified. In furtherance of the minutes resolutions of this meeting, the 2nd Respondent wrote to the Claimant the letter dated 25. 5.2021 forwarded via the email dated 28. 5.2021 at page 58.

126. We note that the 2nd Respondent was neither a party to the Trust Deeds, nor present as a member when the said Trust Deeds were executed. The Respondents have implied that the claimant intends to rectify the Trust deeds to his advantage, yet it is the Respondents who “advised” the Trust Deeds and/or draw “Legally Binding Trust Deeds”. This issue was discussed in the Tripartite meeting and the parties agreed that there were errors that required corrections. The 2nd , 3rd, and 4th Respondents wrote to the claimant the letter dated 25. 5.2021 following the said tripartite meeting of 12. 5.2021. The letter stated “we advise that a new, legally binding Trust Deed be drawn up”.“….also note that any legal fees emanating from this exercise shall be borne by you, James Mugambi.”

127. We note that the parties had already entered into a Trust Relationship with the Trust Deeds on record. This issue of the Trust has been well established in the matter. There was no need to draw up any fresh Trust Deeds hence we see the claimant drew up a “Deed Of Rectification” as per the letter dated 28. 5.2021 for the existing Trust Deed.

128. There was also the issue of the “New Trust Deed” for the shares that were not covered as per the share certificates. (NB: it was noted during the hearing of the matter that there was a split of the shares).

129. The Claimant vide the said letter of 28. 5.2021 and in furtherance of the Tripartite meeting of 12. 5.2021, and in reply to the letter of the Respondent therefore, obliged by making the new Trust Deeds and the Deed of Rectification, which documents he seeks for the orders of the Tribunal for the Respondents to execute as per prayer (b).

130. (C) (i) Decision On Trust Deeds RectificationWe find that the parties had already resolved the issues therein during their meeting on 12. 5.2021 but the Respondents neglected to comply to the Resolutions of the meeting, to execute the Rectification Deed and the new Trust deeds. We therefore order for the Respondents to execute the Deed of Rectification sent to 1st Respondent on 28. 5.2021 and the new Trust Deeds as agreed on 12. 5.2021.

Conclusion 131. In totality, we note that according to the evidence on record, the Respondents have always been aware that the Claimant was the owner/beneficiary of the Coop Holding Cooperative Sacco shares and that the 1st Respondent has held the shares in trust of the Claimant since the year 2009. The Claimant testified that the Respondents have always remitted the dividends once declared to the Claimant. This is glaringly clear according to:(i)Letter written by the 2nd Respondent on 19. 4.2021 that:“…..kindly transfer the above funds to the account as detailed below….Being payment of 125,247,471 coop holdings shares at 0. 96% less withholding tax 5% that we hold in H&M SACCO as trustee….”This letter was signed by the 2nd Respondent being Chairman Charles Kilonzi - Treasurer, Alex Nduli – Secretary.(ii)Letter dated 9. 3.2021 signed by the Chairman (2nd Respondent), Vice-Chairman and Treasurer written to Equity Bank confirming that the Claimant was the owner of 14,000,000 Coop Holdings Cooperatives shares.(iii)In the tripartite meeting of 12. 5.2021 the Respondents were advised by the Cooperative Officer should remit/pay the dividends of Coop Holdings Cooperative shares which belonged to the Claimant and they were to transfer the same by 17. 5.2021. (iv)Since the year 2010, the 1st Respondent has always remitted the dividends amounts to the 1st Respondent. The 2nd Respondent became the Chairman in 2018 and transmitted the payments in 2018, 2019 and 2020. Its not clear why there were issues arising in the remittance of the 2021 and 2022 shares. This issues was discussed at length in the Ruling of the Tribunal of 2. 9.2021.

132. In essence, we find that the issues raised by the Respondents in regard to the Coop Holding Cooperatives shares trusteeship do not hold any water. The Claimant has demonstrated from inception what transpired and has proved that indeed there was a trust created in his favour between him and the 1st Respondent. It is not clear why there was a sudden dissatisfaction by the 1st Respondent officials as to the trust created between the 1st Respondent and the Claimant.

133. In the circumstances we find that the Claimant has proved his case on a balance of probabilities.

134. We therefore issue the following directions and/or orders in accordance to Rules 3 and 4 Cooperative Tribunal (Practice and Procedure) Rules 2004 and in the interest of justice:1. Prayer (a) in the Statement of Claim is marked as spent.2. We hereby declare that the 1st Respondent holds the Coop Holdings Cooperative Shares in trust, for the claimant owing to the Trust created between the claimant and the Respondent as per the Trust Agreements/Deeds executed by both parties.3. The 1st Respondent’s officials do hereby execute the Deed of Rectification and the new Trust Deeds as agreed/proposed in the Tripartite meeting of 12. 5.2021 and attached to the letter dated 28. 5.2021 sent by the Claimant to the 1st Respondent.4. The 1st, 2nd , 3rd and 4th Respondents herein do remit, pay and/or facilitate payments of all monies paid as dividends and/or investments in the Coop Holdings Cooperatives shares belongings to the claimant.5. A permanent injunction be and is hereby issued restraining the Respondents by themselves, agents or assigns from withholding and/or refusing to remit the dividends of Coop Holdings Cooperative Society shares. To this effect, we order as follows:a.That the dividends payments for the year 2022 held in the fixed deposit joint account of the Claimant’s Advocate and the 1st, 2nd 3rd and 5th Respondents Advocate to be released forthwith.[being Kshs. 110,120,701/70, to the Claimant together with the interest therein accrued from the date of issuance of the dividends notice on 30. 6.2022 and the interest accrued therein from the date of deposit into the Fixed Deposit joint account as per the orders of this Tribunal of 14. 9.2022].b.Interest accrued on the dividends issued in the year 2021(if any was not remitted to the claimant).6. Prayer ( e) in the statement of claim spent.7. The 4th Respondent is hereby found to hold no liability in the matter having resigned from the Management Committee of the 1st Respondent and is accordingly discharged from the proceedings.8. The Tribunal having found in favour of the Claimant, we find that the Counter- claim was not proved on a balance of probabilities and the same is hereby dismissed with costs.9. The 1st, 2nd, 3rd and 5th Respondents to bear the costs of the claim jointly and severally.(This decision was reached by the four members of the Tribunal unanimously after deliberations).

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 16TH DAY OF FEBRUARY, 2023. Hon. Beatrice Kimemia Chairperson Signed 16. 2.2023Hon. J. Mwatsama Deputy Chairperson Signed 16. 2.2023M. Mbeneka Member Signed 16. 2.2023Gitonga Kamiti Member Signed 16. 2.2023Tribunal Clerk J. KokiMuriuki Gitonga for the Claimant appearing with Mr. Muturi for Claimant: I pray for a copy of the judgment.Wamutiba advocate for Respondent: PresentJames Mugambi: PresentGray Mwamunye : No appearanceNancy Mwamkuu : PresentMary Thuku : No appearanceLucy Muchiri: No appearanceWamutiba advocate for 1st, 2nd , 3rd and 5thRespondent: I pray for stay of execution for 30 days and leave to appeal.Muriuki advocate for Claimant: I do not object to the leave to appeal.On the stay of execution, we oppose the application, it should be made in writing so that we respond comprehensively. This is an investment and the claimant has heavily invested. The Claimant has a lot of obligation and he has not met them. They should make it formally so that we respond comprehensively. The 50 pages judgment has been considered and the Respondent are asking for the Tribunal cannot sit in appeal of its own orders.Wamutiba advocate for 1st, 2nd, 3rd and 5th Respondent: The Tribunal has original jurisdiction to grant the 30 days stay of execution and there will be no prejudice since the funds are held in a fixed deposit account of the parties.Ruling On Stay of ExecutionOwing to the nature of the matter as terms of complexity and the amounts involved, we find that the 30 days stay of execution is extremely long. We find that the judgment is comprehensive in regards to all the issues raised. The Respondents are at liberty to move to the High Court for further orders or to appeal as per Section 81 Cooperative Societies Act Cap 490. We grant only 7 days stay of Execution to enable the parties to make the necessary arrangements in compliance to the orders herein.Hon. Beatrice Kimemia Chairperson Signed 16. 2.2023Hon. J. Mwatsama Deputy Chairperson Signed 16. 2.2023M. Mbeneka Member Signed 16. 2.2023Gitonga Kamiti Member Signed 16. 2.2023Tribunal Clerk J. Koki