Mugo & 40 others v Akungu [2023] KECPT 832 (KLR)

Mugo & 40 others v Akungu (Cause E018 (15) of 2022) [2023] KECPT 832 (KLR) (31 August 2023) (Ruling)

Neutral citation: [2023] KECPT 832 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Cause E018 (15) of 2022

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

August 31, 2023

Between

Peter Mugo & 40 others

Claimant

and

Askenaz Ochieng Akungu

Respondent

Ruling

claimant’s Case 1. The claimant guaranteed the respondent a loan at Kenversity Sacco Society Limited, which they were both members, for which he paid leaving a balance of Kshs.1,285,528. 90/=.Upon the respondent failing to pay, Kenversity Sacco deducted the guarantors (claimants)deposits to recover the defaulted sum as followsS.NO

1 Dr Patroba Odeny 257,105. 78/=

2 Peter Mugo 257,105. 78/=

3 Caren Obuya 257,105. 78/=

4 Josephine Wokabi 257,105. 78/=

5 Dr Daniel Okur 257,105. 78/=

TOTAL 1,285,528. 90/=

2. The claimants have made several attempts to the respondent to indemnify them for the loss of their shares, for which the respondent has failed to necessitate court action to recover.

3. On April 25, 2022, the claimant requested for Interlocutory Judgment against the respondent who had failed to file his response. On May 19, 2022 the court entered judgment and decreed that the respondent to pay the claimant the sum of Kshs.1,285,528. 90/= plus interest of Kshs.64,276. 40/= totaling to Kshs. 1,349,045. 30/=

4. On 26th, July,2022, the executors of the decree engaged Moran Auctioneers to recover the sum, for which they, moved and attached several properties they believe belong to the Judgment Debtor.

5. On August 1, 2022, the respondent under Certificate of Urgency moved to court seeking orders to halt the execution of the Decree indicating that he would suffer irreparable loss if his properties were attached and offer to pay the decretal sum in monthly instalment of Kshs.10,000/=.

6. On 18th, August 2022, an objector by the name of Brenda Akoth Odera moved to court filing an Application under Certificate of Urgency indicating that all of the properties proclaimed and attached by the Auctioneer are actually hers and not for the Judgment Debtor and if the Tribunal does not halt the action, she would suffer irreparable harm. On 22nd August, 2023, the Tribunal ordered that pending the hearing of the Application, status quo be maintained.

Issues of Determination(i)Whether the auctioneers can proclaim the properties that do not belong to the Judgment Debtor(ii)Whether the decretal sum can be paid in instalments. 7. The objector Brenda Akoth Odero has attached a copy of ownership of the house situated on L. R No 7340/Embakasi Area, where the household goods were attached. This has not been challenged by the claimants in their Replying Affidavit dated August 27, 2022. Order 22 rules 51 of the Civil Procedure Rules provides for the thresholds for setting aside a proclamation.It provides that:1. Any person claiming to be entitled to or to have legal or equitable interest in the whole of or part of any property attached in execution of decree may at any time prior to payment out of the proceeds of sale of such property give notice in writing to the court and to all the parties and to the decree holder of this objection of to the property attached.2. Such notice shall be accompanied by an application supported by affidavit and shall set out in brief in nature of the claim which such objector or person makes to the whole or portion of the property attached.3. Such notice of objection and application shall be served within seven days from the date of filing on all the parties.We find that the objector has satisfied the legal threshold for setting aside the intended proclamation.She has proved interest, legal or equitable in the attached property.

8. In Arun Sharma v Ashana Raikundalla T/AA Raikundalla &Company Advocates 74 others [2014]eKLR the court held as follows:‘’The objector bears the burden of proving that he is entitled to or has legal or equitable interest on the whole or the part of the attached property. The key words are; entitled or to have a legal equitable interest in the whole or part of the property’’In Precast Portal Structure v Kenya Pencil Company Ltd & 2 others [1993] eKLR it was held :-‘’The burden is on objector to prove and establish his right to have attached property released from the attachment may be made if the court is satisfied.’’i).That the property was not when attached, held by the Judgment Debtor for himself or by other person in trust for the Judgment Debtor, orii).That the objector holds that the property on his own account.

9. The Tribunal also finds that the claimants or the auctioneer have not dispatched the burden of proving that the attached properties belong to the respondent or that they were in his custody.

10. Consequently, the Tribunal makes a finding that on a balance of probability the objector has an equitable interest on the household goods proclaimed. ii) Whether the Decretal sum can be paid in instalments. 11. Order 21 rule 12 of Civil Procedure Rules 2010, grant the court power to allow a Judgment Debtor pay a Decretal sum by installments rule provides that;1. Where and in so far as a decree is for the payment of money ,the court may for and sufficient reason at the time of passing the Decree Order that payment of the amount decreed shall be made by installments ,with or without interest notwithstanding anything contained in the contract under which the money is payable.2. After passing of any such decree ,the court may on the application of the judgment debtor and with the consent of the decree holder or without the consent of the decree holder of sufficient cause shown ,order that the payment of the amount decreed be postponed or be made by instalments on such term as to the payment of interest ,the attachment of the property of the judgment debtor or the taking of security from him ,or otherwise ,as it thinks fit’’

12. Courts have always exercised this discretion judicially. In the case of Keshval Jethabhai and Brothers Ltd v Saleh Abdul [1959]EA 260 The court stated the principles that should apply in considering such an Application ,namely ,a)Each case must be considered on its own merit.b)mere inability to pay in full at once is not sufficient reason for exercising the discretionc)the debtor should show the bona fides by arranging prompt payment and that through hardship may be a factor. The court has to consider whether indulgence should be given to the debtor without prejudice to the decree holder .The above decision shows clearly that it is for the judgment debtor to show sufficient cause and justify indulgence.In Hilderguard Ndelut v Lekina Dairies Ltd & another [2005] eKLR it was stated that ‘’ A Judgment Creditors is entitled to payment of the Decretal amount. Which he should receive promptly to reap the fruits of judgment. The Judgment Debtor might genuinely be in a difficult position in paying the Decretal amount at once. However, he has to show seriousness in paying the amount. In that event he should show his bona fides by arranging fair payment proposal to liquidate the amount.’’(emphasis)In Mohammed Akbar khan v Kasturchand Daga cited in Veshavji &brothers ltd v Saleh Abdul.(supra)the court held that the mere fact that the debtors hard pressed or is unable to pay full at once is not sufficient reason for granting leave to pay by instalments .ordinarily he should be required to show his bona fides by arranging prompt payment of a fair proportion of the debt ,although prompt payment of fair proportion of the debt is not a condition preceded for the exercise of the discretion of granting instalments . Each case has to be decided on its own merit the predominant factor being of course the bone fides of the judgment debtor.

11. In exercising discretion on payment by instalments. Court has also considered other factors such as the conduct of the judgment debtor and whether that application is made in good faith

12. In this particular case the Tribunal has considered the submissions of both parties including the very fact that the respondent in the past dishonored or give illegal cheques to his written undertaking to be paying the claimants.

13. In the interest of justice to all parties in this matter, we hereby order as follows;i.Discharge of proclamation of attachment and release of the property attached.ii.Payment of a fixed sum of Kshs 300,000/= on or before 30th of October, 2023, towards settlement of the Decretal amount.iii.A fixed monthly sum of Kenya shillings 20,000/= on or before the 10th day of every month beginning with the month of November 2023.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 31. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 31. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 31. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 31. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 31. 8.2023HON. PAUL AOL MEMBER SIGNED 31. 8.2023TRIBUNAL CLERK JEMIMAHOpiyo Advocate for Decree HolderOdhiambo advocate for the respondentHON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 31. 8.2023