Ndegwa v Tembo Co-operative Sacco [2023] KECPT 739 (KLR)

Ndegwa v Tembo Co-operative Sacco (Tribunal Case E164/364 of 2021) [2023] KECPT 739 (KLR) (3 August 2023) (Ruling)

Neutral citation: [2023] KECPT 739 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E164/364 of 2021

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

August 3, 2023

Between

Peter Ndegwa

Claimant

and

Tembo Co-operative Sacco

Respondent

Ruling

1. The matter coming up for ruling is the Respondent’s Notice of Preliminary Objection dated 20/10/2022 and filed on 1st November 2022. In the notice, the Respondent objects to the Claimant’s claim on the grounds:a.That the suit offends sections 4 and 7 of the Limitations of Sections Act (Cap 22) in that the cause of action arose in 1997 and the suit has been filed in 2021, 30 years later, well beyond the 12 years limitation period for claims over land under section 7 and well beyond 6 years limitation period for claims under contracts under section 4 of the Act. Hence the suit is barred under the limitation of Actions Act.b.The suit is bad in law in that it offends the provisions of sections 3 (3) of the Law of Contract Act (Cap 23) that requires contracts of dispositions of land to be in writing, signed and attested and that the Claimant has not provided such written contract, hence the suit is unsustainable.

2. The Claimant opposes the Respondent’s Notice of Preliminary Objection relying on Grounds of Opposition dated 9th November 2022 filed on 29th November 2022. The Claimant’s Grounds of Opposition are:i.That the suit does not offend Sections 4 and 7 of the Limitation of Actions Act (Cap 23) as the cause of action did not arise in 1997. ii.That the suit does not offend the provisions of Section 3 (3) of the Law of Contract Act since the Claimant was issued with a share certificate after successful balloting of the suit property.iii.That this Tribunal has jurisdiction to hear and determine this matter and striking out the suit will be against the interests of natural notice.iv.That the Preliminary Objection is incompetent and an abuse of the court process and allowing the same will be prejudicial to the Claimant.

3. The matter proceeded by way of written submissions of parties. The Respondent’s written submissions dated 14th November 2022 were filed on 16th March 2023, while the Claimant’s written submissions dated 15th March 2023 were filed on 16th March 2023.

Background: 4. The Claimant/Respondent, in his claim states that he is a member of the Respondent and that:1. On 9th September 1997, the Respondent invited its members to ballot for Kisumu plots which ballot was conducted on 20th September 1997. 2.The Claimant was successful in the ballot and was allotted Plot No. 139 and a share certificate to him.3. The Claimant paid Kshs. 42,000/= as a consideration.4. The Respondent has refused and/or neglected to deliver to the Claimant the plot.5. The Claimant claims for a mandatory injunction directing the Respondent to deliver to him Plot No. 139 or in the alternative the Respondent to pay the sum of Kshs. 42,000/= plus interest at court rates from 20th September 1997.

Issues for Determination: 5. The issues arising for determination from the Notice of Preliminary Objection and Grounds of Opposition are:a.Whether the Claimant’s claim is time barred by virtue of sections 4 and 7 of the Limitation of Actions Act, Cap 22. b.Whether the suit offends Section 3(3) of the Law of Contract Act, Cap 23.

Whether the claimant’s claim is time barred by virtue of sections 4 and 7 of the Limitation Of Actions Act; 6. In its submissions, the Respondent/Applicant argues that the Claimant’s alternative claim for the sum of Kshs. 42,000/= is time barred under Section 4(1) (a) of the Limitation of Actions Act, which sets the limitation period for action founded on contract at 6 years.

7. Further, the Respondent admits that the Claimant was allotted the subject plot in 1997 and paid for the same the same year but goes on to argue that the Claimant’s right of action accrued in 1997 and was extinguished after 12 years in 2009.

8. In rejoinder, the Claimant argues that the Claimant’s cause of action did not accrue in 1997 and therefore the suit is not in contravention of section 4 and 7 of the Limitation of Actions Act. The Claimant argues that the cause of action did not accrue until an enforceable claim came into existence.

9. According to the Claimant, his enforceable claim came into existence on 12th August 2019 when the Respondent declined to issue the Claimant with the title in respect to the plot citing a 30-day demand letter served upon the Respondent on 12th July 2019.

10. We have considered the parties submissions and the authorities cited in respect to the issue whether the claimant’s claim is time barred and conclude that we in order to determine the issue we must answer the following questions;i.What is a right/cause of action.ii.When can it be said that a cause of action has accrued.iii.When does the time begin to run.

11. According Black’s Dictionary, a cause of action is properly the ground on which an action can be maintained. A cause of action is well described in the case of Gurbachan Singh Kalsi vs. Yowani Ekori (Civil Appeal No. 62 of 1958), when the Former East African Court of Appeal stated:“A cause of action is every fact which it would be necessary for the plaintiff to prove if traversed in order to support his right to the judgment of the court. It does not comprise every piece of evidence which is necessary to prove to prove each fact, but every fact which is necessary to be proved.”

12. Looking at the statement of claim, it is clear that the Claimant has a cause of action against the Respondent. This cause of action brings the claim within the jurisdiction of the tribunal by virtue of section 76 of the Co-operative Societies Act.

13. When can it be said that a cause of action has accrued?In the present case the Respondent argues that the cause of action accrued in 1997 while the Claimant argues that it accrued in 2019. To our understanding of the law and without going into the numerous court decisions on this topic, a cause of action accrues when it comes into existence as an enforceable claim or right. It means to us, when the Claimant found cause to file the claim in the Tribunal.

14. From the evidence before us we cannot conclude that the cause of action accrued in 1997 as that was when the Claimant won the ballot after the membership of the Respondent was invited to bid. That was also the year the Claimant paid for the plot and was issued with the share certificate. It would therefore go without saying that the cause of action accrued at a later date and we agree with the Claimant that it’s in the circumstances of the case, the cause of action accrued at the point when the Claimant expected to be issued with the title deed to the land and it was not done.

15. To answer our third question, time would then begin to run when the title deed is not issued as per the Claimant’s legitimate expectations. The only indication of such a time is seen from the Claimant’s action of issuing a demand letter whose notice period lapsed on 12th August 2019. We therefore are persuaded to treat 12th August 2019 as the date when the cause of action accrued and time began to run on the Claimant’s right of action. This Tribunal therefore has jurisdiction to hear and determine the Claimant’s claim.

Whether the claim offends the provisions of section 3(3) of the Law Of Contract Act 16. In considering this issue, it is our resolve to deal with and consider every case before us without undue regard to technicalities and in its own merit as guided by article 159 (2)(d) and (e) of the Constitution.

17. While we do not wish to delve into matters which can be better canvassed in a full hearing, we must say that the special nature and circumstances of the special relationship between a society and its members rides upon the spirit of collective effort, wherein we do not envisage the strict adherence to contract law procedures.

18. In the present case, we therefore find that in the circumstances, the requisite components of a contract are matters of evidence which the Law of Contract did not intend to be raised on a notice of preliminary objection but as issues to be canvassed at trial.

19. In any event, we are persuaded to agree with the Claimant that Section 3(7) of the Law of Contract Act ousts the operation of Section 3(3) of the same Act in respect to contracts entered into before the commencement of that section.

20. In conclusion therefore, we find that:a.The respondent’s notice of preliminary objection is unsuccessful.b.The respondent’s notice of preliminary objection dated 20th October 2022 is hereby dismissed.c.Costs shall be in the cause.d.Parties to file and serve witness statements and documents within 21 days herein. Pre- trial directions on 18. 10. 2023.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3{{^RD} DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 3. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 3. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 3. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 3. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 3. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 3. 8.2023HON. PAUL AOL MEMBER SIGNED 3. 8.2023TRIBUNAL CLERK JEMIMAHWayua for claimantOnsando for RespondentHON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 3. 8.2023