Ngugi v Commissioner for Cooperatives Development & another [2023] KECPT 907 (KLR)

Ngugi v Commissioner for Cooperatives Development & another (Tribunal Case Miscellaneous E013 of 2022) [2023] KECPT 907 (KLR) (Civ) (21 September 2023) (Ruling)

Neutral citation: [2023] KECPT 907 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case Miscellaneous E013 of 2022

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

September 21, 2023

Between

John Mwangi Ngugi

Claimant

and

Commissioner for Cooperatives Development

1st Respondent

Orient Sacco

2nd Respondent

Ruling

Facts of the Case 1. The case began with the filing of a Statement of Claim dated 28thJanuary, 2021, in which Orient Savings and Credit Cooperatives Society, approached this Tribunal and stated among others that:a.John Mwangi Ngugi held office as the Chief Executive Officer of its Sacco between 17th December, 2012….March, 2017. b.That on 7th December 2016, a Special General Meeting suspended the Chief Executive Officer and the entire Management and Supervisory Committee.c.That an Interim Committee was put in place to look into the problems raised at the Special General Meeting, and in another Special General Meeting held in March 2017, a vote of no confidence was passed on the Chief Executive Officer, the Management Committee and the Supervisory Committee.d.That following complaints from members of Orient Sacco, around February/March 2018, the Commissioner for Cooperatives sanctioned an Inquiry with the Inquiry Report being presented to members on 11th April 2019. e.The Inquiry Report recommended the surcharging of John Mwangi Ngugi and others for the loss of Orient Sacco monies, and on 9th May, 2019, the Commissioner of Cooperatives issued a notice of intention to surcharge John Mwangi Ngugi for the loss of Kshs. 42,150,800/=.f.On 18th July, 2019, the Commissioner for Cooperatives issued Surcharge Orders to the Respondent.g.That despite the Notice of Intention to Surcharge Orders being issued to the Respondent , the Respondent failed, neglected or refused to settle the surcharges, necessitating the filing of the claim.

2. On 26th August 2021, the Claimant filed a Notice of Motion seeking among others the orders that:a.The Statement of Defence that had been filed by the Claimant dated 8th April 2021 be struct out as it was frivolous and a sham which constitutes mere denials and an abuse of the process of the court.b.A summary judgment in favour of the Claimant be entered for the sum of Kshs. 42,150,800/= as at 28th January, 2021 with interest thereon from the date of the Surcharge Orders.c.The Respondent to pay the cost of the application as well as the cost of the entire suit.

3. This Tribunal entered Interlocutory Judgment against John Mwangi Ngugi for the amount of Kshs. 42,150,800/=.

4. Feeling aggrieved by the orders, John Mwangi Ngugi filed a Notice of Motion dated 24th August 2022 seeking among others that:a.The Tribunal grants an order of stay of proceedings in CTC. 127 of 2021. b.The Tribunal grants leave to appeal out of time against the Surcharge Orders made by the Commissioner of Cooperatives on 3rd July, 2019. c.The Tribunal in the alternative to hold that the Surcharge Orders were not properly served, and or served at all upon John Mwangi Ngugi.

5. Issues for Determinationi.Whether the threshold for grant of stay pending Appeal has been met.ii.Whether the Tribunal should grant leave to file an Appeal out of time against the Surcharge Orders.iii.Whether the Surcharge Orders were served on the Applicant.

Issue One Whether the threshold for grant of Stay Pending appeal has been met? 6. Order 42 Rule 6(2) of the Civil Procedure Rules stipulate the considerations to be made before granting stay pending appeal, and states that:“2 No order for stay of execution shall be made under sub rule (1) unless….a.The court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delays.”In Victory Construction versus BM [2019] eKLR, the court stated that in deciding whether or not to grant a stay of execution, the overriding objective stipulated in sections 1A and 1B of the Civil Procedure Act should also be taken in consideration. The overriding objectives aim to assist the court with just determination of proceedings efficient disposal of the business of court, and the timely disposal of proceedings.In Butt versus Rent Restriction Tribunal [1979], the court gave pointers on what ought to be considered on whether to grant or refuse stay of execution pending Appeal, and it stated categorically that:i.The power of the court to grant or refuse an application for a stay of execution is discretionary, and the discretion should be exercised in such a way as not to prevent an appeal.ii.The general principle in granting or refusing a stay is, if there is no other overwhelming hinderances, a stay must be granted so that an appeal may not be rendered nugatory should the appeal court reverse the judges discretion.iii.Third, a judge should not refuse a stay if there are good grounds for granting it merely because in his opinion a better remedy may become available to the applicant at the end of the proceedings.iv.Finally, the court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and its unique requirements.

7. We have considered all the above, whether the Application has been made without unreasonable delay, the overriding objectives in section 1A and 1B of the Civil Procedure Act and whether it’s in the interest of justice to grant or refuse the stay pending appeal and note that:a.More than 3 years have passed since the surcharge orders were issued.b.That at this stage of proceedings, the process of appeal against the surcharge orders has already been concluded and how the inquiry was done leading to the surcharge cannot be heard at this point in time-equity does not favour the indolent. It is not in the interest of justice or the efficient and timely disposal of proceedings to allow the grant of stay as there is not even a proper appeal in the present suit.As such, we find that the threshold for grant of stay pending appeal has not been met.

Issue Two Whether The Tribunal should grant leave to file an appeal out of time against the surcharge orders 8. The guiding provision as to whether time should be enlarged to allow filing of Appeal is Section 79 G of the Civil Procedure Act which provides that:“every appeal from a subordinate court to the high court shall be filed within a period of thirty days from the date of the decree or order appealed against, excluding from such period any time which the lower court may certify as having been requisite for the preparation and delivery to the appellant of a copy of the decree or orders:“ Provided that an appeal may be admitted out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time.”Section 73 and 74 of the Cooperatives Act provides for appeal and the procedure to follow when appealing but does not provides for extending time for appeal.The considerations on whether to grant or not grant leave to appeal out of time is an exercise in discretion by courts and the Court of Appeal in Thuita Mwangi versus Kenya Airways Limited [2003] eKLR laid down what to consider, which include:i.The period of delayii.The reason for the delayiii.The arguability of the Appeal.iv.The degree of prejudice which could be suffered by the Respondent if the extension is grantedv.The importance of compliance with time limits to the particular litigation or issue; andvi.The effect if any on the administration of justice or public interest if any is involved.

9. We have considered all the pertinent issues submitted in the Application for grant of leave, and we are not persuaded by the reasons advanced because of the following:a.The period of delay is more than two months. This court rendered its decision on 23rd June, 2022, while the application for grant of leave was filed on 15th September, 2022. b.The reasons given for the delay are not convincing and no evidence has been produced before court to persuade us that his former counsel made an innocent mistake, or that he was misadvised by his former counsel.

10As such, the prayer to enlarge time and allow for leave to file an Appeal falls, as to allow it will prejudice the Respondents in this particular case and it is not in the interest of public policy or administration of justice to forestall a process that has already been concluded.

Issue Three Whether the Surcharge orders were served on the Applicant 11. Section 73 and 74 of the Cooperatives Act read together with the Cooperatives Tribunal (Practice and Procedure ) Rules 2009 and Rule 6 and Rule 12 of the Civil Procedure Rules govern mode of service in relation to court orders.

12. The Constitution of Kenya in Article 159 (2) (d) is clear to the effect that:justice shall be administered without undue regards to technicalities.”

13. In this particular case, we have taken note of the fact that service of the surcharges may not have been effected personally by the Commissioner of Cooperatives, but the Applicant John Mwangi Ngugi was aware of their existence and had the time and goodwill to either appeal against them, or file a substantive Defence to fight the surcharges, but he opted not to when he still had time on his side.

14. In Kenya Ports Authority versus Kenya power and Lighting company limited [2012] eKLR, Justice Mwongo had this to say about technicalities:Procedural technicalities may be described as those that more concern the modes of proceedings and the rules involved that regulate formality and process rather than substantives rights under law”

15. We identify with Justice Mwongo’s position on procedural technicalities, and further state that merits of a case should be considered to be above the procedural technicalities, unless to do that seriously offend the substantive rights of a party, which is not the case in this particular suit.

Upshot 16. Application dated 24. 8.2022 is found to be without merit.We therefore dismiss with costs the application dated 24th August, 2022.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 21ST DAY OF SEPTEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 21. 9.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 21. 9.2023HON. BEATRICE SAWE MEMBER SIGNED 21. 9.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 21. 9.2023HON. PHILIP GICHUKI MEMBER SIGNED 21. 9.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 21. 9.2023HON. PAUL AOL MEMBER SIGNED 21. 9.2023TRIBUNAL CLERK JEMIMAHNyangena advocate for the Applicant.Wokabi Mathenge advocate for 2nd RespondentNyangena advocate- we seek leave to Appeal.Tribunal order:Leave granted to appeal.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 21. 9.2023