Odoyo & 3 others v Otete & 5 others [2024] KECPT 1407 (KLR)

Odoyo & 3 others v Otete & 5 others (Tribunal Case 210 (E011) of 2023) [2024] KECPT 1407 (KLR) (29 August 2024) (Judgment)

Neutral citation: [2024] KECPT 1407 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 210 (E011) of 2023

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

August 29, 2024

Between

Polycarp Odoyo & 3 others & 3 others

Claimant

and

Rosecheus Otete & 5 others & 5 others

Respondent

Judgment

Claimant Case 1. The Claimant’s case is based on the statement of claim dated 15th April, 2023, witness statement of the Claimants, documents dated 13th April, 2023, hearing on 6th December 2023 and Claimant written submissions dated 5. 5.2023.

2. In their Statement of Claim, 1st to 3rd Claimants state that they are members of the 4th Claimant a Cooperative Society. The Claim is for stopping the operations of the current Board of management of the 4th Respondent on the grounds that their term has since expired.

3. The Claimant states that the term of the Chair and the Hon. Secretary is overdue. The 4th and 5th Respondent are accused of running down the 4th Claimant.

4. The Claimant aver that they are demanding for a Special General Meeting for the Claimant. The Claimant states that on or about 24th March 2023 a Notice for a Special General Meeting was issued for 9th April 2023 and elected a new Board of Management composed of the following:i.Chairperson – Joram Onditi Gandaii.Vice Chairperson – Florence Otuomaiii.Treasurer – Polycarp Adoyo Omondiiv.Member – Thomas Omunev.Member – Mordecal Appollovi.The Manager to become the Hon. Secretary to the caretaker committee.

5. The elected officials were tasked with addressing members’ grievances. The Claimant prays for the following:a.The Special General Meeting (SGM) of 9th April 2023 and tis resolution be upheld.b.That the election of Joram Onditi Ganda as the Chairperson, Florence Otuoma as the Vice Chairperson, Polycarp Omondi as the Treasurer, Thomas Omune and Mordecai Appollo as members be upheld.c.The newly elected office bearers be confirmed the signatories of account numbers 01120047234700, 01120047234701 and 012480472347 in the name of the 4th Claimant.d.A permanent injunction restraining the 1st, 2nd and 3rd respondents from running the affairs of the 4th Claimant and not to be around the premises of the 4th Claimant.e.Cost and interests of the claim to the Claimants.f.And any other relief the Honourable Tribunal may deem just to grant.

6. In the 1st, 2nd and 3rd Claimant’s witness statements received on 14th April, 2023, the Claimants stated that the members’ meeting of 9th April, 2023 replaced the Executive Committee of the Sacco. The 1st Claimant stated that he was elected as Treasurer of the Sacco.

7. In the Claimants documents dated 13th April, 2023, the Claimant have filed various documents to support their case including request for a Special General Meeting of the 4th Claimant, petition on mismanagement of the 4th Claimant budget for year 2022/2023 of the 4th Claimant, report of the Chairman of the Sacco for the year 2022 and minutes of the 9th April 2023 Special General Meeting among others.

8. During the hearing of the case on 6th December 2023, the 1st Claimant Mr. Polycarp Omondi adopted his statement filed on 14th April 2023 and documents dated 14th April 2023 as his evidence in chief. He stated that the deliberations of 9th April 2023 should be upheld and the officials elected on the same day to preside over the affairs of the 4th Claimant.

9. On cross-examination, the Claimant admitted that he is an active member of the 4th Claimant and that retired teachers can be members. He confirmed writing to the Chair of the 4th Claimant requesting for a Special General Meeting on 6th March 2023 and the letter was received by the Manager of the Sacco. He stated that they also wrote to the Director of Cooperatives but there was no response occasioning calling for the Special General Meeting.

10. He confirmed that he did not have minutes of meeting nor attendance list. He explained that the quorum to call the meeting was quarter of the members and those calling for the meeting must sign. He confirmed being elected by 33 members.

11. On re-examination, the Claimant stated that the Supervisory Committee does not handle complaints. He stated that the board did not respond to this request for Special General Meeting. He stated that 33 members attended the Special General Meeting with 4 absent with permission. He averred that the term of office for the Board was 3 years.

12. The 2nd Claimant witness Mr. Patrick Makiche adopted his statement filed on 14th April 2023 as his evidence in chief. On cross-examination he confirmed that he was retired teacher and now a farmer and confirmed that he still pays subscription to the Sacco. He stated that the 5th Respondent is composed of 3 members elected by the members. On re-examination he confirmed that he is still a member of the Sacco.

13. In their written Claimant submissions dated 15th April 2024 the Claimant summarizes the contents of the statement of Claim, the 3 witness statements and the hearing of the case.

14. The Claimants submit that they have proved their case and pray for a permanent injunction restraining 1st, 2nd and 3rd Respondents from running the affairs of the Cooperative Society. They also pray that the election of the official held on 9th April 2023 be confirmed.

Respondents Case. 15. The Respondent case is based on the 1st to 5th Respondents’ response to Claim dated 5th May 2023, Respondents’ Witness statements dated 5th May 2023.

16. In the Respondents’ response to claim, the Respondents deny that their term of office has expired and that they did not follow the due process in staff recruitment. They also deny that they are running from the Sacco and that their term is over. They state that they were elected on 6th March 2021 hence their term is not over. They deny even recruiting any staff against procedures.

17. The Respondent state that the issues raised by the Claimant have been raised in previous Sacco meetings and properly addressed. They also deny that the complaint letters were brought to their attention. The 5th Respondent avers that no complaints were brought to its attention. The 1st to 5th Respondents state that on 9th April 2023 the offices of the 4th Respondent were broken into and belief that it is the Claimant who had done so. They also state that request for the Special General Meeting fell short of Article 30 of the bylaws which provides for 100 members or quarter of the membership.

18. The Respondents claim that the list attached to request for the Special General Meeting has members who have since confessed they were not part to the list, averring that there was forgery in the list. The Respondents also state the purported elections in the Special General Meeting were held without a returning officer rendering the purported elections illegal.

19. The following persons wrote Witness Statements in support of the Defence.1. Roscheus Otete, Chairman of the 4th Respondent dated 5. 5.2023. 2.Chatherine John, the 2nd Respondent on 5. 5.2023. 3. Joseph Arot, Chairman of the Sacco Supervisory Committee (Respondent No. 5)

4. Samwuel Okello, 3rd Respondent5. Christopher Abok, member of the Sacco.6. Jane Gogi Jane, member of the Sacco.7. Samson Angienda, member of the Sacco.8. Francis Koga, member of the Sacco.

20. In his statement, Mr. Roscheus Otete the Chairman of the Sacco (4th Respondent) states that he was not aware of the Claimants’ purported meeting of 9th April 2023 and only saw the Notices for the same in the case records.

21. He states that he was surprised that elections were purportedly held contrary to the Sacco by-laws. He avers that he has been in office for only 2 years and that the alleged removal of his Board was void. He accuses the Sacco management of colluding with the Claimants to remove the legitimate Board on alleged mismanagement of funds. The Respondent claims that he is not aware of such statements by the following persons (members) identified with the 1st Respondent statement. These are:- Christopher Abok

Jane Gogi

Samson Angienda and

Francis Koga

22. The Respondents filed the following documents dated 5th May 2023 in support of the defence case: By-laws of the Sacco

Sacco HR manual

Notice of 15. 2.21 S.G.M

Minutes of 29. 11. 20 AGM

SGM minutes of 6. 3.21

23. During the hearing of the Respondent case on 15th February 2024 the Respondents had 6 witnesses with most of them just adopting their statements. The main Respondent witness Mr. Otete stated that he is the Chairman of the Sacco and adopted his statement of 5th May 2023. He clarified that one has to pay deposits to the Sacco to be an active member of the Sacco.

24. He stated that he was not aware of the 9th April 2023 Special General Meeting by the Claimants. He stated that he was elected in March 2021, hence his term would expire in 2023. He explained the recruitment in the Sacco but stated that they have not hired any staff. He also explained the role of the Sacco Supervisory Committee the 5th Respondent, to be to receive and deal with complaints and that the 5th Respondent had not received any complaints.

25. The Respondents prays the Court to throw away the 9th April 2023 meeting outcome as void and null. Adopted his statement dated 6th May 2023. On cross examination he admitted members can call for a Special General Meeting.

26. He confirmed he was adopting the statement of the Chairman and confirmed term of the Board is 3 years and can be re-elected to another 3 years. He confirmed the Board size is 9 members and that the Chairman was in the Board for 6 years, on his 3rd term. He confirmed that there was a returning officer in the 6th March 2021 elections.

27. On forged signatures he stated that those affected are in Court to support their statement.

28. Mr. Joseph Okoko Alote the Supervisory Chairman confirmed and adopted his statement of 5th May 2023 admitted that he receives complaints which he forwards to the Board and admitted they hold joint meetings with the Board.

29. In their written submissions dated 15th May 2024, the 1st to 5th Respondents restate their position that the gist of the case is the Special General Meeting purported to have been held by the Claimants, whether due process was followed and whether the elections held during the said SGM can be upheld.

30. They state that the said Special General Meeting was called by 2 members and not the requisite 100 or quarter of the membership. They aver that quorum was not met. They aver that the Claimants allegation on recruiting staff without following due process was not proved. They also state that the alleged letting of premises without leases was not proved. They also aver that the claim should be dismissed.

Findings 31. The Claimants prays this Court to determine if the 9th April 2023 Special General Meeting as called by themselves was convened as provided by the Sacco regulations.

32. By Law 30. 1(b) of the 4th Respondent, the Sacco is very explicit on who should convene a Special General Meeting. By Law 30. 1(b) clearly states that:‘The Board within 15 days of a receipt of a written request by at least 100 members of ¼ of the members, whichever is less’ can call for a special General Meeting.

33. We observe that this threshold was not met when convening the Special General Meeting. We also note that the issue of membership is clearly explained in the Sacco by-law number 7 and No.14 (vi). We observe that Respondent 2nd and 3rd did not meet the requirement since 3rd Respondent did not renew his membership and the 2nd Respondent was undersubscribed.

34. A look at the Notice of the Special General Meeting called by the Claimants show that it was signed by 2 members namely Thomas Omune and Polycarp Adoyo. This does not meet the requirements of the Sacco bylaws number 7 and 14 vi.

35. The Claimants’ Prayer vide the statement of claim dated 13th April, 2023 is for this court to uphold the resolution of 9th April 2023 and also uphold the elections of the following: Joram Onditi as Chair

Florence Ouma as Vice Chair

Polycarp Omondi as Treasurer

Thomas Omune as member

Mordecai Appolo as member among others.

36. The 1st Claimant confirmed on cross examination that he did not have the minutes of the Special General Meeting nor the attendance list. He also confirmed that the Sacco bylaws provided for quorum of a Special General Meeting and the in the 9th April 2023 meeting he was elected by 33 members.

37. During the hearing the Claimant confirmed in the re-examination that 33 members attended the 9th April 2023 Special General Meeting with 4 absent with permission. This is enough prove that the Special General Meeting of 9th April 2023 did not meet the Sacco by-laws requirements as regards quorum as enshrined in Sacco by-law no. 7.

38. The Chairman of the Sacco’s Supervisory Committee Mr. Joseph Okoko Opopo who is also a respondent witness states that he did not receive, as would be expected a complaint from the claimant. So it is evident that the Claimant has not exhausted the local complain mechanism before filing this case.

39. Given the above facts we observe that the Special General Meeting convened by the Claimants on 9th April 2023 did not meet the Sacco’s by-law no. 7 on quorum of a Special General Meeting and was therefore illegal.

40. We also find that subsequent resolutions arising from the 9th April 2023 Special General Meeting is therefore null and void. UpshotThe Claimant’s claim dated 15th April 2023 is found to be without merit and is dismissed with costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF AUGUST, 2024. Hon. B. Kimemia - Chairperson Signed 29. 8.2024Hon. J. Mwatsama - Deputy Chairperson Signed 29. 8.2024Hon. Beatrice Sawe - Member Signed 29. 8.2024Hon. Fridah Lotuiya - Member Signed 29. 8.2024Hon. Philip Gichuki - Member Signed 29. 8.2024Hon. Michael Chesikaw - Member Signed 29. 8.2024Hon. Paul Aol - Member Signed 29. 8.2024Tribunal Clerk JonahMs. Omondi advocate for the ClaimantQunter Adoyo advocate for the Respondent – No appearanceMS. Omondi:We pray for a copy of judgement.Tribunal OrdersFollow up for typing administrators.Hon. J. Mwatsama - Deputy Chairperson Signed 29. 8.2024.