Ogwei v Yes Sacco Limited [2024] KECPT 236 (KLR)

Ogwei v Yes Sacco Limited (Tribunal Case 355 of 2021) [2024] KECPT 236 (KLR) (7 March 2024) (Ruling)

Neutral citation: [2024] KECPT 236 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 355 of 2021

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

March 7, 2024

Between

Fredrick Otieno Ogwei

Claimant

and

Yes Sacco Limited

Respondent

Ruling

1. This ruling dispenses with two Applications. The Notice to Show Cause dated 23rd August 2023 and the Respondent Notice of Motion Application dated 12th January 2023.

Notice Of Motion Application 2. The Notice of Motion Application is filed on 8th September 2023. The Application is supported by an Affidavit sworn by one VINCENT MAYABI, the Chairman of the Respondent, and brought under Article 159(2) (d), Rules 3,4 &17 of the Cooperative Tribunal (Practice and Procedure Rules, 2009, and sections 1A, 1B, 3A of the Civil Procedure Act, Order 51 Rule 1 and 3, of the Civil Procedure Rules and All other enabling provisions of the law. The Application dated 8th September 2023 seeks the following orders:a.That this instant Application be certified as urgent and the same be heard ex parte in the first instance.b.That the Honourable Tribunal sets aside the notice to show cause and any subsequent orders against the officials.c.That following the forensic audit report as instructed by the members on 12th November, 2022 the same highlighted anomalies in computation of dividend paid out from 2013 -2018. The Claimant/Respondent was overpaid his share of dividends by Kshs. 993,498/= which we pray that this Honourable Tribunal do order that the same deducted from his total shares to avert loss of members money.d.That this Honourable Tribunal be pleased to grant stay of execution of the ex parte judgment entered on 18th October, 2021 pending convening of the Respondent’s Annual General Meeting in March/April of 2024 which is the supreme organ mandated to pass resolutions in respect to members welfare and payment of refunds to former members.e.That this Honourable court be pleased to grant stay of execution of ex judgment entered on 18th October, 2021, and all Consequential Orders and Decree and Certificate of Costs pending convening of the Respondent’s Annual General Meeting in March/April of 2024 which is the supreme organ mandated to pass resolutions in respect to members welfare.f.That the costs of this application be provided for.

3. The Application is premised on the grounds on its face which are inter alia that: The Forensic audit report revealed anomalies in the computation of dividends and the Claimant had been overpaid by Kshs. 993,498/-. That the Applicants are planning to hold an Annual General Meeting in March/April 2024 and during this General Meeting they would pass resolutions in respect to members welfare and refunds. That the Claimant erroneously took out a notice to show cause against the current Sacco because they derive their mandate from the Supreme organ which is the Annual General Meeting.

4. The brief background of this matter is that the claimant filed a Statement of Claim dated 12th August 2021, in which he was seeking a refund of share contributions to the tune of Kshs. 3,369,494/- , unpaid dividends and cost of the suit. An interlocutory judgement was entered on 18th October 2021 in favour of the Claimant against the Respondent. On 24th August 2023, a Notice to Show Cause why execution should not be granted was issued to the Respondent. The Respondent responded to the Notice to Show Cause via a Replying Affidavit dated 8th September 2023 and made an application to set aside the Notice to Show Cause on the same day.

5. Both parties filed their submissions in respect of the Application.

6. In their submissions, the Applicants sought to answer the question of whether the Application dated 8th September should be allowed. They relied on various provisions of the law in the Co-operative Societies Act. The Applicants insisted that the Supreme Authority of Cooperatives is vested in the General Meeting, and therefore, and prayed this court to set aside the notice to show cause pending the Respondent’s General Meeting in March/April.

7. The Respondents, in their submissions, sought to answer the questions on whether the Applicant’s advocate is on record, whether the court is functus officio, and whether the orders sought are tenable. It is their position that the Management Committee is capable of being arrested for the civil debts of the society.

Analysis 8. This Tribunal has noted the application and the submissions with regards to this Application. It is not in dispute that judgment was entered in favour of the Claimant as against the Respondent. It is also on record that the Respondent’s Application to set aside the judgment was dismissed by this Tribunal. The question that this Tribunal ought to answer is whether the Applicant is entitled to the orders sought. The Applicant’s prayer to this Tribunal is to grant a stay of execution to the ex parte judgement and set aside the Notice to Show Cause and any subsequent orders. In the case of James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, that:-“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant ... “

9. The courts in granting stay of execution have considered the issue of substantial loss to the Applicant should the order not be granted. In this case, the applicant has not demonstrated how they stand to suffer substantial loss if the order is not granted. This court also notes that the Interlocutory judgment was entered on 18th October 2021 and the Application was filed in September of 2023. The Applicant seeks stay pending an Annual General Meeting in March/April. This Tribunal feels that the Respondents have had a long time in which to hold its Annual General Meeting since 2021 and does not hold this as a plausible reason of granting stay.

Notice To Show Cause 10. This Tribunal has noted the Replying Affidavit of the Respondent as well as all the submissions of the parties with regards to the Notice to Show Cause dated 24th August 2023.

11. This Court has noted the Applications, Affidavits and all the submissions on record. The question before this Tribunal is whether the Respondents have shown cause why execution should not issue against them. The Respondents have opposed the notice to show cause on the basis that the computation was erroneous and that there is an impending Annual General Meeting where this will be discussed.In the case of Tarpo Industries Ltd vs Picasso Products Limited the Court held that:-“The Judgment debtor’s bond fides (good faith) is the most important consideration when the Court considers whether some indulgence can be fairly given to the judgment debtor without unreasonably prejudicing the decree-holder.”Further in the case of Lavington Security Limited vs Nairobi City Water & Sewerage Co. Ltd (2014) eKLR, the Court defined what amounts to “sufficient cause” to include: the debtor is unable to pay lump sum, the debtor can pay by reasonable monthly installments and the application is made in utmost good faith.After considering both sides on this matter, we fail to see how the impending Annual General Meeting will help the Respondent honor the judgment entered on 18th October 2021. This is a matter where a Judgement has been entered and what is for the Judgement Debtor to pay his debts. The Respondent has not shown how the Annual General Meeting will help the SACCO pay its debts. The resolutions of the Annual General Meeting will not affect this matter as it has concluded already. On the erroneous calculations, we feel that the Respondents would have filed for a review of the judgment pending the discovery of new evidence, rather than opposing the Notice to Show Cause and filing a new Application. This court does not see how staying the execution and/or setting aside the Notice to Show Cause can cure the alleged error in computation.

12. In the upshot of the foregoing, we make the following orders;a.Judgment Debtors application dated September 8, 2023 is hereby dismissed with costs.b.Judgement Creditor to proceed with execution. Warrant to issue.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF MARCH, 2024. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 7. 3.2024HON. BEATRICE SAWE MEMBER SIGNED 7. 3. 2024HON. FRIDAH LOTUIYA MEMBER SIGNED 7. 3.2024HON. PHILIP GICHUKI MEMBER SIGNED 7. 3.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 7. 3.2024HON. PAUL AOL MEMBER SIGNED 7. 3.2024Tribunal Clerk JemimahNg’ang’a advocate for ClaimantMuhoro advocate for RespondentHON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 7. 3.2024