Peter Njau Kangethe v Hacco Saco Limited, Treasurer Haco Sacco & Secretary Haco Sacco [2020] KECPT 144 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 213 OF 2019

PETER NJAU KANGETHE…………............………..…..………………….…CLAIMANT

VERSUS

HACCO SACO LIMITED……………………..………………………..1ST RESPONDENT

TREASURER HACO SACCO……..……………………….…………….2ND DEFENDANT

SECRETARY HACO SACCO……………………………………………3RD DEFENDANT

RULING

This is our Ruling on the outstanding aspects of the case. On 31st July, 2019, parties recorded a consent as regards prayer (a) of the statement of claim. What remains for determination are payers (b), (c) and (d). Vide these payers, the Claimant is seeking the following Orders:

a. Interest at 12% on Kshs. 829,045. 00;

b. Apology for inconvenience and embarrassment caused to the claimant; and

c. Costs.

On 31/07/2019, we directed these prayers to be disposed of by way of written submissions. The Claimant filed his submissions on 29th August, 2019 while the Respondents did so on 14th November, 2019. We render our determination as follows:

Costs and interest

On this, the Claimant submits that “costs follow the event”. He cited the provisions of section 27 of the Civil Procedure Act.  He avers that he has proved on a balance of probability that the Respondents deducted him Kshs. 829, 045. 00 wrongfully and unlawfully. That the said deduction only happened because the 2nd Respondent handles the 1st Respondent’s payroll and that by doing so, he acted beyond his powers. That no justification has been given as to why his monies were withheld. That he duly served them with a letter demanding release of his money but the Respondent’s trivialized it thus precipitating this suit. That the Respondent’s claim that they withheld the money because they were undertaking are-evaluation exercise is unfounded as doing so would be unlawful as the said exercise can only be sanctioned by an Annual General Meeting and not an education day. That the Respondent would have avoided costs if they had acted on the demand letter. That the said monies were never part of the SACCO contribution and that the Respondent’s did not have any business withholding the same.

He has supported his claim with the following authorities:

a. Ezekiel Nyangoya Okemwa-vs- Kenya Marine & Fisheries Research Institute [2016] eKLR;

b. Jane Wanjiku Wambu-vs-Anthony Kigamba Hato & 3 others [2018] eKLR;

c. Joseph Oduor Anode-vs-Kenya Red Cross Society, Nairobi HCCC No. 66 of 2009;

d. Abdi Mohamed Farah-vs-Nairobi Star Publication Ltd & Another [2015 eKLR;

e. Party of Independednt Candidate of Kenya & Another-vs- Mutula Kilonzo & others [2013] eKLR;

f. Orix Oil (Kenya) Lmimited-vs-Paul Kabeu & 2 others [2014] eKLR; and

g. Morgan Air Cargo Limited-vs-Evrest Enterprises Limited [2014] eKLR.

The Respondents have opposed the prayer for interest and costs as follows:

On interest, the Respondent’s submit that the same should not accrue as the said sums were not arbitrarily withheld. That the Claimant was aware about the circumstances surrounding the withholding of the monies as he attended a meeting held on 3/11/2018 which passed a resolution that terminal dues of members who exit the 1st Defendant but had guaranteed loans which been defaulted would be withheld. That the decision was arrived at as so as to shield the 1st Defendant from negative exposure until such time when evaluation would have been done and no risk observed.

That the Claimant was in the meeting where a vote was taken and a decision passed. That the decision allowed for withholding of terminal dues of all persons who might negatively expose the SACCO for a period of time. That the claimant did not oppose the resolution. That in light of the foregoing, the withholding of his terminal dues was not guided by personal vendetta but a reasoned decision voted for by all members. That the said monies were withheld in January, 2019. That the process of loan exposure evaluation is no mean task. That it included re-evaluation of properties issued as security to ensure that they were adequate. That the suit was instituted on 15/4/2019. That the Claimant had received an emergency loan of Kshs. 250,000. 00 in December, 2018 and exited the SACCO in January, 2019. That once the 1st Respondent was certain that the negative exposure no longer existed, it released the money.

As for costs, the Respondents submit that each party should bear own costs. They contend that the suit was settled amicably and that the issue of costs should not arise.

Apology

On this, the Claimant contend that he has been subjected to embarrassment, ridicule, anguish and put to bad light by the Respondents acts of withholding his terminal dues. He avers that this portrays him to be a person who makes financial commitments that he cannot sustain. That the 2nd and 3rd Respondents showed outright malice when they tried to stage a coup by unlawfully trying to remove him as Chairman. That even with the minutes available in the handwriting of the 3rd Respondent and signed by herself and the vice chairman, the 2nd and 3frd Respondents lied under Oath in their Affidavits sworn on 22nd May, 2019 that the 1st Respondent did not suspend him

In Response, the Respondents aver that the prayer for apology is untenable as they only implemented a policy decision passed in under the leadership of the Claimant.

Issues for determination

We frame the following issues for determination

a. Whether the Claimant is entitled to costs and interests; and

b. Whether the Claimant is entitled to an apology

Costs and interest

As submitted by the Claimant, costs always follow the vent. The question we pose here is, what constitutes an event? We find the answer in the case of Peter Muriuki Ngur-vs-Equity Bank (K) Ltd [2018] eKLR. In that case, the court held in this regard thus:

“It is quite clear therefore that the key word in this section is “event”. As stated in the submissions by the Respondent, this word has been addressed in the Judicial Hints on Civil Procedure by Justice (Rtd) Kuloba as follows:

“The word “the event” means the result of all the proceedings to the litigation. The event is the result of the entire litigation. It is clear, however, that the word “event” is to be regarded as a collective noun and is to be read distinctively so that in fact it may mean the “events” of separate issues in an action. Thus the expression, “the costs shall follow the event” means that the party who on the whole succeeds in the action gets the general costs of the action, but that, where the action involve separate issues, whether arising under different causes of action, or under one cause of action, the costs of any particular issue to go to the party who succeeds upon it..”

It follows therefore that for a party to claim payment of costs, the claim must go through the full process of trial.

Apart from costs following the event, we underscore the fact that an award of costs is the sole discretion of the court. This is what the court in the Peter Ngure case above had to say:

“The other issue that arises and is settled in law, is that the court has unfettered discretion to award costs…In the exercise of this discretion though, the court must always have regard to the fact that costs awards are all about indemnification, the purpose of costs should always to indemnify fully or partially the successful party for the expenses incurred in hiring a counsel to defend or enforce their legal rights…”

The question that arises is whether the instant suit meets the legal threshold set out above. Our answer is in the negative. The suit did not go through the full circle of trial. It collapsed midway. Parties opted to negotiate and record a consent on 31/07/2019. As such, the Tribunal did not get a chance to determine the issues on merits.

On this basis alone, we find that the Claimant is not entitled to the costs of the suit. This finding applies mutatis mutandis with the issue of interest.

Apology

On this, we reiterate out finding above and note that the suit was compromised by way of settlement. Much as the Claimant has raised complains of malice and embarrassment allegedly meted on him by the Respondents, the same remain a mere allegation as the facts giving rise to the said allegation were not tested by way of evidence. As such, the prayer fails on that ground.

Conclusion

The upshot of the foregoing is that we find no merit on the Claimants claim for award of interest, costs and apology and hereby dismiss them with no Orders as to costs.

Read and delivered in an open court this 23rd day of January 2020

In the presence of ;-

Claimant: Absent

Respondent: Miss Njoroge for the 1st Respondent and Mr.Kirika  for the 2nd and 3rd Respondents

Court Assistant: C.Maina

Hon. B. Kimemia     -        Chairman                           Signed

Hon. F. Terer           -          Deputy Chairman             Signed

R. Mwambura        -           Member                              Signed