Pius Musimba Muasya, Norman Mutua Kimatu & John Nzomo Kioko v Peter Wanjohi (Official Liquidator) & Commissioner of Cooperatives [2021] KECPT 560 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 720 OF 2016

PIUS  MUSIMBA  MUASYA ..................................................1ST CLAIMANT

NORMAN  MUTUA  KIMATU..............................................2ND CLAIMANT

JOHN  NZOMO KIOKO......................................................3RD CLAIMANT

VERSUS

PETER  WANJOHI

(OFFICIAL  LIQUIDATOR)...........................................1ST RESPONDENT

THE COMMISSIONER  OF COOPERATIVES...........2ND RESPONDENT

RULING

What is before us for consideration and determination is the Claimant’s  Application dated  17. 11. 2019. It seeks, in the main, the following  orders;

a. That  the 1st Respondent  be cited  for contempt  of court  and committed  to Civil Jail for a term  of six (6) months  and/or  be ordered  to purge  the contempt  on terms  the Tribunal  will deem  just;

b. That  summons  be issued  against  the 1st Respondent  to appear  before the  Tribunal  and show cause  why he  should  not be  committed  to civil jail;

c. Costs.

The Application  is supported by the  grounds  on its  face and  the Affidavit   of  the 1st Claimant sworn on  17. 9.2019.

The  1st Respondent  has opposed  the Application  by filing Grounds, of  objection  dated 8. 11. 2019 and a Replying  Affidavit sworn  by himself  on  even  date.

Claimant’s  Contention

Vide  the Instant  Application,  the Claimants contend that  on  24. 11. 2016,  this Tribunal  issued  orders  thus:

a. That  pending  the hearing  and  determination  of the suit,  the Respondents be and are hereby restrained  by way of  an injunction  by themselves, their agents or servants  from transferring, selling, leasing or in any manner  whatsoever alienating  any property  belonging  to Drumvale  Farmers’  Co-operative Society Limited;

b. That a disclosure  of all the Assets  sold  since liquidation  an Application  of the funds  generated  be made  to the Claimants  forthwith;

c. That  a disclosure  of assets,  liabilities  and financial  status  of Drumvale  Farmers’ Co-operative  Society as at the date of liquidation  be made  to the Claimants forthwith;

d. That  a disclosure  of the Assets, liabilities  and Financial  status  after liquidation  of Drumvale  Co-operative  Society  Limited  be made  to the Claimants.

That  on 28. 11. 2016,  the 1st  Respondent  filed  an Application  seeking  to set  aside  the  said orders. That  the Tribunal  dismissed  the said  Application  on 17. 3.2017.

That  dissatisfied with the  Ruling  of the Tribunal, the 1st  Respondent  lodged  an  Appeal  at the High  Court.  That vide  the Judgment  delivered  on  19. 9.2018,  the Appeal  was dismissed. That  being dissatisfied  with the Judgment of the High Court, the 1st  Respondent  filed an Appeal  at the Court  of Appeal.

That  as it  stands,  the said  orders  of  24. 11. 2016 subsist  as  they have  not been  set aside,  stayed  or varied.

That vide  a Ruling  delivered  on 22. 8.2019, this  Tribunal confirmed  that indeed, there  was no orders  staying  enforcement  of the said orders.

That inspite of the foregoing,  the  1st Respondent  has blatantly, and/or  witfully  disobeyed  the said  orders. That he has  continued  to sub- divide  and sell  the property  of Drumvale  Farmers’  Co-operative  Society.

That  further,  the 1st  Respondent  is yet to  furnish  the Claimants  with records  disclosing  how  he has dealt with the property.

That  as a result,  the Claimants  have been  deprived  of their right to  information  in line with  Article  35  of  the Constitution  as they remain  in the dark  as to the status  of the Society, it’s  assets, and  liabilities.

That  it is  on the basis  of the foregoing  that they  pray  the orders sought in the Instant  Application  to be allowed.

1st Respondent’s Case

Vide  his grounds  of objection  and a Replying Affidavit both  dated 8. 11. 2019,  the 1st  Respondent  contend  that the instant  Application  is res judicata as the  orders  being sought  in the instant  Application  have been  determined by  this Tribunal  in the Applicant’s  Grounds  of  Opposition  to the Application  dated 9. 4.2019.

That the  orders  being sought  are unenforceable  as the liquidation  process is almost  concluded  and that  the properties  of the Sacco have been  transferred  to third  parties  who are  not participants  in this  Claim.

That in any  event,  the Claimants  lack  locus  in the matter   as  have  since relinquished their interests in the matter  and are no longer  members  of Drumvale  Co-operative  Society (in liquidation).

That the  matters  being  raised  in the Instant Application  are alive  and pending  determination  in a superior  court  in line  with  Section  81  of the Co-operative  Societies  Act.

Disposal  of the Application

Vide the directions given on 11. 12. 19, the Application was canvassed  by  way of written  submissions. The Claimant’s filed  their written  submissions on 16. 1.2020. As at the date of  writing this  Ruling,  the 1st Respondent  has not  filed  his  written  submissions. We will  consider  the submissions on record  when determining  the issues  arising  in the Application.

Issues  for determination

We  have framed  the following  issues  for determination:

a. Whether  the Tribunal  has jurisdiction  to make  orders  regarding contempt of Court Orders.

b. What  orders  are available  in the circumstances.

Contempt  of Court

Prayer  2 of the Application invites  this Tribunal  to make orders  regarding  contempt of  Court  Orders. This  raises  the question  whether  we have jurisdiction  to make  and/or  issue such  orders.

The Jurisdiction  of the Court  to make  orders  regarding  contempt  of court is  contained  in Section 5(1) of the  Judicature  Act (Cap 8) Laws  of Kenya, Section  63 (1) of the Civil Procedure  Act  (Cap 21) Laws of Kenya and Order  40 Rules  3(1-3) of the Civil  Procedure  Rules . This  was the holding  in the case of Kyoga Hauliers  Limited  versus  Long  Distance  Track Drivers & Allied  Workers  Union [2015]. In the  pertinent  part,  the court held  thus:

“ The power  to deal  with Contempt  of Court  is provided for under Section 5 (1) of the Judicature  Act,  Section 63 (1) of the Civil  Procedure  Act and  Order  4 of Rule  31 of the Civil  Procedure  Rules.”

In the  terms  of the Power  to  punish  for  Contempt  of the  Court, the Court  in the case of  Christine  Wangari  Gachege –versus – Elizabeth  Wanjiru  Evans  & 11 others [2014]eKLR held  thus:

“......the only statutory  basis  of Contempt  of Court Law  in so  far as  the High Court  and the Court of Appeal  are concerned in Section  5 of the Judicature  Act. In addition, Section  63 (1) of the  Civil  Procedure  Act  provides  that a  disobedience of an order  of  temporary  Injunction  will attract  punishment  in form of  imprisonment or attachment  and sale of  the Contempt property.”

From  the  foregoing,  it follows that  we do  not have  jurisdiction  to  punish  for  Contempt of  Court  but rather  have jurisdiction  to punish  for disobedience of a temporary  Injunction.

Thus taken as it is, the wording of prayer 2  of the instant  Application,  presupposes  that we have jurisdiction  to punish  for Contempt.  We reiterate that we do not have  the  same.

However, looking at the prayers as framed in light of the grounds   in support thereof, it is  apparent  that the Claimants  have invited  us to punish the 1st Respondent  for allegedly disobeying  a temporary  Injunction  made  on  24. 11. 2016. We find  that we have Jurisdiction  to do so.

Disobedience  of a temporary  Injunction

Section  63 (1) of the Civil  Procedure  Act  provides  thus:

“ In order  to prevent  the ends  of  Justice  from being  defeated,  the Court  may  if it is so  prescribed –

i) Grant a temporary  Injunction  and is case of disobedience,  commit  a person guilty  thereof  to prison  and order  that his  property  be attached  and sold”

From  the foregoing  provision, it is  trite  that a party  against  whom  a court issues  an order  must comply  with the said  order. This was  the holding  in the case  of  Refrigeration and Kitchen Utensils  Limited –versus -  Gulabchand Popatial Shah &  Another,  Civil Appeal  No. 39/1990.  In the  pertinent  part,  the court  held thus:

“ A party  who knows  of an order,  whether  null or  valid, regular  or irregular,  cannot  be permitted  to disobey  it.....

It would  be most  dangerous  to hold  that the suitors,  or  their solicitors,  could  themselves Judge  whether  an Order  was null   or valid, whether  it was  regular  or irregular. That  they should  come  to court  and not  take upon  themselves  to determine  such a question ......As long  as it  exists,  it must  not be  disobeyed.......”

Applying  these legal  principles into the facts  of this Application,  it  is trite  that  injunctive  orders  were issued  against  the 1st Respondent  on  24. 11. 2016 particularly restraining  him  as the liquidator from transferring, selling, leasing or in any  manner,  alienating  any property  belonging toDrumvale Farmers Cooperative  Society Limited. Secondly,  he was ordered  to disclose  assets and liabilities  and financial  status  of the Sacco.

That soon after  the issuance  of the said  orders,  the  1st Respondent  filed  an Application  before  the  Tribunal  to discharge  the same. The  said  Application  was dismissed  on 17. 3.2017.

Being  dissatisfied  with  the Ruling  of the Tribunal, the 1st  Respondent  lodged  an Appeal  at the High Court. The  said Appeal  was heard  and  dismissed  on 19. 9.2018. He then  preferred  an Appeal  at the  Court  of Appeal.  At the  time of writing  this Ruling,  we do not  have  record  of the status  of the said Appeal.

What  is apparent,  however,  is that  there is no  stay  of the orders  made on  24. 11. 2016. The  1st Respondent’s Attempt  to Stay  enforcement of the said Orders before  this  Tribunal  failed when the Tribunal  rendered  itself  vide the Ruling  delivered  on  22. 8.2019.

It is  thus the Claimants  Contention  that the  1st Respondent  has never obeyed  the said  orders.

On his part,  the 1st  Respondent  has opposed  the instant  Application  on grounds  that  there is  an  active Appeal pending  at the Court of  Appeal.  That the matters  raised  in this  Application  are res judicata as they  were determined  by the Tribunal  vide  the Applicant’s  grounds  of Opposition  dated  9. 4.19.

That  the orders  sought  an unenforceable  as the liquidation  process  is almost  concluded  and  that the properties  of the Sacco  have been  transferred  to third  parties who are  not participants  in the Claim.

Determination

What  we  gather  from the material  placed  before  us by the parties  is that  the orders  made  on  24. 11. 2016 have not been  obeyed. That  in the midst  of the said  orders, the 1st  Respondent  has gone ahead  with the  liquidation  process  and that  according  to  him,  the properties  of the Sacco are now  in the hands of third  parties. From  this  statement  alone,  we find  that the  1st  Respondent  has disobeyed  and continues  to disobey  the orders  issued  on 24. 11. 2016.

As regard his contention  that the  Instant  Application  is Res judicata, we have  perused  the record  and note that  no such  orders  have been  issued  and/or  made  in respect  of an Application  of a similar  nature.

Conclusion

The upshot  of  the  foregoing  is that  we find merit  in the  Claimant’s  Application  dated  17. 11. 2019 and  hereby  allow  it in terms  of prayers  3 and  4.

Enforcement of prayer  3 to take  effect  once  the freeze  on  execution  of court  orders  and Decrees made before  15. 3.2020 is lifted.

Ruling read, dated  and delivered via email  in  accordance  with the guidelines  issued  by  the Hon. Chief Justice  on 15. 3.2020, this 21st  day of May,  2020.

Prepared by Hon. B.Kimemia Chairman, Hon. F. Terer Deputy Chairman, P. Gichuki Member.

With consent  of the parties, the  final orders  to be delivered  by email, as accordance  to the prevailing  measures  during  the covid-19.

Hon. B. Kimemia        Chairman                   Signed      21. 5.2020

Hon. F. Terer               Deputy Chairman      Signed      21. 5.2020

P. Gichuki                    Member                      Signed      21. 5.2020