SAOLI OLE NKANAE, SAKINA ADAN, MICHAEL KANORE & BENJAMIN MUDIDI KILAVUKA V MWALIMU CO-OPERATIVE SAVINGS & CREDIT SOCIETY LIMITED & BENJAMIN SOGOMO [2004] KEHC 337 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (MILIMANI COMMERCIAL COURTS)

Civil Case 496 of 2005

SAOLI OLE NKANAE ……………………………....……………….….1ST PLAINTIFF

SAKINA ADAN ……………………………..………...…………………2ND PLAINTIFF

MICHAEL KANORE…………………………...……………………….3RD PLAINTIFF

BENJAMIN MUDIDI KILAVUKA ……………....………………….....4TH PLAINTIFF

VERSUS

MWALIMU CO-OPERATIVE SAVINGS & CREDIT

SOCIETY LIMITED …………….……………….……..……………1ST DEFENDANT

BENJAMIN SOGOMO ……………………………………………..2ND DEFENDANT

RULING

The 1st defendant, before the hearing of the plaintiff’s application dated 20th September 2005, raised a preliminary objection on a point of law, in the following terms: -

“That this Honourable court lacks jurisdiction to entertain the instant application and the entire suit.

The application dated 20th September 2005 and the entire suit were filed in flagrant breach/abuse and in contravention of the mandatory and express provisions of section 76 of the co-operative society Act 1997 as amended in 2004 and ought to be dismissed with costs ex debito justiciate.”

Mr Mose, learned counsel for the 1st defendant in support of that objection submitted as follows; that the court lacks jurisdiction to entertain the suit and the application dated 20th September, 2005; that the facts which are borne out in the plaintiff’s application and the replies thereof show that the dispute before court arise out of a claim amongst co-operative members, at the Mwalimu Co-operative Savings and Credit Society Ltd; that the relationship between the parties was that the plaintiffs and 2nd defendant were members of the 1st defendant society; that the plaintiff guaranteed a loan facility advanced to the 2nd defendant by 1st defendant.

Counsel submitted that under section 76 (1) of The Co-operative Societies (Amendment) Act 2004, together with the amendment to subsection (2), show that such disputes shall be referred to the Tribunal, that is the Co-operative Tribunal.  That the provisions of S. 76 are mandatory, and do not leave room for the applicants to result to the High Court, for determination of the issues between members, and former member; and between a society and its members.  Defence therefore sought for the striking out of the suit.

Counsel for the 2nd defendant supported the submissions of the 1st defendant.

The learned counsel, Mr. Eboso, for the plaintiff opposed the preliminary objection.  The plaintiff relied on section 60 of The Constitution, which section he stated established the High Court of Kenya and conferred on it unlimited jurisdiction in both civil and criminal matters.  He said that by that section alone no one could question the High Court’s Jurisdiction.  That by Section 3 of The Constitution, the Constitution is declared to be the supreme law of the land, and any other law which is inconsistent with The Constitution, is null and void.  Counsel submitted that section 76 of The Co-operative Societies (Amendment) Act 2004, was inconsistent with the provisions of section 60 of The Constitution, and the same was, by virtue of such inconsistency, null and void.  That to hold otherwise would be to allow that section to oust the jurisdiction conferred upon the High Court by The Constitution.

The plaintiff relied on the case MILLER – VERSUS – MILLER [1989] 257.  The court held in that case that: -

“The Constitution in section 60 (1) did not create any exception to the High Court’s unlimited original jurisdiction in civil and criminal cases and therefore that jurisdiction could not be ousted unless by a constitutional amendment of that section.”

The plaintiff also relied on the HC Misc Application No. 1279 of 2004 REPUBLIC AND THE JUDICIAL COMMISSION OF INQUIRY INTO THE GOLDENBERG AFFAIR AND OTHERS.  Counsel quoted the following portion: -

“Any statute or rule that purports to take that jurisdiction away or is inconsistent with that jurisdiction is void to the extent of that inconsistent under section 3 of The Constitution of Kenya and it will be abdication of this court’s power to impose on itself any fetters not imposed by the constitution itself.”

The plaintiff concluded by stating that the court should find that it has jurisdiction to hear and determine the matter.

The 1st defendant counsel refuted that there was inconsistency or contradictions between section 60 of The Constitution and section 76 of The Co-operative Societies (Amendment) Act 2004.  That the Societies Act gave guidelines on the operations of the Tribunal and its members of staff.  That section 81 of The Society Act provided that an appeal from the Tribunal lay in the High court and that it is provided in that section that the decision of the High court is final.

It is indeed correct proposition in law, to state that the Constitution in creating the High Court, gave it unlimited original jurisdiction in civil and criminal matters.  Having accepted that proposition I find that section 76 of the Societies Act does not contradict section 60 of The Constitution.  The Societies Act provides means of resolving disputes amongst societies and its members without detracting the original jurisdiction given to the High court.

Having made that finding I am of the view that the Societies Act does not cover the disputes, the subject of this case.

Section 76 of the Societies Act provides:

“76 (1) if any dispute concerning the business of the co-operative society arises: -

(a)amongst members past, members and persons claiming through members, past members and deceased members; or

(b)between members, past members or deceased members, and the society, its committee or any officer of the society; or

(c)         between the society and any other co-operative society;

shall bereferred to the Tribunal.”(Underling mine)

If the section had ended there, indeed I would have found that this matter should rightly be taken before the Societies Tribunal.

But then I found there is a definition of what is “A dispute.”  Section 76 (2) as amended states follows: -

“(2) A dispute for the purpose of this section shall include –

(a)a claim by a co-operative societyfor any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or

(b)a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not.”(Underling mine).

The emphasis I have shown by the underling of these two subsections clearly show that subsection (a) deals with claims by a co-operative against a member, and subsection (b) deals with a claim by members against a co-operative.

The claim the subject of this suit is between members of a co-operative society.  Such a dispute is not captured by section 76 of The Co-operative Societies (Amendment) Act 2004.

That finding by the court means that the preliminary objection by the 1st defendant must fail.

If indeed I had found that the dispute fell within the ambits of section 76, the proper course would have been to transfer this matter to the Tribunal.  I believe to strike a suit such as this, when the court has the inherent powers and discretion to transfer, would be a drastic action.

That as it may be the 1st defendants preliminary objection on a point of law, dated 27th October 2005, fails and the same is dismissed with costs to the plaintiffs.

Dated and delivered this 16th November 2004.

MARY KASANGO

JUDGE