Shoppers Sacco Society Limited v Likhanga & another [2023] KECPT 402 (KLR)

Shoppers Sacco Society Limited v Likhanga & another (Civil Case 616/E331 of 2021) [2023] KECPT 402 (KLR) (27 April 2023) (Ruling)

Neutral citation: [2023] KECPT 402 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil Case 616/E331 of 2021

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

April 27, 2023

Between

Shoppers Sacco Society Limited

Claimant

and

Obadiah Chimbini Likhanga

1st Respondent

Hesbon Lukakha Chimbini

2nd Respondent

Ruling

RULING OF THE TRIBUNAL 1. The matter for determination is a Notice of Motion Application dated October 14, 2021, and filed on January 10, 2021.

2. By its Notice of Motion, the Claimant seeks the following orders:a.Spent.b.That status quo pertaining LR NO Kajiado/Kisaju/3422 be maintained pending the hearing and determination of the main suit.c.That a temporary injunction do issue restraining the Respondents either by themselves, their kin, agents, and/or persons acting under their instructions from in any way trespassing, sub-dividing, offering for sale, or adversely dealing in any way whatsoever with all that piece of land known as LR NO Kajiado/Kisaju/3422 pending the hearing and determination of the main suit.d.That the plaintiff be allowed to exercise its power of sale over LR NO Kajiado/Kisaju/3422 either by private or public auction.e.That costs be in the cause.

3. The motion is supported by an Affidavit sworn by the Claimants Credit Supervisor, David Odhiambo Ogutu, and is based on the following grounds:i.That the Respondent applied for a loan facility of Kshs 3,000,0000/= from the Claimantii.That the agreed term for the loan facility is that the Respondent was to service the loan with regular instalmentsiii.That property LR No Kajiado/Kisaju/3422 would act as the security for the loaniv.The 2nd Respondent submitted the title of the land LR No Kajiado/Kisaju/3422 registered under his name with the Claimantv.The first respondent breached the terms of the loan agreement by failing to service the loan with regular instalmentsvi.That they cannot exercise statutory power of sale because the respondents did not complete the registration of the charge over property LR No Kajiado/Kisaju/3422vii.Among other grounds.

4. In response the Respondents filed written submissions dated 27th October and filed on October 31, 2022. In their submission, the Respondents did not dispute that the 1st Respondent has a loan facility owing to the Applicant. There was also no dispute that the 2nd Respondent deposited land title number LR No Kajiado/Kisaju/3422 registered in his name to the Claimant as a security to the loan facility advanced to the 1st Respondent.

5. The question of consideration is whether the Claimant can be granted a temporary injunction restraining the 1st and 2nd Respondent from dealing in any way with the piece of land known as LR No Kajiado/Kisaju/3422 and whether the Claimants can be allowed to exercise its power of sale over LR No Kajiado/Kisaju/3422 either by public or private auction.

Analysis of the Law 6. The germane principles on interlocutory injunctions were stated by the Court of Appeal in East Africa in the case of Giella v Cassman Brown & Co Ltd (1973) EA as follows:a)The Applicant must first establish a prima facie case with a probability of success.b)The Applicant must then demonstrate that he, she or it stands to suffer irreparable loss that cannot be adequately compensated through damages.c)Where there is doubt on the above, then the balance of convenience should tilt in favour of the Applicant.

7. Similarly, in the case ofNguraman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR the Court of Appeal held that:'In an interlocutory injunction application, the Applicant has to satisfy the triple requirements to; establish his case only at a prima facie level, demonstrate irreparable injury if a temporary injunction is not granted, and ally any doubts as to (b) by showing that the balance of convenience is in his favour.These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the Applicant is expected to surmount sequentially.'

8. The first question that this Tribunal should address itself is whether the Claimant has established a prima facie case with a probability of success. It is not in dispute that the 1st Respondent took a loan from the Claimant, and that he has failed to pay the loan as agreed between the parties. It is also not in dispute that the 2nd Respondent deposited a title number LR No Kajiado/Kisaju/3422 registered in his name to the Claimant as a security to the loan facility advanced to the 1st Respondent. The Claimant is a Sacco Society Limited, and amongst its functions is to advance loans to its members, and which loans are guaranteed either by the members’ savings, guarantors provided by the loan applicants or security deposits provided by the members applying for the loan. The Sacco can then have recourse in the security provided (savings, guarantors or the security provided as the case may be) when the member has defaulted in paying his loan. In this case, the 1st Respondent was lawfully advanced a loan by the Claimant, a loan which he has defaulted to pay in the instalments agreed by the parties. I find therefore that the Claimant has establish a prima facie case with a probability of success.

9. On the second question of suffering irreparable loss that cannot be adequately compensated through damages, the Claimant submits that the value of the subject land falls short of the sum owed by the 1st Respondent. It’s the Claimants submission that the Respondents have neglected/ refused to execute the charge instrument so as to actualize the charge and that should this Tribunal intervene by granting an injunction, the Respondent may act to defeat its interest by disposing the suit property and the Claimant stands to suffer irreparable harm. Further, in the above case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal further held that:'On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the Applicant to demonstrate, prim facie, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the Applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.'

10. From the submission of both the parties, the 1st Respondent does not own the property LR No Kajiado/Kisaju/3422, the same being owned by the 2nd Respondent who submitted the title to the Claimants but did not complete the registration of the charge over property LR No Kajiado/Kisaju/3422. From the upshot of this, the Claimant does not own the property LR No Kajiado/Kisaju/3422.

11. However, we find the balance of convenience tilts in favour of the Applicant.

12. We find the Application dated October 14, 2021 has merit and allow the Application in terms of prayer number 3.

a.That a temporary injunction is hereby issued restraining the Respondents either by themselves, their kin, agents, and/or persons acting under their instructions from in any way trespassing, sub-dividing, offering for sale, or adversely dealing in any way whatsoever with all that piece of land known as LR NO Kajiado/Kisaju/3422 pending the hearing and determination of the main suit.b.Each party to bear its own costs.c.Mention for Pre-trial on July 12, 2023. Notice to issue .d.Parties to file witness statements and documents 30 days from today.

Judgment signed, dated and delivered virtually at Nairobi this 27th day of April, 2023. Hon. Beatrice Kimemia Chairperson Signed 27. 4.2023Hon. J. Mwatsama Deputy Chairperson Signed 27. 4.2023Hon. Beatrice Sawe Member Signed 27. 4.2023Hon. Fridah Lotuiya Member Signed 27. 4.2023Hon. Philip Gichuki Member Signed 27. 4.2023Hon. Michael Chesikaw Member Signed 27. 4.2023Hon. Paul Aol Member Signed 27. 4.2023Tribunal Clerk Jemimah /JonahProtos Asunda present -Chief Executive Officer SaccoObadiah Chimbini- No appearanceHesbon Chimbini- No appearanceHon. J. Mwatsama Deputy Chairperson Signed 27. 4.2023NRB.CTC.NO. 616. E331 OF 2021 RULING 13