Stima Sacco Society Ltd v Migori Teachers Savings & Credit Society Ltd [2021] KECPT 587 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.314 OF 2018

STIMA SACCO SOCIETY LTD.........................CLAIMANT

VERSUS

MIGORI TEACHERS SAVINGS

& CREDIT SOCIETY LTD.............................RESPONDENT

RULING

1. Application dated 17/5/19filed on 18/5/2019 seeking the following prayers:

(i) The Statement of defense is evasive, Inconsistent and does not raise bonafide triable issues.

(ii) The Respondent has admitted that they are owing the Claimant the sum claimed in the Statement of Claim.

(iii) The Statement of defence is scandalous, frivolous and vexatious.

(iv) The Statement of defence many prejudice, embarrass or delay the fair trial of the action.

(v) The Statement of defence is otherwise an abuse of the process of court.

Based on the grounds of the Application supported by Affidavit of Dr.James K.Mutura sworn on 17/5/19.

2. The Respondents opposed the Application Vide a Replying Affidavit sword on 9/10/19 by one John Osewe filed on 9/10/19.

The matter was ordered to be canvassed by way of Written Submissions on 6/2/20 and the Claimant/Applicant filed their submissions dated 20/5/20 on 28/10/20 and Respondents filed their submissions dated 15/2/21 on 2/2/21.

3. The Applicant’s in their submissions avers that the Respondent had a loan balance of Kshs.21,191,752/= for a loan facility advanced to the Respondent and if interest was included the amount owed would stand at Kshs.25,360,350. 10 as at 16/4/2018 and continued to accrue interest at the rate of 12% p.a until payment is full.

They state the defence was evasive, inconsistent and did not raise any triable issue.

2.  The Respondents in their submissions opposed the Application denying owing the Claimants a sum of Kshs. 21,191,752. 00stating that they had fully repaid the entire sum borrowed with no balance owing. The Respondent quoted case of D.T DOBIE & CO (K) LTD VS MUCHINA (1982).The learned Judge Madan had this to say regarding striking out pleading or part of pleading.

“The power to strike out should be exercised after the Court has considered all facts, but must not embark on the merit of the case itself as this is solely reserved for the trial judge. On an application to strike out a pleading, no opinion should be expressed as this would prejudice fair trial and would restrict the freedom of the trial judge in disposing the case.”

In the case of MERCY NDUTA MWANGI t/a MWANGI KENG’ARA & CO ADVOCATES-VS-INVESCO ASSUARANCE CO.LTD (2019) Eklr ODUNGA J.

The Learned Judge relied the case of The Co-operative Merchant Bank Ltd-Vs-George Fredrick Wekesa Civil Appeal No.54 of 1999. The Court of Appeal stated as follows;

“……………. striking out a pleading is a draconian act, which may only be restored to in plain case… … whether or not a case is plain is a matter of fact … … … … since oral evidence would be necessary to disapprove what either of the parties disclose no semblance of a cause of action or defence and are incurable by amendment … …”

5.  ISSUES FOR DETERMINATION

i. Whether the Defence raises triable issues.

ii. Who would meet the costs of the Application

ISSUE ONE

Whether the Defence Raises Triable Issues

At this stage, all the Tribunal would need to look out for is whether the defence raises triable issues and if it does, the same ought not to be struck out.

The Applicant quoted the case of:

IN INDUSTRIAL & COMMERCIAL DEVELOPMENT CORPORATION –VS-DABER ENTERPRISES LTD,(2000) 1 EA; the court established that the main reason for application of a summary judgment is to enable the Plaintiff/Applicant acquire a quick judgment where there is plainly no defence to the claims or in other words where there exists no bona fide triable issues. The question that arises here is what amounts to triable issues?

6. The Principles that guide the court in determining whether to strike out a pleading were set out in the case of D T DOBIE & CO. (KENYA

) LTD –VS-JOSEPH MBARIA MUCHINA & ANOTHER Civil Appeal 37 of 1978[1980] eKLRby Madan Judge stated:

“The court ought to act very cautiously and carefully and consider all facts of the case without embarking upon a trial thereof, before dismissing a case for not disclosing reasonable cause of action or being otherwise an abuse of court process. At this stage the court ought not to deal with any merits of the case for that it is a function solely reserved for the judge at the trial as the court itself is not surely fully informed so as to deal with the merits “without discovery, without oral evidence tested by cross examination in the ordinary way.” (Seller, L.J(Supra)). As far as possible, indeed not at all of the action or make it uncomfortable or restrict the freedom of trial judge in disposing off the case in the way he thinks right.”

If an action is explainable as a likely happening which is not plainly and obviously impossible the court ought not to overact by considering itself in a bind summarily to dismiss the action. A court of justice should aim at sustaining a suit rather than terminating it by summary dismissal. Normally a law suit is for pursuing it.

No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action, and is so weak as to be beyond redemption and incurable by amendment. If a suit shows a mere semblance of a cause of action, provided it can be injected with real life by amendment, it ought to be allowed to go forward for a court of justice ought not to act in darkness without the full facts of a case before it.

In the case of HCC No.79 OF 2013 [2014] SAUDI ARABIAN AIRLINE CORPORATION –VS- SEAN EXPRESS SERVICES LTD the court held :

“…………………….I need not re-invent the wheel on the subject of striking out a defence. A great number of judicial decisions have now settled the legal principles which should guide the Court in determining whether to strike out a pleading. Except, I can state comfortably that these principles now draw, not only from judicial precedent, but from the principles of justice enshrined in the Constitution especially in Article 47, 50 and 159.  The first guiding principle is that, every Court of law should pay homage to its core duty of serving substantive justice in the judicial proceeding before it, which explains the reasoning by Madan JA in the famousDT DOBIE casethat the Court should aim at sustaining rather than terminating suit.”

8. In the substantive suit, the Claimant/Applicant claims the Respondent has not repaid with a period of 48 months. The Respondent have neglected, refused and/ or failed to hold on to the agreement.

The Respondent Claim that the loan facility has specific guarantees which Applicant could not reset to and not to ask the Respondent directly. The Applicant has not given full accounts including sums recovered and that the Respondent had allowed the Claimant to utilize the deposits in the account to effect the loan balance but Claimant refused.

9. A perusal of the defence, one can state it raises triable issues contrary to what is claimed by the Applicant and the Respondent has made no admissions as alleged. The defence is not a sham as the Applicant would like us to believe.

The issues raised in the defence are substantial and should be determined on merit.

10. ISSUE TWO

Costs

Costs shall be in the cause.

11. UPSHOT.

a) The upshot of the foregoing is that the Application dated 21/5/21  is dismissed.

b) Costs  in the cause.

c) Both  parties  to file  and serve  witness  statement  and documents  within  30 days  herein.

d) Mention to confirm compliance  and  fix  a hearing date  on  27. 7.2021.  notice  to issue  to both parties.

Ruling signed, dated and delivered virtually this 27thday of May, 2021.

Hon. B. Kimemia   Chairperson   Signed  27. 5.2021

Hon. J. Mwatsama  Deputy Chairperson Signed  27. 5.2021

Mr. P. Gichuki    Member   Signed  27. 5.2021

Tribunal Clerk   Leweri

Getange  Advocate  for Respondent.

Alekeen  for Claimant.

Hon. B. Kimemia   Chairperson   Signed  27. 5.2021