Wahome & 2 others v FEP Saving & Credit Society Limited [2023] KECPT 918 (KLR)

Wahome & 2 others v FEP Saving & Credit Society Limited (Tribunal Case 29 of 2020) [2023] KECPT 918 (KLR) (28 September 2023) (Judgment)

Neutral citation: [2023] KECPT 918 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 29 of 2020

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

September 28, 2023

Between

Matu Wahome

1st Claimant

Raphael Macharia Irungu

2nd Claimant

Christopher Isaac Nderitu

3rd Claimant

and

FEP Saving & Credit Society Limited

Respondent

Judgment

1. The 1st Claimant was a member in the Respondent’s Sacco until August 24, 2018 when he expressed his interest to withdraw his membership and sought for refund of his shares.In a Statement of Claim dated January 30, 2020 filed on the instant date, the Claimant prayed for;a.Judgment against the Respondent in the sum of Kshs. 1,018,200/= calculated as follows:i.Savings Deposit Kshs. 104,000/=ii.Fish bond Kshs. 914,200/=Less outstanding loan Kshs. 158,600/=Balance due for refund Kshs. 1,018,200/=b.Cost for the Suit.The Claim was supported by Verifying Affidavit, Claimants’ List of Documents, Claimants’ List of Witnesses and Authority to Sue on behalf of the 2nd and 3rd Claimants’ all dated January 30, 2020. That an Affidavit of Service dated February 19, 2020 was filed on the same date as prove that the Summons to enter Appearance dated January 31, 2020 and the Supporting Documents were given to the Respondent.

2. Upon failure to enter appearance and or file a Statement of Defence, the Claimants’ through an application dated February 19, 2020 filed on the same date sought for judgment against the Respondent. This application was heard by the Tribunal on March 4, 2020 and an interlocutory judgment was entered against the Respondent in the sum of Kshs. 1,018,200/= plus costs and interest.Resulting from the judgment above, a decree dated 16th June, 2020 was extracted with the following details;Principal Amount Kshs. 1,018,200/=12% Interest from 20/9/2019 Kshs. 61,092/=Total Kshs. 1,079,292/=Costs Total Kshs. 25,814/=Bricked by the judgment and the decree, the Respondent filed a Notice of Motion dated June 19, 2020 on the instant date. The Respondent anchored the Notice of Motion under Section 1A and 3A of the Civil Procedure Act and Order 10 Rule 11 of theCivil Procedure Rules2010 and sought for the following orders:i.Spent.ii.That pending the hearing and determination of the Application inter-parties and pending the hearing of this suit, there be a temporary stay of the judgment and decree issued on 16th June, 2020 and all Consequential Orders thereof.iii.That the Honorable Tribunal be pleased to set aside the judgment and decree issued on June 16, 2020 against the Respondent/Applicant and the Respondent be allowed to defend the suit.iv.That the Statement of Defence and Counter-claim dated the February 18, 2020 filed on June 19, 2020 be deemed as filed and the Claimant be granted leave to respond to the same.In support of the Notice of Motion, the Respondent through the firm of M/S Chimei & Company Advocates filed a Supporting Affidavit sworn by Haggai Chimei dated June 19, 2020 and a Supplementary Affidavit dated June 8, 2020, a Certificate of Urgency dated June 19, 2020 and attached photocopies of Memorandum of Appearance dated February 14, 2020, Notice of entry of judgment dated June 18, 2020 and decree dated June 16, 2020. In addition, a Statement of Defence and Counter-Claim dated February 18, 2020 but filed on June 23, 2020 was attached to the Bundle of Documents of the Respondent’s. The Respondent’s sought for the orders under Paragraph 7 of this judgment.The Respondent Application vide the Notice of Motion filed under Certificate of Urgency was considered by the Tribunal on 23rd June, 2020 and the following orders were given:i.That the Application to be canvassed by way of written submissions.ii.That the Respondents to serve the Application upon the Claimants’ within 7 days herein.iii.That the Claimants’ to file a Response.iv.That in the meantime an order is hereby issued staying the execution of the judgment and decree issued on 16th June, 2020. v.That order 7 to subsist pending the hearing and determination of the instant Application.

3. Upon consideration of the party’s written submissions Respondents filed written submissions dated August 19, 2020 filed on 17. 9.2020 Claimant/Respondent filed written submissions dated on July 14, 2020 filed on July 14, 2020 the Tribunal set the following issues for determination:a.Whether the Respondent has laid a proper basis to warrant the setting aside of the default judgment entered on March 4, 2020. b.Who should meet the costs of the Application.The Tribunal went further to sub- divide the above main issues into sub-issues as follows;a.Reasons for failure by the Respondent to file a Memorandum of Appearance or Defence.b.The length of time that had elapsed from the time the default judgment was entered upto the date of the Application to set it aside.c.Whether the intended Defence raise triable issues.d.Prejudice likely to be suffered by each party.e.Whether it is in the interest of justice to set aside the default judgment.The Tribunal went ahead to analyze each of the above sub-issues and in summary found that the draft Defence raise triable issue which can only be determined on merits upon hearing.Finally, on the prayers of the Respondent’s Application dated June 19, 2020, the Tribunal made the following orders;i.That the Statement of Defence and Counter-Claim filed on February 23, 2020 was deemed as duly filed and served.ii.That the Claimant was granted 14days to file and serve a Reply to Defence and Defence to Counter-claim.iii.Parties to comply with Order 11 within 30days herein.iv.Mention for pre-trial directions on February 4, 2021. v.Costs in the cause.On this note the Tribunal arrived at the following determination:a.On reasons why there was failure by the Respondent’s to file a Memorandum of Appearance or Defence the Tribunal agreed on the benefit of doubt that the Chief Executive Officer was sick and that he was not available to approve the pleading.b.Arising from (a) above, the Tribunal found that the length of time that it took the Respondent to file the Application to set aside the default judgment was reasonable.c.Regarding whether the draft Defence would raise triable issues, the Tribunal established the Respondent raised a Counter-Claim against the Claimant for an outstanding loan amounting to Kshs. 158,600/= which should be determined at trial (voir dire).

4. On July 13, 2022, the date of the hearing the Claimants’ did not attend the hearing as earlier set. This made the Tribunal to order the Claimants’ to file an Application to show cause.As fate would tricker a storm on December 6, 2022, M/S Kemunto Advocate holding brief for Chimei and Company Advocates told the Tribunal that she had an Application dated October 27, 2022 to cease acting for the 1st Respondent and needed 7days to file and serve the Claimants’.On the mention date of March 23, 2023, the Tribunal allowed the Application of Chimei and Company Advocates dates 27th October, 2022 and ordered that they be released from acting for the 1st Claimant.The Tribunal further set the hearing of the main suit to commence on July 18, 2022. On the hearing day, the Claimants’ gave their oral evidence in the Tribunal beginning from;a.Christopher Isaac Nderitu – Cw1He adopted his Witness Statement dated August 3, 2021 and List of Documents dated January 30, 2020. Documents from Number 1-13 marked as exhibit 1 and further List of Documents dated 3rd August, 2021 marked as exhibit 2. b.Matu Wahome – Cw2He stated that he is the Chairman of Mutirithia Wa Andu Self Help Group.He adopted his Written Statement dated August 3, 2021, as his Evidence -in - Chief.He stated that the Self Help Group invested Kshs. 370,000/= in Fep Sacco with a promise that they were to be paid a fixed amount each year. The Respondents’ advanced the group with a loan of Kshs. 285,000/=. He concluded by saying that the Respondent’s did not keep their promise.c.Raphael Macharia Irungu – Cw3He stated that he is the Secretary of the Self-help group.He adopted his Written Statements dated August 3, 2021 and List of Documents on the same day as his Evidence -in- Chief.He confirmed that the Respondent had advanced the Self-help group with a loan of Kshs. 285,000/= which they repaid Kshs. 100,000/=.Thereafter M/S Bizimana Advocates that he wished to close the Claimants’ Case.

5. The Tribunal ordered that in the absence of the Respondent, the Respondent’s case be marked as closed and the Counter-Claim dated March 13, 2020 be dismissed for want of prosecution under 17 of CPR 2010 and the costs be in favour of the Claimants’.Having considered the back and forth applications made by the parties, the Tribunal’s rulings and the written/oral evidence filed and or adduced before this Tribunal, we are dismayed by the lack of the Respondent’s to attend the hearing to defend the Claim made by the Claimants’ and to prosecute the Counter-Claim.However, we are alive to the provisions of Section 1A and Section 1B of the Civil Procedure Act where we are duty bond to do substantive justice to the parties in a suit. Herein we are guided by the decision in The Court of Appeal in the Case of:Trust bank vs Amalo Co. Ltd(2009) KLR 63“The administration of justice should normally require that the substance of all disputes should be investigated and decided on their merit and that errors should not necessarily deter a litigate from the pursuits of his right. The spirit of the law is that as far as possible in the exercise of judicial discretion, the court ought to hear and consider the case of both parties in any dispute in the absence of any good reason for it not to do so”

6. Going by the chronological order of events, the parties looked like they were ready to canvass over this matter upto conclusion despite the intermittent delays or failure by the Respondents’ once in a while which practice manifested itself when a date was set for hearing and failed to show up to defend the suit.Going by the principle that litigation must come to an end, the Tribunal decided to make this judgment based on the facts on record and the oral evidence. However, this may not apply to the Respondents’ records because their documents were not provided as exhibits. The mere fact that the Respondent filed a Defence does not warrant the documents to become part of the judicial record.On this, the Tribunal is guided by the decision in the case ofKenneth Nyaga Mwige and Austin Kiguta and 2 Others(2015) eKLR where the court stated that:“……..When the document are tendered or produced in evidence as an exhibit by either party and the court admits the documents in evidence, it becomes part of the judicial record of a case and constitute evidence.”We therefore look at Paragraph 7 of the Claimants’ Statement of Claim as a basis of this judgment because the Tribunal had dismissed the Respondent’s Counter-Claim Application dated March 13, 2020 and cannot be referred to.The Tribunal ordered as follows;“In the absence and upon hearing of the application by the Claimants’ counsel, the Respondent’s case is ordered as closed and the counter-claim is dismissed for want of prosecution/ non-attendance”.

7. Failure by the Respondent to attend the hearing denied the Tribunal the opportunity to hear the parties to interrogate the sums claimed together with the outstanding loan of Kshs. 158,600/= as indicated by the Claimants’. However, the Tribunal noted that the 1st and the 2nd Claimants’ in their oral testimony confirmed that they took some loan from the Respondent’s.Given that said loan could be the loan being referred to ,we now embark to calculate the Claimants’ sum which is not controverted.Savings Deposit Kshs. 104,000/=Fish pond Kshs. 914,200/=Total Kshs. 1,018,200/=Less outstanding loan Kshs. 158,600/=Balance due Kshs. 859,600/=

Upshot 8. Accordingly, the Claimants’ claim dated January 30, 2020 is allowed and order as follows;a.We enter judgment in favour of Claimants against the Respondents to the tune of Kshs. 859,600/= plus interest to be calculated from 1st February, 2020 until payment made in full.b.Plus, costs and interest.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 28TH DAY OF SEPTEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 28. 9.2023HON. BEATRICE SAWE MEMBER SIGNED 28. 9.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 28. 9.2023HON. PHILIP GICHUKI MEMBER SIGNED 28. 9.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 28. 9.2023HON. PAUL AOL MEMBER SIGNED 28. 9.2023TRIBUNAL CLERK JEMIMAHJudgment delivered in the absence of the parties.HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023