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Mathenge v Marmanet Coop.Society Limited (Tribunal Case 524/E308 of 2021) [2023] KECPT 405 (KLR) (15 June 2023) (Ruling)
Neutral citation:
[2023] KECPT 405 (KLR)
Republic of Kenya
Tribunal Case 524/E308 of 2021
BM Kimemia, Chair, J. Mwatsama, Vice Chair, Beatrice Sawe, Fridah Lotuiya, P. Gichuki, Michael Chesikaw & Paul Otieno Aol, Members
June 15, 2023
Between
Simeon Miano Mathenge
Claimant
and
Marmanet Coop.Society Limited
Respondent
Ruling
1.The Application for Preliminary Objection dated February 9, 2022 was filed by the Respondent to challenge a Notice of Motion Application dated November 2, 2021 by the Claimant.The Preliminary Objection for striking out the Claimants prayers were grounded on the following:i.That the suit is time barred under the limitation of actions Act Cap 22.ii.That the Tribunal lacks jurisdiction to hear and determine the matter.iii.That the claim does not fall within section 76 of the Cooperative Societies Act.
2.As we consider the Preliminary Objection, it is prudent to understand the background of this dispute.First, the Claimant is a member of the Respondent and a director of Marmanet Service Station which was owned by the Respondent.
3.That a civil suit Nyahururu PM.CC.NO. 63 of 2000 was filed by Marmanet Service Station against Marmanet Farmers’ Cooperative Society Limited of which the Defendants were ordered to pay a decretal sum. The court order was not complied with and the Plaintiff sought to attach the moveable properties of the Defendant.
4.As is expected, the board of directors of the respondents requested the creditors to advice their auctioneer to put on hold the sale as they excise, sub-divide and sale part of their plot number 3 to liquidate the debt.
5.Nine (9) plots were later sub-divided from plot number 3 and the respondent Board of Directors agreed to sell plot number 9 measuring 50ft by 100ft to the claimant.
6.That on July 19, 2000, the Executive Directors of the Respondent signed a Sale Agreement with the Claimant for the plot marked number 9 for a consideration of Kshs 80,000/= thereafter the Claimant paid the total amount on July 25, 2000 and he was issued with a receipt.
7.On August 23, 2001, on Inquiry from the Claimant, the Respondent responded in writing that the transfer of the plot was ongoing and gave assurance that it would be ready before the end of that year 2001. That transfer did not take place.
8.Vide a letter dated August 25, 2015, the Claimant through his Advocate wrote to the Chairman of the Respondent Cooperative Society advising them to transfer plot number 9 to the Claimant, the response from the Respondent denied the existence of the sale of plot number 9 which was excised from plot number 3 at the same time the Respondents denied that the society do not have records to support the claim.
9.Resulting from the information which they hold, the Respondents filed the Preliminary Objection of which the tribunal issued orders for directions on February 14, 2022.
10.We have now read and considered the submissions from both the Respondent and the Claimant regarding the Preliminary Objection and analyse as follows:
11.In the case of Mukisa Biscuits Manufacturing Limited versus West-end Distributors (1969)E.A696, the lordship observed what constitute a Preliminary Objection as:
12.Having established what a Preliminary Objection entail, we turn to whether the Preliminary Objection raised by the Respondent is suitable. We start with:i.Whether the Tribunal has jurisdiction to hear and determine the matter at hand.Here we take cognizance of parties reference to the decided case in owners of Motor Vessel Lilian “s” versus Caltex Kenya Limited 1989 for the interpretation of the court regarding the meaning of jurisdiction:
13.As a stamp of approval, the Supreme Court of Kenya in Civil Application number 2 of 2011 between Samuel Macharia versus KCB Limited & 2 others in dictum stated that:
14.Flowing from the above, the Cooperative Tribunal is established under the Cooperative Act Cap 490 and Section 76 of the same Act cloth the Tribunal with jurisdiction to hear and determine disputes that arise within the Cooperative sector:
15.The Claimant is a member of Marmanet Cooperative Society and falls properly within the ambit of Section 76 (1)(a) and (b).
16.To demonstrate that Cooperative Tribunal is vested with jurisdiction to hear and determine Cooperative disputes, reference is made to the case of Muthui wa Kariuki versus Tembo Cooperative Sacco (2014)eKLR in which the high court stated thus:
17.It is our considered view that resulting from the law and the decided cases, this Tribunal has jurisdiction to hear and determine this matter.
18.On whether the claim falls within Section 76 of the Cooperative Societies Act, the Claimant bought a piece of plot which was offered to him by the Board of Directors of the Respondent within the meaning of the ‘business of the society’ as provided under Section 76 (1) of the Cooperative Societies Act Cap 490 on interpretation of the context of business of a society, the court in a case of Gatanga Coffee Growers Cooperative Society Limited versus Gitau (1970) stated that:
19.We consider that selling off a plot to pay off a debt and salvage the movable properties of the society which was attached and on the verge of being auctioned was the business of the society. The fact that an Annual General Meeting was held which resolved under min. 3/2000 to exercise the plots and sell them was a show of approval within the meaning of the By-laws and Rules of Marmanet Cooperative Society Limited.
20.The claim therefore falls within Section 76 (1) of the Cooperative Society Act.
21.On the Preliminary Objection because the claim is time barred under the Limitation of Actions Act. We have considered the statements and the annextures by the Claimant prior to 2015 and the possible reasons as to whether this objection can stand.
22.It is our view that subject to full hearing the Board of Directors who served in the year 2000 sold the plot marked number 9 to the Claimant in good faith. However, why they could not transfer the same in the name of the Claimant despite writing letters to him of hope is another story.
23.Overtime the Board of Directors of the Respondent changed and circumstances also changed. It is until the receipt of the letter dated September 2, 2015 from the Respondent that the Claimant discovered that things are longer the same with the Respondent.
24.Flowing from the above, we take cognizance of the provisions of Section 26(c ) of the Limitations of Actions Act Cap 22 which provide as follows:
25.The upshot of this provision is that time start to run from the time the Claimant discovered that he was short changed or that a mistake occurred which a reasonable diligence could not have discovered.
26.In conclusion having considered the law and the decided cases, we order as follows:a.That the Preliminary Objections dated February 9, 2022 (a)(b) and (c)raised by Respondent is hereby dismissed with costs to the Claimant.b.That the orders issued by this Tribunal on February 14, 2021 on the Claimant’s notice of motion is extended until this matter is heard and determined on merit.c.Pre- trial directions on September 7, 2023. Notice to issue.
RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 15TH DAY OF JUNE 2023.HON. BEATRICE KIMEMIACHAIRPERSON SIGNED 15.6.2023 HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 15.6.2023 HON. BEATRICE SAWE MEMBER SIGNED 15.6.2023 HON. FRIDAH LOTUIYA MEMBER SIGNED 15.6.2023 HON. PHILIP GICHUKIMEMBER SIGNED 15.6.2023 HON. MICHAEL CHESIKAW MEMBER SIGNED 15.6.2023HON. PAUL AOLMEMBER SIGNED 15.6.2023 Tribunal Clerk Jemimah/JonahMs. Kemunto holding brief for Mr. Chimei for the ClaimantMarmanet Cooperative – no appearance.
