(Being an Appeal from the Ruling of the Honourable Mjeni Mwatsama, Gitonga Kamiti & Maria Mbeneka Members of the Co-operative Tribunal on 23rd February 2023 in Co-operative Tribunal Claim No. 418 of 2020)
1. Tribunals are a key component of the justice system in Kenya and the world over. In Kenya as established under Article 159(1) of the Constitution of Kenya Tribunals share judicial authority with courts. That means they are no lesser than the courts in the dispensation of justice. They thus make decisions with finality, that is, decisions that are binding, subject to appeal or review, just as the courts do.
2. However, there must be a good reason why the constitution specifically created these two separate pathways for justice dispensation in Kenya, the courts and the tribunals. In the exercise of the judicial authority both of them are required to adhere to the principles set out under Article 159(2)(d) of the Constitution that, justice shall be administered without undue regard to procedural technicalities. With specific regard to tribunals many of the statutes creating them eschew the application of technical rules of procedure under the Civil Procedure Act (Cap. 21) Laws of Kenya and the rules made thereunder.
3. For instance, section 78 of the Co-operative Societies Act (Cap, 490) Laws of Kenya on the Proceedings of the Co-operative Tribunal provides that:
(1) The Tribunal shall not be bound by the rules of evidence.
(2) The Tribunal shall, upon an application made to it in writing by any party or a reference made to it by the Commissioner, the Commissioner or any Committee or officer of a co-operative society on any matter relating to this Act, the rules made thereunder or the by-laws of the society, inquire into the matter and make an award thereon, and every award made shall be notified by the Tribunal to the parties concerned.
(3) The Tribunal shall sit at such times and in such places as it may decide.
(4) The proceedings of the Tribunal shall be open to the public save where the Tribunal, for good cause, otherwise directs.
(5) Except as expressly provided in this Act or any rules made there under, the Tribunal shall regulate its own procedure.
4. In my understanding, the provisions of this section, excluding the rules of evidence and the provision the other that the Tribunal shall regulate its own procedure were meant to ensure that the Tribunal is not shackled by the complex rules of evidence under the Evidence Act (Cap. 80) Laws of Kenya, and also the technical rules of procedure under the Civil Procedure Act (Cap. 21) Laws of Kenya and the Civil Procedure Rules(CPR) made thereunder. So that abiding by the provisions of its enacting statute it would proceed to consider and determine matters before it in the simplest and expeditious of ways that Tribunals are established to. I fully associate with the sentiments expressed by Joash Dache, Secretary and Chief Executive Officer of the Law Reform Commission in his paper: Reforming Tribunals in Kenya, The Case for Reform of the Tribunal System available on the Commissions website at https://www.klrc.go.ke/index.php/klrc-blog/522-reforming-tribunals-in-kenya-concept-paper-by-joash-dache?showall=1&limitstart=# that Tribunals:
“... enjoy obvious advantages over the regular courts, which make them quite appealing. ... they are more accessible to a greater part of the population. Their proceedings are far much cheaper and speedier. They tend to apply simpler procedures, are less technical and have the ability to foster informal justice. More importantly, they have capacity to evolve specialisation and expertise in their field of jurisdiction.”
5. Dache cites other authors who have enumerated various advanatges of tribunals over courts as follows:
“Prof S A de Smith ( SA de Smith, Judicial Review of Administrative Action, 3rd edn (London, Stevens, 1973) App 1; Baker, ch 9) has enumerated the advantages of Tribunals in the following terms:-
“A tribunal may be preferred to an ordinary court because its members will have (or soon will acquire) specialised knowledge of the subject-matter, because it will be more informal in its trappings and procedure, because it may be better at finding facts, applying flexible standards and exercising discretionary powers, and because it may be cheaper, more accessible and more expeditious that the High Court. Occasionally dissatisfaction with the over-technical and allegedly unsympathetic approach of the Courts towards social welfare legislation has led to a transfer of their functions to special tribunals…”
The Franks Committee (Marshall, G. (1957). The Franks Report on Administrative Tribunals and Enquiries. Public Administration, 35(4), 347-358. https://doi.org/10.1111/j.1467-9299.1957.tb01316.x) expressed itself in similar terms on the advantages of Tribunals. It noted as follows:-
“Tribunals have certain characteristics which often give them advantages over the courts. These are cheapness, accessibility, freedom from technicality, expedition and expert knowledge of their particular subject. It is no doubt because of these advantages that Parliament once it has decided that certain decisions ought not to be made by normal executive or departmental process, often entrusts them to tribunals rather than ordinary Courts.”
6. These seemingly old materials set out some of the attributes of tribunals that can be considered as foundational for the uptake of their jurisdiction in the dispensation of justice. It is apparent from these writings that tribunals are considered as being better than courts in various respects among them expertise, speed, cost, and flexibility as observed by Peter Cane in Administrative Tribunals and Adjudication, Hart Publishing, 2009 at pp. 266. For these reasons, even as reforms are made to modernize tribunals to keep them up to pace with modern trends in their prime duty of dispensing justice just like the courts, their essential features as outlined above should not be lost or let to get mixed up with the practice of courts.
7. However, the Co-operative Tribunal (Practice and Procedure) Rules in Rule 6 has imported wholesome the provisions of the CPR by providing that the provisions of the Civil Procedure Rules (Cap. 21, Sub. Leg.) shall apply in respect of the proceedings of the Tribunal. I think this was a misnomer because it complicates proceedings before the Tribunal which I do not think was the intendment of the principal Act in providing expressly that the Tribunal shall regulate its own proceedings. In my understanding a Tribunal such as the Co-operative Tribunal should be free from the technical rules of procedure under the CPR. The operations of a tribunal should be such that they are largely informed by its members with technical expertise in the relevant field, in this case, the cooperative movement, with guidance from the legal experts on basic issues of conforming to the law such as observance of the rules of natural justice and adherence to constitutional principles and other relevant laws It should therefore not be the case that such proceedings are conducted under the strictures of the CPR because it will mean largely excluding the contribution of some of the major stakeholders, the persons with technical expertise in the Tribunal in decision making. Having said so, I cannot help observing that under section 77 of the Cooperative Society Act, a majority of the members are advocates or lawyers for that matter.
8. Take for instance the present case. Under the Cooperative Societies Act, one can hardly see its point of entry into the Tribunal’s jurisdiction, how it ought to be handled and then its final exit point.
9. The reason is that, the issue began as a surcharge under Part XIII of the Act where the appellant herein, with two others, were served by the Commissioner of Cooperatives with a notice of intention to surcharge under section 73 of the Act. Proceedings were had under Part XIII and eventually the appellant was issued with surcharge orders by the Commissioner of Cooperatives in the sum of KShs 115,972,306/= being losses occasioned by him as an official of the respondent. He was required to pay the money but he has failed to do so. In a bid to enforce the surcharge orders, the respondent filed before the CT a claim dated 29th October 2020, which by all appearances is in the form of institution of a suit before the CT for recovery of the monies against the appellant. In that case, by proceeding as though this was a suit, the provisions of the CPR then set in, as provided for under Rule 6 of the Co-operative Tribunal (Practice and Procedure) Rules and this is where the conundrum set in.
10. The appellant entered appearance to the summons but he did not file his defence on time. Interlocutory judgment was entered against him on 22nd May 2021. The claim was then set for formal proof on 18th March 2021. On this day, the appellant filed an application by way of notice of motion dated 16th March 2021 seeking leave to file and serve his defence and documents out of time. He annexed a draft defence which he sought to be deemed as duly filed. When the matter came up for formal proof on that day, the appellant appeared through his advocate and sought to prosecute his application.
11. Here the complexities of the CPR had set in viz interlocutory judgment, formal proof, setting aside of default judgment and all. I highly doubt that the technical members of the CT were interested, leave alone following these proceedings.
12. The application was eventually prosecuted and dismissed by the Tribunal in a ruling dated 18th November 2021. The Tribunal at the same time ordered that its directions dated 22nd February 2021 in terms of the formal proof were reviewed such that the formal proof hearing was dispensed with. This meant that final judgment had been entered against the appellant for the sum claimed and that the respondent was free to proceed with execution.
13. In dismissing the application, the Tribunal observed that:
“We agree with the Claimant that the entry point for the Respondent would have been to challenge the interlocutory judgment under Order 10 Rule 11 of the Rules and thereafter seek to put in a defence out of time, it the Tribunal would agree with him and indeed set the judgment aside...
The prayer sought in the Application are thus incapable of being granted by this Tribunal, as they have no feet to stand on as long as the judgment still stands.”
14. So that the only issue that was driving the appellant out of the Tribunal’s seat of judgment was that in his application he had failed to include one essential prayer, that first, the interlocutory judgment entered be first set aside.
15. However, from the outset, it is apparent that, any other person in the appellant’s position would be in a dilemma on which orders to seek because whereas interlocutory judgment had been entered, final judgment had not and that was why the Tribunal had set the matter for formal proof. The Tribunal later, in that ruling reviewed its earlier order on interlocutory judgment and decided that it be made a final judgment. The CT stated that:
“On the issue of Formal Proof, this Tribunal finds that the same is superfluous and does suo moto review its directions relating thereto, to dispense with the need thereof on the strength of section 75(1) of the Cooperative Societies Act.”
16. There are several issues that arise from this holding. First, assuming that the appellant herein had not filed the application, would the Tribunal have proceeded with the formal proof or abandoned it? I do not think the issue should have been dismissed by the Tribunal as superfluous seeing that the appellant seems to have relied on the fact that there being no final judgment in place at the time he filed his application he did not seem to find it necessary to include a prayer for setting it aside, even though he was wrong in that respect.
17. Secondly section 75(1) of the Act gives powers to the Tribunal to set aside its own decision suo moto. Further, Rule 17 of the Tribunal’s Practoc and Procedure Rules on Setting aside judgement, order or award provides that a judgement, order or award made ex parte under the Rules may, on application, be set aside on such terms as may be just. In light of the fact that the appellant had showed interest in defending the claim by first filing the memorandum of appearance on time and then filing the application for extension of time to file the defence, the Tribunal should have been inclined to lean on the side of substantive justice and set aside the order of interlocutory judgment.
18. Thirdly the procedure for recovering a civil debt summarily is provided for under a different statute, the Debts (Summary Recovery) Act (Cap. 42) Laws of Kenya. Yet, it appears from its ruling that in setting aside its earlier order that the matter proceeds to formal proof, the CT adverted to the fact that the claim would be proceeded with by way of summary recovery of debt. However, in doing so, it obviously not acting under Debts (Summary Recovery) Act as will be seen later herein.
19. For the foregoing reasons it follows that the Tribunal made errors of both law and fact.
20. A pertinent concern however is the procedure adopted by the Tribunal to deal with the appellant’s application. The Tribunal chose to be entangled in procedural technicalities under the CPR when it would have dealt with the matter quite expeditiously by invoking the provisions section 78(5) of the Act that it shall regulate its own procedure and then under Rules 3 and 4 of its Procedure Rules which provide that:
3. Saving of the inherent power of the Tribunal
Nothing contained in these Rules shall limit or otherwise affect the inherent power of the Tribunal to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Tribunal.
4. Disregard of technicalities
The Tribunal shall have power and discretion to decide all matters before it with due speed and dispatch without undue regard to technicalities of procedure.
21. Under these two Rules the Tribunal had the authority to make an order that asking the appellant to amend his application to include a prayer for setting aside the interlocutory judgment was a technicality of procedure since what was more important was his defence to be on record. Therefore, the ends of justice in this case required that the appellant, who had not inordinately delayed in filing his defence, be given an opportunity to file the same and for the claim to be heard on the merits. In that case, therefore the Tribunal would have invoked its inherent discretion and set aside the interlocutory judgment and allowed the appellant’s defence to be admitted the fact that he had not in his application, sought the prayer for setting aside notwithstanding. Therefore, the fact that the applicant had not sought a prayer for setting aside the interlocutory judgment which had been entered and on record should not have shackled the Tribunal’s hands in making an order to the effect that since he had shown the intention to defend the claim, he ought to be given the opportunity to do so and any inconvenience occasioned to the other party would be compensated by an award of costs.
22. That for me would be in line with the intendment of setting up Tribunals to dispense justice alongside the courts but in a less formal manner bereft of procedural technicalities.
23. Following the Tribunal’s ruling the appellant filed another application dated 4th January 2022 hoping to rectify his earlier mistake as pointed out by the Tribunal. He therefore sought a temporary stay of execution of the judgment of the Tribunal, orders to set aside the interlocutory judgment and leave to file defence to the claim. The application was heard and determined by the Tribunal and in a ruling dated 23rd February 2023, the same was dismissed for reasons that the earlier ruling dismissing a similar application was still in force and had neither been reviewed nor appealed against.
24. This second ruling is the one against which the appellant has filed the present appeal by way of a memorandum dated 11th February 2025 seeking the following orders:
a. The appeal be allowed and the ruling of the Co-operative Tribunal delivered on 23rd February 2023 in CTC 418 of 2020 be set aside.
b. The application dated 4th January 2022 be allowed and the interlocutory judgment entered on 22nd February 2021 be set aside and the appellant be allowed to file a defence out of time.
c. The costs of the appeal be provided for.
d. Such further or other orders as the court may deem just and expedient.
25. The appeal is based on ten grounds, as follows:
e. That the Tribunal erred in fact and in law by failing to consider the explanation proffered by the appellant in the application and supporting affidavit seeking leave to file defence out of time.
f. That the Tribunal erred in law and in fact by penalizing the appellant for the mistake of his advocate.
g. That the Tribunal erred in law and in fact by dismissing the application desite overwhelming reasons and grounds justifying the delay in filing the defence in good time.
h. That the Tribunal erred in law and in fact by laying great emphasis on matters irrelevant to the prayers sought rather than the ctual issues in the application.
i. That the Tribunal erred in fact and in law by failing to exercise their discretion judiciously when they failed to address themselves as to the extent of the mistake of the advocate as pleaded by the appellant.
j. That the Tribunal erred in fact and in law by disregarding the fact that the draft defence annexed to the application raised reasonable and triable issues and ought to be heard on the merits.
k. That the Tribunal erred in fact and in law by failing to grant stay of execution despite the application having been made without unreasonable delay.
l. That the Tribunal erred in fact and in law by allowing execution of the ¬ex-parte judgment without taking into consideration the substantial loss and hardship that would be occasioned upon the appellant and the fact that the matter was yet to proceed for formal proof.
m. That the Tribunal erred in fact and in law by disregarding the exercise of its power under the overriding objective principle to cure the injustice and hardship resulting from the previous advocate’s mistake.
n. That the Tribunal erred in fact and in law by failing to find that since the formal proof was yet to proceed as per the proceedings of the 18th March 2021, there was no substantial injustice that would occur if the appellant was allowed to defend the claim on merit based on the draft defence filed.
26. The appeal was heard by way of submissions filed by learned counsels for the parties.
27. In his submissions, learned counsel for the appellant has outlined the background to the appeal. He submits that the appellant is ready and willing to defend the claim and that he was only let down by his then advocate who failed to file the defence on time. He had thus filed a complaint against the advocate with the Advocates Complaints Commission.
28. Learned counsel submits that the intended defence by the appellant raises triable issues because it challenges the validity and legality of the surcharge order. He thus prays that he be given a chance to be heard on the merits of the case.
29. The appellant has raised three issues for determination on this appeal viz:
i. Whether the court should set aside the interlocutory judgment delivered on and grant the respondent leave to file their defence?
ii. Whether the mistake/error on the part of counsel(previous) for the respondent be visited upon the client?
iii. Whether the draft defence raises triable issues.
30. However, these issues as framed and the submissions in support made in support thereof are more for a court considering an application to set aside the interlocutory judgment rather than an appeal pointing out the errors of law and fact made by the Tribunal whose decision is challenged. I will therefore consider the grounds of appeal to determine the substance therein.
31. In his brief submissions, learned counsel for the respondent urges this court to dismiss the appeal for the reasons that this Court ‘s jurisdiction has been ousted by section 74(2) of the Co-operatives Societies Act which provides that an appeal to this court from a decision of the Tribunal shall be on points of law only.
32. Learned counsel submits that the appeal herein is based on facts and it should be dismissed with costs for the reason that it is an affront to the law.
33. The starting point then is the respondent’s submission that this appeal is under section 74 of the Cooperative Societies Act and should therefore be confined to matters of law only. Section 74 provides as follows:
74. Appeal against order
(1) Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.
(2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.
34. The ruling, the subject of the appeal herein was not made by the Tribunal in exercise of its appellate authority under section 74(1) of the Act. It was made in an interlocutory application. This is not provided for under the Act but in Rule 11 of the Co-operative Tribunal (Practice and Procedure) Rules which provides as follows:
11. Interlocutory applications
(1) All interlocutory applications made to the Tribunal shall be by Chamber Summons or Notice of Motion signed by the claimant, his advocate or a duly authorized agent, supported by an affidavit.
(2) A party served with a Chamber Summons or Notice of Motion may file a replying affidavit or grounds of opposition. However, any party who desires to be heard and appears to the Tribunal to be a proper party to be heard, may be heard, despite failure to file replying affidavit or grounds of opposition.
35. Consequently, the appeal from that decision would be determined under section 81 of the Act which provides that:
81. Appeal to High Court
(1) Any party to the proceedings before the Tribunal who is aggrieved by any order of the Tribunal may, within thirty days of such order, appeal against such order to the High Court:
Provided that the High Court may, where it is satisfied that there is sufficient reason for so doing, extend the said period of thirty days upon such conditions, if any, as it may think fit.
(2) Upon the hearing of an appeal under this section, the High Court may:—
(a) confirm, set aside or vary the order in question;
(b) remit the proceedings to the Tribunal with such instructions for further consideration, report, proceedings or evidence as the court may deem fit to give;
(c) exercise any of the powers which could have been exercised by the Tribunal in the proceedings in connection with which the appeal is brought; or
(d) make such other order as it may deem just, including an order as to costs of the appeal or of earlier proceedings in the matter before the Tribunal.
(3) The decision of the High court on any appeal shall be final.
36. There is no limitation under section 81(1) of the Act that the appeal shall be confined to points of law only. In the absence of any other provision to the contrary the appeal by this court will proceed under section 78(2) of the CPA which provides that an appellate court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Act on courts of original jurisdiction in respect of suits instituted therein. In so proceeding in a first appeal, the court considers issues of both law and fact.
37. This being a first appeal, this court must consider the case before the Tribunal, re-evaluate and re-analyze, keeping in mind that it did not observe the witnesses testifying and should therefore give due allowance for that. This is the position as held in Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 on a first appeal from the High Court to the Court of Appeal that:
“An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally (Abdul Hameed Saif v Ali Mohamed Sholan (1955), 22 E.A.C.A. 270)”.
38. I have carefully considered the grounds in support of the appeal and the submissions by learned counsels for the parties. For me the issue for determination is whether the Tribunal proceeded in the correct way considering the law and the facts before it to arrive at the decision that is the subject of the appeal herein.
39. Going back to Part XIII of the Act under which the surcharge proceedings were initiated against the appellant, there is no dispute that a decision was made by the Commissioner under section 73(2) of the Act which provides that:
(2) Upon inquiry under subsection (1), the Commissioner may, if he considers it appropriate, make an order requiring the person to repay or restore the money or property or any part thereof to the co-operative society together with interest at such rate as the Commissioner thinks just or to contribute such sum to the assets of the society by way of compensation as the Commissioner deems just.
40. Sections 74 and 75 of the Act provide for appeals against the Commissioner’s orders and recovery of surcharge as follows:
74. Appeal against order
(1) Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.
(2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.
75. Recovery of Surcharge
(1) Subject to section 74, an order made pursuant to section 73 for any moneys to be repaid or contributed to a co-operative society shall be filed with the Tribunal and shall, without prejudice to any other mode of recovery, be a civil debt recoverable summarily.
(2) Without prejudice to the powers by the Committee of a society to take action for recovery of the sum surcharged under section 73, the Commissioner may, on behalf of the society, institute such action.
41. There is no indication that being aggrieved by the decision of the Commissioner the appellant filed an appeal to the Tribunal as provided above. It appears that he sought to pursue judicial review proceedings against the order of the Commissioner through High Court Judicial Review Application No. E1117 of 2020 Republic v. The Commissioner for Co-operative Development Ex parte Habakkuk H.O. Wamududa. The same was dismissed by the High Court on 4th February 2021.
42. I have not seen an indication that the order of the Commissioner made under section 73 of the Act was then filed with the Tribunal as provided for under section 75(1) of the Act. However, the respondent herein filed the claim dated 29th October 2020 with a single prayer for adoption of the surcharge orders and judgment against the appellant herein for the surcharged sum of KShs 115,972,306/=.
43. Under section 75(1) once the order of the Commissioner has been filed with the Tribunal the amount surcharged “shall, without prejudice to any other mode of recovery, be a civil debt recoverable summarily.”
44. Now, for me, any other mode of recovery basically means institution of a civil suit in court. I find so because under section 75(2) of the Act it is provided that either the Committee of the Society or the Commissioner may institute action for the recovery of the amount surcharged. The word “action” is not defined under the Cooperative Societies Act. But it is defined under section 3 of the Interpretations and General Provisions Act as
“action” means any civil proceedings in a court and includes any suit as defined in section 2 of the Civil Procedure Act (Cap. 21);
45. Similarly, there is no definition of what the phrase, “a civil debt recoverable summarily” in under the Cooperative Societies Act. However, it is provided for under the Debts (Summary Recovery) Act (Cap. 42) Laws of Kenya which provides as is relevant that:
2. Any sum declared by any Act, whether past or
future, to be a civil debt recoverable summarily may be
recovered in the court of any magistrate of competent
jurisdiction in the manner prescribed by this Act.
2A. (1) A magistrate holding a subordinate court of the
first class shall have jurisdiction in any suit or proceeding
brought under this Act, and, notwithstanding anything contained in the Magistrate's Courts Act, the pecuniary jurisdiction of such magistrate in any such suit or proceeding shall be unlimited.
46. Therefore, under section 75 of the Act, I do not find a provision that other than filing the surcharge order with the Tribunal the same can be proceeded with for hearing as a claim for purposes of enforcement by way of entry of judgment such as was had in this case. It appears to me that what is provided for is for filing of the order with the Tribunal only and from there the surcharge order is proceeded on as an action in court and not the Tribunal. Otherwise, if the drafters of the Act had intended to give the Tribunal the power to proceed with enforcement of the surcharge order as such, they would have expressly stated so in that section. They would also have expressly stated that re
[...truncated]
1. Tribunals are a key component of the justice system in Kenya and the world over. In Kenya as established under Article 159(1) of the Constitution of Kenya Tribunals share judicial authority with courts. That means they are no lesser than the courts in the dispensation of justice. They thus make decisions with finality, that is, decisions that are binding, subject to appeal or review, just as the courts do.
2. However, there must be a good reason why the constitution specifically created these two separate pathways for justice dispensation in Kenya, the courts and the tribunals. In the exercise of the judicial authority both of them are required to adhere to the principles set out under Article 159(2)(d) of the Constitution that, justice shall be administered without undue regard to procedural technicalities. With specific regard to tribunals many of the statutes creating them eschew the application of technical rules of procedure under the Civil Procedure Act (Cap. 21) Laws of Kenya and the rules made thereunder.
3. For instance, section 78 of the Co-operative Societies Act (Cap, 490) Laws of Kenya on the Proceedings of the Co-operative Tribunal provides that:
(1) The Tribunal shall not be bound by the rules of evidence.
(2) The Tribunal shall, upon an application made to it in writing by any party or a reference made to it by the Commissioner, the Commissioner or any Committee or officer of a co-operative society on any matter relating to this Act, the rules made thereunder or the by-laws of the society, inquire into the matter and make an award thereon, and every award made shall be notified by the Tribunal to the parties concerned.
(3) The Tribunal shall sit at such times and in such places as it may decide.
(4) The proceedings of the Tribunal shall be open to the public save where the Tribunal, for good cause, otherwise directs.
(5) Except as expressly provided in this Act or any rules made there under, the Tribunal shall regulate its own procedure.
4. In my understanding, the provisions of this section, excluding the rules of evidence and the provision the other that the Tribunal shall regulate its own procedure were meant to ensure that the Tribunal is not shackled by the complex rules of evidence under the Evidence Act (Cap. 80) Laws of Kenya, and also the technical rules of procedure under the Civil Procedure Act (Cap. 21) Laws of Kenya and the Civil Procedure Rules(CPR) made thereunder. So that abiding by the provisions of its enacting statute it would proceed to consider and determine matters before it in the simplest and expeditious of ways that Tribunals are established to. I fully associate with the sentiments expressed by Joash Dache, Secretary and Chief Executive Officer of the Law Reform Commission in his paper: Reforming Tribunals in Kenya, The Case for Reform of the Tribunal System available on the Commissions website at https://www.klrc.go.ke/index.php/klrc-blog/522-reforming-tribunals-in-kenya-concept-paper-by-joash-dache?showall=1&limitstart=# that Tribunals:
“... enjoy obvious advantages over the regular courts, which make them quite appealing. ... they are more accessible to a greater part of the population. Their proceedings are far much cheaper and speedier. They tend to apply simpler procedures, are less technical and have the ability to foster informal justice. More importantly, they have capacity to evolve specialisation and expertise in their field of jurisdiction.”
5. Dache cites other authors who have enumerated various advanatges of tribunals over courts as follows:
“Prof S A de Smith ( SA de Smith, Judicial Review of Administrative Action, 3rd edn (London, Stevens, 1973) App 1; Baker, ch 9) has enumerated the advantages of Tribunals in the following terms:-
“A tribunal may be preferred to an ordinary court because its members will have (or soon will acquire) specialised knowledge of the subject-matter, because it will be more informal in its trappings and procedure, because it may be better at finding facts, applying flexible standards and exercising discretionary powers, and because it may be cheaper, more accessible and more expeditious that the High Court. Occasionally dissatisfaction with the over-technical and allegedly unsympathetic approach of the Courts towards social welfare legislation has led to a transfer of their functions to special tribunals…”
The Franks Committee (Marshall, G. (1957). The Franks Report on Administrative Tribunals and Enquiries. Public Administration, 35(4), 347-358. https://doi.org/10.1111/j.1467-9299.1957.tb01316.x) expressed itself in similar terms on the advantages of Tribunals. It noted as follows:-
“Tribunals have certain characteristics which often give them advantages over the courts. These are cheapness, accessibility, freedom from technicality, expedition and expert knowledge of their particular subject. It is no doubt because of these advantages that Parliament once it has decided that certain decisions ought not to be made by normal executive or departmental process, often entrusts them to tribunals rather than ordinary Courts.”
6. These seemingly old materials set out some of the attributes of tribunals that can be considered as foundational for the uptake of their jurisdiction in the dispensation of justice. It is apparent from these writings that tribunals are considered as being better than courts in various respects among them expertise, speed, cost, and flexibility as observed by Peter Cane in Administrative Tribunals and Adjudication, Hart Publishing, 2009 at pp. 266. For these reasons, even as reforms are made to modernize tribunals to keep them up to pace with modern trends in their prime duty of dispensing justice just like the courts, their essential features as outlined above should not be lost or let to get mixed up with the practice of courts.
7. However, the Co-operative Tribunal (Practice and Procedure) Rules in Rule 6 has imported wholesome the provisions of the CPR by providing that the provisions of the Civil Procedure Rules (Cap. 21, Sub. Leg.) shall apply in respect of the proceedings of the Tribunal. I think this was a misnomer because it complicates proceedings before the Tribunal which I do not think was the intendment of the principal Act in providing expressly that the Tribunal shall regulate its own proceedings. In my understanding a Tribunal such as the Co-operative Tribunal should be free from the technical rules of procedure under the CPR. The operations of a tribunal should be such that they are largely informed by its members with technical expertise in the relevant field, in this case, the cooperative movement, with guidance from the legal experts on basic issues of conforming to the law such as observance of the rules of natural justice and adherence to constitutional principles and other relevant laws It should therefore not be the case that such proceedings are conducted under the strictures of the CPR because it will mean largely excluding the contribution of some of the major stakeholders, the persons with technical expertise in the Tribunal in decision making. Having said so, I cannot help observing that under section 77 of the Cooperative Society Act, a majority of the members are advocates or lawyers for that matter.
8. Take for instance the present case. Under the Cooperative Societies Act, one can hardly see its point of entry into the Tribunal’s jurisdiction, how it ought to be handled and then its final exit point.
9. The reason is that, the issue began as a surcharge under Part XIII of the Act where the appellant herein, with two others, were served by the Commissioner of Cooperatives with a notice of intention to surcharge under section 73 of the Act. Proceedings were had under Part XIII and eventually the appellant was issued with surcharge orders by the Commissioner of Cooperatives in the sum of KShs 115,972,306/= being losses occasioned by him as an official of the respondent. He was required to pay the money but he has failed to do so. In a bid to enforce the surcharge orders, the respondent filed before the CT a claim dated 29th October 2020, which by all appearances is in the form of institution of a suit before the CT for recovery of the monies against the appellant. In that case, by proceeding as though this was a suit, the provisions of the CPR then set in, as provided for under Rule 6 of the Co-operative Tribunal (Practice and Procedure) Rules and this is where the conundrum set in.
10. The appellant entered appearance to the summons but he did not file his defence on time. Interlocutory judgment was entered against him on 22nd May 2021. The claim was then set for formal proof on 18th March 2021. On this day, the appellant filed an application by way of notice of motion dated 16th March 2021 seeking leave to file and serve his defence and documents out of time. He annexed a draft defence which he sought to be deemed as duly filed. When the matter came up for formal proof on that day, the appellant appeared through his advocate and sought to prosecute his application.
11. Here the complexities of the CPR had set in viz interlocutory judgment, formal proof, setting aside of default judgment and all. I highly doubt that the technical members of the CT were interested, leave alone following these proceedings.
12. The application was eventually prosecuted and dismissed by the Tribunal in a ruling dated 18th November 2021. The Tribunal at the same time ordered that its directions dated 22nd February 2021 in terms of the formal proof were reviewed such that the formal proof hearing was dispensed with. This meant that final judgment had been entered against the appellant for the sum claimed and that the respondent was free to proceed with execution.
13. In dismissing the application, the Tribunal observed that:
“We agree with the Claimant that the entry point for the Respondent would have been to challenge the interlocutory judgment under Order 10 Rule 11 of the Rules and thereafter seek to put in a defence out of time, it the Tribunal would agree with him and indeed set the judgment aside...
The prayer sought in the Application are thus incapable of being granted by this Tribunal, as they have no feet to stand on as long as the judgment still stands.”
14. So that the only issue that was driving the appellant out of the Tribunal’s seat of judgment was that in his application he had failed to include one essential prayer, that first, the interlocutory judgment entered be first set aside.
15. However, from the outset, it is apparent that, any other person in the appellant’s position would be in a dilemma on which orders to seek because whereas interlocutory judgment had been entered, final judgment had not and that was why the Tribunal had set the matter for formal proof. The Tribunal later, in that ruling reviewed its earlier order on interlocutory judgment and decided that it be made a final judgment. The CT stated that:
“On the issue of Formal Proof, this Tribunal finds that the same is superfluous and does suo moto review its directions relating thereto, to dispense with the need thereof on the strength of section 75(1) of the Cooperative Societies Act.”
16. There are several issues that arise from this holding. First, assuming that the appellant herein had not filed the application, would the Tribunal have proceeded with the formal proof or abandoned it? I do not think the issue should have been dismissed by the Tribunal as superfluous seeing that the appellant seems to have relied on the fact that there being no final judgment in place at the time he filed his application he did not seem to find it necessary to include a prayer for setting it aside, even though he was wrong in that respect.
17. Secondly section 75(1) of the Act gives powers to the Tribunal to set aside its own decision suo moto. Further, Rule 17 of the Tribunal’s Practoc and Procedure Rules on Setting aside judgement, order or award provides that a judgement, order or award made ex parte under the Rules may, on application, be set aside on such terms as may be just. In light of the fact that the appellant had showed interest in defending the claim by first filing the memorandum of appearance on time and then filing the application for extension of time to file the defence, the Tribunal should have been inclined to lean on the side of substantive justice and set aside the order of interlocutory judgment.
18. Thirdly the procedure for recovering a civil debt summarily is provided for under a different statute, the Debts (Summary Recovery) Act (Cap. 42) Laws of Kenya. Yet, it appears from its ruling that in setting aside its earlier order that the matter proceeds to formal proof, the CT adverted to the fact that the claim would be proceeded with by way of summary recovery of debt. However, in doing so, it obviously not acting under Debts (Summary Recovery) Act as will be seen later herein.
19. For the foregoing reasons it follows that the Tribunal made errors of both law and fact.
20. A pertinent concern however is the procedure adopted by the Tribunal to deal with the appellant’s application. The Tribunal chose to be entangled in procedural technicalities under the CPR when it would have dealt with the matter quite expeditiously by invoking the provisions section 78(5) of the Act that it shall regulate its own procedure and then under Rules 3 and 4 of its Procedure Rules which provide that:
3. Saving of the inherent power of the Tribunal
Nothing contained in these Rules shall limit or otherwise affect the inherent power of the Tribunal to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Tribunal.
4. Disregard of technicalities
The Tribunal shall have power and discretion to decide all matters before it with due speed and dispatch without undue regard to technicalities of procedure.
21. Under these two Rules the Tribunal had the authority to make an order that asking the appellant to amend his application to include a prayer for setting aside the interlocutory judgment was a technicality of procedure since what was more important was his defence to be on record. Therefore, the ends of justice in this case required that the appellant, who had not inordinately delayed in filing his defence, be given an opportunity to file the same and for the claim to be heard on the merits. In that case, therefore the Tribunal would have invoked its inherent discretion and set aside the interlocutory judgment and allowed the appellant’s defence to be admitted the fact that he had not in his application, sought the prayer for setting aside notwithstanding. Therefore, the fact that the applicant had not sought a prayer for setting aside the interlocutory judgment which had been entered and on record should not have shackled the Tribunal’s hands in making an order to the effect that since he had shown the intention to defend the claim, he ought to be given the opportunity to do so and any inconvenience occasioned to the other party would be compensated by an award of costs.
22. That for me would be in line with the intendment of setting up Tribunals to dispense justice alongside the courts but in a less formal manner bereft of procedural technicalities.
23. Following the Tribunal’s ruling the appellant filed another application dated 4th January 2022 hoping to rectify his earlier mistake as pointed out by the Tribunal. He therefore sought a temporary stay of execution of the judgment of the Tribunal, orders to set aside the interlocutory judgment and leave to file defence to the claim. The application was heard and determined by the Tribunal and in a ruling dated 23rd February 2023, the same was dismissed for reasons that the earlier ruling dismissing a similar application was still in force and had neither been reviewed nor appealed against.
24. This second ruling is the one against which the appellant has filed the present appeal by way of a memorandum dated 11th February 2025 seeking the following orders:
a. The appeal be allowed and the ruling of the Co-operative Tribunal delivered on 23rd February 2023 in CTC 418 of 2020 be set aside.
b. The application dated 4th January 2022 be allowed and the interlocutory judgment entered on 22nd February 2021 be set aside and the appellant be allowed to file a defence out of time.
c. The costs of the appeal be provided for.
d. Such further or other orders as the court may deem just and expedient.
25. The appeal is based on ten grounds, as follows:
e. That the Tribunal erred in fact and in law by failing to consider the explanation proffered by the appellant in the application and supporting affidavit seeking leave to file defence out of time.
f. That the Tribunal erred in law and in fact by penalizing the appellant for the mistake of his advocate.
g. That the Tribunal erred in law and in fact by dismissing the application desite overwhelming reasons and grounds justifying the delay in filing the defence in good time.
h. That the Tribunal erred in law and in fact by laying great emphasis on matters irrelevant to the prayers sought rather than the ctual issues in the application.
i. That the Tribunal erred in fact and in law by failing to exercise their discretion judiciously when they failed to address themselves as to the extent of the mistake of the advocate as pleaded by the appellant.
j. That the Tribunal erred in fact and in law by disregarding the fact that the draft defence annexed to the application raised reasonable and triable issues and ought to be heard on the merits.
k. That the Tribunal erred in fact and in law by failing to grant stay of execution despite the application having been made without unreasonable delay.
l. That the Tribunal erred in fact and in law by allowing execution of the ¬ex-parte judgment without taking into consideration the substantial loss and hardship that would be occasioned upon the appellant and the fact that the matter was yet to proceed for formal proof.
m. That the Tribunal erred in fact and in law by disregarding the exercise of its power under the overriding objective principle to cure the injustice and hardship resulting from the previous advocate’s mistake.
n. That the Tribunal erred in fact and in law by failing to find that since the formal proof was yet to proceed as per the proceedings of the 18th March 2021, there was no substantial injustice that would occur if the appellant was allowed to defend the claim on merit based on the draft defence filed.
26. The appeal was heard by way of submissions filed by learned counsels for the parties.
27. In his submissions, learned counsel for the appellant has outlined the background to the appeal. He submits that the appellant is ready and willing to defend the claim and that he was only let down by his then advocate who failed to file the defence on time. He had thus filed a complaint against the advocate with the Advocates Complaints Commission.
28. Learned counsel submits that the intended defence by the appellant raises triable issues because it challenges the validity and legality of the surcharge order. He thus prays that he be given a chance to be heard on the merits of the case.
29. The appellant has raised three issues for determination on this appeal viz:
i. Whether the court should set aside the interlocutory judgment delivered on and grant the respondent leave to file their defence?
ii. Whether the mistake/error on the part of counsel(previous) for the respondent be visited upon the client?
iii. Whether the draft defence raises triable issues.
30. However, these issues as framed and the submissions in support made in support thereof are more for a court considering an application to set aside the interlocutory judgment rather than an appeal pointing out the errors of law and fact made by the Tribunal whose decision is challenged. I will therefore consider the grounds of appeal to determine the substance therein.
31. In his brief submissions, learned counsel for the respondent urges this court to dismiss the appeal for the reasons that this Court ‘s jurisdiction has been ousted by section 74(2) of the Co-operatives Societies Act which provides that an appeal to this court from a decision of the Tribunal shall be on points of law only.
32. Learned counsel submits that the appeal herein is based on facts and it should be dismissed with costs for the reason that it is an affront to the law.
33. The starting point then is the respondent’s submission that this appeal is under section 74 of the Cooperative Societies Act and should therefore be confined to matters of law only. Section 74 provides as follows:
74. Appeal against order
(1) Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.
(2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.
34. The ruling, the subject of the appeal herein was not made by the Tribunal in exercise of its appellate authority under section 74(1) of the Act. It was made in an interlocutory application. This is not provided for under the Act but in Rule 11 of the Co-operative Tribunal (Practice and Procedure) Rules which provides as follows:
11. Interlocutory applications
(1) All interlocutory applications made to the Tribunal shall be by Chamber Summons or Notice of Motion signed by the claimant, his advocate or a duly authorized agent, supported by an affidavit.
(2) A party served with a Chamber Summons or Notice of Motion may file a replying affidavit or grounds of opposition. However, any party who desires to be heard and appears to the Tribunal to be a proper party to be heard, may be heard, despite failure to file replying affidavit or grounds of opposition.
35. Consequently, the appeal from that decision would be determined under section 81 of the Act which provides that:
81. Appeal to High Court
(1) Any party to the proceedings before the Tribunal who is aggrieved by any order of the Tribunal may, within thirty days of such order, appeal against such order to the High Court:
Provided that the High Court may, where it is satisfied that there is sufficient reason for so doing, extend the said period of thirty days upon such conditions, if any, as it may think fit.
(2) Upon the hearing of an appeal under this section, the High Court may:—
(a) confirm, set aside or vary the order in question;
(b) remit the proceedings to the Tribunal with such instructions for further consideration, report, proceedings or evidence as the court may deem fit to give;
(c) exercise any of the powers which could have been exercised by the Tribunal in the proceedings in connection with which the appeal is brought; or
(d) make such other order as it may deem just, including an order as to costs of the appeal or of earlier proceedings in the matter before the Tribunal.
(3) The decision of the High court on any appeal shall be final.
36. There is no limitation under section 81(1) of the Act that the appeal shall be confined to points of law only. In the absence of any other provision to the contrary the appeal by this court will proceed under section 78(2) of the CPA which provides that an appellate court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by the Act on courts of original jurisdiction in respect of suits instituted therein. In so proceeding in a first appeal, the court considers issues of both law and fact.
37. This being a first appeal, this court must consider the case before the Tribunal, re-evaluate and re-analyze, keeping in mind that it did not observe the witnesses testifying and should therefore give due allowance for that. This is the position as held in Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 on a first appeal from the High Court to the Court of Appeal that:
“An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally (Abdul Hameed Saif v Ali Mohamed Sholan (1955), 22 E.A.C.A. 270)”.
38. I have carefully considered the grounds in support of the appeal and the submissions by learned counsels for the parties. For me the issue for determination is whether the Tribunal proceeded in the correct way considering the law and the facts before it to arrive at the decision that is the subject of the appeal herein.
39. Going back to Part XIII of the Act under which the surcharge proceedings were initiated against the appellant, there is no dispute that a decision was made by the Commissioner under section 73(2) of the Act which provides that:
(2) Upon inquiry under subsection (1), the Commissioner may, if he considers it appropriate, make an order requiring the person to repay or restore the money or property or any part thereof to the co-operative society together with interest at such rate as the Commissioner thinks just or to contribute such sum to the assets of the society by way of compensation as the Commissioner deems just.
40. Sections 74 and 75 of the Act provide for appeals against the Commissioner’s orders and recovery of surcharge as follows:
74. Appeal against order
(1) Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal.
(2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.
75. Recovery of Surcharge
(1) Subject to section 74, an order made pursuant to section 73 for any moneys to be repaid or contributed to a co-operative society shall be filed with the Tribunal and shall, without prejudice to any other mode of recovery, be a civil debt recoverable summarily.
(2) Without prejudice to the powers by the Committee of a society to take action for recovery of the sum surcharged under section 73, the Commissioner may, on behalf of the society, institute such action.
41. There is no indication that being aggrieved by the decision of the Commissioner the appellant filed an appeal to the Tribunal as provided above. It appears that he sought to pursue judicial review proceedings against the order of the Commissioner through High Court Judicial Review Application No. E1117 of 2020 Republic v. The Commissioner for Co-operative Development Ex parte Habakkuk H.O. Wamududa. The same was dismissed by the High Court on 4th February 2021.
42. I have not seen an indication that the order of the Commissioner made under section 73 of the Act was then filed with the Tribunal as provided for under section 75(1) of the Act. However, the respondent herein filed the claim dated 29th October 2020 with a single prayer for adoption of the surcharge orders and judgment against the appellant herein for the surcharged sum of KShs 115,972,306/=.
43. Under section 75(1) once the order of the Commissioner has been filed with the Tribunal the amount surcharged “shall, without prejudice to any other mode of recovery, be a civil debt recoverable summarily.”
44. Now, for me, any other mode of recovery basically means institution of a civil suit in court. I find so because under section 75(2) of the Act it is provided that either the Committee of the Society or the Commissioner may institute action for the recovery of the amount surcharged. The word “action” is not defined under the Cooperative Societies Act. But it is defined under section 3 of the Interpretations and General Provisions Act as
“action” means any civil proceedings in a court and includes any suit as defined in section 2 of the Civil Procedure Act (Cap. 21);
45. Similarly, there is no definition of what the phrase, “a civil debt recoverable summarily” in under the Cooperative Societies Act. However, it is provided for under the Debts (Summary Recovery) Act (Cap. 42) Laws of Kenya which provides as is relevant that:
2. Any sum declared by any Act, whether past or
future, to be a civil debt recoverable summarily may be
recovered in the court of any magistrate of competent
jurisdiction in the manner prescribed by this Act.
2A. (1) A magistrate holding a subordinate court of the
first class shall have jurisdiction in any suit or proceeding
brought under this Act, and, notwithstanding anything contained in the Magistrate's Courts Act, the pecuniary jurisdiction of such magistrate in any such suit or proceeding shall be unlimited.
46. Therefore, under section 75 of the Act, I do not find a provision that other than filing the surcharge order with the Tribunal the same can be proceeded with for hearing as a claim for purposes of enforcement by way of entry of judgment such as was had in this case. It appears to me that what is provided for is for filing of the order with the Tribunal only and from there the surcharge order is proceeded on as an action in court and not the Tribunal. Otherwise, if the drafters of the Act had intended to give the Tribunal the power to proceed with enforcement of the surcharge order as such, they would have expressly stated so in that section. They would also have expressly stated that re
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