JOHNSON MAINA STEPHEN AND 27TH OTHERS VS UNITY HOUSING COOPERATIVE SOCIETY

Background Information
1.This is an appeal against the Judgement of the Co-operative Tribunal dated 8th January 2019. The claimants filed statement of claim dated 4th November 2012 against the respondent.
2.The Claimants claim was that in the 1980, the Respondent introduced a saving system through which it raised money for purchasing buildings. It introduced a check off system. Under this system the Claimants instructed their said employer Murang'a District Co-operative Union to deduct Kshs.100/= every month from their salary and remit it to the Respondent. When the Union's Banking Section was converted into Murata Farmers; Co-operative Society, the check off system was transferred to this society.
3.The Claimants aver that between 1980 and 2002 the Murang'a District Co-operative Union and Murata Farmers' Co-operative Society deducted Kshs.100/= every month from their salaries and paid it to the Respondent.
4.The Claimants also aver that using their contributions and those of other members the Respondent bought the following immovable properties which are registered in its name:
a)Murang'a Municipality Block II/347; this is a property with a building with 16 self contained rooms, three commercial shops and offices occupied by the Respondent and let to a co-operative society known as Mumanthi; the rooms, shops and office are let to tenants who pay rent to the Respondent.
b)Nairobi Eastleigh LR. No. 36/VII/578; this is a one storey building with four flats; each flat has three bedrooms; the flats are let to tenants who pay rent to the Respondent.
c) Location II/1795; an undeveloped plot.
d)Location II/1796; an undeveloped plot.
e)Location II/1797; an undeveloped plot;
f)Maragua Plot No. 512; an undeveloped plot in Maragua town.
g)Maragua Plot No. 523; an undeveloped plot in Maragua town.
5.The claimants stated that on becoming members of respondent,  claimants acquired rights to participate in the management of the Respondent directly through serving as members of the management committee if elected or to participate in decision making by attending meetings of the Respondent; to be paid dividends from the rent paid by the Respondent's tenants.
6.The Claimants further aver that in breach of its obligations under its by-laws, the Respondent has excluded them from its meetings and also discriminated against them. The other members of the Respondent have been paid dividends whilst none have been paid to the Claimants.
7.The claimants are therefore seeking an order of declaration that the Claimants are members of the Respondent;  A declaration that the Claimants have a right to participate in the management of the Respondent; A permanent injunction restraining the Respondent from interfering with the Claimants' rights under the membership contract; A declaration that the respondent has contravened the Claimants' freedom association under Article 36 of the Constitution; A declaration that the Respondent has discriminated against the Claimants by excluding them from its meetings and not paying them dividends; An order that the Respondent do pay the Claimants all the dividends; General damages and the costs of this suit.
8.The respondent opposed the application and filed a statement of claim. The respondent denied the claim and averred  that sometimes in December, 2000, the employer of the claimants, Murata Farmers Sacco Society Limited failed to remit the members monthly deduction done through the check off system for the month of November, 2000.
9.The respondent averred that on the 20th December, 2000 the chairman of the respondent wrote to the General Manager, Murata Farmer Sacco Society Limited reminding him of their non remittance of the monthly deductions for November, 2000 and copied the relevant documentation to the district, provincial and commissioner of Co-operatives Development.
10.The respondent averred that this letter was not responded to leading to the Chairman of the respondent to lodge a -3 formal complaint vide his letter of 27th January, 2001 with the Registrar of Co-operatives for the failure of the claimants employer to remit monthly deductions.
11.The respondent stated that the failure of the employer to remit the monthly deduction was causing the respondent  financial hardship since the respondent had taken a loan from Co-operative bank to finance the development of the respondent Murang' a plot. The security of the loan were the properties stated in clause 10 of the claim and all members of the respondent were aware that their monthly contributions was going towards servicing the loan, failure to repay the loans would result in the auction of the above stated properties.
12.The respondent stated that on 7th May, 2001, the General manager Murata Farmers Sacco Society Limited  responded to the Registrar of Co-operatives Society enquiring about the failure to remit members contribution in his response, the employer wrote and confirmed that their employees (the claimants herein) wrote to them and requested them to stop deductions. Their instruction was effected and claimants monthly deductions as members of the respondent were stopped in November, 2000.
13.The respondent stated the letter from the claimants employer was copied to the respondent who was now put in a precarious position since the respondent knew that the claimants had a malicious intention of causing the imminent collapse of the respondent since the respondent would not be in a position to service the loans taken to invest it.
14.The respondent stated that It is not true for the claimants to allege that they contributed to the respondent upto the year 2002 while it is clear they stopped their contributions in November, 2000.
15.The respondent stated that the  Chairman wrote on the 9th May, 2001 to the Registrar of Co-operative Societies and copied to the claimants employer complaining about the alleged withdrawal of members contributions from November, 2000 and no response was forth coming.  
16.The respondent stated   it sought financial assistance from other sources and managed to repay the loans fully since it was now apparent that the claimants and others who has stopped their contribution to the respondent had the sole intention of causing it to collapse under the weight of non-performing loans and debts due to political and or other reasons.
17.The respondent stated that by a members special resolution on 21st April, 2002, by minutes no. 243/2007, the members resolved unanimously to remove the 66 members from the societies register, amongst them the 27 claimants herein pursuant to by-law no. 15, 16 and 19.
18.The respondent stated that the claimants therefore are not members of the respondent due to their written voluntary withdrawal and thus the respondent has no obligations towards them ever since their individual voluntary withdrawal was accepted by the management committee.
19.The respondent avers that the funds used to develop the property was borrowed from Co-operative Bank of Kenya Limited which loans were known and approved by the claimants. The respondent stated that by voluntary withdrawing their membership by conduct and in unity, the respondent has no obligation towards them and neither do the claimants have any rights towards the respondent.
Evidence
20.The matter proceeded for hearing on 30/10/2017, the Claimants called two witnesses. AND the Respondent called one witness and closed its case. The first witness called by the Claimants was Johnson Maina. He adopted his statement. He stated that on 8/8/2001 they stopped their contributions to the society. He stated that this did not amount to withdrawal from membership to the Society. He stated that by the time they wrote the letters stopping deductions they had contributed KShs.294,900/=. CW1 stated that writing of the letter did not amount to withdrawal. He stated that they are entitled to parcels of land that were bought when they were members.
21.During cross examination CW1 stated that the stoppage of deductions were voluntary. That he was aware that Charles Kigo rescinded his letter in writing. That he was also aware that his alleged withdrawal was, accepted in general meeting. He complained that he was not served with any expulsion notice.
22.CW2, Mburu Francis adopted his statement as evidence in chief in which he reiterated averments stated by CWI. He also confirmed stopping his contributions from the Society.
23.The Respondent called one witness known as Simon Muchoki, the Respondent Vice - Chairman. He testified that according to him the Claimants are former members who withdrew their membership in the year 2000. That the withdrawal was in writing. He referred to letters signed by each member. That they stopped the monthly contributions which were being paid through check off system. That the society adopted the withdrawal under the bylaws.
24.RWI testified that the Claimants were not entitled to any refund of shares as the Society had unpaid loans when they left. He referred to statements signed by some of the Claimants saying that the claim of discrimination raised by the Claimants was untrue. In cross examination he stated that he is authorized by the by laws to testify for the Society. That one cannot continue being a member without contribution. He stated Mr. Kigo wrote to them seeking readmission. That the society started paying dividends in 2011 as they had faced financial difficulties.
25.The parties also filed their respective submissions. After full hearing the tribunal delivered a judgement in which it found that the claimants are  not entitled to any of the prayers sought and that entire suit is without merit.
Appeal
26.Being aggrieved by the judgement the appellant filed the instant appeal through a memorandum of Appeal setting the following grounds of appeal;
i.The Learned Tribunal wholly misunderstood the case before it.
ii. The Learned Tribunal erred in striking off the fth and 20th Appellants on the alleged ground that they had not complied with Order 1 Rule 13 of the Civil Procedure Rules.
iii.The Learned Tribunal erred in holding that the Appellants had voluntarily stopped paying their contributions and showed no intention to resume payment.
iv.The Learned Tribunal erred in holding that the Appellants were not entitled to -20 the rights guaranteed under Section 21 of the Co - operatives Societies Act, Cap 490 of the Laws of Kenya.
v.The Learned Tribunal erred in holding that the Appellants were not entitled to a refund of their savings with the Respondent.
vi.The Learned Tribunal erred in holding that the suit had no merit and dismissing the same with costs to the Respondent.
The appellant proposed that the appeal be allowed with costs and that the judgement delivered by the Co Operatives Tribunal on 8th   January, 2019, be set aside. That there be substituted thereof an order allowing the Appellants' Claim in the Co Operatives Tribunal with costs. Any other/ further orders that this Honourable Court deems fit to make.
Submissions
27.By consent of parties the appeal was canvassed by way of written submissions. The parties filed their respective submissions. I have carefully analyzed and considered the submissions and case law authorities in support.
Analysis and Determination
28.From the evidence adduced above and submissions by Counsels the following issues are issues for determination is whether this court should set aside the judgement of the tribunal court and whether the claimants are entitled to the payment of dividends.
29.The court has considered the record of appeal, the pleadings and original record of the proceedings as well as the submissions by the respective parties. This is a first appeal. The Court of Appeal for East Africa set out the duty of the first appellate court in Selle –Vs- Associated Motor Boat Co. [1968] EA 123 in the following terms:
“An appeal from the High Court is by way of re-trial and the Court of Appeal is not bound to follow the trial judge’s finding of fact if it appears either that he failed to take account of circumstances or probabilities, or if the impression of the demeanour of a witness is inconsistent with the evidence generally.
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.”
30.Having thus said, I shall proceed to the merits of this appeal, where from the onset, a preliminary issue for determination is;

Whether appellants failure to comply with order 1 Rule 13 of the CPR 2010 is fatal on the suit?
31.It is not in dispute that the suit is representative in nature. Order 1 rule 8 Civil Procedure Rules provides:
 (1) Where numerous persons have the same interest in any proceedings, the proceedings may be commenced, and unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them.
(2) The parties shall in such case give notice of the suit to all such persons either by personal service or, where from the number of persons or any other cause such service is not reasonably practicable, by public advertisement, as the court in each case may direct.
(3) Any person on whose behalf or for whose benefit a suit is instituted or defended under subrule (1) may apply to the court to be made a party to such suit.

Order 1 Rule 13(1) (2) Civil Procedure Rules provides:
Where there are more plaintiffs than one, any one or more of them may be authorized by any other of them to appear, plead or act for such other in any proceeding, and in like manner, where there are more defendants than one or more of them may be authorized by any other of them to appear, plead or act for such other in any proceeding.
The authority shall be in writing signed by the party giving it and shall be filed in the case.
32.There is no doubt that when the appellants filed the claim it was clear that this was a representative suit. This notwithstanding, there was non-compliance with the provisions requiring notices and even filing authority to act on behalf of the others. Order 1 rule 8(3) and Rule 13(1) Civil Procedure Rules are however not mandatory provisions.
33.I am persuaded by that the true spirit of the 2010 Constitution of Kenya guarantees litigants a hearing without undue regard to procedural technicalities. As I have already found this is a representative suit, as the pleadings speak to it. The failure to file the authority with the plaint is not fatal to the suit. It is one of those instances where article 159 (2) (d) of the Constitution comes into play. Substantive justice would demand that the error be corrected in the circumstances and the case be heard and determined on merit rather than striking it out.
34.In the case of Ahmed Dolai & others suing on their behalf and on behalf of 27 members of Likoley Farmers  -Vs-  Kengen & another (2018) Eklr  where the Court held as follows:-
“…that the spirit of the law in requiring notice to be given to persons likely to be affected in the case of representative nature is a procedural requirement that cannot be elevated to a fetish for non-compliance.  The rule should not be treated as a rigid matter of principle but a flexible tool of convenience in the administration of justice to the parties…”
35.Further, in Jack Mukhongo Munialo -Vs-  Nzoia Sugar Company Ltd & another (2017) Eklr  where the Court stated as follows:-
“…the above in my view is not a reason to strike out the entire suit taking into account that it is not fatal at this stage since the suit is still in its infancy stage and giving due regard to Article 159 of the Constitution.  The Plaintiff still has opportunity to comply…”
36.My take, especially in this era, Courts should be hesitant to strike out cases on procedural technicalities unless what is omitted goes to the root of the case. The proper route by the tribunal would be to extend an olive branch to the parties to aptly comply with the statutory requirements, other than levy a technicality as a part-ground to dismiss the suit. Thus, in the spirit of the constitution, I find that the trial tribunal erred under this head, in finding the suit incompetent.

Whether the appellants’ in ceasing to make contributions and their voluntary withdrawal as members negates any entitlement to partake in the respondent’s management and benefits thereto?
37.The issue in dispute is whether the appellants upon stopping making contribution to the respondent and withdrawal of their membership are entitled to dividends for the period they were members. The appellants submitted the Claimants between 1980 and 2002 the Murang'a District Co-operative Union and Murata Farmers' Co-operative Society deducted Kshs.100/= every month from their salaries and paid it to the Respondent. It was submitted that using their contributions and those of other members the Respondent bought the immovable properties which are registered in its name.
38.The appellants submitted that on becoming members of respondent, claimants acquired rights to participate in the management of the Respondent directly through serving as members of the management committee if elected or to participate in decision making by attending meetings of the Respondent; to be paid dividends from the rent paid by the Respondent's tenants.
39.The Claimants submitted the respondent in breach of its by-laws, the has excluded them from its meetings and also discriminated against them. The other members of the Respondent have been paid dividends whilst none have been paid to the Claimants.
40.The respondent on the other hand submitted that the appellants ceased to members. That the claimants stopped making contributions and the respondent wrote a letter to General manager Murata Farmers Sacco Society Limited who responded to the Registrar of Co-operatives Society about the failure to remit members contribution that the employer wrote and confirmed that their employees (the claimants herein) wrote to them and requested them to stop deductions. The respondent submitted the instructions was effected and claimants monthly deductions as members of the respondent were stopped in November, 2000. The respondent submitted that It is not true for the claimants to allege that they contributed to the respondent upto the year 2002.
41.The respondent submitted that the Chairman wrote on the 9th May, 2001 to the Registrar of Co-operative Societies and copied to the claimants employer complaining about the alleged withdrawal of members contributions from November, 2000 and no response was forth coming.   The respondent submitted it sought financial assistance from other sources and managed to repay the loans fully since it was now apparent that the claimants and others who has stopped their contribution to the respondent had the sole intention of causing it to collapse under the weight of non-performing loans.
42.The respondent submitted that by a members special resolution on 21st April, 2002, by minutes no. 243/2007, the members resolved unanimously to remove the 66 members from the societies register, amongst them the 27 claimants herein pursuant to by-law no. 15, 16 and 19.The respondent argued  that the claimants therefore are not members of the respondent due to their written voluntary withdrawal and thus the respondent has no obligations towards them ever since their individual voluntary withdrawal was accepted by the management committee.
43.I have perused the letters by the appellants among others to Murata Farmers Sacco Society Ltd, authorizing the stopping of further deductions payable to the respondent effectively. Section 17 of the Co-operative Societies Act 12 of 1997 provides that no member of a co-operative society shall exercise any of the rights a member unless he has made such payment to the society in respect of membership or has acquired such interest in the society as may be prescribed under this Act or under the by-laws of the society.
A member’s obligation to comply with all the society by-laws and decisions taken by the relevant organs of the co-operative society in accordance with the by-laws of that society including making periodic payments as dictated therein is a statutory commitment as under Sec 22 of the Act.
44.In Daniel Mutisya Kivuva v Machakos Golf Club [2019] eKLR this court seated in Machakos held thus;
“The charter, articles of association and bylaws of an association may constitute a contract between the organization and its members wherein members are deemed to have consented to all reasonable regulations and rules of the organization, traditional rules of contract interpretation apply when assessing whether the club followed its own internal rules and procedures.
See Wood v Odessa Waterworks Co (1889) 42 Ch D 636. The intention of the parties must necessarily be found within the contract or the statute of the by- laws or whole written instrument that set up the club.”
45.In my view, the appellants abdicated their obligations, whereby in their volition, withdrew from the respondent society, which withdrawal was accepted, and proceedings duly communicated to the Registrar of Co-operatives Society. The ripple effect of their withdrawal is that the appellants’ cannot rely on the said bylaws to confer rights or impose obligations on the appellants and respondents, respectively, in as far as inclusion in the management and running of the society. Simply put, I do not find any morsel of discrimination inflicted on the appellants by the respondent.

Whether the appellants are entitled to a refund of their contributions and/or dividends?
46.The principle is that whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of fact which he assert, must prove that those facts exist.  The burden of proof in a suit or proceeding, lies on that person, who fail if no evidence at all were given on either side, See also (Section 107 of the Evidence Act). Justice Mativo in Hellen Wangari Wangechi case, supra observed as follows in similar circumstances:
“It is a well-established rule of evidence that whoever asserts a fact is under an obligation to prove it in order to succeed.  As observed above, the Appellant made allegation in the plaint, hence she was under an obligation to support the allegation.  For example, since there was a denial in the defence, it was necessary to adduce evidence to show how the amount of Kshs.316,000/- was arrived at.”
47.CW1 stated that by the time they wrote the letters stopping deductions they had contributed KShs.294,900/=, however, the particularization of the sum, in as far as each individual contributor is concerned is found wanting. The evidence or lack thereof is deficient, as it is not particularized with specificity that each claimant was an actual contributor.
48.The claim was a special damage in nature thus need for not only be particularly pleaded, but also be specifically proved.  See the cases of Savannah Development CO. Ltd v Posts and Telecommunications Employees Housing Co-Op Society Ltd (Civil Appeal No. 160 of 1991 (unreported), Jivanji v Sanyo Electrical Company Limited [2003] 1EA 98 and Kenya Shell Ltd v Benjamin K. Kibiro (Civil App. No. 97 of 1986)
49.This requirement is not merely a procedural necessity but is a mandatory requirement as held in Savannah Development CO. Ltd v Posts and Telecommunications Employees Housing Co-Op Society Ltd supra, where the learned Judges of Appeal held as follows on this requirement:
“Having considered judicial pronouncement on the subject of special damages including the decision of this court, we can confidently state that the requirement that special damages must be explicitly pleaded proved is not merely a procedural necessity but is a mandatory legal requirement going to the jurisdiction on the specific issue and an objection by the Respondent that an Appellant has violated this rule may be taken at any time and even an appeal.”
50.There was no reliable evidence from the Appellants to prove with the necessary degree of certainty, the justification and the particularization of the sums claimed. This court would thus not rely on whims in sustaining the claim.
51.Similarly, the injunctive reliefs and the claim for general damages are disallowed.
Conclusion
52.I find that the appeal lacks merit and is hereby dismissed.
53.Costs of the appeal assessed at Khs.30,000 all-inclusive and are awarded to the respondent.

Dated, Signed and Delivered at NAIROBI Virtually this ……………Day of AUGUST, 2024.
……………………
WENDY MICHENI
JUDGE