1. The appellant Nanzala Jonathan filed this appeal through a memorandum of appeal dated 4/7/2016 challenging the judgment of the Co-operative Tribunal Case (CTC) No. 75 of 2013 which was delivered on 3/6/2016. The respondent who was the claimant in the case through an amended statement of claim dated 10/4/2013 sought to recover KShs 2,109,066/= from the claimant. The claim was based on grounds that the appellant was a member and employee of the respondent and on diverse dates between January 2005 and March 2010 the appellant obtained several loans from the respondent amounting to KShs 2,109,066/= and had failed to repay.
2. It was alleged that some of the defaulted loans were obtained fraudulently and without following the laid down procedures particulars of which were:
a) willfully disbursing funds without approval.
b) willfully disbursing funds without signatures in the loan application forms.
c) willfully disbursing funds where forms were not properly signed by the applicants.
d) disbursing money without all signatures in the application forms.
e) making payments to untraceable loan application forms
3. The respondent further alleged that it was the appellant’s duty both under statute and in contract to, among other things, take all reasonable steps to protect the respondent from all foreseeable losses, liability, claims and any other adverse consequences in the course of her duties. As a result of the fraudulent activities, the appellant benefitted from the respondent to the tune of KShs 2,109,066/= which she had failed to refund. Reasons whereof the respondent was claiming the same from her.
4. In her statement of defence dated 4/6/2013 the appellant denied the respondent’s claim and put the respondent to strict proof thereof. She averred that she was not aware of the loans claimed and that the sums being claimed had no basis and were not supported by any materials or applications to warrant their being claimed as loans. Further that the respondent heaped together sums of money withdrawn by herself on the authority of the management committee for the committee’s use and operations and claimed the same from her as loans.
5. The case was heard with the respondent calling one witness David Mutisya, (CW 1) its manager while the appellant testified in her defence.
6. In a judgment delivered on 3/6/2016 the Tribunal found that the appellant had admitted owing the respondent the sum of KShs 935,860/= while the sum of KShs 1,400,000/= had been proved by the respondents against her making a total of KShs 2,335,860/=. However, since parties are bound by their pleadings, judgment was entered for the claimed sum of KShs 2,109,066/=.
7. Dissatisfied with the decision, the appellant filed the present t appeal based on grounds that:
a) the Tribunal erred in law and factin ordering the appellant to pay a total of KShs 2,109,066/= in unpaid loan amounts without proof of such loans being applied for, granted and not paid for.
b) the Tribunal erred in law and in fact in entering judgment against the weight of evidence tendered before it and without proof to the standard necessary for a special claim.
8. Based on these grounds the appellant prays that the judgment of the Tribunal issued on 3/6/2016 be set aside and the CTC No. 75 of 2013 be dismissed with costs to the appellant.
9. The appeal was disposed of by way of written submissions filed by learned counsels for both parties.
10. Learned counsel for the appellant submits that the evidence offered by the respondent before the Tribunal to prove its case did not establish that the appellant had fraudulently obtained loans from the respondent because there were no documents to show that she had signed a loan form which was then vetted and approved by the Sacco directors before disbursement of the loan. That the claim was for loan monies obtained and not repaid and not embezzlement of funds. If it was the later case, the appellant would have been surcharged as provided under section 75 of the Co-operative Societies Act. Therefore, some of the sums shown in her statement of account as loans advanced to her were introduced into the account “out of the blues.” The sums she contested in the statement of account were as follows:
a) KShs 220,000/= on 12/3/2008.
b) KShs 170,000/= on 22/7/2009.
c) KShs 466,024/= on 22/7/2009.
d) KShs 49,966/= on 22/7/2009
e) KShs 1,230,000/= on 16/12/2009. This sum however, according to learned counsel was investigated and found to have been sed to pay Sacco officials/directors allowances.
11. Learned counsel submits that considering the sums above which total KShs 2,135,990/= could not be proved by the respondent yet its claim was for KShs 2,109,066/=.
12. According to the appellant, the loan due from her to the respondent was KShs 703,355/= out of which KShs 518,000/= worth of her shares and KShs 42,598/= worth of her dividends making a total of KShs 560,598/= was utilized to offset the loan thereby leaving a balance of KShs 142,757/=. This would be liquidated in the normal manner as per the Sacco rules.
13. Learned counsel submits further that the claim by the respondent being in the nature of special damages required to be strictly proved.
14. Learned counsel further submits that the judgment delivered by the chairman of the Sacco alone was illegal as it was required to be by a three-member panel consisting of at least the chairman and/or the deputy chairman and two other members.
15. Learned counsel for the respondent on his part submitted that the respondent proved its claim against the appellant that she irregularly obtained loans without following due process during the period of his membership and employment. He recounted in his submissions the evidence tendered by the respondent before the tribunal and the response by the appellant and said that the Tribunal had rightly rejected the appellant’s explanation and found that the respondent had proved its claim against her.
16. I have considered the appeal. The issue for determination is whether the Co-operative Tribunal erred in holding that the respondent had proved its case against the appellant.
17. This being a first appeal, the duty of the court is to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. See for example Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 and Peters vs. Sunday Post Limited (1968) EA 123. (1956) E.A page 424.
18. The jurisdiction of the Cooperatives Tribunal, is provided for under section 76 of the Cooperative Societies Act (Cap. 490) Laws of Kenya provides as follows:
“76. (1) If any dispute concerning the business of a co- operative society arises:-
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between members, past members or deceased members, and the society, its Committee or any officer of the society; or
(c) between the society and any other co-operative Society; it shall be referred to the Tribunal.
(2) A dispute for the purpose of this section shall include -
(a) a claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or
(b) a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not.
(c) a claim by a Sacco society against a refusal to grant or a revocation of license or any other due, from the Authority.”
19. The appellant was a member of the Sacco and also an employee and therefore an officer thereof. The dispute is over a debt the sacco claims the appellant owes it. The appellant disputed the authenticity of the claim.
20. Learned counsel for the appellant submitted that the decision rendered by the Tribunal, written by the chairman alone was not legal as there was no quorum. On the issue of the illegality of the decision rendered by the chairman alone, section 80(1) of the Co-operative Societies Act (Cap. 490) Laws of Kenya provides that:
“For the purposes of hearing and determining any cause or matter under this Act, the Chairman and two members of the Tribunal shall form a quorum.
Provided that where for any reason either or both of the members is or are not present for any part of the hearing, the jurisdiction of the Tribunal may be exercised by the Chairman, sitting either with one such member or alone as the case may be.”
21. It is apparent from the foregoing provision that although quorum of the Tribunal is three members, under the proviso to sub-section 1, the chairman of the Tribunal sitting alone can conduct business.
22. Section 80(5) on the other hand gives authority to the Deputy Chairman to exercise the powers of the Chairman under certain circumstances as follows:
“5. Any power conferred or duty imposed by or under this Act on the Chairman may, unless a contrary intention appears, be exercised or performed by the Deputy Chairman of the Tribunal if:—
a) the Chairman is unable to exercise or perform that power or duty owing to illness or absence;
b) the Chairman authorises the Deputy Chairman to exercise or perform that power or duty.”
23. The proceedings show that the hearing of the respondent’s case on 10/3/2015 was conducted by the Deputy Chairman, Mr. Mathenge, alone. Hearing of the appellant’s case on 26/5/2015 by the Deputy Chairman, and a member G.O. Ochich. The judgment was written by Mr. Alex Ithuku, Chairman and read by the Deputy Chairman Mr. B. M. Mathenge. Since the law gives the chairman jurisdiction to conduct the business of the Tribunal alone under certain circumstances and goes further to confer upon the Deputy Chairman authority to exercise the powers of the chairman under certain circumstances, it is incumbent upon the appellant to show that when the chairman exercised the jurisdiction to write the judgment, the circumstances under which he is permitted to do so under the Act did not exist. That has not been shown in this appeal. Consequently, I do not find any breach of the law in their exercise of the duties with respect to the hearing and determination of the claim. The submission in that respect is thus without merit and the same is dismissed.
24. The claim by the Sacco from the appellant is KShs 2,109,066/=. The issue for determination is whether the Chairman of the Tribunal was correct in finding that the claim had been proved.
25. The burden to prove the case was upon the appellant. Section 107 of the Evidence Ac (Cap. 80) Laws of Kenyat provides that:
“Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.”
26. Section 108 of the Evidence Act goes further to provide that, the burden of proof lies on the party who would lose if no evidence was provided before the court. Justice Mativo (as he then was) in Hellen Wangari Wangechi v Carumera Muthini Gathua [2005] eKLR referred to the decision of Lord Denning in Miller v Minister of Pensions [1942] 2 ALL ER 372 which states that:
“The … (standard of proof) … is well settled. It must carry a reasonable degree of probability…If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged, but if the probabilities are equal, it is not.”
“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.”
27. In the case of Re H (minors) sexual abuse; standard of proof {1996} AC 563 The House of Lords laid down a series of guiding principles on standard of proof as follows:
a) Where the matters in issue are facts, the standard of proof required in non-criminal proceedings is the preponderance of probability, usually referred to as the balance of probability.
b) The balance of probability standard means that the Court must be satisfied that the event in question is more likely than not to have occurred.
c) The balance of probability standard is a flexible standard. This means that when assessing this probability, the Court will assume that some things are inherently more likely than others.”
28. The standard of proof in civil cases was discussed in the Court of Appeal decision in Civil Appeal 15 of 2016, Samuel Ndegwa Waithaka v Agnes Wangui Mathenge & 2 others [2017] [eKLR]. The Court while referring to Lord Nicholls in the Case above observed that in civil cases such as this case, the standard of proof is on the balance of probabilities. This standard means that a court is satisfied that an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. In H (Minors) [1966] AC 563 at pg 586, Lord Nicholls explained that the test on the balance of probabilities was flexible. The learned Judge said,
“When assessing the probabilities, the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation, the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.”
29. The appellant presented evidence showing his repayment of the loan, letters from the bank confirming the full repayment of the loan. This was in response to the bank’s demands indicating that he was yet to clear the loan. He also presented a letter from the bank telling him that his name had been forwarded to the CRB for listing as a loan defaulter.
30. According to the evidence tendered by CW 1, the appellant was employed by the Sacco in 2003. She variously applied for and was granted loans by the Sacco and she serviced them appropriately from 26/1/2005 to 6/1/2010 when she was granted a loan of KShs 1,525,290/=. Shortly thereafter on 6/4/2010 the appellant’s employment with the Sacco was terminated and she had never repaid her outstanding loan with the Sacco.
31. In addition, the Sacco claims, and the respondent conceded that on 9/4/2008, a cheque No. 00D77472 for the sum of KShs 1,230,000/= was drawn in favour of the appellant and the Sacco account No. 0112061334700 was debited.
32. It is the Sacco’s case and this is not disputed by the appellant that the appellant was not one of the Sacco’s agents authorized to cash cheques with their bank. In case money was withdrawn by one of the authorized agents namely Annah Fridah Nyamboga, Violet Purity Mghoi and David Mutisya the same was entered in the cash book/register before it was paid out. The register was produced as exhibit before the Tribunal and although the cheque was entered in the register, there is no payment entered therein to show how the money was utilized. This issue was discovered after the appellant had left the Sacco employment.
33. In cross-examination, CW 1 said that the appellant was suspended from employment in February, 2010 and her employment terminated in August 2020. That he was previously a System Analyst and he became the Sacco manager in January 2011. Before him the manager was Fridah Nyaboke.
34. CW 1 also said that no action was taken against the signatories of the cheque for KShs 1,230,000/= who were still members of the Sacco. They had not been surcharged for the same.
35. He also said that they obtained a copy of the cheque from the bank in 2012, long after the appellant had left the Sacco employment. He also said that they could not trace any supporting documents for the payment. Nyaboke had left the Sacco in April 2010 at the same time as the appellant and no action was taken against Nyaboke over the payment of that sum.
36. In further cross-examination, the CW 1 said that the appellants account statement showed an entry of KShs 1,230,000/= on 16/12/2009 but there was no loan application for the amount. That it was entered into her loan statement in view of the cheque counterfoil.
37. In her defence the appellant said that indeed she cashed the cheque for KShs 1,230,000/= but that it was at the instance of the manager Fridah Nyaboke who asked her to draw the cheque in her name and have it open so that she could withdraw the money. She said that she tried to find out from Fridah what the money was for. But in her evidence she did not say whether Fridah answered her and if so, what it was for. She said that she handed over the money to Fridah. She conceded that she was not an agent of the Sacco and she could not withdraw the money directly from the bank when the cheque was open.
38. The appellant conceded that on 6/1/2010 she applied and was granted a loan of KShs 1,525,290/= and she was paid a net of KShs 300,000/= after deductions of her previous running loans were made. She said that at the time she left the Sacco her loan portfolio was KShs 1,523,290/=.
39. She also said that the sum of KShs 300,000/= that had been given to her after she was granted the last loan had not been posted to her account statement by the time she left. She said that out of this, KShs 170,000/= went to National Bank as a cheque No. 19550 and the balance of KShs 130,000/= was paid to her through Fosa.
40. The appellant’s dispute was over KShs 1,230,000/= and KShs 170,000/= indicated in her statement of account as loans.
41. This is almost a straightforward matter. I do not appreciate how the Chairman of the Tribunal arrived at the conclusion that the appellant had obtained an unexplained loan of KShs 170,000/=. The KShs 170,000/= appearing in the evidence was explained by both the Sacco and the appellant as the money the appellant received out of her last loan she was granted. She explained that her net take home was KShs 300,000/= and KShs 170,000/= was paid to National Bank and KShs 130,000/= to her Fosa account. There was no dispute over that issue.
42. The only issue in this dispute is how much was the appellant owing the Sacco by the time her shares and dividends had been applied to offset her loan. From the evidence of CW 1, the appellant’s indebtedness to the Sacco would be KShs 1,525,290/= (being the last loan granted) + 1,230,000/= (which she conceded she withdrew at the instance of the manager) making a total of KShs 2,755,290/=. However, CW 1 said in evidence that their claim was for KShs 2,498,290/=. I do not see any evidence on how this figure came to be because there is no dispute between the parties that the appellant’s deposits of KShs 518,000/= and dividends of KShs 42,598/= for the year 2020 were utilized to offset part of the debt leaving a balance of KShs 2,194,692/=. However, the Sacco’s claim is for KShs 2,109,066/= The difference of KShs 85,626/= is explained from the evidence of the appellant that the loan was serviced for January, February and March, 2010 at the rate of KShs 28,542/= making a total of KShs 85,626/= and this was not disputed by the Sacco. Therefore, the submission that some monies as outlined in the submissions were introduced into the appellant’s statement of account out of the blues is not valid. The appellant conceded that as at the time of leaving the Sacco, her Sacco account was accurate and she had just been granted the loan of KShs 1,525,290/=. Consequently, KShs 85,626 was applied from her salary, KShs 518,000 from her Sacco share deposits and KShs 42,598/= from her dividends leaving a balance of KShs 879,066/=..
43. There is no dispute that the appellant had not paid her outstanding loan of KShs 879,066/= (1,525,290 - 85,626 – 518,000 – 42,598) by the time the dispute went to the Tribunal. She is liable to pay this sum.
44. She disputes that she is liable to pay the KShs 1,230,000/= for reasons that she was asked to withdraw the money by the manager Nyaboke which she did and she handed over to her. It is highly probable that the appellant is saying the truth that the money was withdrawn at the instance of the manager, Nyaboke because the withdrawal cheque was duly signed. It is also highly probable that she handed over the money to the manager, Nyaboke by the appellant because Nyaboke was dismissed from the Sacco at the same time as the appellant. Unfortunately for her, this money was not entered into the books of account for the Sacco as such. The appellant never told the management about it, not even when she was suspended from duty and even on dismissal. The issue was discovered long after she was dismissed. She then admits that indeed she was the one who carried out that transaction.
45. There is evidence that the money was paid to her by way of withdrawal from the bank. There is no evidence that it reached the Sacco. There is evidence tendered by the Sacco and which she has conceded to be correct that she was the one who withdrew the money from the bank. Other than her verbal claim in court that she handed over the money to the manager the appellant did not make available any documentary evidence to prove her handing over such a large sum of money to the manager.
46. Given the circumstances, it is hardly surprising that the appellant was the only person pointed at for appropriation of the money. There is no evidence that she submitted any explanation or report to her senior, the Loans Officer or the management of the Sacco over the utilization of the funds save for pointing an accusatory finger at the manager during her testimony. In that instance, she is lucky that the Sacco decided to treat the amount as a loan to her because this was what was indicated at the back of the counterfoil cheque. Otherwise, it would have pursued her as a fraud as well. Her protestations that she is not liable to pay the money is without merit and the Chairman of the Tribunal was right to dismiss it.
47. I am satisfied that on this sum, the Chairman of the Tribunal was correct in his finding that the appellant was liable to pay the money to the Sacco.
48. Consequently, I am satisfied that the appellant owed the Sacco KShs 2,109,066/= made up of KShs 879,066/= as her unpaid loan and KShs 1, 230,000/= which she irregularly withdrew from the Sacco account. The Sacco proved its dispute before the Tribunal and the appellant is liable to pay this sum in case she has not made any other payments from the time her deductions for the share deposits and dividends were made.
49. I therefore find the appeal to be without merit and the same is dismissed with costs to the respondent together with interest thereon.
Dated, Signed and Delivered on the Virtual Platform Teams this 19th day of December, 2024.
ANDAYI W. F.
JUDGE
In the presence of:
N/A for the Appellant.
N/A for the Respondent.
Eutropia Court Assistant.
Right of appeal 30 days granted.
2. It was alleged that some of the defaulted loans were obtained fraudulently and without following the laid down procedures particulars of which were:
a) willfully disbursing funds without approval.
b) willfully disbursing funds without signatures in the loan application forms.
c) willfully disbursing funds where forms were not properly signed by the applicants.
d) disbursing money without all signatures in the application forms.
e) making payments to untraceable loan application forms
3. The respondent further alleged that it was the appellant’s duty both under statute and in contract to, among other things, take all reasonable steps to protect the respondent from all foreseeable losses, liability, claims and any other adverse consequences in the course of her duties. As a result of the fraudulent activities, the appellant benefitted from the respondent to the tune of KShs 2,109,066/= which she had failed to refund. Reasons whereof the respondent was claiming the same from her.
4. In her statement of defence dated 4/6/2013 the appellant denied the respondent’s claim and put the respondent to strict proof thereof. She averred that she was not aware of the loans claimed and that the sums being claimed had no basis and were not supported by any materials or applications to warrant their being claimed as loans. Further that the respondent heaped together sums of money withdrawn by herself on the authority of the management committee for the committee’s use and operations and claimed the same from her as loans.
5. The case was heard with the respondent calling one witness David Mutisya, (CW 1) its manager while the appellant testified in her defence.
6. In a judgment delivered on 3/6/2016 the Tribunal found that the appellant had admitted owing the respondent the sum of KShs 935,860/= while the sum of KShs 1,400,000/= had been proved by the respondents against her making a total of KShs 2,335,860/=. However, since parties are bound by their pleadings, judgment was entered for the claimed sum of KShs 2,109,066/=.
7. Dissatisfied with the decision, the appellant filed the present t appeal based on grounds that:
a) the Tribunal erred in law and factin ordering the appellant to pay a total of KShs 2,109,066/= in unpaid loan amounts without proof of such loans being applied for, granted and not paid for.
b) the Tribunal erred in law and in fact in entering judgment against the weight of evidence tendered before it and without proof to the standard necessary for a special claim.
8. Based on these grounds the appellant prays that the judgment of the Tribunal issued on 3/6/2016 be set aside and the CTC No. 75 of 2013 be dismissed with costs to the appellant.
9. The appeal was disposed of by way of written submissions filed by learned counsels for both parties.
10. Learned counsel for the appellant submits that the evidence offered by the respondent before the Tribunal to prove its case did not establish that the appellant had fraudulently obtained loans from the respondent because there were no documents to show that she had signed a loan form which was then vetted and approved by the Sacco directors before disbursement of the loan. That the claim was for loan monies obtained and not repaid and not embezzlement of funds. If it was the later case, the appellant would have been surcharged as provided under section 75 of the Co-operative Societies Act. Therefore, some of the sums shown in her statement of account as loans advanced to her were introduced into the account “out of the blues.” The sums she contested in the statement of account were as follows:
a) KShs 220,000/= on 12/3/2008.
b) KShs 170,000/= on 22/7/2009.
c) KShs 466,024/= on 22/7/2009.
d) KShs 49,966/= on 22/7/2009
e) KShs 1,230,000/= on 16/12/2009. This sum however, according to learned counsel was investigated and found to have been sed to pay Sacco officials/directors allowances.
11. Learned counsel submits that considering the sums above which total KShs 2,135,990/= could not be proved by the respondent yet its claim was for KShs 2,109,066/=.
12. According to the appellant, the loan due from her to the respondent was KShs 703,355/= out of which KShs 518,000/= worth of her shares and KShs 42,598/= worth of her dividends making a total of KShs 560,598/= was utilized to offset the loan thereby leaving a balance of KShs 142,757/=. This would be liquidated in the normal manner as per the Sacco rules.
13. Learned counsel submits further that the claim by the respondent being in the nature of special damages required to be strictly proved.
14. Learned counsel further submits that the judgment delivered by the chairman of the Sacco alone was illegal as it was required to be by a three-member panel consisting of at least the chairman and/or the deputy chairman and two other members.
15. Learned counsel for the respondent on his part submitted that the respondent proved its claim against the appellant that she irregularly obtained loans without following due process during the period of his membership and employment. He recounted in his submissions the evidence tendered by the respondent before the tribunal and the response by the appellant and said that the Tribunal had rightly rejected the appellant’s explanation and found that the respondent had proved its claim against her.
16. I have considered the appeal. The issue for determination is whether the Co-operative Tribunal erred in holding that the respondent had proved its case against the appellant.
17. This being a first appeal, the duty of the court is to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. See for example Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 and Peters vs. Sunday Post Limited (1968) EA 123. (1956) E.A page 424.
18. The jurisdiction of the Cooperatives Tribunal, is provided for under section 76 of the Cooperative Societies Act (Cap. 490) Laws of Kenya provides as follows:
“76. (1) If any dispute concerning the business of a co- operative society arises:-
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between members, past members or deceased members, and the society, its Committee or any officer of the society; or
(c) between the society and any other co-operative Society; it shall be referred to the Tribunal.
(2) A dispute for the purpose of this section shall include -
(a) a claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or
(b) a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not.
(c) a claim by a Sacco society against a refusal to grant or a revocation of license or any other due, from the Authority.”
19. The appellant was a member of the Sacco and also an employee and therefore an officer thereof. The dispute is over a debt the sacco claims the appellant owes it. The appellant disputed the authenticity of the claim.
20. Learned counsel for the appellant submitted that the decision rendered by the Tribunal, written by the chairman alone was not legal as there was no quorum. On the issue of the illegality of the decision rendered by the chairman alone, section 80(1) of the Co-operative Societies Act (Cap. 490) Laws of Kenya provides that:
“For the purposes of hearing and determining any cause or matter under this Act, the Chairman and two members of the Tribunal shall form a quorum.
Provided that where for any reason either or both of the members is or are not present for any part of the hearing, the jurisdiction of the Tribunal may be exercised by the Chairman, sitting either with one such member or alone as the case may be.”
21. It is apparent from the foregoing provision that although quorum of the Tribunal is three members, under the proviso to sub-section 1, the chairman of the Tribunal sitting alone can conduct business.
22. Section 80(5) on the other hand gives authority to the Deputy Chairman to exercise the powers of the Chairman under certain circumstances as follows:
“5. Any power conferred or duty imposed by or under this Act on the Chairman may, unless a contrary intention appears, be exercised or performed by the Deputy Chairman of the Tribunal if:—
a) the Chairman is unable to exercise or perform that power or duty owing to illness or absence;
b) the Chairman authorises the Deputy Chairman to exercise or perform that power or duty.”
23. The proceedings show that the hearing of the respondent’s case on 10/3/2015 was conducted by the Deputy Chairman, Mr. Mathenge, alone. Hearing of the appellant’s case on 26/5/2015 by the Deputy Chairman, and a member G.O. Ochich. The judgment was written by Mr. Alex Ithuku, Chairman and read by the Deputy Chairman Mr. B. M. Mathenge. Since the law gives the chairman jurisdiction to conduct the business of the Tribunal alone under certain circumstances and goes further to confer upon the Deputy Chairman authority to exercise the powers of the chairman under certain circumstances, it is incumbent upon the appellant to show that when the chairman exercised the jurisdiction to write the judgment, the circumstances under which he is permitted to do so under the Act did not exist. That has not been shown in this appeal. Consequently, I do not find any breach of the law in their exercise of the duties with respect to the hearing and determination of the claim. The submission in that respect is thus without merit and the same is dismissed.
24. The claim by the Sacco from the appellant is KShs 2,109,066/=. The issue for determination is whether the Chairman of the Tribunal was correct in finding that the claim had been proved.
25. The burden to prove the case was upon the appellant. Section 107 of the Evidence Ac (Cap. 80) Laws of Kenyat provides that:
“Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.”
26. Section 108 of the Evidence Act goes further to provide that, the burden of proof lies on the party who would lose if no evidence was provided before the court. Justice Mativo (as he then was) in Hellen Wangari Wangechi v Carumera Muthini Gathua [2005] eKLR referred to the decision of Lord Denning in Miller v Minister of Pensions [1942] 2 ALL ER 372 which states that:
“The … (standard of proof) … is well settled. It must carry a reasonable degree of probability…If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged, but if the probabilities are equal, it is not.”
“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.”
27. In the case of Re H (minors) sexual abuse; standard of proof {1996} AC 563 The House of Lords laid down a series of guiding principles on standard of proof as follows:
a) Where the matters in issue are facts, the standard of proof required in non-criminal proceedings is the preponderance of probability, usually referred to as the balance of probability.
b) The balance of probability standard means that the Court must be satisfied that the event in question is more likely than not to have occurred.
c) The balance of probability standard is a flexible standard. This means that when assessing this probability, the Court will assume that some things are inherently more likely than others.”
28. The standard of proof in civil cases was discussed in the Court of Appeal decision in Civil Appeal 15 of 2016, Samuel Ndegwa Waithaka v Agnes Wangui Mathenge & 2 others [2017] [eKLR]. The Court while referring to Lord Nicholls in the Case above observed that in civil cases such as this case, the standard of proof is on the balance of probabilities. This standard means that a court is satisfied that an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. In H (Minors) [1966] AC 563 at pg 586, Lord Nicholls explained that the test on the balance of probabilities was flexible. The learned Judge said,
“When assessing the probabilities, the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation, the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.”
29. The appellant presented evidence showing his repayment of the loan, letters from the bank confirming the full repayment of the loan. This was in response to the bank’s demands indicating that he was yet to clear the loan. He also presented a letter from the bank telling him that his name had been forwarded to the CRB for listing as a loan defaulter.
30. According to the evidence tendered by CW 1, the appellant was employed by the Sacco in 2003. She variously applied for and was granted loans by the Sacco and she serviced them appropriately from 26/1/2005 to 6/1/2010 when she was granted a loan of KShs 1,525,290/=. Shortly thereafter on 6/4/2010 the appellant’s employment with the Sacco was terminated and she had never repaid her outstanding loan with the Sacco.
31. In addition, the Sacco claims, and the respondent conceded that on 9/4/2008, a cheque No. 00D77472 for the sum of KShs 1,230,000/= was drawn in favour of the appellant and the Sacco account No. 0112061334700 was debited.
32. It is the Sacco’s case and this is not disputed by the appellant that the appellant was not one of the Sacco’s agents authorized to cash cheques with their bank. In case money was withdrawn by one of the authorized agents namely Annah Fridah Nyamboga, Violet Purity Mghoi and David Mutisya the same was entered in the cash book/register before it was paid out. The register was produced as exhibit before the Tribunal and although the cheque was entered in the register, there is no payment entered therein to show how the money was utilized. This issue was discovered after the appellant had left the Sacco employment.
33. In cross-examination, CW 1 said that the appellant was suspended from employment in February, 2010 and her employment terminated in August 2020. That he was previously a System Analyst and he became the Sacco manager in January 2011. Before him the manager was Fridah Nyaboke.
34. CW 1 also said that no action was taken against the signatories of the cheque for KShs 1,230,000/= who were still members of the Sacco. They had not been surcharged for the same.
35. He also said that they obtained a copy of the cheque from the bank in 2012, long after the appellant had left the Sacco employment. He also said that they could not trace any supporting documents for the payment. Nyaboke had left the Sacco in April 2010 at the same time as the appellant and no action was taken against Nyaboke over the payment of that sum.
36. In further cross-examination, the CW 1 said that the appellants account statement showed an entry of KShs 1,230,000/= on 16/12/2009 but there was no loan application for the amount. That it was entered into her loan statement in view of the cheque counterfoil.
37. In her defence the appellant said that indeed she cashed the cheque for KShs 1,230,000/= but that it was at the instance of the manager Fridah Nyaboke who asked her to draw the cheque in her name and have it open so that she could withdraw the money. She said that she tried to find out from Fridah what the money was for. But in her evidence she did not say whether Fridah answered her and if so, what it was for. She said that she handed over the money to Fridah. She conceded that she was not an agent of the Sacco and she could not withdraw the money directly from the bank when the cheque was open.
38. The appellant conceded that on 6/1/2010 she applied and was granted a loan of KShs 1,525,290/= and she was paid a net of KShs 300,000/= after deductions of her previous running loans were made. She said that at the time she left the Sacco her loan portfolio was KShs 1,523,290/=.
39. She also said that the sum of KShs 300,000/= that had been given to her after she was granted the last loan had not been posted to her account statement by the time she left. She said that out of this, KShs 170,000/= went to National Bank as a cheque No. 19550 and the balance of KShs 130,000/= was paid to her through Fosa.
40. The appellant’s dispute was over KShs 1,230,000/= and KShs 170,000/= indicated in her statement of account as loans.
41. This is almost a straightforward matter. I do not appreciate how the Chairman of the Tribunal arrived at the conclusion that the appellant had obtained an unexplained loan of KShs 170,000/=. The KShs 170,000/= appearing in the evidence was explained by both the Sacco and the appellant as the money the appellant received out of her last loan she was granted. She explained that her net take home was KShs 300,000/= and KShs 170,000/= was paid to National Bank and KShs 130,000/= to her Fosa account. There was no dispute over that issue.
42. The only issue in this dispute is how much was the appellant owing the Sacco by the time her shares and dividends had been applied to offset her loan. From the evidence of CW 1, the appellant’s indebtedness to the Sacco would be KShs 1,525,290/= (being the last loan granted) + 1,230,000/= (which she conceded she withdrew at the instance of the manager) making a total of KShs 2,755,290/=. However, CW 1 said in evidence that their claim was for KShs 2,498,290/=. I do not see any evidence on how this figure came to be because there is no dispute between the parties that the appellant’s deposits of KShs 518,000/= and dividends of KShs 42,598/= for the year 2020 were utilized to offset part of the debt leaving a balance of KShs 2,194,692/=. However, the Sacco’s claim is for KShs 2,109,066/= The difference of KShs 85,626/= is explained from the evidence of the appellant that the loan was serviced for January, February and March, 2010 at the rate of KShs 28,542/= making a total of KShs 85,626/= and this was not disputed by the Sacco. Therefore, the submission that some monies as outlined in the submissions were introduced into the appellant’s statement of account out of the blues is not valid. The appellant conceded that as at the time of leaving the Sacco, her Sacco account was accurate and she had just been granted the loan of KShs 1,525,290/=. Consequently, KShs 85,626 was applied from her salary, KShs 518,000 from her Sacco share deposits and KShs 42,598/= from her dividends leaving a balance of KShs 879,066/=..
43. There is no dispute that the appellant had not paid her outstanding loan of KShs 879,066/= (1,525,290 - 85,626 – 518,000 – 42,598) by the time the dispute went to the Tribunal. She is liable to pay this sum.
44. She disputes that she is liable to pay the KShs 1,230,000/= for reasons that she was asked to withdraw the money by the manager Nyaboke which she did and she handed over to her. It is highly probable that the appellant is saying the truth that the money was withdrawn at the instance of the manager, Nyaboke because the withdrawal cheque was duly signed. It is also highly probable that she handed over the money to the manager, Nyaboke by the appellant because Nyaboke was dismissed from the Sacco at the same time as the appellant. Unfortunately for her, this money was not entered into the books of account for the Sacco as such. The appellant never told the management about it, not even when she was suspended from duty and even on dismissal. The issue was discovered long after she was dismissed. She then admits that indeed she was the one who carried out that transaction.
45. There is evidence that the money was paid to her by way of withdrawal from the bank. There is no evidence that it reached the Sacco. There is evidence tendered by the Sacco and which she has conceded to be correct that she was the one who withdrew the money from the bank. Other than her verbal claim in court that she handed over the money to the manager the appellant did not make available any documentary evidence to prove her handing over such a large sum of money to the manager.
46. Given the circumstances, it is hardly surprising that the appellant was the only person pointed at for appropriation of the money. There is no evidence that she submitted any explanation or report to her senior, the Loans Officer or the management of the Sacco over the utilization of the funds save for pointing an accusatory finger at the manager during her testimony. In that instance, she is lucky that the Sacco decided to treat the amount as a loan to her because this was what was indicated at the back of the counterfoil cheque. Otherwise, it would have pursued her as a fraud as well. Her protestations that she is not liable to pay the money is without merit and the Chairman of the Tribunal was right to dismiss it.
47. I am satisfied that on this sum, the Chairman of the Tribunal was correct in his finding that the appellant was liable to pay the money to the Sacco.
48. Consequently, I am satisfied that the appellant owed the Sacco KShs 2,109,066/= made up of KShs 879,066/= as her unpaid loan and KShs 1, 230,000/= which she irregularly withdrew from the Sacco account. The Sacco proved its dispute before the Tribunal and the appellant is liable to pay this sum in case she has not made any other payments from the time her deductions for the share deposits and dividends were made.
49. I therefore find the appeal to be without merit and the same is dismissed with costs to the respondent together with interest thereon.
Dated, Signed and Delivered on the Virtual Platform Teams this 19th day of December, 2024.
ANDAYI W. F.
JUDGE
In the presence of:
N/A for the Appellant.
N/A for the Respondent.
Eutropia Court Assistant.
Right of appeal 30 days granted.