Kioko & 6 others v Ojwang & 17 others (Civil Appeal 78 of 2019) [2024] KECA 1424 (KLR) (11 October 2024) (Judgment)
Neutral citation:
[2024] KECA 1424 (KLR)
Republic of Kenya
Civil Appeal 78 of 2019
DK Musinga, MSA Makhandia & P Nyamweya, JJA
October 11, 2024
Between
John Muange Kioko
1st Appellant
Nzisa Beth Wambu
2nd Appellant
Joseph Mbaluto
3rd Appellant
Mbithi Mulela
4th Appellant
Nancy Mailu
5th Appellant
Joseph Ndony
6th Appellant
Janet Nzilani
7th Appellant
and
Samson Ojwang
1st Respondent
Harrison Nyamu
2nd Respondent
Lazarus Muema Ndivo
3rd Respondent
Rosemary Mwaniki
4th Respondent
Peter Kamba Kiiti
5th Respondent
David Nzomo
6th Respondent
Catherine Nzila
7th Respondent
Nathan Muange Ngwili
8th Respondent
Collins Kitaka Kaloki
9th Respondent
Romana Ngina Kitusa
10th Respondent
David Ndolo
11th Respondent
Geoffrey Omondi
12th Respondent
Rose Kasuu
13th Respondent
Moses Tama
14th Respondent
Patrick Mulaa
15th Respondent
Joshua Kavithi
16th Respondent
Katelembo Athiani Muvuti Farming And Ranching Cooperative Society
17th Respondent
County Commissioner for Co-operatives Machakos County
18th Respondent
(Being an appeal from the ruling and order of the High Court at Machakos (Kemei, J.) dated 4th December 2018 in Civil Suit No. 13 of 2018
Civil Suit 13 of 2018
)
Judgment
1.The facts leading to this appeal are fairly straightforward. The appellants filed suit against the respondents in the High Court at Machakos by a plaint dated 12th June 2018. They sought various prayers with regard to the running and management of the affairs of Katelembo Athiani Muvuti Farming and Ranching Co-operative Society, (“the 17th respondent”) by the management committee. Pursuant to the suit, the appellants filed an application by way of Notice of Motion dated 12th June 2018, seeking orders of injunction in terms that the 1st to 9th respondents who were then members of the 17th respondent Task Force Committee, either by themselves, their agents, servants or in any manner whatsoever be restrained from running and managing the 17th respondent’s affairs; be restrained from in any manner whatsoever taking up office pending the hearing and determination of the suit, and that the court do issue an order directing the County Commissioner for Co- operatives in Machakos County, (“the 18th respondent”) to convene a valid Annual General Meeting and thereafter oversee and conduct elections under the 17th respondent’s Constitution and the Co-operatives Societies Act, so as to elect a new management committee.
2.In response to the suit and application, the 5th, 7th, 10th to 18th respondents filed notices of preliminary objections dated 27th June 2018, 28th June 2018, and 9th August 2018, respectively. They were all to the effect that the trial court had no jurisdiction to entertain a dispute concerning the business of a Co-operative Society as provided for in section 76 of the Co-operative Societies Act as that jurisdiction was a preserve of the Co-operative Societies Tribunal (“the Tribunal”). Further, that the entire suit and the application offended the provisions of section 81(1) of the said Act which provides for appeals from the decision of the Tribunal to the High Court within 30 days of the decision.
3.To these preliminary objections, the appellants responded by filing grounds of opposition, stating that the subject matter of the suit was about the composition and management of the 17th respondent’s task force committee, therefore it did not fall within those matters that must be handled by the Tribunal in the first instance as envisaged and contemplated under section 76 of the Cooperative Societies Act.
4.The trial court upon hearing the preliminary objections inter- partes, upheld them, stating that whatever the appellants were raising did not fall outside the realm of section 76 of the Co- operative Societies Act. The suit as well as the application were accordingly struck out.
5.Aggrieved by the ruling and order, the appellants filed the instant appeal challenging the decision on grounds, inter alia, that the trial court erred in law and in fact by failing to consider the appellants’ written submissions; in finding that the preliminary objections had merit; by only considering the arguments raised in the respondents’ submissions; and in failing to consider the authorities filed by the appellants, which demonstrated that the dispute was not one of those contemplated by section 76 of the Co-operatives Societies Act.
6.The appeal was canvased by way of written submissions, with limited oral highlights. At the plenary hearing of the appeal on 15th May 2024, Mr. Mocha held brief for Ms. Sawe, learned counsel for the appellants, whereas Mr. Mutua, learned counsel, appeared for the 5th and 8th to 18th respondents. The appellants compressed the grounds of appeal into one main issue, that is, whether the trial court erred in law in upholding the preliminary objections.
7.The appellants submitted that the trial court wrongly agreed with respondents that the appellants’ suit was purely a dispute relating to the business of the Co-operative Society and therefore, a preserve of the Tribunal. To the appellants, the dispute related to elections, illegal holding of office and failure to convene a general meeting by the management committee to allow for elections to be held and therefore the trial court had jurisdiction. That the disputes raised by the appellants were not the kind of business of the Society falling within the ambit and purview of section 76 of the Co-operative Societies Act and therefore, the trial court misdirected itself by holding otherwise. Counsel relied on the case of Alex Malikhe Wafubwa & Others v Elias Nambakha Wamita & 4 Others [2012] eKLR, for the propositions.
8.The respondents on the other hand submitted that their Preliminary Objections were anchored on section 76 of the Co- operative Societies Act. Their argument was that the appellants’ suit was purely a dispute relating to the business of the affairs of a Co-operative Society and therefore, a preserve of the Tribunal. Accordingly, the trial court did not have jurisdiction to entertain the suit.
9.At the plenary hearing of the appeal, Mr. Mocha indicated that the 1st to 4th and 6th to 7th respondents did not appear, though served with hearing notices. We also noted that they had not participated in the proceedings in the trial court. Both counsel reiterated the appellants’ and respondents’ positions already set out elsewhere in this judgment. Suffice to add that the 18th respondent through its submissions dated 13th May 2024, equally submitted that the High Court was right in upholding the Preliminary Objections as raised by the respective respondents. That the appellants’ argument that a dispute relating to election, illegal holding of office, and failure to convene a general meeting by the management committee did not concern the business of the society was misleading. That such disputes cover not only the internal management of the Society but also part of the activities of the society within the ambit of its bylaws and rules. That the court was right therefore in holding that the dispute fell within section 76 of the Co-operative Societies Act and that it was a dispute that the Tribunal could handle in the first instance.
10.We have carefully considered the record of appeal, the submissions of respective counsel, the authorities cited, and the law. To our minds, the only issue for determination is whether the trial court was right in upholding the preliminary objections raised by the respondents. From the plaint, the appellants expressly pleaded that they were members of the 17th respondent and that what concerned them was the interim committee which had been put in place to oversee the affairs of the Society for a three-months period, and that they had failed to do, what they were required to do that is, putting in place measures to safeguard the members' interest. They had also failed to address issues concerning the Society’s properties. That despite there being definite time within which the members were to stay in the office, and the same having expired, they had refused to vacate the offices. The appellants also attacked the mode of appointment of the task force members. They thus sought prayers already set out elsewhere in this judgment. This was, therefore, ideally a dispute between members of the 17th respondent and their management team as correctly held by the trial court.
11.It has constantly been stated that jurisdiction is a threshold issue that goes to the competence of the Court to hear and determine a suit. Jurisdiction can be raised at any stage of the proceedings in court, by any of the parties, or by the court, and once raised the court would do well to examine it and render a considered ruling on it. Jurisdiction, a mantra in adjudication, connotes the authority or power of a court to determine a dispute submitted to it by contending parties in any proceedings. Where a court is drained of the jurisdiction to entertain a matter, the proceedings flowing from it, no matter the quantum of diligence, dexterity, artistry, sophistry, transparency, and objectivity injected into it, will be marooned in the intractable web of nullity. See National Social Security Fund Board of Trustees v Kenya Tea Growers Association & 14 Others [2023] KECA 80 (KLR).
12.Were the preliminary objections raised in the suit in the trial court well taken? In the Tanzanian case of Karata Ernest & Others v Attorney General [2010] TZCA 30, the court put the issue of preliminary objections in a more succinct manner:
13.Section 76 of the Co-operative Societies Act is the principal section that hems the scope of disputes which fall within the jurisdiction of the Tribunal. It provides that: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; orb.between members, past members or deceased members, and the society, its Committee or any officer of the society; orc.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; orb.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.”
14.From the foregoing, it is clear that a dispute that falls under section 76 of the act must be referred to the Tribunal.
15.The appellants’ suit in the main revolved around the complaints by members of the Society as against the management team. The dispute therefore clearly involved members of a Co-operative Society and its business, which ideally meant that the High Court had no jurisdiction to entertain the suit. The proper forum was none other than the Co-operative Societies Tribunal. The High Court only had appellate jurisdiction in the circumstances pursuant to section 81 of the Act and its decision flowing therefrom was final.
16.We note though that the expression “business of the society” has not been defined in the Act, the expression has fallen for interpretation by the courts in this Country and elsewhere with commendable frequency. Pronouncements from different courts in this country and elsewhere have led to a cleavage in judicial opinions as to the true meaning and scope of that expression appearing in the Act. In the case of Gatanga Coffee Growers Co- operative Society Ltd v Gitau Civil Appeal No. 135 of 1967, for instance, Harris and Simpson, J. held as follows:
17.Clearly, from the pleadings in the High Court, the issues raised were disputes that relate to the business of a Co-operative Society and no other, and as such, the dispute ought to have been referred to the Tribunal and not the High Court. The forum provided for ventilating the aggrieved party’s claim is clear, it is the Tribunal. The High Court is not clothed with original jurisdiction in Co- operative Societies disputes, but can hear parties by way of appeals only as per section 81(1) of the Co-operatives Act which provides:Also, section 81(5) provides:
18.We think we have said enough to show that the trial court was right in downing its tools with regard to the dispute. Before we pen off, we wish to reiterate what Lenaola, J. (as he then was), said in the case of John Richard Ouma Nyamai v The Co-operative Tribunal & 2 Others [2013] eKLR:
19.Courts over the years have been constantly reminded that where Parliament has through statute provided a clear procedure for redress or resolution of disputes, that procedure ought and must be followed. This principle was reiterated in the case of Speaker of the National Assembly v James Njenga Karume [1992] eKLR. The appellants’ first pit stop therefore should have been the Tribunal and not the High Court.
20.In the light of our conclusions above, we are satisfied that the ruling and order of the trial court was arrived at on well-reasoned grounds. Accordingly, the appeal is devoid of merit and we dismiss it with costs to the respondents.
DATED AND DELIVERED AT NAIROBI THIS 11TH DAY OF OCTOBER 2024.D. K. MUSINGA, (P).............................JUDGE OF APPEALASIKE-MAKHANDIA.............................JUDGE OF APPEALP. NYAMWEYA.............................JUDGE OF APPEALI certify that this is a True copy of the originalSignedDEPUTY REGISTRAR