Kimani & 5 others v Kangemi Matatu Owners Sacco; National Transport & Safety Authority (Interested Party) (Tribunal Case 856 of 2016) [2024] KECPT 1697 (KLR) (At Nairobi) (3 October 2024) (Judgment)
Neutral citation:
[2024] KECPT 1697 (KLR)
Republic of Kenya
Tribunal Case 856 of 2016
BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
October 3, 2024
Between
Patrick Njoroge Kimani
1st Claimant
John King'u Wambui
2nd Claimant
Michael Kenda
3rd Claimant
Joseph Gichuki Mutungu
4th Claimant
Robert Mwangi Nderitu
5th Claimant
stanley Ngugi Gacheru
6th Claimant
and
Kangemi Matatu Owners Sacco
Defendant
and
The National Transport & Safety Authority
Interested Party
Judgment
1.Matter for determination is the Statement of Claim dated 7/3/2017 to which the Claimants aver that they are registered proprietors of the motor vehicle registration number KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S.The aforementioned motor vehicles were duly licensed by National Transport and Safety Authority(NTSA) to operate as Public Service Motor vehicles(PSV) operators, between Central Business District(CBD) and Kangemi.The Claimants were members of the Respondent until 7/10/2016 when they withdrew their membership informing the Respondent and Interested party.
2.The Interested Party, that is, the NTSA demanded that all PSV operators should form associations, Companies or Saccos to be given PSV Road service License by its regulation in 2014. As a result, the Claimant’s motor vehicles were entered in the Interested Party’s data under the Respondent fleet of PSV vehicles plying the Kangemi-CBD route.The Claimant wrote to the Respondent vide a letter dated 7/10/2016 informing them of their decision to cease membership with the Respondent. The Claimant avers that the Respondent did not object to the cessation of the membership and demanded that the Claimants surrender the Road Service Licenses issued in respect to the Claimant’s motor vehicles and to remit unspecified sums to the Respondent.Before the Claimant could respond, the Respondent proceeded on 8/10/2016 to remove the Road Service Licenses from the Claimant’s motor vehicles registration number; KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S.
3.The Claimant, vide their letter dated 8/10/2016 to the Respondent lamented towards the actions of the Respondent but they never responded. The Claimants have thus grounded all the affected motor vehicles from 8/10/2016 to date.The Claimants have requested the Respondent to remove their motor vehicles from its portal but the Interested Party has not done so.The Claimant further claims the allegations that the Claimants owe the Respondent dues does not or should not form a basis of the oppressive actions that constitute unethical conduct. Another letter was written on 11/11/2016 to the Respondent but no response had been elicited.
4.The particulars of damage and loss by the Claimant as a result of not having their Road Service Licenses are as follows.a.Patrick Njoroge Kimani; KAT 647ZKshs. 391,400/=b.Patrick Njoroge Kimani; KBH 190VKshs. 604,200/=c.John Kung’u Wambui; KAM 347DKshs. 294,900/=d.John Kung’u Wambui; KBN 670NKshs. 740,395/=e.Michael Kenda; KBK 961CKshs. 375,100/=f.Joseph Gichuki Mutung’u; KBR 081PKshs. 714,850/=g.Robert Mwangi Nderitu; KCB 503SKshs. 790,500/=h.Stanley Ngugi Gacheru; KBK 023JKshs. 709,000/=
5.The Respondents are yet to compensate the Claimant for the unutilized value of their fully paid up Road Service Licence. The Respondents have failed to release the Claimant’s motor vehicles from reflecting its PSV portal and the Claimants cannot earn because of the Respondent’s wrongful denial of access to the Claimants.The Claimants thus pray for:a.A declaration does issue that the Plaintiffs have fully notified the Defendant of the cessation of their respective vehicles from the membership of the Defendant’s PSV fleet was duty bound to respond formally on any outstanding issue so as to pave way for the cessation to take effect, and the forcible removal of the Plaintiffs’ Road Service Licenses to their respective vehicles was unlawful and wrongful.b.An injunction does issue, restraining the Defendant/Respondent, and the Interested Party, or any person acting under their behest, direction, and authority, from including the Plaintiffs’/Applicants’ vehicles registration number KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S as part of the PSV vehicles under the Kangemi Matatu Owners Sacco fleet of PSV vehicles.c.A mandatory injunction do forthwith issue compelling the Defendant/Respondent herein, and not later than 1 day from the date of the making of this Order and service thereof upon the Defendant, to remove the Plaintiffs’ PSV vehicles, KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S from their PSV portal with the Interested Party under their membership, aegis, and control as suck PSV portal vehicles, and to forthwith communicate to the Interested Party NTSA the cessation of the Plaintiffs’ PSV vehicles, registration number KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S from being part of Kangemi Matatu Owners Sacco fleet of PSV vehicles.d.Loss of business from the date the Road Service Licenses of the respective Plaintiffs’ vehicles were plucked off to the date of full payment ordered by this Tribunal, as stated in paragraph 27A of this Amended Plaint.e.Costs and Interest of this suit.f.Any other relief that this Honourable Court may deem fit to grant.
6.The Claimant filed Witness Statements dated 16th December, 2016 and List of Documents dated 16/12/2016 which included;a.Copy of 1st Plaintiff’s vehicle registration for KBH 190V.b.Copy of 1st Plaintiff’s RSL license.c.Copy of letter from 1st Plaintiff to the Chairman KMO dated 7th October, 2016d.Copy of a letter from KMO to Stanley Ngugi Gacheru dated 7th October 2016.e.Copy of a letter from Plaintiffs to the Chairman KMO dated 8th October, 2016.f.Copy of KMO Bylaws dated December, 2010.g.Copy of schedule of payments of the 1st Plaintiff to KMO.h.Copy of a letter from the Plaintiffs to the Chairman KMO dated 11th November, 2016.i.Copy of 2nd Plaintiff’s vehicle registration for KBN 670N.j.Copy of 3rd Plaintiff’s vehicle registration for KBK 961C.k.Copy of 4th Plaintiff’s vehicle registration for KBR 081P.l.Copy of 5th Plaintiff’s vehicle registration for KCB 503S.m.Copy of 6th Plaintiff’s vehicle registration for KBK 023J.
7.The Respondent filed their Statement of Defence dated 7/8/2017 denying the averments of the Amended Statement of Claim. The Respondents filed Witness Statement sworn by the Respondent’s Chairman on 9/2/2018 and another Witness Statement by Samuel Michael Kinyanjui on 9/2/2018.The Respondent aver that the Claimants are not registered owners of the motor vehicles cited in the Amended Statement of Claim and that the Claimants having ceased being members of the Respondent on 7/10/2016, cannot claim special damages for period between July-September 2016 when they were still members of the Respondent operating and making profitsThe Respondent avers that the Claimants themselves grounded their motor vehicles by withdrawing their vehicles from the Respondent. The Respondent aver that the Claimants withdrew their motor vehicles from the Respondent and did not apply to cease being members and to date are still active members of the Respondent attending Annual General Meetings and collecting dividends.The Respondent admits to paragraph 28 Amended Statement of Claim because the Claimants removed their motor vehicles on their own free will but to expect compensation is being unrealistic.
8.The Respondent filed List of Documents dated 29/7/2022 which include:a.Loan Schedule of the 1st Claimant.b.Loan Schedule of the 2nd Claimant.c.Loan Schedule of the 3rd Claimant.d.Loan Schedule of the 6th Claimant.e.Certificate as to Computer Print-outs producing the following photographs.f.List of Kangemi matatu owners.g.Computation of Interest on deposit of Kangemi Matatu Owners.h.Motor Vehicle Copy of Records from the National Transport and Safety Authority for Vehicles Registration KBK 023J, KBN 670N, KBR 081P, KCB 503S.The Respondent’s additional Documents dated 7/8/2017 filed on 7/8/2017 which included:a.Loan Schedule to the 1st Claimantb.Loan Schedule to the 2nd Claimantc.Lan Schedule to the 3rd Claimantd.Loan Schedule to the 6th Claimant
9.The Claimant filed a Reply to Defence dated 26/9/2017 filed on 27/9/2017 and reiterated that they were members of the Respondent only by virtue of having their PSV buses as part of the Respondent fleet duly registered with the NTSA.That the Interested Party only permitted the Claimants PSV buses to ply the Route 23 Kangemi route while registered as part of the Respondent’s PSV fleet.That the Claimants were forced to ground their PSV as they could not operate them without lawfully issued Road Service License. The Claimants further aver that they wrote to the Kangemi Matatu Owners (KMO) Management on 13/12/2016 requesting them to offset their loans against their shares.The Claimants outstanding balance and savings as sum the membership;
10.The Respondent further filed Documents dated 24/2/2018 pursuant to leave granted on 21/2/2018 photographs of the motor vehicles KBH 190V, KAM 347D, KBN 670N, KBV 905J, KBW 978C, KBK 023J.Matter came up for hearing on 20/6/23. The 6th Claimant, adopted his Witness Statement dated 17/3/2017 as his evidence in Chief. He presented the documents filed. He stated that he was unable to proceed with their business when the Respondent took over the TLB.He confirmed orders were given by the Tribunal to release their motor vehicles and they formed their own company.The Claimants claim that the Respondent did not wait for 60 days to lapse as per the by-laws. He stated that their concern was they were prevented from running their business and were seeking compensation for their loss.
11.On cross-examination, he stated the conditions for entry to the Respondent was a fee of Kshs. 2,500/= for registration.The membership was to operate the motor vehicle. The nexus between Kangemi Matatu Owners and NTSA is to assist in licensing of motor vehicles because NTSA license is only issued through Saccos.The rule of Kangemi Matatu Owners the Respondent is that the motor vehicle cannot operate if he was not a member of a Sacco. Members do not have a direct link to NTSA.He confirmed the letter dated 7/10/2016 did not give a 60 days’ notice. Further, he confirmed letter in page 25 of Claimant’s documents he requested for reconciliation of accounts.He denied owing the Respondents any dues. He stated that the Claimant’s document page 88 shows their savings.He confirmed his savings were Kshs. 170,000/= and the Respondent owed him Kshs. 35,753/= as per page 166 Claimant’s documents which document is from the Respondent.Michael Kenda – Respondent owed him Kshs. 2,100/=John Kiago – Respondent owed him Kshs. 53,436/=Patrick Njoroge – Respondent owed him Kshs. 59,848/=
12.Page 26 of Respondents documents number 94, he denied the signature therein and confirmed they had never received dividends.The Claimant confirmed he purchased a motor vehicle through a bank loan and his guarantor is Ukristo and Ufanisi Sacco.KMO was not his guarantor. The road license was removed on 8/10/2016.He confirmed having removed KMO after the Court gave orders. They went back to operate on 17/1/2017 since 8/10/2016.On re-examination, he stated that the Respondent did not give them a 60 day exit as envisaged in the By laws. The Respondent did not allow the 60 days to him neither did they reconcile the accounts. He confirmed the documents in page 166 of Claimants documents that is, were prepared by the Respondents.
13.The Respondent proceeded with their case on 18/10/2023. The Respondent Witness 1, Stanley Mugweru adopted his Witness Statement dated 9/2/2018 as his evidence in Chief page 32 and produced his List of Documents dated 29/7/2022 as Respondent Exhibit 2-8 as listed.He stated from the copy of records motor vehicle KBK 023J – Page 22 Respondents documents owner is Peter William Kinyanjui who is not a Claimant.Page 28 Respondent’s Documents motor vehicle registered number KBN 670N owner is John Githinji Kamau is not one of the Claimant’s as at 4/5/2017.Page 29 of the Respondent’s documents KBR 081P, the registered owner is Mutungo Kamande Stephen and is also not a Claimant in the suit.Page 30 of the Respondents Document is registered under Kathi Nyemu Self Help Group and is not part of the Claimant.
14.The Respondent Witness 1 stated the procedure for withdrawing motor vehicle was one was to share intention to withdraw 60 days’ notice for society to process.He stated that the Claimants had loan arrears:
- Page 5, Respondent’s List of Documents;
- Patrick Njoroge – 1st Claimant had a loan arrears of Kshs 61,712/= as at December 2016.
- Page 6, Respondent’s List of Documents; Kung’u John – 2nd Claimant had a loan arrears of Kshs. 108,364/= as at December, 2016.
- Page 7, Respondent’s List of Documents; Michael Kenda – 3rd Respondent had a loan arrears of Kshs. 125,520 as at 2016.
- Page 8, Respondent’s List of Documents; Stanley Gacheru – 6th Claimant had a loan arrears of Kshs 140,264/=.
- Page 24 – number 42, John Kung’u
- the 2nd Claimant was paid Kshs. 13,361/=.
- Page 49 – Joseph Gichuki the 4th Claimant was paid Kshs. 67,035/=.
- Page 77 – Patrick Kimani the 1st Claimant was paid Kshs. 9,980/= which he collected.
- Page 94 – Stanley Ngugi Gacheru the 6th Claimant was paid Kshs. 5,227/=.
15.The Respondent Witness 2 stated that the Road Service License was given to the Society and not individuals. The Claimants have not cleared their loans and motor vehicles are not operating under them.Respondent Witness 1 demonstrated using photographs that;
- Page 11, KBH 190S is operating under Digital Luxury Shuttle.
- KAM 347D is operating under Digital Luxury Shuttle.
- Page 13, KBN 670N is operating under City Trans.
- Page 14, KBV 905J is operating under KMO shuttle.
16.On further cross examination, he confirmed the 60 days had not expired before taking away the Road service Licence (RSL). The RSL is issued for a year by NTSA and RSL was expiring on 29/6/2017.Even though the licence had barely been used, he stated that they needed to have it for safety reasons. He confirmed as at the date of withdrawal that is, 7/10/2016, he did not have the copy of records for motor vehicle KBK 023J.He also confirmed that it was not allowed for a member to bring another motor vehicle on behalf of someone else.He did not have cheques issued to the Claimant, only that they had signed for their money.RW1 confirmed John Kung’u the 2nd Claimant had not signed for the dividends. In the instance of Stanley Ngugi, Claimants’ documents paragraph 166 he confirmed his savings were Kshs. 332,650/= and the offset was Kshs. 35,753/= which figure was not refuted.Respondent Witness 1 further confirmed the photograph adduced in evidence was taken in 23/2/2018 and none of them was taken in 2016.He further stated that he had no evidence that the Claimants’ motor vehicle were operational. He denied having agreed to pay the Claimants Kshs. 700,000/=.
17.Upon close of the Respondent’s case, parties were to file Written Submissions. The Respondent filed their Written Submissions dated 28/3/2024 on 23/9/2034.The Claimants filed their Written Submissions dated 15/12/2023 filed on 6/3/2024.Having considered the pleadings, evidence and submissions, the issues for determination are as follows.a.Issue One.Whether the Claimant’s lawfully withdrew from the Respondent.b.Issue Two.Whether the 60 day notice was adhered to by the Respondents.c.Issue Three.Whether the Claimants have any liabilities due to the Respondent.d.Issue Four.Whether the Respondents were liable for the losses suffered by the ClaimantsWe shall discuss the issues one by one.Issue One.Whether the Claimants lawfully withdrew from the Respondent.The Claimants while giving evidence and or testifying stated they wrote a letter dated 7/10/2016 which informed the Respondent of their intention to withdraw their motor vehicle from KMO Sacco.We have looked into the Respondent’s by-laws produced by the Claimants in their Bundle of Documents page 28-49.By-law no 12 is on cessation of membership and provides for voluntary resignation which the Claimants did vide the letter dated 7/8/2016.Further, By-law no 20 and 21 provides for Notice of Voluntary withdrawal where it provides;In the instance, the Claimant voluntarily withdrew and there was a window period if 60 days within which the Society was to settle the members accounts and refund the members share deposits or amounts due to him.As such, during this period that is, between 7/10/2016 and 7/12/2016 the Respondents had the responsibility of ensuring the Claimants’ accounts were taken into consideration, to confirm any liabilities the Claimants had If any and communicate the same to its members.From the Claimant’s evidence in court and Documents and Respondent’s admission of getting the Claimant’s letter and their letter dated 7/10/2016 requesting for Claimants to return their documents means the Claimants withdrawal was done as required by the Respondent’s by-laws and as such the Claimants lawfully withdrew from the Respondent Sacco.
18.Issue No. 2.Whether the 60-day notice was achieved to by the Respondents.The question is; What is the implication of the 60-day notice period provided for in the Respondent’s by-laws?Paragraph number 20 and 21 of the Respondent’s By-laws is on Voluntary withdrawal.As stated above, the purpose of the 60 days written notice is for the Respondent to settle the members accounts and refund their shares.In our understanding, the 60 days’ notice cuts across the board for the Claimant and Respondent for the Respondent to clear the Claimants and confirm their status and Claimant to do all they can for a smooth transition.Thus, the implication of the 60 days’ notice would mean, the Claimant can still conduct business with the Respondent until cleared by the Respondent wither before the 60 day period is over or upon the end of the 60 days.
19.The action by the Respondents therefore to take the Claimants Road Service License on 8/10/2016 was unlawful; unlawful because the Respondents had not cleared the Claimants and as such the Claimants still had the right to use the Road Service License. In any event the onus was on the Respondent to ensure clearance of the Claimants before releasing them and taking their Road Service Licenses.Further, the mere fact that even after taking from their possession the Claimants’ Road Service License the Respondent went ahead and retained them in their system with NTSA making it impossible for them to trade in any other Sacco at all.
20.Issue No. 3Whether the Claimants had any liabilities pending with the Respondent.Paragraph 20 of the Respondent’s By-laws is headed; “Payment resulting from withdrawals, terminations or expulsions from membership”Part a readsFrom the above, the Claimants, if they had any liabilities then the same had to be paid before being given a clean bill of health by the Respondents.The Respondent while giving evidence stated some Claimants had loan balances which they are yet to clear as enumerated in the Respondent’s Bundle of Documents dated 29/7/2022 filed on 4/8/2022.
- The 1st Claimant; Patrick Njoroge Kimani showed to have a loan balance of Kshs. 61,712.00/= as at 18/12/2016.
- The 2nd Claimant; Kohn Kung’u Wambui page 6 had a loan balance Kshs. 108,364.00/=
- The 3rd Claimant; Michael Kenda loan balance of Kshs. 12,520.00/=
- The 6th Claimant; Stanley Ngugi Gacheru had a loan balance of Kshs. 140,264/=
21.Issue No. 4.Whether the Respondents are liable for losses suffered by the Claimant?Indeed, as discussed above in issue no. 2, it was wrong for the Respondent to take the Road Service License badges/ Sticker from the Claimants’ motor vehicles before clearing them and before the 60 day period was over.As stated, the 60-day period cover both Claimants and Respondents and the Respondents ought to have respected their own By-laws.For that reason, the Respondent are liable for the losses of the 60-day period the Claimants suffered and could not operate their motor vehicle between 8/10/2016 and 7/12/2016.
22.The Respondent’s argument that the Claimants did not own the motor vehicle is neither here nor there at this juncture.The said motor vehicle KBH 190V, KAM 347D, KBN 670N, KBV 905J, KBW 978C and KBK 023J were all operating under the Respondent before notices of withdrawal were done on 7/10/2016.Why did the Respondent not raise an issue on ownership of some of the motor vehicle before the case?Further, the copy of records attached as evidence the search done is as at 4/5/2017. There is nothing to show ownership of motor vehicle as at 7/10/2016 when the Claimants were leaving the Respondent Sacco.
23.It is also important to note that the Road Service License is tied to the Respondent Sacco and as the Respondent ought to have known the implication of denying the Claimants’ said TLB for the 60 day note period no business would have been transacted by the Claimants within this period.The Respondent have however demonstrated payment of the Claimants’ dividends which we are satisfied with save for the 2nd Claimants who had not signed for them as per the Respondents documents.What therefore the Claimant is entitled to the loss during the 60-day notice period.It is unfortunate the tribunal is not privy to any information when the Claimants’ motor vehicle transited to the other Saccos where they are plying. This information was not provided and as such we shall restrain ourselves to the notice period.
24.Determination.Having considered all the above issues and prayers by the Claimants, we are convinced of the following:a.The Claimants did give adequate notice to the Respondent.b.The Respondent did not act in good faith by taking the Claimants’ Road Service License before the 60 day period and not having cleared them as well.c.The Claimants did suffer some loss as a result of not having the Road Service License.We therefore enter judgement in favour of the Claimant against the Respondent for:a.A declaration is hereby issued that the Plaintiffs have fully notified the Defendant of the cessation of their respective vehicles from the membership of the Defendant’s PSV fleet was duty bound to respond formally on any outstanding issue so as to pave way for the cessation to take effect, and the forcible removal of the Plaintiffs’ Road Service Licenses to their respective vehicles was unlawful and wrongful.b.Prayer b; spent (overtaken by events)c.Prayer c; Any Motor vehicle that is, KBK 023J, KBK 961C, KAM 346D, KBN 670N, KBR 081P, KBH 190V, KAT 647 Z and KCB 503S that is under the Respondent’s control through the Interested Party i.e. NTSA be released forthwith from the Respondent’s hold.d.Prayer d, on loss of business the Claimants suffered loss: As such, are entitled to damages which we asses as follows;
- 1st Claimant; Motor vehicle KAT 647Z – Kshs 193,800/=
- 1st Claimant– Motor vehicle KAT 647Z; Kshs. 79,350 ×2 = Kshs. 158,700/=
- Motor vehicle KBH 190V; Kshs. 136,166×2=Kshs 274,333/=
- 2nd Claimant– John Kung’u Wambui, Motor vehicle KAM 347D; Kshs. 52,666×2=Kshs. 105,333/=
- 3rd Claimant - Michael Kenda, Motor vehicle KBK 961C; Kshs. 77,000×2=Kshs.154,000/=
- 4th Claimant - Joseph Gichuki Mutungu, Motor Vehicle KBR 081P; Kshs. 174,416×2=Kshs. 348,833/=
- 5th Claimant - Robert Mwangi Nderitu, Motor vehicle KCB 503S. Kshs. 194,550×2=Kshs. 389,100/=
- 6th Claimant - Stanley Ngugi Gacheru, Motor vehicle KBK 023J; Kshs. 125,000×2=Kshs. 250,000/=
- Plus costs and interest
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF OCTOBER, 2024.Hon. B. Kimemia - Chairperson Signed 3.10.2024Hon. J. Mwatsama - Deputy Chairperson Signed 3.10.2024Hon. Beatrice Sawe - Member Signed 3.10.2024Hon. Fridah Lotuiya - Member Signed 3.10.2024Hon. Philip Gichuki - Member Signed 3.10.2024Hon. Michael Chesikaw - Member Signed 3.10.2024Hon. Paul Aol - Member Signed 3.10.2024Tribunal Clerk MutaiHarrison Kinyanjui advocate for the ClaimantMabeya advocate holding brief for Mr. Omari advocate for the 2nd RespondentMabeya advocate - We request for 30 days stay pending Appeal we further request for leave to Appeal.Hon. J. Mwatsama - Deputy Chairperson Signed 3.10.2024