Wambugu v Okeyo (Tribunal Case 590/E616 of 2023) [2025] KECPT 327 (KLR) (Civ) (12 June 2025) (Judgment)
Neutral citation:
[2025] KECPT 327 (KLR)
Republic of Kenya
Tribunal Case 590/E616 of 2023
Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
June 12, 2025
Between
Antony Maina Wambugu
Claimant
and
Kennedy Omondi Okeyo
Respondent
Judgment
1.The matter for determination is a Statement of Claim dated 20th September 2023. In the Statement of Claim, the Claimant claims that he and the Respondent were members of Mhasibu Sacco Society Limited. That the Respondent took a loan with Mhasibu Sacco Society Limited, and the Claimant agreed to guarantee him for the loan. However, according to the Claimant, the Respondent defaulted which led to Mhasibu Sacco Society Limited deducting Kshs. 212,185/- from the Claimant’s share to cover the defaulted loan. That in addition to the deduction on the Claimant’s shares, he lost on dividend income on the amount, which was given at an average rate of 8% over 12 years, and which has accumulated to Kshs. 321,931/-. The Claimant is aggrieved and prays for :a.Summary Judgment entered into on this prayer on 30th January 2025b.The said sum of Kshs. 534,116/- the loan amount recovered.c.damages from loss of dividends.d.costs of the suit and interest until payment in full.e.any other relief so deemed appropriate by this Honourable Tribunal.The Claimant filed a witness statement and a List of Documents in support of her claim.
2.The Respondent did not enter an appearance or file any response to the Claim. The claimant requested for judgement on 10th November 2023 and a summary judgment on prayer 1 was delivered on 30th January 2024 in favour of the Claimant as against the Respondent. On prayer b, it was agreed that it be dispensed with via written submissions.
3.The Claimant filed written submissions dated 11th February 2025.
Analysis
4.The question before this Tribunal is whether the Claimant is entitled to the relief sought. The Claimant’s claim is for the loss of dividends.
5.However, on closer look at the interlocutory judgement, this court has noted that the summation of prayer a) is inclusive of the sums subject of prayer (b). The sums subject to prayer (b) is unliquidated and therefore cannot be determined summarily.
6.This Tribunal, therefore invokes Section 99 of the Civil Procedure Act which provides as follows;
7.Flowing from above this court hereby corrects the summary judgement entered into on 30th January 2024, from
8.On the question of prayer (b), the Claimant is praying for lost dividends.
9.It is trite law that one has to proof what they allege. This is a legal principle that was held in Wambui Ndiritu v Joseph Kiprono & Another [2005] 1 EA 334.
10.The question before this Tribunal is whether the Claimant has proven his case. Dividends are normally declared first and then paid. The rate of dividends is normally declared in the AGM and also tabulated in the financial statements. The Claimant has informed this court that a dividend has been given at an average rate of 8% over the 12 years. The Claimant has produced no document to show that indeed dividends were declared and that they were paid. This court cannot use approximation to determine something that is normally determined with certainty. Dividends can only be paid if and when declared. We have no prove that any of his happened.
11.The other issue that this court would consider when awarding a prayer on loss of dividends is the remoteness of loss. When one guarantees another, something like a floating charge is created over the shares of the guarantor that have been given up as guarantee. When the loanee defaults, and the guarantor’s shares are recovered to repay the loan, that action is not too remote and the guarantor can be said to have accepted the consequences that flow naturally from the default one of them being lost dividends.
12.The Upshot is that we find that the Claimant’s Claim partly merited, and make the following ordersa.We enter judgement for the Claimant against the Respondent for Kshs. 212,185/- together with costs and interests.b.Prayer b failsc.The Claimant is awarded costs of this claim together with interest from the date of judgement till payment in full.
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 12TH DAY OF JUNE, 2025.Hon. J. Mwatsama Deputy Chairperson Signed 12.6.2025Hon. Beatrice Sawe Member Signed 12.6.2025Hon. Fridah Lotuiya Member Signed 12.6.2025Hon. Philip Gichuki Member Signed 12.6.2025Hon. Michael Chesikaw Member Signed 12.6.2025Hon. P. Aol Member Signed 12.6.2025Tribunal Clerk MutaiJudgment delivered in absence of the parties.Hon. J. Mwatsama Deputy Chairperson Signed 12.6.2025