REPUBLIC OF KENYA
IN THE MICRO AND SMALL ENTERPRISES TRIBUNAL
AT KISII
CLAIM NUMBER 5 OF 2019
1. JOYCE RASUGU
2. ABEL KEBASO OTOTO [SUING AS THE LEGAL REPRESENTATIVES
OF MOSIABANO SELF HELP GROUP] ....................................CLAIMANTS
VERSUS
1. ROSE NYANCHAMA KEBASO............................................RESPONDENT
JUDGEMENT
1. The Claimants herein commenced this claim on behalf of Mosiabano Self Help Group. The two are members and officials of the group, chairperson and secretary respectively. According to the Claimants the Respondent was at all material times a member of the group.
2. Through a statement of claim dated 10th July 2019, the claimants on behalf of their afore-stated group claims against the Respondent for a liquidated sum of Kshs. 60,000.00 interest and costs. As can be discerned from the affidavit of service filed herein by the Claimants, a notice of claim, statement of claim, list of exhibits and witness statement were served upon the Respondent. The claimants also filed an affidavit of service evidencing the service of the hearing notice on the respondent.
3. The Respondent, upon service of the claim did enter appearance and filed a response to the claim. The parties were granted an opportunity to resolve the matter amicably and the same was unsuccessful. The matter thus proceeded for a full trial. The Claimants are seeking for an award of the claim of Ksh. 60,000.00 and interest at the rate of 10 percent per a month translating to 120 percent per annum. On this interest rate, we shall make a comment shortly hereunder.
4. The second Claimant testified in fortification of the claim. His witness statement dated 10th July 2019 was produced and deemed his evidence in chief. According to this witness, on or about the 2nd December 2015 the group at the instance of the Respondent, lent the latter a sum of Kshs. 60,000.00
5. The Loan Agreement were executed to this effect by the parties. The Loan Agreement dated 2nd December 2015 was produced as Exhibit 1 before the Tribunal. The claimants’ sought for interest for the period 2nd December 2015 to 2nd June 2017 at a rate of 10% per a month, an amount that totals to Kshs. 331,250.00 for the loan. This calculation obviously had an error. The claim was prompted by the fact that the Respondent failed to repay the amount that he had borrowed plus the agreed interest as per the Loan Agreements.
6. The Respondent challenged the Claimants’ claim by entering appearance and filing a response. She also attended and gave her evidence in defence. It was her evidence that she registered as a member of the Mosiabano Self Help Group and paid the requisite membership fee. She did apply for a loan of Ksh. 60,000.00 but only Ksh. 54,000.00 was remitted to her. Her contention was that the plaintiff retained Ksh. 6,000.00 as advance payment of interest.
7. The respondent added that she repaid the sum to Mr. Kebaso, the 2nd claimant herein at 9.30am near the road. She could not recall the exact date of the repayment. She alleged that save for her own records, no acknowledgement or receipt was issued to the by the claimants. She thus contended that she was not indebted to the claimants and thus the claim should be dismissed.
8. On a preliminary issue, the Advocate for the claimant had conceded in the related matters, Kisii MSET No. 1-19, where the claimants are the same that they would concede the issue of interest and if the claim is successful, will be content with interest at court rates. Subject to the success of the claim, we shall apply court rates on interest.
ANALYSIS.
9. It is not in dispute that Mosiabano Self Help Group Is a duly registered association as contemplated under the Micro and Small Enterprises Act, 2012. It is also not in contention that the 1st and 2nd claimants were and still are the chairperson and secretary respectively of the said group. It is also admitted by both parties that the respondent was a member of the group during the relevant period.
10. From the evidence, it is not in contention that the respondent requested and was advanced a loan by the claimants. It is however disputed on what amount was remitted and whether it was repaid in full.
11. The loan agreement form signed on the 2nd December, 2015 indicates the loan request of Ksh. 66,665.00. In her evidence, she stated she received Ksh. 54,000.00 and the claimants insist she was given Ksh. 60,000.00 From the documentation, it is clear the application by the respondent was capped at Ksh. 60,000.00
12. For a member to benefit from the group’s loans, one had to register and have shares in the group. I note that the claimant has not accounted for the same. It is not clear how the group has dealt with the respondent’s deposits, in relation either to clearing part of the loan owed or interest accrued over the years.
13. As we have stated before, the claimants have a very poor record keeping culture. I have no doubt that with some better record keeping, the defaults herein and subsequent legal action would have been reduced.
14. That notwithstanding, it remains the duty of the claimant to prove and convince the tribunal, on a balance of probability that their claim is merited. In their favour though, most of the critical issues are not in dispute, we therefore have to determine three main issues:
i. How much was disbursed to the respondent?
ii. Has the respondent paid any of the amounts loaned to her?
iii. Has any credit been given for the respondent’s shares?
i. How Much was disbursed to the respondent?
In responding to this issue, we look at the documents and evidence produced before court. I have no doubt that the sum of Ksh. 66,665.00 indicated in the form is what the respondent had wished to receive from the group. The group offered her Ksh. 60,000.00. It is her contention that the actual sum disbursed was Ksh. 54,000.00 with Ksh. 6,000.00 being the advance collection of interest.
We are persuaded from the evidence of the 1st claimant and the evasive response during the hearing by the respondent, that the respondent was loaned Ksh. 60,000.00 which she duly acknowledged on 2nd December, 2015. There is no indication that any sum was deducted in advance or otherwise. We shall thus make a finding that the loan advanced to the respondent was Ksh. 60,000.00
ii. Has the respondent repaid any of the sums advanced to her?
We reiterate that the claimants have maintained a very poor record keeping culture. It makes it difficult to determine the repayment processes and documentation. Though stated that the method was basically table tanking, that was no excuse for the claimants to keep no record. This did not however absolve the respondent from exercising care and diligence that any payments were documented. Even a simple written acknowledgement would have sufficed.
We are indeed doubtful that the respondent would remit Ksh. 60,000.00 to the 1st claimant by the roadside and demand no acknowledgement or documentation. We are therefore unpersuaded by her allegations of handing over the money and never attempting to follow up to ensure that the debt is cleared from the books.
iii. Have the claimant’s given the respondent credit for her shares?
From the evidence of both parties, it is clear that the claimant did not account for the respondents shares since 2015. It would only therefore be fair that the shares be discounted from any award given in favour of the claimants.
DETERMINATION.
15. In the upshot we are inclined to enter judgement in favour of the claimant in relation to the total loan amount of Kshs. 60,000.00 with interest at the rate of 14% per annum. Interest is to be charged from the date of borrowing till full payment.
16. In view of our determination above, the claimants to account for the respondent’s shares paid prior to the application and remittance for the current loan and the same be subjected to a set off against the award of Ksh. 60,000.00 made in favour of the claimants. The balance to be paid to the claimants.
17. In the event of failure by the parties to agree, either party is at liberty to apply to the Tribunal for assessment of the same or further directions.
18. The Respondent shall bear the costs of this claim.
19. We assess the party and party costs at Kshs. 15,000.00.
20. Orders accordingly.
Dated at Kisii this 2nd Day of March, 2020.
Joseph M. Were……………………………………
Chairperson
Ocharo Kebira………………………………………..
Member
Annette Gikuya………………………………………
Member