Mutuku v Tung’a & 2 others (All Sued as Officials of Mutituni Self Help Group Sikoni) (Tribunal Case E002 of 2022) [2023] KEMSET 2 (KLR) (19 January 2023) (Judgment)

Citation
Mutuku v Tung’a & 2 others (All Sued as Officials of Mutituni Self Help Group Sikoni) [2023] KEMSET 2 (KLR)
Media Neutral Citation
[2023] KEMSET 2 (KLR)
Court
Micro and Small Enterprises Tribunal
Outcome
Allowed in part
Case number
Tribunal Case E002 of 2022
Attorneys
Mr. Kyule, Advocate,
Judges
J.Bett, R.Katina, J.Were, A Gikuya, A Kibet
Judgment date
19 January 2023
Language
English
Type
Judgment
Original source file
Download DOC (258.5 KB)
Collections
Order
i. The Respondents pay the Claimant’s claim as follows: a. Benefits arising from the death of the Claimant’s husband: 44 members x Kshs 500/= - =Kshs 22,000/=. b. Merry go round Contributions - 22 contributions x 1,600/- = Kshs 35,200/= c. Weekly savings refunded at the end of the year from January 2021 – August 25, 2021 - Kshs 300 x 34 weeks = Kshs 10,200/= d. The Claimant’s claim for weekly contributions of Kshs 72,500/= for member’s events is dismissed. ii. Damages of Kshs 100,000/= for breach of the By-laws and Claimant’s legitimate expectations iii. The Respondent’s Counterclaim of Kshs 76,180/= is dismissed. iv. Costs awarded in favour of the Claimant. v. Interest on i and ii above at the prevailing court rates.
Introduction
1.This claim was lodged by way of a statement of claim dated June 3, 2022 and filed at the Micro and Small Enterprises Tribunal (MSET) through the e-filing platform. In addition to the Claim, the Claimant filed the list of documents, list of witnesses and witness statement.
2.The matter came before the Tribunal on August 26, 2022 when the following directions were issued:a.That the Claimant serves the statement of claim and all the supporting documents upon the Respondents within 7 days and in any case by September 2, 2022.b.That the Respondents file and serve their Response within fourteen days of service of the Claim and in any case by September 16, 2022.c.That the Claimant files and serves the Reply to the Response within seven days of service of the Response and in any case by September 23, 2022.d.The Cause be mentioned virtually on September 30, 2022, at 9.00 o’clock.
3.The Claimant brought the claim against Mutituni Self Help Group (sokoni) through its office bearers. The Claimant claims the following:a.An award of Kshs 139,900/= on account of savings and contributions owed to the Claimant by the Respondents.b.Damages for breach of the By-laws and legitimate expectations of the Claimant.c.Costs of the suit and interest thereof.d.Any other or further relief as the Tribunal deems fit and just.
4.The Claimant admits that she joined the Group on February 28, 2008 and fully subscribed to the By-laws of the Group. The Group is comprised of members drawn from business people operating in Athi River.
5.The Respondents filed their Statement of Defence and Counterclaim dated September 26, 2022. The Counterclaim seeks for a dismissal of the Claimants case with costs and that Judgment be entered in favour of the Respondent for :-a.An award of Kshs 76,180/=, being the total amount due to the Respondents Group up to date.b.Costs of the suit plus interest.c.Any other or further remedy that the Tribunal deems just and expedient.
6.This matter was heard on October 27, 2022 when the Claimant and Mr John Mwania Mutuku, Secretary of the Group testified.
Claimants CaseBackground
7.The Claimant avers that she was a bonafide member of Mutituni Self Help Group, having joined on February 28, 2008 and that she was governed by the By-laws of the Group. Accordingly, she made contributions to the Group as savings and to fellow members to the tune of Kshs 139,000/= until October 29, 2021, when she resigned from the Group.
8.The Claimant further avers that upon the demise of her husband on August 27, 2021, she was entitled to the contributions of members according to the By-laws of the Group. The Claimant further avers that in breach of the By-laws, the officials and the members of the Group resolved to withhold contributions and the support entitled to her during the difficult period of bereavement and that due to the failure by the Group to pay her the dues, she decided to resign from the Group and formally demanded refund of her contribution and savings.
9.She further claimed that the decision by the officials and the members of the Mutituni Self Help Group to withhold her dues upon the demise of her husband and the refusal to refund her savings and contributions to the Group was in breach of the By-laws of the Group and her legitimate expectations.
10.The Claimant particularised the allegations of breach by the Respondents as follows:a.Failing to contribute Kshs 500/= each to the Claimant’s event (Funeral) as provided for in the By-laws;b.Failing to attend the Claimant’s event (funeral as provided for in the By-laws;c.Failing to refund the Claimant’s annual savings of Kshs 10,200/= for the year 2021 as per the By-laws;d.Refusal to pay the Claimant’s lifetime savings of Kshs 72,500/= from the time of joining the Group until resignation, contrary to the By-laws;e.Failing to refund the Claimant’s contribution of Kshs 35,200/= being the contributions of 22 members’ event each at Kshs 1, 600/= and refundable to the Claimant upon resignation.
11.The Claimant further claimed that the acts of the Respondents were discriminatory. She set out the particulars of discrimination as follows:a.Failing to attend to the Claimants event (funeral) despite attending the previous events of the other members;b.Failing to make contributions to the Claimant’s event (funeral) despite contributing to the similar events of other members;c.Failure to inform the Claimant of the reasons for failure to attend or contribute to the Claimant’s event (funeral);d.Refusal to refund the Claimant’s contributions to the Group despite the issuance of her resignation and notice of demand to the Respondents.
12.Accordingly, the Claimant seeks a refund of all contributions made to the Group and compensation for breach of By-laws, legitimate expectations and discrimination of Kshs 139,900/= particularised as follows:a.Benefits arising from the death of the Claimant’s husband:44 members x 500 shillings - = Kshs 22,000/=b.Contributions to member’s events22 contributions x 1,600/- = Kshs 35,200/=c.Weekly contributions of Kshs 100 as savingsKshs 100 x 72.5 months = Kshs 72,500/=d.Weekly savings refunded at the end of the year from January 2021 – August 25, 2021Kshs 300 x 34 weeks = Kshs 10,200/=
Claimant’s Evidence
13.At the hearing of this claim, the Claimant sought to rely on her statement filed alongside the pleadings. She was represented by the firm of M/S Munyoki Junior Advocates. She testified that the Group was formed to help the members and that they contributed Kshs 500 to help the bereaved members. In addition, they contributed Kshs 1,600/= pm and Kshs 100/= every Wednesday so as to assist the bereaved members. That a contribution of Kshs 500/= would be made when a member was bereaved and the Kshs 100/= was payable for transport and savings payable at the end of the year. She further testified that the by- laws did not provide for issuance of loans to the members.
14.That upon the death of her husband on August 27, 2021, she informed the officials of the Group. As usual, she expected the Group to support her by making contributions of Kshs 500/= each and attending the funeral ceremony by utilising the Kshs 100/= contributed by the members every Wednesday. To her surprise and utter disappointment, there was no representative of the Group during the funeral. There was no message on why she was not supported as expected. She testified that she received nothing from the Group as the last respect for her deceased husband. She further testified that she had not made any claim from the Group from the time she joined in 2008 up to 2021 yet she was not supported. Consequently, she wrote a letter of resignation from the Group. The letter was delivered to the Chairman of the Group, Mr John Tung’a. She reiterated that she did not take any loan from the Group and that she had withdrawn from the membership of the Group in September, 2021 by informing the Group Chairman and formally in writing on October 29, 2021.
15.In regards to the Counterclaim, she stated that she did not take a loan of Kshs 5000/= and that she did not have any debt at all as alleged by the Respondents. She testified that she did not have arrears to the Group before she withdrew from the membership. Moreover, the contribution of Kshs 100/= was not utilised as she did not have any event during the said period. That there was no visit by the officials of the SHG to inform her that she was indebted and why she was not supported as provided in the By-laws. She further testified that no letter or communication had been sent to her to refund the any money as alleged. She also testified that no meeting had been held to discuss the death of her husband and his final send off. Consequently, she asked the Tribunal to dismiss the Counterclaim.
Respondent’s Case
16.The Respondents filed their Statement of Defence and Counterclaim dated September 26, 2021. In addition, they filed the list of documents and witness statements all dated September 26, 2021. They were represented by the firm of M/S Mwanzia Kyule Advocates.
17.At the hearing on October 27, 2022, the Respondents called one witness, Mr John Mwania Mutuku, the secretary to the Group. He testified that each member contributed Kshs 100/= every Wednesday to be used for transport and other logistics when a member was bereaved. In addition, when a member was bereaved, each member would contribute Kshs 500/= and that upon bereavement, a member was given Kshs 22, 000/=. He stated that the contribution was for a member who did not have any debt owing to the Group. He also testified that there was no letter showing that the Claimant had withdrawn from the membership of the Group.
18.In his testimony, the Group did not support the Claimant since she had loan arrears of Kshs 6500/=. That each member was given a loan of Kshs 5000/= and that the same had attracted interest of Kshs 1500/=.
19.Further, he stated that the Group contributed Ksh. 100/= for transport to the Group functions and that the Claimant had arrears of Kshs 5,280/=. He also testified that the failure by the Claimant to attend the Wednesdays meetings had attracted a penalty of Kshs 4,200/= accounting for 42 meetings. He further stated that that the failure by any member to pay for the merry go round attracted a penalty of Kshs 500/= pm cumulatively attracting arrears of Kshs 60,000/=. He also testified that there was a default in payment of Kshs 50/= storage charges payable 4 times annually. That the total tally of arrears was Kshs 76,180/= as set out in the Respondents’ Statement of Defence and Counterclaim dated September 16, 2021.
Issues For Determination
20.After the conclusion of the hearing process, the Tribunal isolated the following broad issues for determination.I.Whether the Claimant is entitled to her claim of Kshs 139,900/= from Mutituni Self Help Group, the Respondents herein.II.Whether the Claimant is entitled to damages for breach of the By-laws and her legitimate expectations.III.Whether the Respondents are entitled to their Counterclaim of Kshs 76,180/=.IV.Who bears the costs of the suit?
Analysis Of The Issues, Evidence And The LawI.Whether The Claimant Is Entitled To Her Claim Of Kshs 139,900/= From The Respondents
21.In determining whether the Claimant is entitled to this claim, the Tribunal sought to deal with the following issues which are considered pertinent in this case:a.Whether the Claimant was a member of the Respondents’ Group at the filing of this suit.b.Whether the Claimant resigned from the Group.c.Whether the By-laws of the Group allowed for the refund of the contributions.
22.The Claimant admitted that she voluntarily joined the Self Help Group on February 28, 2008 as per the witness statement, list of documents and her oral testimony. It is not opposed that the Claimant joined the Group on the said date. It is also not opposed that the Claimant fully ascribed to the By-laws of the Group. The Respondents’ witness testified that the Claimant had indeed attended all the meetings of the Group prior to September 2021.
23.The Jurisdiction of this Tribunal is not contested. Section 55 of the Micro and Small Enterprises Act no 55 of 2012 envisages disputes involving members, past members and persons claiming through members and past members of the associations. We therefore find that the jurisdiction of this Tribunal is affirmed notwithstanding the status of the Claimant at the time of filing this suit.
24.On the question of resignation, the Claimant testified that she informed the Group through its chairman that she had resigned from the Group and that she formally through her advocate communicated her resignation in writing. This, she claimed was due to failure by the Group to support her during her bereavement. The Claimant relied on the demand letter dated October 29, 2021. The relevant section of the letter reads as follows:'Having never benefitted from the Group before and considering the contemptuous treatment accorded to our client in the aforementioned events of august 2021, our client has resolved to immediately withdraw from her membership from the Group.'
25.Reading the preceding sections of the demand letter shows that the Claimant took that decision due to the failure by the Respondents to follow the By-laws of the Group following the passing on of her husband when the Group failed to accord her assistance and support as set out in the By-laws of the Group.
26.Further, the secretary of the Group in his testimony stated that the Claimant stopped attending the meetings after the death of her husband and indicated that she did not want the Chama anymore.
27.While reacting to the Tribunal questions, on whether she would consider returning to the Group, if she paid the outstanding arrears, the Claimant was clear that she would not.
28.The Respondents submitted on the basis of paragraph 9 of the Claimant’s witness statement that the period between the demise of the Claimant’s husband and the allegations of resignation from the Group as per the demand letter is almost two months. That as such, the Claimant was still a member of the association on the October 29, 2021 when the demand letter was written. They further submit that the demand letter does not state anywhere that the Claimant resigned from the Group but that the Claimant made oral claim of resignation on the October 27, 2022 during the hearing of this claim.
29.From their submissions, the Respondents seem to contend that the Claimant was a member of the Group until the October 29, 2021 when the demand letter was delivered to the Respondents.
30.From the Respondents own admission through the testimony of the secretary, the Claimant was in full compliance of the Group’s By-laws from the time of entry until the demise of her husband and that the Claimant had attended all the Group’s meetings in the past. The discovery that the Claimant was in full compliance for over thirteen years is a clear indication of her commitment to the aspirations and desires of the Group. The Tribunal cannot close its eyes to this revelation.
31.Having considered the evidence produced and the circumstances that the Claimant found herself in, the Tribunal is convinced that she was left with limited options other than taking the subsequent actions of disengaging from the membership of the Group as she did. The Tribunal is persuaded by the evidence of the Claimant that she withdrew from the membership of the Group after the death of her husband and the subsequent failure by the Group to contribute towards and failure to attend the burial.
32.In their Statement of Defence and Counterclaim, the Respondents aver that the Claimant made her last contributions on the September 8, 2021 and that subsequently, owing to the failure to make further contributions; she was in breach of the Group’s constitution.
33.We therefore find that the Claimant constructively withdrew from the membership of the Group following the events of August 27, 2021, made an oral communication to the Chairman of the Group on September 8, 2021 and formally communicated her resignation in writing on October 29, 2021.
34.On the issue of whether the By-laws of the Group allowed the refund of the member’s contribution, the Tribunal notes that the Claimant has sought a refund of her contributions to the Group since her membership on February 28, 2008 to the time of her resignation from the Group. The By-laws were annexed in the list of documents and produced during the hearing. In their Statement of Defence and Counterclaim and through the evidence adduced during the hearing, the Respondents opposed this prayer on the grounds that the contributions were not refundable. The Respondents submitted that the Claimant’s actions are an afterthought to extort the money from the Association contrary to the constitution of the Group.
35.In their submissions, the Respondents urged the Tribunal to follow the Court’s guidance in the case of Omar Gorham vs Municipal Council of Malindi (Council Government of Kilifi) vs- Overlook Management Kenya Ltd (2020) eKLR where the court stated as follows:'The correct rule in contracting parties and liability was stated in Baltic Shipping Co. vs- Dillon that 'the institution of contract, by which parties are empowered to create a charter of their rights and obligations and interests can only operate effectively only if the parties at the time of consideration, they create their charter, can form some estimate liability in the event of default in performance.’
36.The Respondents further relied the dictum of the court in the Omar Gorhans case above flowing from the rule in the case of Hadley vs- Bexandale 1854] EWHC J70 that:'Damages cannot be awarded since this cannot be said to have been reasonably supposed to have been in contemplation of both parties at the time they made the contract as the probable result of the breach of it.'
37.On her part, the Claimant drew to the Tribunal to the clause on dissolution of the Group that states as follows:'Actions taken against people who offend constitution cannot lead to dissolution but if one feels cannot continue, he/he should leave the organization for good but to pay what the Group owes him/her vice versa in case of dissolution, the Group’s assets or money in the bank must be shared equally among existing members.
38.Stemming from the pleadings, the evidence adduced and the submissions of the parties, the Tribunal is convinced that since constitution of the Group provides for a refund upon dissolution, on the same breath, it envisages a refund of the member’s contributions upon withdrawal from the Group, subject to the payment of all the dues owed by the concerned member. We therefore find that the refund of the member’s contribution is permissible under the Group’s By-laws.
A. Claimant’s Entitlementsa.Funeral Benefits
39.The Claimant in her demand letter and statement of claim has sought a refund of all her contributions to the Group. She has sought a refund of Kshs 22,000/= being the amount payable upon the demise of her husband, as cumulative contribution of Kshs 500/= by the 44 members of the Group.
40.The Claimants allegations are opposed by the Respondents through their witness statement dated 26th September that the Claimant had defaulted in paying her loan and contributions to the Group since September 8, 2021. The Respondents’ submitted that the Claimant had never communicated her resignation whether formally or orally until during the hearing of the suit on October 27, 2022. However, the Respondent’s witness testified that the Claimant had stated in September 2021 that she no longer wanted the Chama. The Respondents further stated that the Claimant was not entitled to the said amount as she had a debt of Kshs 6,500/= owed to the Group.
41.The Respondents further submitted that the Claimants’ actions contravened the Group’s constitution at page 6 titled death that provides in paragraph 5 that 'in case a member was in debt in the Group, we are not able to stand with you in any case no matter death cases.' That as such, the Claimant was not entitled to claim anything due to her breach of the Group’s By-laws.
42.According to the Respondents’, the outstanding debt are those from a loan of Kshs 5000/= that was advanced to all the members on August 4, 2021. The loan was to be payable in 13 months and members were to pay Kshs 500/= every month. During cross examination, the Respondents witness stated that there was no provision in the By-laws on loans to members. He stated that they sat as a Group and agreed to loan each other. The Claimant denied ever receiving the stated loan amount. The Respondents witness stated that he did not file the minutes showing that such resolution was made. The list of documents filed either do not show evidence of members contributions towards the servicing of the loan.
43.Assuming the loan was advanced on August 4, 2021 as claimed by the Respondents, it would not be expected that the Claimant would have made the first instalment as at August 27, 2021 when her husband passed on. The main reason advanced by the Respondents for failure to support the Claimant is based on the claim of a debt arising from the loan.
44.The Respondents witness testified during the hearing that the debt by the Claimant was with effect from 8th September when she stopped attending the meetings and stated that she was not interested with the Group. The Tribunal is not convinced by the evidence adduced by the Respondents that the Claimant owed the Group a debt of Kshs 6,500/= as at August 27, 2021 when her husband passed on. The grounds advanced for failure to support the Claimant financially upon the death of her husband do not hold. We find that the Claimant was therefore entitled to the funeral benefits of Kshs 22,000/= being the amount payable upon the demise of her husband.b.Merry go round (events) benefits
45.Evidence was adduced at the hearing of this claim that every member of the Group was required to make a contribution of Kshs 1600/= pm, towards the Group’s merry go round. The Claimant adduced evidence that at the time of withdrawal from the Group, she had contributed to the merry go round for 22 members. The total amount contributed by the Claimant totalled Kshs 35,200/=. The Respondents concurred with the Claimant on the extent of contributions made. However, they averred that the Claimant was not entitled to the contributions as she had defaulted in payment since September 8, 2021 when she completely stopped remitting contributions to the welfare.
46.The Respondents submitted that Page 5 of the Groups by laws do not favour the Claimant. The relevant part provides as follows: 'in case a member leaves the Group without any issue nothing is refundable 'ONLY' if you contributed merry go round and your savings. Contrary to the Respondents claim, the Tribunal interprets this provision to the extent that the member is entitled to merry go round contributions and the savings subject to fulfilment of the requirements of no debt upon exit from the Group. We therefore find that the Clamant is entitled to the merry go round contributions of Kshs 35,200/=.c.Weekly savings of Kshs 100
47.The Claimant submitted that she was entitled to a claim of her contribution towards Group’s weekly contributions of Kshs 100/= from February 28, 2008 until the time of her resignation. She testified that each member kept an account of the weekly contributions made and that when a member had an event, it was that account that could be utilised by the members to attend the event. She further testified that since the Group did not attend her event when she was bereaved, she was entitled to a refund of her contributions of Kshs 72,500/= since 2008. She reiterated that she did not have any debt in so far as the weekly contributions are concerned and therefore she was entitled the full refund.
48.The Respondents submitted that the Claimant was not entitled to the refund of the weekly contributions as claimed since the Group had facilitated her to attend several events/kyathi. Further, that the Claimant admitted that the Kshs 100/= was contributed for transport to various events which the association catered for. Both the Claimant and the Respondent acknowledged that the Group catered for transport charges for those attending the members’ events/kyathi.
49.The Tribunal notes that even though the Claimant had attended several events for other members, the Group failed to facilitate a visit to her when she lost her husband. That notwithstanding, is she entitled to the refund of all contributions made in support of the previous events? We find that the Claimant is not entitled to her previous contributions as the same should be treated as an expenditure which has already been utilised or to be utilised in the future events. The Claim for Kshs 72,500/= therefore fails.d.Weekly savings
50.The Claimant testified that she made a weekly saving of Kshs 300/= commencing January, 2021 until August 25, 2021 when she made her last contribution. Both the Claimant and the Respondents admitted that the contributions were refundable at the end of the year.
51.Having found that the Claimant resigned from the Group constructively on September 8, 2021 and formally on October 29, 2021, it was not possible for her to make further contributions to the end of 2021. In any case, the weekly contributions were made depending on the member’s ability. It was not mandatory therefore that such payment was to be made. What then happens to the contributions of a member who had resigned? Would the contributions escheat to the Group? We agree with the Claimants submissions that the savings were personal property of the Claimant and should be refundable on resignation. The Claimant is therefore entitled to a refund of Kshs 10,200/= being the cumulative amount for the 34 weekly contributions in the year 2021.
II. Whether The Claimant Is Entitled To Damages For Breach Of The By-laws And Legitimate Expectations
52.This is one of the distinct prayers in the Claimants statement of claim. The Claimant submitted that that she subscribed into the Group so that she could get help whenever she had an event envisaged in the By-laws and that when her husband passed on, the Group abandoned her and failed to support her in breach of its By-laws.
53.The Claimant further submitted that the Respondents did not inform the her the reasons for failure to attend the funeral of her husband. She was equally not given an opportunity to interrogate the decision of the Group not to attend the event and she went on to include the Group in the funeral program only for the Group not to show up. That the failure by the Group to turn up was against the By- laws, the practice by the Group and breach of her legitimate expectations. The Claimant also testified that she that she had planned to utilise the funds payable from the Group for funeral arrangements and that she was disenfranchised by the turn of events.
54.The Claimant relied on the court’s decision in the case of Muema Ndungi and Another vs Raphael Kituva & 7 others where the court held:'The Charter, Articles of Association and by laws of an association may constitute a contract between the organisation and its members wherein the members are deemed to have consented to all reasonable regulations and rules of the organisation, traditional rules of contract. Interpretation applies when assessing whether the church followed its own internal rules and procedures.' The Tribunal was also urged to consider the court’s decision in the case of Wood vs- Odessa waterworks Co (1889) 42 Ch D 636.
55.In addition, the Claimant submitted that she took every available step to mitigate the loss and damage by proceeding with the funeral plans and eventually resigning from the Group. She urged the Tribunal to follow the guide in the case of Peri Formwork Scaffolding Vs White Lotus Projects Limited ( 2021) eKLR where Mabeya J held as follows:''In African Highland Produce Limited vs- John Kisorio (2001) eKLR, the court of Appeal stated:-'The guiding principle in mitigation of losses is as follows; it is the duty of the plaintiff to take all reasonable steps to mitigate the loss he has sustained consequent upon the wrongful act in respect of which he sues, and he cannot claim as damages any sum which is due to his own neglect the question of what is reasonable for plaintiff to do in mitigation of his damages is not a question of law, but one of fact in the circumstances of each particular case, the burden of proof being upon the defendant.'
56.Finally, the Claimant submitted that the aforementioned breach of the By-laws and legitimate expectation entitles her damages as set out in the statement of the claim. She relied on the case of Peri Formwork Scaffolding Vs White Lotus Projects Limited where the court held :'On general damages, in Anson’s law of Contract, 28th Edition at Page 589 and 590, it is stated:'Every breach of contract entitles the injured party to damages for the loss he or she has suffered. Damages for breach of contract are designed to compensate for the damage, loss or injury the Claimant has suffered through that breach. A Claimant, who has not, in fact, suffered any loss by reason of that breach, is nevertheless entitled to a verdict but the damages recoverable will be purely nominal.'
57.The Claimant submitted that flowing from the alleged breach of the Group’s By-laws and her legitimate expectations, she is entitled to damages of Kshs 500,000/=.
58.On their part, the Respondents urged the Tribunal to follow the Court’s guidance in the case of Omar Gorhan vs- Municipal Council of Malindi (Council Government of Kilifi) vs- Overlook Management Kenya Ltd (2020) eKLR where the court stated as follows:'The correct rule in contracting parties and liability was stated in Baltic Shipping Co. vs- Dillon that 'the institution of contract, by which parties are empowered to create a charter of their rights and obligations and interests can only operate effectively only if the parties at the time of consideration, they create their charter, can form some estimate liability in the event of default in performance.’
59.The Respondents further relied the dictum of the court in the Omar Gorhans case above flowing from the rule in the case of Hadley vs- Bexandale 1854] EWHC J 70 that:'Damages cannot be awarded since this cannot be said to have been reasonably supposed to have been in contemplation of both parties at the time they made the contract as the probable result of the breach of it.'
60.Having established that the Claimant did not have any outstanding debt at the time of the demise of her husband. We find that the failure by the Group to support the Claimant at her moment of need, the very core reason why she joined the Group and without any explanation or reason to accord the her an opportunity to understand the Group’s decision not to attend the event was in breach of the By-laws, the practice of the Group and her legitimate expectation.
61.The Tribunal is also cognisant that if the Group had attended the event, it would have encountered a considerable cost payable through the weekly contribution of Kshs 100/= that the Claimant paid without failure. Indeed the Claimant claims that throughout the period of membership, she has made a weekly contribution totalling Kshs 72,500/=. What then happened to the Claimant’s share of financial, moral and legitimately expected support?
62.In lieu thereof, the Tribunal awards the Claimant general damages of Kshs 100,000/= for breach of her rights as set out in the Groups By-laws, general practice and her legitimate expectations. We are convinced that the Claimant took every reasonable step to mitigate the further escalation of the loss, injury or damage.
III. Whether The Respondents Are Entitled To Their Counterclaim Of Kshs 76,180/=
63.The Respondents filed their defence and Counterclaim on September 26, 2022. The gist of the claim is that the Claimant made her last contributions on September 8, 2021 and that she is in breach of the Group’s constitution as she did not communicate her resignation from the Group. The breakdown of the arrears to the date of the filing of the suit are set out as follows:a.Loan arrears Kshs 6,500/=b.Transport Arrears and Fines Kshs 5,280/=c.Fines for failure to attend meetings and events Kshs 4,200/=d.Merry go round arrears Kshs 60,000/=e.Storage charges Kshs 200Total amount Kshs 76,180/=
64.The Respondents submitted that the Counterclaim is justified on the grounds that the Claimant defaulted in paying her Group dues since September 8, 2021 and that she only confirmed her resignation from the Group on September 27, 2022 at the hearing of the claim. In addition, they submitted that the demand letter issued by the Claimant on October 29, 2021 simply demanded for money she paid to the association and was not in any way a letter of resignation from the Group.
65.The Respondents further submitted that the suit by the Claimant was an afterthought since from her evidence; her husband passed on August 27, 2021 but she wrote a demand letter on October 29, 2021 without stating that she had resigned from the Group. That the suit was initiated on June 3, 2022, more than six months from the purported demand and that the service of the demand was disputed. That as such, the Respondents were not aware of the resignation until the day of the hearing of the claim on October 27, 2022 and that the claim for the arrears and fines was therefore justified.
66.The Claimant opposed the Counterclaim vide the Reply to the Defence and Counterclaim dated October 5, 2022. She adduced evidence that claim related to the monies calculated from September 8, 2021 to the filing of the suit. The Claimant submitted that by the time, she had resigned from the Group and therefore the claim was unfounded. The Respondents’ witness confirmed that the Claimant was not indebted prior to the September 8, 2021.
67.On the issue of the loan advanced, the Claimant denied ever being loaned any money by the Group or failing to pay her dues. The Respondents witness did not provide any evidence before the Tribunal that the Claimant applied for the Loan, the loan advanced, the schedule of payments and the demand made upon the Claimant by the Group. The Respondents witness told the Tribunal that the members agreed collectively to loan each other Kshs 5000/=. He also stated that there was no provision in the By- laws of the Group that touched on the loaning of the members. From his testimony, the Respondent’s witness stated that the loan was advanced on August 4, 2021 and it was repayable in 13 months. The question that arises therefore is how the Respondents arrived at the loan and loan arrears of Ksh 6,500/= as at the time when the Claimants husband passed on August 27, 2021.
68.From the respective pleadings, evidence adduced at the hearing of the claim and the submission by the parties, the Tribunal finds that the Claimant resigned constructively upon the realisation that the Group would not support her at the her difficult moment following the passing on of her husband. She them communicated orally on the September 8, 2021 that she was no longer interested in the Group and formally in writing through the demand letter dated October 29, 2021. The 4th paragraph of the demand letter states as follows:'Having never benefitted from the Group before and considering the contemptuous treatment accorded to our client in the aforementioned events of August 2021, our client has resolved to immediately withdraw his membership from the Group.'We find that this letter sufficiently communicated the Claimants position in so far as her membership of the Group is concerned.
69.Having found that the Claimant was not indebted to the Group at the time of the demise of her husband, and having established that she resigned from the Group formally on October 29, 2021 and having established that she made her last payment on September 8, 2021, and having further found no evidence that the Claimant obtained a loan of Ksh 5000/=, logically, the arrears and fines set out in the Counterclaim do not arise. Consequently, the Respondents claim of Kshs 76, 180/= is hereby dismissed.
IV. Who Bears The Costs Of The Suit?
70.On the issue of costs, the Claimant submitted that the costs follow the event and urged the Tribunal to award costs to the Claimant.
71.On their part, the Respondents asked the Tribunal to award them the costs of the counter claim and to dismiss the Claimants suit with costs. They relied on the provisions of section 27 (1) of the Civil Procedure Act, Cap 21, that:'Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and give all the necessary discretions for the purposes aforesaid; and the fact that the court has no jurisdiction to try the suit shall bear no bar to exercise of those powers; provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise direct.'
72.The Tribunal has also been invited to consider the case of Cecilia Karuru Ngayu vs- Barclays Bank of Kenya & another (2016) eKLR where the court looked at Justice (Retired) Kuloba’s book on Judicial Hints on Civil Procedure, 2nd Edition at page 99 as follows:'Thus the expression ‘the costs shall follow the event’ means that the party who on the whole succeeds in the action gets the general costs of the action, but that, where the action involves separate issues, whether arising under different causes of action or under one cause of action, the costs of any particular issue go to the party who succeeds upon it.'
73.Based on the party’s submissions and our findings that the Respondents were in breach of its By-laws in failing to support the Claimant and our subsequent findings that the Counterclaim fails, we find that the Claimants prayer for costs of this claim is merited. We therefore award costs of this suit to the Claimant.
V. Determination And Final Orders
74.Based on our findings above we make the following orders that:i.The Respondents pay the Claimant’s claim as follows:a.Benefits arising from the death of the Claimant’s husband: 44 members x Kshs 500/= - =Kshs 22,000/=.b.Merry go round Contributions - 22 contributions x 1,600/- = Kshs 35,200/=c.Weekly savings refunded at the end of the year from January 2021 – August 25, 2021 - Kshs 300 x 34 weeks = Kshs 10,200/=d.The Claimant’s claim for weekly contributions of Kshs 72,500/= for member’s events is dismissed.ii.Damages of Kshs 100,000/= for breach of the By-laws and Claimant’s legitimate expectationsiii.The Respondent’s Counterclaim of Kshs 76,180/= is dismissed.iv.Costs awarded in favour of the Claimant.v.Interest on i and ii above at the prevailing court rates.Those then are the orders of this Tribunal
DATED AND DELIVERED AT NAIROBI THIS 19TH DAY OF JANUARY, 2023.DR. J. BETT …… ........................................ [CHAIRMAN]R. KATINA… ...........................[VICE-CHAIR]HON. J. WERE …………… ……..............................[MEMBER]A. GIKUYA………………………….................................[MEMBER]A. KIBET...................................................................[MEMBER]Judgement delivered virtually in the presence of:Mr. Munyoki, Advocate for the ClaimantMr. Kyule, Advocate for the RespondentsMr. Isaac Kapelikinei- Tribunal Assistant
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