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Court of AppealDismissedCivil Appeal No 76 of 2015· [2018] KECA 570 (KLR)

Kipkemboi v Sacco Societies Regulatory Authority & another (Civil Appeal 76 of 2015) [2018] KECA 570 (KLR)

Court of Appeal of Kenya
17 May 2018
EGE. M. GithinjiHOHannah OkwenguJMJ. Mohammed
2,232 words in judgment
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The bottom line

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Kenya's Sacco regulator can suspend or remove Sacco officers directly, and officers who ignore show-cause letters risk losing constitutional claims.

What this practically means

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Executive summary

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The Court of Appeal at Eldoret (Githinji, Okwengu and Mohammed, JJA) dismissed an appeal against the High Court (Kimondo, J.) which had rejected a constitutional petition by a former Chief Executive Officer of a deposit-taking Sacco. The Regulatory Authority had suspended the appellant for 60 days, required a written explanation within 15 days, and, when he did not respond, removed him from office, declared him ineligible to hold office in any Sacco, and prohibited him from holding such office for three years, citing Section 51(c) of the Sacco Societies Act and Regulations 67 and 72 of the Deposit-taking Sacco Business Regulations 2010. The Court framed two issues: whether the Authority, rather than the employer, had power to suspend and remove the appellant, and whether the appellant had discharged the burden of proving constitutional violations. It held that Section 51(c) expressly conferred the power on the Authority, a reading reinforced by Section 92(2) of the Employment Act, which leaves other statutory powers intact. On fair administrative action under Article 47 and Section 4(3) of the Fair Administrative Action Act, 2015, the Court found the appellant received adequate prior notice, a detailed four-page show-cause letter, an opportunity to respond, and detailed written reasons for removal; his election not to respond meant there was nothing to investigate and no need for disciplinary proceedings. The appeal was dismissed with costs to the 1st respondent, with no orders as to costs against the non-participating 2nd respondent. The judgment binds lower courts on the Authority's statutory removal powers.

Key legal issues

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01

Statutory power of the Regulatory Authority to suspend and remove a Sacco officer

Holding

Section 51(c) of the Sacco Societies Act, read with Regulations 67 and 72, confers on the Authority express statutory power to direct the suspension or removal of an officer of a Sacco Society; this power supplements, and is not derogated from, the employer's disciplinary powers under the Employment Act.

Reasoning

Ordinarily the employer disciplines and terminates employment, but Section 92(2) of the Employment Act makes its provisions additional to, not in substitution for, other statutes. Parliament by Section 51(c) of the Sacco Societies Act conferred on the Regulatory Authority the power to direct suspension or removal of officers involved in prohibited conduct, reinforced by Regulation 72(6). The High Court correctly construed the empowering statute.

p. 4
02

Compliance with Article 47 and the Fair Administrative Action Act, 2015

Holding

The suspension and removal complied with Section 4(3) of the Fair Administrative Action Act: the appellant was given prior and adequate written notice of the grounds, an opportunity to be heard by way of written representation, and detailed written reasons for removal.

Reasoning

The suspension letter was a four-page document with grounds and specific facts, and required a written explanation within 15 days; the removal letter was a six-page document citing the empowering provisions with detailed grounds and reasons for prohibition. The appellant elected not to respond, so there was nothing to investigate and no basis for full disciplinary proceedings. The claim that disciplinary proceedings should have been held despite his failure to respond was rejected as fallacious.

p. 5
03

Burden of proving violation of constitutional rights

Holding

The appellant failed to discharge the onus of proving that the 1st respondent violated his constitutional rights, upholding the High Court's finding.

Reasoning

The appellant admitted service of the show-cause letters, did not refute the factual basis of the proposed removal, and did not contend that the grounds given could not constitute a breach of Sacco laws. The High Court found serious allegations of mismanagement or financial impropriety. The claim for damages therefore had no foundation.

p. 3

Legal principles established

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  • The Sacco Societies Regulatory Authority has statutory power under Section 51(c) of the Sacco Societies Act and Regulations 67 and 72 of the Sacco Societies (Deposit-taking Sacco Business) Regulations 2010 to suspend or remove an officer employed by a Sacco Society, notwithstanding that the Sacco is the employer.
  • Where an officer is given prior and adequate notice of the nature and reasons for proposed removal and an opportunity to give a written explanation, and fails to respond, there is no obligation to convene disciplinary proceedings before removal.

Court orders

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  1. 1.The appeal is dismissed with costs to the 1st respondent
  2. 2.No orders as to costs in respect of the 2nd respondent, which did not participate in the appeal

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 10, 19, 19(2), 21, 22, 41, 47, 47(1), 47(2), 47(3), 50
  • Sacco Societies Act, 2008 (No. 14 of 2008)Sections 50, 51, 51(c)
  • Sacco Societies (Deposit-taking Sacco Business) Regulations 2010Regulations 67, 67(4), 72, 72(6)
  • Employment ActSection 92(2)
  • Fair Administrative Action Act, 2015Section 4(3)
  • Co-operative Societies ActReferenced generally (High Court findings)
On appeal from
High Court of Kenya
Not stated in the judgment text provided
Jurisdiction invoked
First appellate jurisdiction over the High Court's dismissal of a constitutional petition (Article 164 Court of Appeal jurisdiction; specific provision not cited in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kipkemboi v Sacco Societies Regulatory Authority & another (Civil Appeal 76 of 2015) [2018] KECA 570 (KLR)", Case Analysis (2018). Civil Appeal No 76 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/570/eng@2018-05-17

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.