Liquidator for Mukungugu Farmers Cooperative Society v Gathua & 5 others (Environment & Land Case 26 of 2020) [2024] KEELC 7140 (KLR)
The bottom line
#Kenya's Environment and Land Court upheld a co-operative liquidator's power to sell society land and stopped members from interfering with the liquidation.
What this practically means
#Executive summary
#Key legal issues
#Legality of the Liquidator's appointment
The Liquidator was lawfully appointed by the Commissioner under Section 65 of Cap 490, vide Gazette Notice No. 6120 of 5th August 2016, and challenges to the appointment were dismissed
The appointment was gazetted and evidenced by a liquidation order dated 27th July 2016. The Defendants challenged the appointment in Judicial Review No. 27 of 2016 and a further judicial review in 2018, both dismissed, and did not appeal. A Tribunal case was also dismissed without appeal under Section 69(2). The court therefore held the appointment lawful and the grievance closed.
Whether the utility plots were available for sale and whether the Liquidator acted lawfully
The suit plots formed part of the society's assets vesting in the Liquidator; members resolved to dispose of idle plots and the Liquidator acted with the Commissioner's approval and supervision
The court found the Liquidator prepared statements of affairs and distribution schemes approved by the Commissioner, convened a members' meeting, sold plots in accordance with the members' resolution, and acted under statutory supervision. Some public utilities were given to a public school for community benefit. No mismanagement or ultra vires conduct was proved.
Whether the Defendants proved their counterclaim
The counterclaim was dismissed as an afterthought, the Defendants having failed to prove membership or any unlawful conduct by the Plaintiff
The Defendants admitted they were never members of the society and gave no evidence of intimidation or destruction attributable to the Plaintiff. Their prior litigation had been dismissed without appeal. On a balance of probabilities, the counterclaim failed and the Plaintiff's claim for injunction succeeded.
Legal principles established
#- Where a liquidator's appointment has been challenged before the Co-operative Tribunal and the High Court and those challenges were dismissed without appeal, the appointment cannot be collaterally attacked in a subsequent suit
- Upon cancellation of a co-operative society's registration, all its property vests in the liquidator appointed by the Commissioner under Section 65 of Cap 490
Court orders
#- 1.A permanent injunction restraining the Defendants, their agents, servants and employees from dealing with, interfering with or disrupting the Plaintiff from fulfilling his mandate of liquidating Mukungugu Farmers' Co-operative Society, including sale of Njoro/Njoro Block 1 (Mukungugu) Cattle Dip Plot No. 332(2), A.I. Plot No. 326(3) and Market Place Plot No. 334
- 2.Defendants' counterclaim dismissed with costs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the suit plots; Co-operative Societies Act, Cap 490
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Liquidator for Mukungugu Farmers Cooperative Society v Gathua & 5 others (Environment & Land Case 26 of 2020) [2024] KEELC 7140 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/7140/eng@2024-10-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.