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MagistrateDismissedMiscellaneous Civil Application No. E002 of 2023

Mukunga t/a Jabri Auctioneers & another v Lokere t/a Kiteri Limited (Miscellaneous Civil Application E002 of 2023) [2024] KEMC 49 (KLR)

Magistrates' Court (Chief Magistrate's/Magistrate's Court, Maralal)
15 November 2024
1,813 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out an auctioneer's vehicle repossession application, ruling that disputes between a SACCO and its member belong only in the Co-operative Tribunal.

What this practically means

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Executive summary

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This ruling by Senior Principal Magistrate T.A. Sitati at Maralal Law Courts determined two competing applications in Miscellaneous Civil Application No. E002 of 2023. The auctioneer, Jared Omondi Mukunga, sought ex parte orders (obtained on 24th October 2023 from Hon. J.H.S. Wanyanga, Principal Magistrate) compelling the respondent to surrender two motor vehicles to the OCS Maralal Police Station, having received written instructions on 17th August 2023 from a creditor to repossess the vehicles to satisfy loan arrears of Kshs 13,396,699. The respondent opposed, contending the dispute was between Tower SACCO and its member secured by a chattels mortgage, that no repossession order existed, and that a Notice of Motion is not a recognised originating process. The court held that while the auctioneer acted properly on a letter of instruction and could not sue the debtor directly for want of privity of contract, the underlying dispute between a SACCO and its member over indebtedness and recovery of a chattels mortgage falls exclusively within the Co-operative Tribunal under section 76 of the Co-operative Societies Act. Relying on Jamal Salim and Adero v Ulinzi Sacco, the court held that jurisdiction either exists or does not and cannot be conferred by consent. The court dismissed the auctioneer's application with costs and vacated all previously issued ex parte orders, allowing a 30-day right of appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the auctioneer's miscellaneous application by Notice of Motion was properly before the court
  2. 2.Whether the dispute between Tower SACCO and its member over loan indebtedness and chattels mortgage repossession falls within the exclusive jurisdiction of the Co-operative Tribunal under section 76 of the Co-operative Societies Act
  3. 3.Whether the ex parte orders issued on 24th October 2023 should stand

Key legal issues

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01

Whether an auctioneer with no personal claim against a debtor may institute recovery proceedings by miscellaneous application in the magistrates' court

Holding

The procedure required a forum where the principal's claim could be ventilated; the magistrates' court lacked jurisdiction because the underlying dispute is between a SACCO and its member.

Reasoning

The auctioneer acted on a written letter of instruction from the creditor and committed no fault up to that point. However, the claim is one for recovery of indebtedness secured by a chattels mortgage between Tower SACCO and its member, a dispute expressly reserved to the Co-operative Tribunal by section 76 of the Co-operative Societies Act, covering claims by a society for debts due from a member whether admitted or not.

p. 5
02

Whether jurisdiction can be conferred by consent or acquiescence

Holding

No - jurisdiction either exists ab initio or it does not, and can be raised at any stage of the proceedings.

Reasoning

The court adopted the Court of Appeal's holding in Jamal Salim v Yusuf Abdulahi Abdi and Adero & another v Ulinzi Sacco Society Limited that jurisdiction cannot be granted by consent of parties or assumed from acquiescence, and may be raised even on appeal. Accordingly, the respondent's late jurisdictional challenge was valid.

p. 4

Legal principles established

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  • All proceedings, whether substantive or interlocutory, between a SACCO and its member-debtor must be ventilated before the Co-operative Tribunal
  • Jurisdiction either exists or it does not and cannot be conferred by consent or acquiescence of the parties

Court orders

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  1. 1.The application by the auctioneer filed in the improper forum is dismissed with costs
  2. 2.All the previous orders issued without jurisdiction are vacated forthwith
  3. 3.Right of appeal is 30 days

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Jurisdiction of the magistrates' court vis-à-vis section 76 of the Co-operative Societies Act (Cap 490), which vests SACCO-member disputes in the Co-operative Tribunal

Relief refused

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Surrender of motor vehicles KHMA 380L and KMHA 057H to police and related recovery reliefs sought by the auctioneer

The court lacked jurisdiction ab initio as the dispute is a SACCO-member dispute reserved for the Co-operative Tribunal

p. 5

Costs

The auctioneer's application dismissed with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The application by the auctioneer has been filed in the improper forum and is dismissed with costs. All the previous orders issued without jurisdiction are vacated forthwith. Right of appeal is 30 days.
p. 5Final orders - dismissal and vacation of ex parte orders
Jurisdiction either exists or it does not. Neither can it be acquiesced or granted by consent of the parties.
p. 4Nature of jurisdiction
section 76 of the Cooperative Societies Act demands all proceedings whether substantive or interlocutory between the SACCO and its member –debtor be ventilated before the Cooperative Tribunal.
p. 5Exclusive jurisdiction of the Co-operative Tribunal

Issues in the judgment

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minor

Motor vehicle registration numbers are inconsistently rendered in the judgment (KHMA 380L and KMHA 057H in some passages, KHMA 380L and KMHA 057L in another)

minor

Judgment text contains typographical errors and a reference to 'respondent/counter-applicant' and '1st and 2nd respondent' although only one respondent appears on the face of the ruling

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, "Mukunga t/a Jabri Auctioneers & another v Lokere t/a Kiteri Limited (Miscellaneous Civil Application E002 of 2023) [2024] KEMC 49 (KLR)", Case Analysis (2024). Miscellaneous Civil Application No. E002 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2024/49/eng@2024-11-15

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