Bungoma Teachers Housing & Investment Co-operative Society Ltd v Bonito Properties Ltd (Land Case E023 of 2025) [2026] KEELC 4288 (KLR)

Ruling-ELC LC No. E023 of 2025 They urged that the intended withdrawal of the suit was contrary to the interests of the members of the Plaintiff and would occasion them substantial loss. They urged that they had a direct identifiable stake in the proceedings and would be adversely affected by the outcome of the suit. Additionally, that their presence was necessary to enable this court effectually and completely adjudicate upon all the issues in controversy. 3. Victor Kakenyi Nduma swore the supporting affidavit and exhibited letters dated 31/3/2026 (10/6/2025), 30/4/2026 and 5/5/2026. B.S Advocates LLP wrote to Teddy & Co. Advocates on 31/3/26 (the letter also bears the date 10/6/2025) complaining that a director of the Defendant summoned and engaged officials of the Plaintiff in relation to matters which are the subject of these proceedings. The letter required the Defendant and its agents to cease and desist from contacting or summoning the Plaintiff’s official on matters touching on this suit and for future communication to be challenged through the Plaintiff’s advocate. 4. The letter dated 30/4/2026 was addressed to Mr. Moses Welikhe, as the Director for Cooperatives, Bungoma County and indicated that he convened a meeting on 23/4/2026 at his office in his official capacity during which he directed the Plaintiff to consider withdrawing this suit on grounds that it may not be sufficiently supported by the evidence. The Director of Cooperatives summoned the Chairman again on 30/4/2026. The letter Page 2 of 17

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Ruling-ELC LC No. E023 of 2025 expressed disapproval regarding the directors’ involvement on a matter, which was sub judice. 5. Victor Nduma wrote the letter dated 5/5/2026 to the County Executive Member, the County Government of Bungoma, in his capacity as the Chairman of the Supervisory Committee of Bungoma Tourist Housing Cooperative Society (BUTICOH), seeking his intervention in the affairs of the society. He mentioned that for a prolonged period, the Plaintiff struggled to collect rent from its premises occupied by the Tourist Hotel and that the rent arrears for over twelve years exceeded Kshs. 50 Million. He expressed concern that instead of supporting the society in its decision to institute legal proceedings, officers including the Director of Cooperatives, Mr. Welikhe, had engaged in actions which undermined the member’s position. He contended that the Director was protecting the tenant and had convened meetings on 6/5/2026 and 23/4/2026 aimed at coercing the Plaintiff’s officials to withdraw the case. The letters sought the halting of further interference in the Plaintiff’s internal affairs and its pursuit of the claim in court. 6. Wyckliff Wafula Wangamati swore the replying affidavit in opposition to the application. He pointed out that the jurat of the supporting affidavit was defective because it was sworn by Saul Wasilwa and not Victor Kakenyi Nduma. He averred that the application did not meet the threshold for a party seeking to join a suit as an interested party, who is required to demonstrate the existence of an identifiable stake in the proceedings. Page 3 of 17

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Ruling-ELC LC No. E023 of 2025 7. He added that vide the resolution passed on 26/5/2025, members of the Plaintiff agreed that Peter Sirengo, the Plaintiff’s Chairman would pursue the suit on behalf of the Plaintiff and that it is on the strength of that resolution that this suit was filed. That having donated their power to the Chairman, the applicants could not be allowed to claim to participate in the suit. He added that he was aware that an application dated 18/5/2026 had been filed by the Plaintiff to withdraw the suit with no orders as to costs following a resolution of the Plaintiff’s members made on 15/5/2026 pursuant to a meeting held on 6/5/2026. 8. He deponed that there was no suit pending which the applicants could join and pointed out that the Plaintiff appointed the firm of Achieng Twena and Associates Advocates to act for it in place of B.S Advocates LLP. He averred that this court lacked jurisdiction to determine issues relating to management and organization of entities while pointing out that its jurisdiction was limited to land and environment. 9. In the further affidavit sworn on 4/6/2026, Wyckliff Wangamati deponed that Saul Wasilwa was not opposed to the application dated 18/5/2025 for withdrawal of the suit and that the Plaintiff had instructed Achieng Twena Advocates to represent it in the matter. 10. The Defendant filed a notice of preliminary objection dated 22/6/2026 that this court lacked jurisdiction to entertain this suit in light of Section 76 of the Cooperative Societies Act and that jurisdiction vested in the Cooperatives Tribunal. Page 4 of 17

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Ruling-ELC LC No. E023 of 2025 11. Victor Nduma swore the affidavit dated 18/6/2026 in which he averred that his advocate’s name, Saul S. Wasilwa was inadvertently typed in the affidavit which he swore on 13/5/2026 and that his name should have appeared on the affidavit, which bore his signature. He explained that the advocate’s name was inadvertently typed and reiterated the contents of his affidavit. 12. Achieng Twena Associates Advocates filed the application dated 18/5/2026 seeking to have the entire suit marked as withdrawn with no orders as to costs. The application was made on the grounds that the Plaintiff filed a notice of withdrawal of the suit dated 6/5/2026 signed by its Chairman, Mr. Peter Sirengo. The court was reluctant to allow the withdrawal on 13/5/2026 when the matter came up due to lack of a resolution to that effect. That the court set down the matter for ruling on the withdrawal of the suit for 20/5/2026. 13. The other ground was that the Plaintiff had passed a resolution in the meeting held on 15/5/2026 through which all the members had resolved to withdraw the case against the Defendant with no orders as to costs. Through the same resolution, the Plaintiff appointed Achieng Twena Associates Advocates to represent it in place of B.S Associates LL.P. The other ground advanced was that the Plaintiff was no longer interested in pursuing this suit and preferred an out of court settlement with the Defendant. 14. Peter Sirengo, the Plaintiff’s Chairman, swore the affidavit in support of the application and exhibited the resolution dated 15/5/2026 for the withdrawal of the suit and for instruction of a Page 5 of 17

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Ruling-ELC LC No. E023 of 2025 new firm of advocates. He also exhibited the Minutes of the meeting of the full board, supervisory committee and tenant held on 6/5/2026 at the Tourist Hotel Bungoma. The resolution stated that the tenant would deposit Kshs. 500,000/= for the month of May, 2026 and Kshs. 3.5 Million by the end of October, 2026. The other resolution was that Achieng Twena & Associates Advocates would take over conduct of the matter and that the matter stood withdrawn with no orders as to costs. 15. He also exhibited the affidavits sworn by Smith Waswa and Zadock Makhanu sworn on 18/5/2026 in which they expressed the desire not to be joined to the proceedings in light of the fact that the suit had been withdrawn. 16. Peter Simiyu Sirengo, the Plaintiff’s Chairman, subsequently swore the affidavit dated 29/5/2026 in which he averred that he was aware of the application dated 18/5/2026 seeking to withdraw the suit with no orders as to costs. He stated that he had previously filed a notice to withdraw the suit dated 6/5/2026. He averred that he represented a group of senior citizens who are members of the Plaintiff, which does not take new members. He deponed that his committee had tried to change the fortunes of the society but had met numerous obstacles and efforts by Mr. Moses Welikhe, a Director in the Department of Cooperatives of Bungoma, who was pushing to have the case withdrawn from the court. This culminated in the Plaintiff’s advocate writing the letter dated 30/4/2026 to Mr. Moses Welikhe. Page 6 of 17

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Ruling-ELC LC No. E023 of 2025 17. He also exhibited the message he received from Wilson Matete on 5/5/2026 indicating that the Director for Cooperatives had summoned the Plaintiff’s board members and Supervisory Committee to a meeting at the directors’ office on 6/5/2026. He stated that he attended the meeting, which was chaired by Mr. Welikhe who compelled them to pass a resolution to withdraw the case from court. He deponed that he was under the impression that the withdrawal was a step in the right direction for members based on the Defendant’s promise to commence paying rent. However, when the court made its ruling on 13/5/2026 and compelled the Defendant to pay the Plaintiff the outstanding rent of Kshs. 47 Million, he realized that the Director of Cooperatives had misled him to withdraw the suit. 18. In hindsight, he did not support the quest to withdraw the suit. He added that the decision had been arrived at following extensive consultation with members who were of the view that the case should proceed to its logical conclusion. He apologized to the court for misleading it by moving the court to have the case withdrawn, a decision that was not supported by the vast majority of members. 19. Remi Wamalwa Tulienge, who deponed that he was member no. 259 of the Plaintiff swore the affidavit dated 25/5/2026 and averred that the intended withdrawal of the Plaintiff’s suit was contrary to the interests of its members and would occasion loss and prejudice to the vast majority of the silent members who Page 7 of 17

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Ruling-ELC LC No. E023 of 2025 were of advanced age. He deponed that the decision to withdraw the suit was taken without involving the members of the society. 20. The court directed parties to file and exchange written submissions on the two applications. The proposed interested parties filed written submissions in which they pointed out that the Chairman of the Plaintiff stated in paragraph 5 of his witness statement that the original shareholders of the Plaintiff were 4065 but over time had dwindled to 2100 as a result of natural attrition. They submitted that many of the Plaintiff members were retired teachers and widows and that many others had died without ever enjoying dividends from the Plaintiff’s one substantial investment. 21. They submitted that the application for joinder arose from a genuine apprehension by the members of the Plaintiff that the Plaintiff’s official who sought justice from the court had turned around and were attempting to defeat, compromise and ultimately extinguish the members’ claim knowledge, authority or participation of without the the Plaintiff’s membership. They argued that what was before the court was a blanket request to terminate proceedings of immense public and economic importance to members of the Plaintiff’s society without transparency, consultation or accountability. 22. They found it baffling that the court had already issued orders directing payment of rent arrears amounting to Kshs. 47,250,170/= yet the proposed withdrawal was not motivated by the interests of justice or the welfare of members but by ulterior Page 8 of 17

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Ruling-ELC LC No. E023 of 2025 considerations designed to defeat the legitimate claim of the society and unjustly benefit the Defendant. 23. Regarding joinder, the intended interested parties submitted that they were bona fide members of the Plaintiff and that the suit land, which is the subject matter of this suit, belonged to the members of the society. They submitted that they possessed a direct, identifiable and legally protectable interest in these proceedings. Further, that there existed serious conflict within the society regarding the conduct of the suit and there was genuine apprehension of collusion between the Plaintiff’s officials who had acted without consulting members, with the Defendant. 24. They urged that there was credible evidence that those entrusted with authority were acting contrary to the interests of members and members themselves were therefore entitled to move the court to safeguard the society and its assets. They cited Order 1 Rule 10 (2) of the Civil Procedure Rules and relied on Thiga v Ngenda Investment Rural Sacco Limited & 2 Others (2023) KECA 509 (KLR) on what an applicant seeking to be joined in proceedings as an interested party needs to prove. 25. The Defendant submitted that the Black’s Law Dictionary, 8 th Edition defined an interested party as a party who has a recognizable stake and therefore standing in a matter. It relied on Meme v Republic [2004] 1 EA 124 where the High Court observed that a party could be joined to a suit because his presence would result in a complete settlement of all the Page 9 of 17

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Ruling-ELC LC No. E023 of 2025 questions in the proceedings or where the joinder would provide protection for the rights of a party who would otherwise be adversely affected in law or where the joinder would prevent a proliferation of litigation. The Defendant submitted that the intended interested parties had failed to tender evidence before this court to prove that they were members of the Plaintiff and that they did not file an affidavit to support the application dated 13/5/2026. 26. The Defendant submitted that it had been agreed that the Plaintiff’s chairman, Peter Sirengo, should pursue the suit on behalf of the Plaintiff and its members to its conclusion as demonstrated in the resolution dated 15/5/2026. It urged that the applicants could not be allowed to lay claim to participate in this suit having donated their power to the Plaintiff’s chairman. Further, that the intended interested parties had not demonstrated how their joinder to the suit would lead to a conclusive determination of the issues raised while urging that their joinder would lead to unnecessary protracted and prolonged litigation contrary to overriding objective of the court. The Defendant urged this court to dismiss the application dated 13/5/2026 with costs in light of the fact that the claim had been withdrawn by the Plaintiff’s resolution. 27. Regarding the application for withdrawal of the suit dated 18/5/2026, the Defendant submitted that the application was filed by the Plaintiff’s current advocates, Achieng Twena & Associates Advocates following a meeting held by the Plaintiff’s Page 10 of 17

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Ruling-ELC LC No. E023 of 2025 full board, supervisory committee and tenant on 6/5/2026 where it was resolved that the tenant would pay Kshs. 500,000/= for the month of May, 2026 and Kshs. 3.5 Million at the end of October, 2026. The Defendant maintained that the resolution dated 15/5/2026 vide which the Plaintiff resolved to withdraw the suit had not been revoked. 28. The Defendant relied on Section 3 (1) of the Environment and Land Court Act on the objective of the Act, which is to facilitate the just, expeditious, proportionate and accessible resolution of disputes. It also cited Article 159 (2)(c) of the Constitution while urging that parties had embraced the use of alternative dispute resolution through negotiation and come up with an agreement, which the court had the a duty to adopt and give effect to the intention of the parties. The Defendant urged the court to allow the application dated 18/5/2026 and order the withdrawal of the suit in accordance with the Plaintiff’s resolution dated 15/5/2026. 29. The Defendant argued in the further submissions dated 22/6/2026 that if the intended interested parties contend that the Plaintiff’s Chairman who filed the application to withdraw the suit was acting contrary to the interests of the members, then they needed to exhaust the remedies provided in law. The Defendant contended that this court lacked jurisdiction to determine the dispute between the intended interested members and its officials based on Section 76 of the Cooperative Societies Act that vests Cooperatives Tribunal. Page 11 of 17 jurisdiction on the

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Ruling-ELC LC No. E023 of 2025 30. The intended interested parties filed further submissions dated 18/6/2026 where they urged that this court had jurisdiction to determine this dispute which is between a cooperative society acting as a landlord and a tenant that is neither a cooperative society nor a member of the cooperative society. They submitted that their entitlement to participate in these proceedings derived from the Constitution and the Cooperatives Societies Act. 31. The intended interested parties relied on Articles 1 and 22 of the Constitution, which vests sovereign authority in the people and guarantees every person the right to approach the courts when their rights are threatened or infringed respectively. They pointed out that Sections 27 and 28 the Co-operative Societies Act vested supreme authority in the general meeting of members and required elected officials to exercise their powers in trust for the benefit of the society and to be accountable to the members. 32. They reiterated that they possessed an identifiable stake in the subject matter of this suit and that its outcome would affect their rights as members particularly where there was a concern that the officials representing them in court may not be safeguarding the interests of the society and its members. Further, that Section 85(5) of the Co-operative Societies Act, which holds committee members accountable for losses suffered by the society as a result of actions undertaken in breach of their statutory obligations recognised the possibility that officials may act contrary to the interests of the society and its members. Page 12 of 17

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Ruling-ELC LC No. E023 of 2025 33. The proposed interested parties relied on Article 65(2) of the Plaintiff’s bylaws, which enjoins the management to develop strict tenancy agreements that guarantee adequate compensation to members in the event of defaulting tenants. They adverted to the affidavit, which the Plaintiff’s chairman swore on 29/5/2026 detailing the pressure exerted upon the committee by the Director of Cooperatives, Bungoma County, to withdraw the suit. The applicants noted that Achieng Twena & Company Advocates who took over conduct of the matter did not file submissions and that Teddy Advocate, who represents the Defendant, appeared to be advancing arguments on behalf of Achieng Twena & Company Advocates. 34. The applicants argued that the circumstances of this case pointed to the conclusion that the individual driving the efforts to withdraw this suit stood to benefit from its withdrawal. They expressed concern over the nature and terms of the purported settlement proposal vide which the Plaintiff was to be paid Kshs. 500,000/= at the end of May and Kshs. 3,500,000/= at the end of October 2026, which in their view was detrimental to the Plaintiff in light of the fact that the court had already issued orders directing the Defendant to pay Kshs. 47, 250,000/= and not to undertake any further construction on the suit land. 35. What falls for determination is twofold, firstly, whether the court should allow the intended interested parties, who claim to be members of the Plaintiff to join this suit and participate in the proceedings and secondly, whether the court should allow the Page 13 of 17

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Ruling-ELC LC No. E023 of 2025 Plaintiff to withdraw this suit as sought in the application dated 18/5/2026. 36. Achieng Twena Advocates indicated in the application for withdrawal of the suit that the Plaintiff passed a resolution in a meeting held on 15/5/2026 through which all the members resolved to have this case withdrawn with no orders as to costs. Further, that the Plaintiff was no longer interested in pursuing this suit and preferred an out of court settlement with the Defendant. This contradicts the position taken by the intended interested parties who claim that the decision was taken without the authority or approval of the members of the Plaintiff. It is doubtful whether the resolution to withdraw the suit was taken by all the members of the Plaintiff. 37. The Plaintiff, which is a cooperative society composed of retired teachers filed this suit claiming that the Defendant had failed to pay rent for the premises known as Bungoma Township/457 also known as Bungoma Tourist Hotel (the suit land), which it occupies and which is the Plaintiff’s investment. This court allowed the Plaintiff’s application dated 26/8/2025 on 13/5/2026 and directed the Defendant to pay the Plaintiff accrued rent arrears of Kshs. 47,250,170/= for the period running from 1/8/2014 to August 2025. The court also restrained the Defendant from erecting, improving or continuing any construction works on the suit land. 38. Subsequently, the Plaintiff filed the application seeking to withdraw the suit. The application was supported by the affidavit Page 14 of 17

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Ruling-ELC LC No. E023 of 2025 of its chairman, Peter Sirengo. Peter Simiyu Sirengo, the Plaintiff’s Chairman retracted his position regarding the withdrawal of the suit. He deponed in the affidavit dated 29/5/2026 that he had changed his mind and did not support the quest to withdraw the suit, following extensive consultation with members whose view was that the case should proceed to its logical conclusion. In that affidavit, the Chairman apologized to the court for misleading it by moving the court to have the case withdrawn. 39. It is apparent that undue pressure was exerted on the Plaintiff’s chairman and its leadership to withdraw the suit. It is contended that Mr. Moses Welikhe, the Director for Cooperatives, Bungoma County convened a meeting on 23/4/2026 at his office in his official capacity during which he directed the Plaintiff to consider withdrawing this suit and he also summoned the Chairman on 30/4/2026. 40. The Defendant argued that this court lacked jurisdiction to entertain this suit in light of Section 76 of the Cooperative Societies Act and that jurisdiction vested in the Cooperatives Tribunal. The disputes envisioned to be referred to the Cooperatives Tribunal under that section are those among members of a cooperative society, or between members and committee members or between the society and another cooperative society. This dispute falls outside the purview of that section and is properly before this court. The preliminary objection fails. Page 15 of 17

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Ruling-ELC LC No. E023 of 2025 41. The court is satisfied that the intended interested parties have an identifiable stake in the proceedings and the subject matter of this suit and would be adversely affected by the outcome of the suit. If indeed the steps taken by the Plaintiff’s officials to withdraw or compromise the suit was done without consultation, authority and approval of the members, then the intended withdrawal of the suit is contrary to the interests of the members of the Plaintiff and would occasion them substantial loss and it is only fair and just that the intended interested parties participate in this suit. 42. The court declines to mark this suit as withdrawn with no orders as to costs as sought in the application dated 18/5/2026. 43. The court grants leave to Smith Waswa, Victor Kakenyi Nduma, Fadhila Shiundu Nalyanya and Zaddock Wekulo Makhani to join this suiy as interested parties and to file the appropriate pleadings within 14 days of today. The costs of the applications will be in the cause. Delivered virtually at Bungoma this 1st day of July 2026. K. BOR JUDGE In the Presence of:Ms. Joy Wanyonyi for the Plaintiff Mr. Saul Wasilwa for the Plaintiff and Interested Parties Mr. Teddy Achieng for the Defendant Page 16 of 17

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Ruling-ELC LC No. E023 of 2025 Court Assistants – Bett/Metrine Page 17 of 17

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