https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9439

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **THE CIVIL APPELLATE DIVISION** *(****Coram: A.C. Mrima, J.)*** **CIVIL APPEAL NO. E725 OF 2024** ***-between-*** **AMBRISH N. SHAH ….......................................................... APPELLANT** *-****versus-*** 1. **SAMUEL KARIUKI NDUMIA** 2. **HIRUM NDIRITU NGATIA .........................................RESPONDENTS** ***[Being an appeal from the Judgment of the Hon. D. S. Aswani (Adjudicator) in Milimani Small Claims Civil Case No. 6462 of 2023) delivered on 30th May 2024]*** **JUDGMENT** **Background:** 1. This appeal stems from a road traffic accident that occurred on 18th December 2020, along *Muthithi Road* within Nairobi City County, that resulted in the extensive damage of the motor vehicle of *Ambrish N Shah*, the Appellant herein. The accident was allegedly caused by the negligence of *Samuel Ndumia* and *Hirum Ngatia*, the 1st and 2nd Respondents herein respectively. 2. Following the accident, the Appellant’s insurer, *GA Insurance Co. Limited*, indemnified the Appellant for the loss and instituted a subrogation claim in the Small Claims Court seeking Kshs. 146,552/= which comprised repair charges of Kshs. 102,892/=, assessor’s charges of Kshs. 7,410/=, and tracing/investigator charges of Kshs. 36,250/=. 3. In a judgment delivered on 30th May 2024, the trial Court found the Respondents 100% liable for the accident. However, the Learned Adjudicator dismissed the Appellant’s claim in its entirety on the premise that the payment vouchers tendered as evidence were inadequate proof of special damages and did not imply actual payment, particularly since ETR receipts were not attached. 4. That decision prompted the instant appeal which was heard by way of written submissions, hence, this judgment. **The Appeal:** 1. The Appellant filed a Memorandum of Appeal dated 13th June 2024 and preferred the following grounds: - 2. *The trial court erred in law and fact in dismissing the claimant’s case.* 3. *The trial court erred in law and in fact in finding that payment vouchers produced by the claimant were not adequate proof of payment.* 4. *The Learned Adjudicator erred in law and in fact in finding that the claimant had not provided proof of special damages incurred.* 5. *The Learned Adjudicator erred in law and in fact in finding that payment vouchers do not imply actual payment.* 6. *The Learned Adjudicator erred in law and in fact in not considering the submissions and authorities citied by the Appellant and applicable principles for assessment of damages.* *The Appellant’s Submissions:* 1. The Appellant urged his case further through written submissions dated 19th May 2025. He argued that the trial Court misdirected itself by disregarding the payment vouchers. He pointed out that the motor vehicle assessment report, repair invoices, and a signed satisfaction note proved that repairs were done and authorized. 2. To support the assertion that payment vouchers are valid proof of payment, the Appellant relied on the Court of Appeal decision in *Abdi Ali Dere -vs- Firoz Hussein Tundal & 2 others* [2013] eKLR, which held that it is incorrect to state that a payment voucher cannot be evidence of payment, as it serves as confirmation of payment much like a receipt. 3. The Appellant further relied on *Ndungu -vs- M’Ikiao & another* (Civil Appeal 182 of 2019) [2022] KEHC 15753 (KLR), where the High Court accepted a claim payment requisition voucher indicating a cheque number and authorization by an insurer as sufficient proof of payment for repair costs. 4. The Appellant prayed that the appeal be allowed and damages be awarded as pleaded. **The Respondents’ case:** 1. *Samuel N. Shah* & *Hirum Ndiriru Ngatia* challenged the appeal through written submissions dated 29th October 2025. It was their primary contention that under the doctrine of subrogation, an insurer cannot institute a claim against a third party in its own name. In that regard, they referred the Court to the authority in *Africa Merchant Assurance Company -vs- Kenya Power & Lighting Company Limited (*2018) eKLR as quoted in *Kibe & 2 others -vs- Martin* [2024] KEHC 12961 (KLR), which outlined that while an insurer steps into the shoes of the insured upon indemnification, the suit cannot be brought in the insurer’s own name. 2. On quantum, the Respondents argued that the payment vouchers produced were unsigned, lacked cheque details, and did not indicate to whom the funds were payable. Relying also on *Abdi Ali Dere -vs- Firoz Hussein Tundal & 2 Others* [2013] eKLR, they submitted that vouchers must be countersigned by the payee to signify payment, and failure to do so rendered them incapable of proving actual financial loss. They urged the court to dismiss the appeal with costs. **Analysis and Determination:** 1. Having considered the pleadings, the impugned judgment, and the rival submissions, the following two issues crystallize for determination: - 1. *Whether the suit in the trial court was incompetently instituted under the doctrine of subrogation.* 2. *The propriety of claim regarding special damages.* 2. Before delving into the merits of the rival arguments, it is imperative to set out the jurisdictional mandate of this Court sitting as an appellate Court from the Small Claims Court. Section 38(1) of the Small Claims Court Act, provides as follows; ***38. Appeals*** *(1) A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law.* *(2) An appeal from any decision or order referred to in subsection (1) shall be final.* 1. In the case of ***J N & 5 Others -vs- Board of Management, St. G School Nairobi & Another***[2017] eKLR, the Court discussed points of law in the following fashion: - *…. In law, a question of law, also known as a point of law, is a question that must be answered by applying relevant legal principles to interpretation of the law. Such a question is distinct from a question of fact, which must be answered by reference to facts and evidence as well as inferences arising from those facts. Such a question is distinct from a question of law, which must be answered by applying relevant legal principles. The answer to a question of fact (a “finding of fact”) usually depends on particular circumstances or factual situations.* 1. In ***M’riungu and Others -vs- R***[1982-88] 1 KAR 360 his Lordship, *Chesoni AJA* discussed matters of law in the following manner; *…. We would agree with the views expressed in the English case of Martin v Glyneed Distributors Ltd (t/a MBS Fastenings) [1983] 1 CR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court(s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decision of the trial of first appellate court unless it is apparent that; on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad law.* 1. Consequently, this Court is statutorily barred from re-evaluating factual disputes or interfering with the trial Court’s findings of fact, unless it is demonstrated that the Adjudicator misdirected herself on the law, applied an incorrect legal standard, or arrived at a conclusion so perverse that no reasonable tribunal could have reached it, thereby elevating a factual error to a point of law. 2. Deriving from the above, and in appreciation of the doctrine of subrogation as fundamental legal principle primarily in insurance and equity law that allows one party to step into the shoes of another for purposes of pursing any claims or remedies that the injured party held against a third party, this Court finds that the Appellant’s claim falls within the bounds of Section 38(1) of the Small Claims Court Act. 3. A consideration of the above issues now follows. **[a] Whether the trial Court suit was incompetently instituted under the doctrine of subrogation:** 1. The Respondents challenged the subrogation claim on a point of law, arguing that an insurer cannot institute a claim against a third party in its own name. While the Respondents are correct on the legal principle that an insurer must step into the shoes of the insured and sue in the insured’s name, they have misapplied this law to the facts on record. 2. The Court of Appeal in the case of ***Octagon Private investigation Security Services -vs- Lion of Kenya Insurance Co.***[1994] KECA 105 (KLR) outlined how the doctrine of subrogation works. It was observed: - *….. The Respondent (Lion of Insurance Company) in turn contended that it had sued the appellant under its right of subrogation under the contract of insurance between itself and the Bank. We have no doubt that this argument by the respondent was wholly false. The right of subrogation in a contract of insurance cannot create privity of contract between the insurance company and third parties. All that it gives an insurance company is the right to take over the rights and privileges of the insured under an insurance policy but if the insurance company wishes to exercise against third parties the rights and privileges so taken over from the insured, then it (the insurance company) can only do so on behalf of and in the name of the insured. We think Mr J B Byamugisha in his book “Elements of Insurance Law in East Africa” correctly states the law when he says at pg 109 under the heading “More on Subrogation”:* *“The insurance company is not given rights against third parties. The rights must and can only be enforced by the insured personally (to whom they are actually owed). Normally, the insurance company will use its rich resources to prosecute the claims; but, even then, it will do so on behalf of and in the name of the insured person.…” (Emphasis added)* 1. Turning back to the suit before the trial Court, a perusal of the Statement of Claim reveals that the primary suit, *SCC Claim No. 6462 of 2023*, was explicitly instituted in the name of the insured, *Ambrish N. Shah*, as the Claimant. Therefore, there was no error of law in how the suit was framed or instituted. This ground of opposition, therefore, fails. **[b] The propriety of claim regarding special damages:** 1. The crux of this appeal is whether the Learned Adjudicator committed an error of law in her assessment of the evidence tendered to prove special damages. The trial Court was not convinced that the claim was proved. For clarity, the Adjudicator held in paragraph 14 as follows: *…Not even ETR receipts were attached to the requests for payment. Nothing would have been easier, the Court finds, than to prove that indeed these amounts were paid. A request for payment does not imply actual payment*. 1. The established legal standard is that special damages must be specifically pleaded and strictly proved. In Civil Appeal No. 282 of 2018***John Nganga Kinuu & 2 Others -vs- Peter Rubiro Ndongi & 4 Others,***the Court of Appeal, in reference to the decision in *Hann -vs- Singh [1985] KLR 716* discussed special damages as follows; *…. Special damages must not only be specifically claimed but also strictly proved. The degree of certainty and the particularity of proof required depends on the circumstances and the nature of the acts themselves…* 1. The question of law before this Court is whether the Adjudicator misdirected herself on the legal standard of strict proof by categorically concluding that payment vouchers, absent ETR receipts, are legally incapable of proving financial loss. 2. There is no doubt that the suit was based on a material damage claim. The recovery of repair costs arising from motor accidents was settled by the Court of Appeal in ***Nkuene Dairy Farmers Co-op Society Ltd & another v Ngacha Ndeiya*** [2010] KECA 20 (KLR) in the following rendition: - ***…. In our view special damages in a material damage claim need not be shown to have actually been incurred. The claimant is only required to show the extent of the damage and what it would cost to restore the damaged item to as near as possible the condition it was in before the damage complained of. An accident assessor gave details of the parts of the respondent’s vehicle which were damaged. Against each item he assigned a value….*** 1. The Court further went on to srate that: - ***In the result we agree with Mr. Charles Kariuki that the Assessor’s report was sufficient proof and the failure to produce receipts for any repairs done was not fatal to the respondent’s claim……*** 1. Further, in ***Abdi Ali Dere -vs- Firoz Hussein Tundal & 2 others***[2013] eKLR, the Court of Appeal established the legal position regarding the evidentiary weight of vouchers as follows: - ***… it is not correct to say, as the trial court did, that in all and sundry cases a payment voucher cannot be evidence of payment... In the latter sense, a payment voucher is not any different from a receipt.*** 1. Earlier on, the Court of Appeal in ***Hahn vs. Singh*** [1985] KECA 129 (KLR), had discussed the degree of certainty and particularity of proof in respect to special damages as follows: - *…. Now the next two grounds of the memorandum concern special damages which must be not only claimed specially but proved strictly for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act.* ***The degree of certainty and particularity of proof required depends on the circumstances and the nature of the acts themselves****. This has been adumbrated by Bowen, LJ in Ratcliffee v Evans (1892), 2 QB 524, 532, 533, Lord Macnaghten in Stroms Bruks Aktic Bolag v John & Peter Hutchinson, [1905] AC 515, 525, 526, Lutta, JA in Kampala City Council v Nakaye, [1972] EA 446, 447 and Chesoni, J, in Ouma v Nairobi City Council, [1976] KLR 297, 304.* 1. Also, in ***Ndungu -vs- M’Ikiao & another***(Civil Appeal 182 of 2019) [2022] KEHC 15753 (KLR), the High Court held that an internal insurance claim payment requisition voucher indicating authorization and a cheque number constitutes sufficient proof of payment for repair costs, and a trial magistrate’s finding to the contrary constitutes a reversible error. 2. In applying the foregoing to this matter, it is apparent that the Appellant did not rely on uncorroborated vouchers in a vacuum. The documentary evidence on record included: - 1. *An Assessor’s Report by Intercounty Accident Assessors Ltd dated 23rd December 2020. It details the damages and includes a breakdown of parts, labour, and painting, culminating in a grand total estimate of Kshs. 101,118.00.* 2. *Repair Invoice from Megnet Limited: It is invoice No. 31165, dated 15th Jan 2021. It corresponds to the replacement of the rear bumper assembly, parking sensor, reflector, painting materials, and labour. The grand total on this repair invoice is Kshs. 102,892.00.* 3. *An investigator’s Invoice from Revelation Insurance Services Ltd: This is invoice No. 3507, dated 28th October 2023. It bills GA Insurance Ltd for tracing fees, mileage, NTSA search, and out-of-pocket expenses, totaling Kshs. 36,250.00.* 4. *Payment Request Vouchers generated by GA Insurance for the exact sums, indicating the Policy Number (P-2009-100-9001-4803), Claim Number, payee codes, and authorized signatures.* 5. *A signed Satisfaction Note dated 12th October 2021, where the insured, Ambrish N. Shah, confirmed: “I have received my vehicle Reg Nos KCB 715Q with repairs completed to my satisfaction”.* 3. The Respondents offered no evidence at trial to controvert these documents. There was, hence, no challenge to the contents of the documents. Drawing from the above, it is inherently evident that by rigidly demanding ETR receipts as the sole legally acceptable proof of payment in a material damage claim, and summarily dismissing the probative value of the corroborated payment vouchers and the satisfaction note, with utmost respect, the Learned Adjudicator failed to give due regard to the nature of the claim [being a material damage claim] and the circumstances thereto and imposed an evidentiary burden that is way beyond the standard of proof required in civil litigation, namely, balance of probabilities. It is, therefore, an error of law capable of this Court’s intervention under Section 38(1) of the Small Claims Court Act. Had the correct legal standard been applied, it would have been found that, collectively, the documentary evidence on record met the legal threshold for proof of special damages in a material damage claim. 4. QAs such, this ground of appeal succeeds. **Disposition:** 1. As the appeal is merited, and since the trial Court had already conclusively found the Respondents 100% liable for the accident, then, the Appellant is entitled to the damages as pleaded. 2. Accordingly, the following final orders hereby issue: - **[a] The Appeal is hereby allowed.** **[b] The part of the judgment of the Small Claims Court in Milimani SCCC No. 6462 of 2023 delivered on 30th May 2024 regarding the dismissal of the special damages** **is hereby set aside and is hereby substituted with a finding entering judgment in favour of the Appellant against the 1st and 2nd Respondents, jointly and severally, for the sum of Kshs. 146,552/= with costs.** **[c] The awarded sum shall attract interest at court rates from the date of filing the suit in the Small Claims Court until payment in full.** **[d] Costs of the appeal to the Appellant.** Orders accordingly. **DELIVERED, DATED** and **SIGNED** at **NAIROBI** this **23rd** day of **June 2026.** **A. C. MRIMA** **JUDGE** **Judgment virtually delivered in the presence of:** **Miss Ombwori,** LearnedCounsel for the Appellant. **No appearance for,** Learned Counsel for the Respondents. **Michael/Amina** –Court Assistants.