https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10977

APA Insurance Ltd (Sued as Successor of Pan Africa General Insurance Ltd v Majority & another (Civil Appeal E156 & E157 of 2024 (Consolidated)) [2026] KEHC 10977 (KLR) (16 July 2026) (Judgment) Neutral citation: [2026] KEHC 10977 (KLR) Republic of Kenya In the High Court at Kisii Civil Appeal E156 & E157 of 2024 (Consolidated) RK Koech, J July 16, 2026 Between APA Insurance Ltd (Sued as Successor of Pan Africa General Insurance Ltd Appellant and LM (Minor Suing by Next Friend GY But Now Having Attained Majority) 1st Respondent Sanslam Kenya Plc (Sued as Successor of Pan Africa Insurance CompanyLtd 2nd Respondent (Being consolidated appeal Nos. HCCA E 156 & HCCA E157 of 2024 arising from the judgment and decree of the Honourable B. O. Omwanza, Senior Principal Magistrate delivered on 30th July, 2024 in Kisii CMCC 1025 of 2005) Judgment 1.Vide a 2nd further amended plaint dated 29th January, 2020 the appellant was sued as the 1st defendant through the 2nd Respondent and described as the predecessor of Sanslam Kenya Ltd ( 2nd Respondent) and as the successor of M/S Pan Africa General Insurance Co. Ltd. The later was sued as the 2nd defendant in the suit while the 1st Respondent was the plaintiff in Kisii CMCC No. 1025 of 2025. The 1st Respondent’s claim against the appellant and the 2nd respondent was for the satisfaction of a judgment and decree delivered in the original/primary suit being Kisii CMCC No. 658 of 2003 which arose from a road traffic accident involving motor vehicle Reg. No. KAG 098 M alleged to have been insured by the MS Pan Africa Insurance Co. Ltd as the predecessors of the 2nd Respondent vide Insurance Policy No. 070/080/1/007343/1996/xx. At the conclusion of the original suit, the 1st Respondent was awarded a total of Kshs. 305,500/= comprising both general and special damages. 2.Vide a 2nd further amended written statement of defence dated 17th May, 2025, the appellant denied the 1st respondent’s claim. The appellant denied allegations that it was formerly trading as Pan Africa Insurance Co. Ltd before a merger involving Apollo Insurance and Pan Africa Insurance Co. Ltd. The appellant denounced any liabilities incurred by the aforesaid companies. The appellant denied being the insurers of the accident motor vehicle registered in the name of M/S Marwa Distributers Ltd. who are judgment debtors in the original suit and the insured. 3.In the impugned judgment, the trial court found that the 1st respondent had proved is case against the appellant and the 2nd respondent jointly and severally holding that there was a trail of change of ownership from the original insurers of the accident motor vehicle to the appellant and the 2nd respondent who are liable to make good the 1st respondent’s claim. 4.In a memorandum of appeal dated 28th August, 2024 the appellant is seeking orders to have its appeal allowed and the trial court’s judgment set aside with costs to the appellant. The grounds in support of the appeal are as summarized hereunder;1.That the trial magistrate erred in law and fact by failing to consider the appellant’s defence and evidence in support thereof which demonstrated that the appellant was not privy to the insurance contract between Marwa Distributors and the 2nd respondent,2.That the learned trial magistrate erred in law and fact by failing to find that the appellant did not take over the assets and or liabilities of 2nd respondent being MS Pan Africa Insurance Co. Ltd and that by virtue of the terms of the Transfer of Business Act the 2nd respondent continued to bear liability for the subject matter of the suit and that the notice/action by the 2nd respondent is statutorily time barred by limitation in terms of the provisions of the Transfer of Business Act, Limitation of Actions Act and the periods prescribed in the relevant Gazette and Statutory notices,3.That the learned trial magistrate erred in law and fact by finding the appellant and the 2nd respondent jointly and severally liable after ignoring the evidence adduced by the appellant in a conclusion tilted in favour of the 1st respondent, and4.That the learned trial magistrate erred in law and fact by failing to properly analyze the entire evidence on record, trivially considering the submissions of the parties thereby arriving at erroneous conclusions in a decision unsustainable in law. Appellant submissions. 5.The appellant in its submissions dated 10th December, 2025 submits that the 1st respondent’s case was commenced with a plaint dated 13th December, 2005 which was amended severally including an oral amendment on 8th June, 2023 shortly before the 1st respondent testified. In the oral amendment, the appellant was described as the 1st defendant sued as the successor of Pan Africa General Insurance Co. Ltd. while the 2nd respondent was described as the 2nd defendant sued as the successor of Pan Africa Insurance Ltd. The appellant submits that the trial court erred by failing to find that the appellant was not privy to the contract between the 2nd respondent and the 1st respondent over motor vehicle Reg. No. KAG 098 M. The appellant also faults the trial court for failing to find that the appellant did not take over the assets and liabilities of 2nd respondent Ms Pan Africa Insurance Co. Ltd whose successor is Sanlam PLC. 6.The appellant further submits that the trial court erred in law and fact by holding that both the appellant and the 2nd respondent were jointly and severally liable to settle the judgment in the primary suit, being Kisii CMCC No. 658 of 2003. The appellant avers that the finding that the appellant was liable was pursuant to the provisions of S. 10 of the Insurance (Motor Vehicle Third Party Risks) Act, Cap. 405. According to the appellant, that cannot be the case because the 1st respondent testified that the accident vehicle was insured by Pan Africa Insurance which was served with a statutory notice. The demand notice is also said to have been served on the 2nd respondent. 7.The appellant submits that the 1st respondent failed to link the appellant to the policy of insurance, it is averred that the allegations that the appellant was the successor of the 2nd respondent were not proved. The appellant submits that it is only parties privy to a contract that can enforce the terms of the contract. The appellant has referred to authorities whose copies are not attached to the submissions. Citing the case of Scruttons Ltd. v Midland Silicons Ltd. (1962) AC 444 (see pgs. 239 to 248 of the record of appeal), the appellant submits that a stranger to a contract cannot take advantage of the provisions of the contract even where it is clear from the contract that some of the provisions in it was intended to benefit him. 8.The appellant faulted the 2nd respondent for using Memoranda of Association of Pan Africa General Insurance Co. Ltd. and Newco Ltd as proof that the two companies were engaged in general insurance business that was later transferred to the appellant. The appellant avers that the memoranda were in its list of documents. 9.The appellant submits that Pan Africa Insurance Ltd. was named PA Securities in the year 2004 and 2nd respondent wholly owned its allotted shares. The appellant submits that it submitted a certificate of Change of Name No. C.10/46 dated 8th October, 2019 (see page 163 of the ROA). The appellant urged the court to find that Pan Africa Insurance Co. Ltd. merged with Apollo Insurance Co. to form a new company, Newco, whose transfer was by way of sale of certain assets and liabilities from Pan Africa General Insurance Co. Ltd and not any other extraneous liabilities. The appellant denies assertions by the 2nd respondent that the 2nd respondent transferred all its general insurance business, all liabilities and claims thereof including those of Pan Africa Insurance Co. which in turn transferred to Newco which was later renamed as the appellant. 10.The appellant submits that the transfer of the business of Pan Africa General Insurance Ltd. to PA and later to itself complied with the provisions of S. 3(1) as read with S. 4 of the Transfer of Business Act 4 through publication under Gazette No. 7928 of 28th October, 2003. Citing S. 8 of the Transfer of Business Act, which provides, “Notwithstanding the provisions of this Act or any other written law, no proceedings shall be brought against a transferee in respect of any liability imposed by this Act after the expiration of six months after the date of the transfer concerned.” 11.The appellant further submits that the Minister for Finance gave the approval of its business transfer from Apollo Insurance Co. Ltd. by Legal Notice No. 117 of 15th September, 2005 (produced by the appellant in evidence)(see page 162 of the ROA). The appellant submits that by virtue of S. 117(2) (a) of the Insurance Act, the transfer of business took place on the day of approval. By implication, the appellant submits that Pan Africa Insurance Co. claim arising from the contract it entered with Marwa Distributors vide policy No. 070/080/1/00733/1996/xx. The appellant sums up its submissions by urging this court to allow its appeal with costs against the respondents. 1st Respondent’s submissions. 12.The 1st respondent submits that the 2nd further amended plaint was amended through an oral application on 8th June’ 2023 to allow the 1st respondent to sue the 2nd respondent as the successor of Pan Africa Insurance Co. Ltd and the appellant as the successor of Pan Africa General Insurance Ltd. The 1st respondent submits that if filed a declaratory suit against the appellant and the 2nd respondent in order to enforce the judgment delivered in his favour on 21st October, 2004 in Kisii CMCC No. 658 of 2003. 13.The 1st respondent submits that he sought several amendment of his plaint due to the uncertainty occasioned by the unpredictable change of names by the insurer under policy relating to the 1st respondent’s claim. He submits that the insurer was invariably the appellant and 2nd respondent and the 1st respondent submits that he proved that defendants were jointly and severally liable to compensate the 1st respondent pursuant to the declaratory suit. The 1st respondent urges the court to find that the appeal is lacking in merit and should be dismissed. 14.The 1st respondent points out that the cause of action in the primary suit occurred on 16th July, 2001 and the primary suit filed on 2nd July’ 2003. The judgment in the primary suit was thereafter delivered on 21st October, 2004. The 1st respondent submits that he has had to wait for over 20 years to enjoy the fruits of his judgement due to the machinations and delays designed by the appellant and the 2nd respondent. The 1st respondent is urging this court to dismiss the appeal with costs to the 1st respondent. 2nd Respondent’s submissions. 15.The 2nd respondent submits that the present appeal hinges on the effect of the transfer of business from one entity to another particularly in circumstances where the transferee company expressly assumes the debts and liabilities of the transferor company. The 2nd respondent urged the court to pronounce itself on the effect of the failure to serve a statutory notice upon an insurer and the consequential effect such failure has on the insurer’s obligation, if any, to satisfy the decretal sum arising from a judgment. The 2nd respondent submits that in HCCA No. 157 of 2024, it is challenging the judgment and decree of B.O. Omwanza delivered on 30th July, 2024 in favour of the 1st respondent as against the appellant and the 2nd respondents jointly and severally. 16.In the 2nd respondent’s appeal, above mentioned, the 2nd respondent in the consolidated appeal was the 1st respondent while the appellant was the 2nd respondent. The grounds cited by the 2nd respondent, being the appellant in HCCA E157 of 2024, can be summarized as hereunder;1.That the learned trial magistrate erred in law and fact by failing to hold that there was transfer of General Insurance Business from the appellant to the 2nd respondent and that the 1st respondent failed to serve the appellant with the requisite statutory notice,2.That the learned trial magistrate erred in law and fact in holding that the appellant and the 2nd respondent are jointly and severally liable to settle the decretal sum and by holding that the transfer of business between the appellant and the 2nd respondent was an administrative act, and3.That the learned trial magistrate erred in law and fact by holding that the appellant and the 2nd respondent were essentially the same entity and by failing to consider the appellant’s case including the evidence and written submissions. 17.The 2nd respondent asks the court to determine whether a statutory notice was served on the 2nd respondent herein (Sanslam Kenya PLC), now sued as successor of Pan Africa Insurance Ltd. The 2nd respondent also asks the court to determine whether liabilities of Pan Africa Insurance Co. Ltd were transferred to Newco Ltd, now APA Insurance Ltd and whether the claim resulting from the policy should be settled by APA Insurance Ltd (the appellant herein.) The 2nd respondent submits that failure to serve the insurer with a statutory notice pursuant to S. 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act is fatal to the claimant. 18.The 2nd respondent has cited the case of Mvuria Mugwabi Chandago v African Merchant Assurance Co. Ltd (2017) eKLR, Mombasa HCCA No. 60 of 2014 in which it was held, “To this court, the provisions of S. 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act are substantive legal provisions and not procedural requirements. I regard the provision to stand as a pedestal above rules of procedure as the same, to this court, vest upon the insurer a complete defence and the right to decline to meet a decree given prior in a suit in which notice given before or within 14 days of the commencement of a suit later sought to be enforced by a subsequent declaratory suit. ………….It’s true and only meaning is that a victim of a road traffic accident who wishes to enforce a resultant decree against the insurer must serve on such insurer a notice of the primary suit, not later, than 14 days after the suit is filed. Where the notice is not served, the insurer is by statute absolved from any liability.” 19.The 2nd respondent submits that it was never served with a statutory notice by the 1st respondent in order to refute or decline the claim. The 2nd respondent avers that the 1st respondent did not proof that he ever served the 2nd respondent with a statutory notice issued under S. 10(2) (a) of the Insurance (Motor Vehicle Third Party Risks) Act. The 2nd respondent avers that M/S Pan Africa Insurance Ltd, now the appellant was served with a statutory notice dated 28th May, 2003. The 2nd respondent submits that the appellant was always aware of the existence of the primary suit and that the trial court should have apportioned liability wholly on the part of the appellant. 20.The 2nd respondent submits that policy No. 070/080/1/00733/1996/xx was underwritten by Pan Africa Insurance Co. Ltd., subsequently Pan Africa General Insurance Ltd. was created as a special purpose vehicle to effect transfer of business and thus did not issue any policy. The 2nd respondent submits that the transfer of business was done in strict compliance with S. 4 of the Transfer of Business Act as regards publication of the conditions antecedent (see Gazette Notice No. 7928 of 7th November, 2003) that had to be met by the transferor and transferee. The 2nd respondent submits that general insurance business of Pan Africa General Insurance Ltd. and Apollo Insurance Co. Ltd (transferors) were transferred by way of certain of the assets and liabilities to Newco Ltd to be known as, subject to approval from the Commissioner of Insurance pursuant to Insurance Act, as APA Insurance Co. Ltd (transferee). 21.The 2nd respondent submits that the Minister of Finance vide Legal Notice No. 117 dated 15th September, 2005 approved the transfer of business to the appellant and that the appellant as the transferee assumed all debts and liabilities arising from the transferred assets with effect from 1st January, 2003. The 2nd respondent submits that Policy No. 070/080/1/00733/1996/xx which is the subject of this appeal was lawfully transferred and assumed by the appellant and any claim arising from it. The 2nd respondent avers that the delivery of judgment in the primary suit on 21st October, 2004 crystalized liability on the part of the appellant arising from the claim related to the policy in question which the appellant has to satisfy. The 2nd respondent faults the trial court for apportioning liability on both the appellant and the 2nd respondent. The 2nd respondent is urging this court to dismiss HCCA No. 156 of 2024 and allow HCCA No. 157 of 2024. 22.It is trite law, as severally held in many decisions that a first appellate court is like a trial court and must re-evaluate the evidence on record to see if the decision of the trial court is factually and legally sound. In the case of Selle & Another v Associated Motor Boat Co. Ltd (1968) EA 123, it was held; and I quote;“Being a first appeal, this court is enjoined to re-evaluate the evidence on record and draw its own conclusions while bearing in mind that it did not see or hear witnesses testify.” 23.The above position was reiterated in the case of Kemfro Africa Ltd. t/a Meru Express Services v Lubia & Another (1982-88) 1 KLR 727 where it was held, “The principles guiding an appellate court on interference with an award of damages are well settled. An appellate court will not disturb an award of damages unless it is demonstrated that the trial court acted on a wrong principle, misapprehended the evidence, took into account irrelevant facts, failed to take into account relevant factors or that the award is so inordinately high or low as to represent an entirely erroneous estimate of the damages.” 24.The burden of proof lied with the 1st respondent that was duty bound to proof his case on a balance of probabilities against the appellant and the 2nd respondent. This is expressly provided under the Evidence Act, Cap. 80 Laws of Kenya as quoted below;Burden of proof.S. 107 of the Evidence Act provides as follows,(1)“Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.(2)When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.”Incidence of burdenS. 108 provides, “The burden of proof in a suit or proceedings lies on that person who would fail if no evidence at all were given on either side.”Proof of particular factS. 109 provides, “ The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”I can identify four (4) issues for determination by this court;1.Whether the learned trial magistrate erred in law and fact by apportioning liability jointly and severally on the part of the appellant and the 2nd respondent,2.Whether the 1st respondent issued the requisite statutory notice to the underwriter of Policy No. 070/080/007343/1996/xx covering motor vehicle Reg. No. KAG 098 M,3.Who between the appellant and the 2nd respondent should bear the responsibility for satisfying the judgment and decree issued in the primary suit, being Kisii CMCC No. 658 of 2003, and4.Whether a transfer of the business of insurance pursuant to S. 4 of the Transfer of Business Act, Cap. 500 of the Laws of Kenya, extinguishes existing liabilities on the part of the transferor and confers the same on the part of the transferee. Analysis. 25.The primary suit, the subject of this appeal, was instituted in court on or about 2nd July, 2003 and it arises from a road traffic accident which occurred on 16th July, 2001 involving the 1st respondent who was a cyclist and motor vehicle Reg. No. KAG 098 M insured vide policy No. 070/080/1/007343/1996/xx issued by Pan Africa Insurance Co. Ltd. On 21st October, 2004 the 1st respondent obtained a judgment against M/S Marwa Distributors Ltd., being the owners of KAG 098 M. 26.On 14th December, 2005 the 1st respondent instituted a suit against the appellant and the 2nd respondent vide a plaint dated 13th December, 2005 seeking to enforce the decree issued in the above primary suit. In the plaint dated 13th December, 2005 the M/S APA Insurance Co. Ltd. formerly trading as Pan Africa Insurance Co. Ltd was named as the defendant. The 1st respondent’s plaint was thereafter amended four (4) times including an oral application to amend the plaint made by the 1st respondent on 8th June, 2023 (see page 228 of the record of appeal) which was allowed by the trial court. During the later amendment, the appellant was described as the successor of Pan Africa General Insurance Co. Ltd. while the 2nd respondent was described as the successor of Pan Africa Insurance Co. Ltd. which was the insurer of KAG 098 M registered in the name of Marwa Distributors Ltd. 27.As pointed out above, evidence shows that a statutory notice dated 26th May, 2003 which was sent by registered courier services on 16th June, 2003. Was issued to Ms. Pan Africa Insurance Co. Ltd. This was prior to the filing of the primary suit on 2nd July, 2003. A certificate of change of name dated 2nd January, 2001 shows that , by a resolution, Ms. Pan Africa Insurance Co. Ltd. changed its name to Pan Africa Insurance Holdings Ltd. A certificate of incorporation dated 10th July, 2001 shows that Pan Africa General Insurance Ltd. was incorporated, according to the 2nd respondent, the company was a special purpose vehicle formed for purposes of transferring some aspects of insurance business alongside Apollo Insurance Co. Ltd (hereinafter referred to as transferors) to Newco Ltd. (hereafter referred to as the transferee) which later changed it’s name to APA Insurance Co. Ltd (the appellant herein) upon statutory approval. 28.The above business transfer was gazetted vide Gazette Notice No. 7928 of 28th October, 2003. It is worth noting that Pan Africa General Insurance Co. Ltd is a different legal entity from Pan Africa Insurance Co. Ltd. Evidence adduced shows that Pan Africa Insurance Co. Ltd changed its name to Pan Africa Insurance Holdings Ltd, probably the owners of the special purpose vehicle, Pan Africa General Insurance Ltd, which transferred some aspects of its insurance business to the predecessor of the appellant. Pan Africa Insurance Holdings Ltd. later changed its name to Sanslam Kenya PLC, the 2nd respondent herein (see certificate of change of name at page 163 of the record of appeal). In a linear sequence, Ms. Pan Africa Insurance Co. Ltd changed its name to Ms. Pan Africa Insurance Holdings Ltd., which later changed its name to Ms. Sanslam Kenya PLC, which is the 2nd respondent herein. 29.It is my finding that that the 2nd respondent is the insurer of KAG 098 M registered in the name of Mawa Distibutors Ltd, the defendant in the primary suit. By inference, the 2nd respondent was served with a statutory notice through its predecessor being Pan Africa Insurance Ltd. In terms of privity of contract, the 2nd respondent is liable to make good the decree issued in the primary suit. If the 2nd respondent believed that it had transferred the risk to the appellant, the appropriate thing to do was to commence 3rd party proceedings against the appellant for indemnity. That way, the trial court would have arbitrated between the 2nd respondent and the appellant as to what aspects of its insurance business was transferred to the appellant and what aspects were retained. It would also have been established which liabilities were assumed by the transferor. 30.I agree with the appellant that the trial court totally ignored the evidence advanced by the appellant, choosing the easy way of lumping the appellant and the 2nd respondent as if they were one and the same company. There was no proof on the part of the 1st respondent that it had any contractual relationship with the appellant. In answer to the four issues, I do find that the learned trail court erred in law and fact by apportioning liability jointly and severally on the appellant and the 2nd respondent. I also find that the 2nd respondent was the insurer of the defendant in the primary suit, was duly served with a statutory notice and is liable to indemnify the 1st respondent the decretal sum awarded in the primary suit. 31.Finally, I do find that under the provisions of S. 4 of the transfer of Business Act, Cap 500 Laws of Kenya, a transferee may only assume liabilities when expressly provided in the deed of transfer and proved by way of evidence. I must also add that the claimants must lodge the claims during the acquisition process within the period provided under the relevant gazette notice.What are the appropriate orders that I must make in disposing the consolidated appeals?1.HCCA E 156 of 2024 is hereby allowed in its entirety and both the 1st and 2nd respondents are hereby ordered to pay the costs incurred by the appellant on the appeal and before the subordinate court, and2.HCCA E 157 of 2024 is hereby dismissed in its entirety.It is hereby ordered. JUDGMENT READ, DATED, SIGNED AND DELIVERED VIRTUALLY THIS 16TH DAY OF JULY, 2026HON. RICHARD K. KOECHJUDGEIn the presence of:Mr. Wangoda appearing virtually for the AppellantMs. Kusa appearing virtually for the 1st RespondentMr. Aloo appearing virtually for the 2nd RespondentMs. Roselyne Makali, Court Assistant present physically in court.Right of appeal within 30 days