[2025] KEHC 3369 (KLR)

Cannon Assurance Company Limited v Chebotip (Suing as Administrator & Legal Representative of the Estate of Elijah Kipkoech Rotich - Deceased) (Civil Appeal E022 of 2024) [2025] KEHC 3369 (KLR) (19 March 2025) (Judgment)

Neutral citation: [2025] KEHC 3369 (KLR)

Republic of Kenya

In the High Court at Kapsabet

Civil Appeal E022 of 2024

JR Karanja, J

March 19, 2025

Between

Cannon Assurance Company Limited

Appellant

and

Lilian Chebotip [Suing as Administrator & Legal Representative of the Estate of Elijah Kipkoech Rotich - Deceased]

Respondent

(Being an appeal from the judgment and/or decree of Hon. S.M. Mokua Chief Magistrate delivered on 25th June 2024 in Kapsabet CMCC NO. E114 of 2023)

Judgment

1. The Appellant Cannon Assurance Company Limited, was the Defendant in Kapsabet CMCC NO. E114 of 2023 in which it was sued by the Respondent Lilian Chebotip as the Administrator and Legal Representative of the Estate of Elijah Kipkoech Rotich [deceased] for a declaratory order to the affect that it was bound to satisfy the entire decretal amount awarded in Kapsabet CMCC NO. E018 of 2021 and/ or in the alternative that judgment be entered against itself for the decretal sum of Kshs 6,177,990/- inclusive of costs and interest from the date of judgment [i.e. 10th January 2022] to the 17th June 2022, when the decreed was drawn.

2. It was pleaded in the amended plaint dated 27th February 2024 that on or about the 18th August 2019, the deceased was carefully and lawfully driving Motor Vehicle Registration No. KBU 118N Toyota Hiace along the Kapsabet/ Lessos – Ainapkoi Road when the Second Defendant in Kapsabet CMCC No. E018 of 2021, drove the First Defendant’s Motor Vehicle Registration KBY 948A Toyota Land Cruiser so carelessly, negligently and/or dangerously and without due care and attention to other road users that it violently collided with Motor Vehicle Registration No. KBU 118 Toyota Hiace thereby causing fatal injuries to the deceased.

3. It was also pleaded that the Defendant had insured the Motor Vehicle Registration No. KBY 948A Toyota Land Cruiser through Policy No. 01/07/25417/18 and that on 5th March 2021, the Plaintiff sued the Defendant in Kapsabet CMCC No. E018 of 2021. That on the 10th January 2022, judgment was entered in favour of the Plaintiff against the Defendants jointly and severally in Kapsabet CMCC No. E018 of 2021 for Kshs. 5,606,240/- inclusive of special damages.That, the judgment was in respect of liability covered by the said Policy Under Paragraph [8] of Section 5 CAP 405 which is covered by the form of policy and had been obtained against the insured and therefore the Defendant herein was bound to pay the Plaintiff’s total decretal amount under Section 10[1] Cap 405 of the Laws of Kenya.

4. The Defendant denied the claim, in particular that it was bound to pay any sum by virtue of the judgment entered in Kapsabet CMCC No. E018 of 2021. It was the Defendant’s contention that if at all it insrured the Motor Vehicle Registration No. KBY 948A, then it was not bound to satisfy any judgment as entered in Kapsabet CMCC NO. E018 of 2021 as the police did not cover such risks as the one giving to the sum.

5. Alternatively, the Defendant in its statement of defence contended that if it had insured motor vehicle KBY 948A, it was not bound and/or under any statutory contractual duly to indemnify the Plaintiff under the policy of insurance since the Defendant in Kapsabet CMCC No. E018 of 2021 was in breach of the policy condition pursuant to which the suit was purported to be brought and that if at all it had insured the said motor vehicle KBY 948A under policy No. 01/07/25417/18, then it was not under any statutory obligation to satisfy the judgment entered therein by virtue of the fact that it was not served with the requisite statutory notice under Section 10 of the Insurance [motor vehicle third party risks] Act Cap 405 Laws of Kenya within the specified time or at all.Ultimately, the Defendant prayed for the dismissal of the Plaintiff’s case with costs.

6. After a full trial of the case, the trial court, in its judgment delivered on 25th June 2024 found in favour of the Plaintiff/ Respondent and stated in conclusion that the suit was timeously brought. The Plaintiff served the statutory notice as demonstrated. Therefore, the declaratory sit met the set threshold. The trial court then ordered that the Defendant does settle the claim to the limit provided by the Act [i.e Kshs. 3 Million] and that the Plaintiff was to have the costs of the suit.

7. Being aggrieved, the Defendant filed the present appeal on the basis of the following grounds: -1. The Learned Magistrate erred in law and fact by holding that the Respondent proved her case on a balance of probabilities.2. The Learned Magistrate erred in law and fact by failing to make a finding that the Respondent did not serve the statutory notice upon the Appellant as provided for under Section 10 of the Insurance Act [Cap 405 of the Laws of Kenya].3. The Learned Magistrate erred in law and fact by making a finding that the Appellant was duty bound to satisfy the decretal sum award in Kapsabet CMCC No. E018 of 20214. The Learned Magistrate erred in law and fact by making a finding that the Appellant had insured the Motor Vehicle Registration Number KBY 948A whilst no premium had been paid by the insured.5. The Learned Magistrate erred in law and fact by finding that the Applicant had the legal obligation to the Respondent to settle the Kshs. 3,000,000/- when there was no basis of such an award.6. The Learned Magistrate erred in law and fact by disregarding the Appellant’s submissions and authorities therefore arriving at a wrong conclusion.

8. The appeal was canvased by written submissions which were duly filed by the Appellant through J.M. Kimani & Company Advocates and by the Respondent through K.O. Obae & Company Advocates.Having considered the appeal, the supporting grounds and the rival submissions of the parties, the duty of this court was to reconsider the evidence and draw its own conclusions bearing in mind that the trial court had the advantage of seeing and hearing the witnesses [See, Selle and Another Vs. Associated Motor Boat Company Limited and Other [1968] EA 123].

9. In that regard, the evidence led by the Plaintiff/ Respondent [PW1] was considered as against that of the Defendant/ Appellant through its legal officer, Rachael Njoki [DW1] and coupled with the pleadings, it emerged that the basic issue for determination was whether the Appellant/ Defendant was lawfully bound to satisfy the judgment entered in favour of the Respondent/ Plaintiff in Kapsabet CMCC No. E018 of 2021.

10. Basically, the entry of the judgment in favour of the Respondent against the Appellant’s insured was not at all or substantially disputed and so was the fact that the operating policy of insurance respecting Motor Vehicle Registration No. KBY 948A Toyota Land Cruiser [i.e. Policy No. 01/07/25417/18] was valid at the material time.Indeed, the Appellant’s witness [DW1] readily admitted that the policy of insurance was valid as at the time of the material accident, but suggested that the Appellant’s stamp on relevant documents could have been a forgery. She did not however avail any evidence to establish the alleged fraud thereby confirming that the policy was for all intent and purposes a lawful and valid document.

11. The witness [DW1] suggested that the Appellant’s objection to the Respondent’s present claim was grounded on the fact that the requisite statutory notice was not served and that in the primary suit the Defendant therein failed to pay the premium. However, the witness conceded that the claim was never repudiated whatsoever.

12. Section 10 of the Insurance [Motor Vehicle Third Party Risk] Act [Cap 405 Laws of Kenya], places an obligation upon an insurer to settle any decretal amount arising from the judgment of the court made in favour of a claimant against the insured. Where an insurer does not take any or adequate step to repudiate liability under a third party risk policy it would be under statutory obligation to pay the awarded decretal sum.

13. Section 10[1] of the Act [Cap 405 Laws of Kenya] provides that: -“if, after a policy of insurance has been effected judgment in respect of any such liability as is required to be covered by a policy under paragraph [b] of Section 5 [being a liability covered by the terms of the policy] is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest or that sum by virtue of any enactment relating to interest on judgments;Provided that the sum payable under a judgment for a liability pursuant to this section shall not exceed the maximum percentage, of the sum specified in Section 5[b] prescribed in thereof in the schedule.”

14. It was not disputed that the Defendant/ Appellant was the insurer of the motor vehicle Registration No. KBY 948A Toyota Land Cruiser and that the Plaintiff/ Respondent was the person entitled to the benefit of the judgment in the primary suit to the extent of a sum of Kshs. 3 million in terms of 0. 5[b][IV]of the Act.Section 10[2][a] of the Act provides an exception to the duty of the insurer to satisfy judgment to the extent that no sum shall be payable by an insurer in respect of any judgment; unless before or within fourteen days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the bringing of the proceedings.

15. Under Section 10[4] of the Act: -“no sum shall be payable by an insurer under the foregoing provisions of this section if in an action commencement before or within three months after the commencement of these proceeding in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by representation of fact which was false in some material particular, or if he had avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it:Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby be-come entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is the Plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely and on any person to whom notice of such action is so given is so given shall be entitled if he thinks fit, to be made a party thereto.”

16. In this case, the Defendant/ Appellant as noted hereinabove did not repudiate the claim, nor did it provide sufficient evidence to disprove that it was served with a demand letter and a statutory notice as alleged by the Plaintiff/Respondent.Further, there was no evidence from the Defendant/ Appellant that it moved the court under the Act to obtain a declaration that it was not duty bound to satisfy the decree arising from the judgment in the primary suit.In any event, the Defendant/ Appellant did not challenge the validity of the judgment obtained in the primary suit, its liability under Section 10 of the Act was therefore not in question.

17. The trial court found that the primary suit was not contested and that judgment was obtained against the Defendant/ Appellants’ insured. Further, that the statutory notice [P. Exhibit 1] was served on 19th November 2019. The trial court also found that the allegation by the Defendant/Appellant that the stamp on the notice was forged was never substantiated thereby implying that the allegation was unproved.

18. The finding; by the trial court did not go against the weight of the evidence which established and proved that the Defendant/Appellant was indeed served with the statutory notice. The claim that the insured i.e. the Defendant in the primary suit did not pay to the insurer the necessary premium was not a relevant factor and was in any event a matter between the Appellant/ Defendant and its insured.

19. In sum, this court find no reason to interfere with the judgment of the trial court in this matter. There is no merit in this appeal which is hereby dismissed with costs to the Respondent.

DELIVERED AND DATED THIS 19THDAY OF MARCH 2025HON. J. R. KARANJAH,JUDGE