[2022] KEHC 13668 (KLR)

Cic General Insurance Group Ltd v Marube (Civil Appeal 9 of 2017) [2022] KEHC 13668 (KLR) (12 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13668 (KLR)

Republic of Kenya

In the High Court at Bomet

Civil Appeal 9 of 2017

RL Korir, J

October 12, 2022

Between

Cic General Insurance Group Ltd

Applicant

and

Gerald Ochoki Marube

Respondent

Ruling

1. The Applicant filed the Notice of Motion dated May 21, 2021 seeking the following Orders:a.Spent.b.Spent.c.That the Notice to Show Cause dated March 4, 2021 be set aside.d.That this Honourable Court determine what is the total amount due and owing to the Respondent, if any, pursuant to the Judgment of this Honourable Court.e.That this court issues a declaration to the effect that upon payment of the sum certified as due and owing by this court, this Appeal together with the primary suit, Bomet CMCC No 98/2016: Gerald Achoki alias Marube, be marked as closed.f.That the costs of this Application be awarded to the Applicant.

2. The Application was brought under Order 22 Rule 1, 19 (2), Order 51 Rule 1 of theCivil Procedure Rules, Section 1A, 1B, 3, 3A, Section 63 (e) of the Civil Procedure Act and Article 159 of theConstitution. The same was supported by the grounds on the face of the Application and further by the Supporting Affidavit sworn by Lydia Wairimu on May 21, 2021.

The Applicant’s Case. 3. The Applicant stated that sometime in 2017, the Respondent herein filed a Declaratory Suit against it being Bomet CMCC No 98 of 2016: Gerald Ochoki alias Marube vs CIC General Insurance Group Limited seeking a declaration that it be bound to satisfy the Judgment in Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another. That the trial court entered Judgment against the Applicant to the tune of Kshs 9,548,757/=.

4. It was the Applicant’s case that it appealed against the aforementioned Judgment and this court found that the Applicant was liable to pay the Respondent three million Kenyan shillings (Kshs 3,000,000/=) It was its further case that this Judgment was affirmed by the Court of Appeal.

5. The Applicant averred that it had paid the Respondent Kshs 3,000,000/= and part of the interest all amounting to Kshs 4,154,766/=.

6. The Applicant stated that this court and the Court of Appeal had clearly and unequivocally expressed themselves that the Applicant’s liability was in respect to Kshs 3,000,000/= and the Respondent through their Notice to Show Cause was attempting to revisit matters that had already been decided by this court and the Court of Appeal. That any recourse available for the Respondent for any amount above Kshs 3,000,000/= ought to be directed to the Defendants in Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another.

7. It was the Applicant’s contention that the Respondent had filed a similar Application in Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another which was struck out on the same grounds i.e that the Applicant was not a party to the suit. That this was a back door attempt by the Respondent to get what he could not at the trial court. It was its case that the Respondent was a vexatious litigant who was deliberately trying to enrich himself.

8. The Applicant opined that the court’s rate of interest on an award of damages was 12%. That there was no order levying interest on costs and any attempt to do the same would be an illegality.

9. It was the Applicant’s case that the Decretal sum of Kshs 3,000,000/= the costs of the Appeal amounting to Kshs 301,650 as well as a portion of the interest amounting to Kshs 853,116, all totalling to Kshs 4,154,766 had been paid. It was the Applicant’s further case that it also paid costs in Bomet CMCC No 98 of 2016: Gerald Ochoki alias Marube vs CIC General Insurance Group Limited.

10. The Applicant stated that Judgment in Bomet CMCC No 98 of 2016: Gerald Ochoki alias Marube vs CIC General Insurance Group Limited was delivered on March 27, 2017 and that the Respondent was entitled to interest from the March 27, 2017 up to September 10, 2020 when the principal sum was paid. That by his calculation that was based on 12% interest, the total interest for the aforementioned period was Kshs 1,242,740. That out of Kshs 1,242,740, Kshs 853,116 was paid on March 30, 2021 leaving a balance of Kshs 389,624.

11. It was the Applicant’s case that its liability to satisfy the suit in Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another begun upon the pronouncement of the Declaratory Suit Bomet CMCC No 98 of 2016: Gerald Ochoki alias Marube vs CIC General Insurance Group Limited.

The Applicant’s Submissions. 12. The Applicant submitted that it was not a party to Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another and there was no way that the court would have made it liable to pay costs in the aforementioned suit. It was its further submission that its liability to the Respondent only begun in Bomet CMCC No 98 of 2016: Gerald Ochoki alias Marube vs CIC General Insurance Group Limited.

13. It was the Applicant’s submission that there was no order that levied interest on costs. It relied on Section 27 (2) of the Civil Procedure Act and also relied on the case of Governors Balloon Safaris Ltd vs Sky Ship Ltd (2008) eKLRandSantana Fernandes vs Kara Arjan & Sons (1961) EA 693to support this submission.

14. The Applicant submitted that the principal sum and costs in the lower court had been paid and what remained was only part of the interest which accrued between March 27, 2017 to September 10, 2021. That the costs of the Appeal had been paid and therefore the Respondent’s claim was misplaced. It was its further submission that the Notice to Show Cause was premised on the wrong facts and principles.

The Respondent’s Case. 15. The Respondent contended that the Application was brought with bad faith and that the Applicant was not keen on satisfying the Judgment delivered by this Court and the Court of Appeal in his favour.

16. It was the Respondent’s case that on May 30, 2018, this court delivered Judgment in his favour and that the Applicant was supposed to pay him Kshs 3,000,000/= together with costs arising from Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another. That the Applicant later filed an Appeal at the Court of Appeal in Nakuru, Civil Appeal No 126 of 2018 where the said Appeal was dismissed.

17. The Respondent averred that the Applicant paid him Kshs 3,000,000/= on September 10, 2020 and Kshs 1,154,766 on March 30, 2021 making it a total of Kshs 4,154,766. That he instructted his advocates to apply for execution of the Decree balance because the Applicant had failed to settle the matter and close the file.

18. It was the Respondent’s case that the Kshs 1,154,766 comprised of costs and interest in the lower court. That his advocate informed the Applicant that the amount claimed in the Notice to Show Cause had reduced from Kshs 2,942,080 to Kshs 1,787,304 and that was the amount he was claiming. It was the Respondent’s further case that the Applicant was insincere and did not want the matter to be settled.

19. The Respondent stated that the interest charged was at 14% and not the 12% alleged by the Applicant. That therefore the interest charged on the Notice to Show Cause was correct.

20. It was the Respondent’s case that the Applicant could not escape bearing costs in the lower court as the subject matter before this court originated from Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another. That the Judgments by this court and the Nakuru Court of Appeal were self-explanatory that the Applicant was obliged to satisfy the Judgment in the lower court to the extent of Kshs 3,000,000 together with costs and interest thereon. That the lower court referred to Bomet CMCC Numbers 61 of 2015 and 98 of 2016.

21. The Respondent stated that the Notice to Show Cause was properly filed and what he claimed was what was due to him by virtue of the Judgment delivered by this court. That the Applicant had itself to blame over the issue of accrued interest.

The Respondent’s Submissions. 22. The Respondent submitted that he could not mislead this court because its Judgment was very clear. It was his further submission that this court ordered the Applicant to bear the costs plus interest in the Declaratory Suit.

23. It was the Respondent’s submission that this court and the Nakuru Court of Appeal referred to Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another .That the Orders were express that the Applicant do satisfy the Judgment to the tune of Kshs 3,000,000 plus costs and interest thereon. It was the Respondent’s further submission that the Applicant’s aim was to mislead the court.

24. The Respondent submitted that the Applicant was a party to the suit Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another as it was ordered to partly indemnify its insured to the tune of Kshs 3,000,000 plus costs and interest thereon instead of Kshs 9,548,757.

25. It was the Respondent’s submission that the court normally charged interest between 12% to 14% depending on the circumstances of the case and that the same was awarded based on the court’s discretion under Section 27 of the Civil Procedure Act. That the interest charged in this case was correct and did not need to be interfered with.

26. The Respondent submitted that the wordings of this court’s Judgment of May 30, 2018 was clear that the Applicant was liable to the extent of Kshs 3,000,000/= plus costs and interest in the lower court and in the appeal. Therefore that the interest charged in the Notice to Show Cause was from the date the Judgment in Bomet CMCC No 61 of 2015: Gerald Ochoki alias Marube vs Macharia James and Another i.e July 4, 2016.

27. It was the Respondent’s submission that the Notice to Show Cause was drawn to scale and that the Application herein was misconceived, bad in law and that the Applicant was out to delay justice.

28. I have gone through and considered the Notice of Motion Application dated May 21, 2021, the Replying Affidavit dated June 17, 2021, the Supplementary Affidavit dated July 22, 2021, the Applicant’s Written Submissions dated July 22, 2021 and the Respondent’s Written Submissions dated July 16, 2021 and they raise three issues for my determination:a.What rate of interest was applicable?b.Whether the Appellant was liable to pay for costs and interest in Bomet CMCC No 61 of 2015?c.Whether there was a Notice to Show Cause dated March 4, 2021?a.What rate of interest was applicable?

29. The issue of interest is covered by Section 26 of the Civil Procedure Act which states:1. Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.2. Where such a decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have ordered interest at 6 per cent per annum.

30. The issue of costs is covered by Section 27 of the Civil Procedure Act which states:1. Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction to try the suit shall be no bar to the exercise of those powers:Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order.2. The court or judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.

31. With respect to the interest applicable on the principal sum, I shall rely on statute and current jurisprudence. In Practice Note Number 1 of 1982, Chief Justice Simpson directed that:'The civil procedure act (cap 21 laws of Kenya) section 26 enables the court to order interest on the principal sum adjudged in a decree both before and after the date of the decree to be paid at such rate as the court deems reasonable.In the absence of any valid reason for ordering a higher or lower rate of interest, the rate of interest should now be 12%.

32. Section 26(2) of the Civil Procedure Act is very clear that when a Decree is silent with respect to the rate of interest paid on an aggregate sum, then the court is deemed to have ordered interest at 6% per annum. The wording of the aforementioned Section is that further interest would be interest from the date of the Decree to the date of payment.

33. I am persuaded by the case of Meridian Medical Centre Limited vs National Hospital Insurance Fund (Civil Suit 345 of 2013) (2021) KEHC 365 (KLR) (Commercial and Tax ) (17 December 2021) (Ruling) where Mabeya J stated:'As I have already stated, the court rate of interest set by the Chief Justice way back in 1982 under section 26(1) of the Act is 12% p.a. That section applies to the two scenarios, the interest from the date before the filing of suit and from the date of filing suit to the date of judgment.On the other hand, section 26(2) of the Act applies to only one limb of section 26(1). The sub-section clearly states, 'Where such decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have ordered interest at 6 per cent per annum'.In this regard, sub-section 2 applies when the decree is silent on the 'payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date. It is clear therefore that, that sub-section applies to the interest chargeable on the aggregate amount after the date of judgment and not earlier. That is, the aggregate sum that comprise the interest from the date of filing suit until judgment plus the principal sum.Accordingly, I hold that when a judgment is silent on the rate of interest, the court rate applicable will be two fold, 12% from the date of filing suit until judgment. But from the date of judgment until payment in full the rate applicable to the aggregate amount, i.e the principle sum plus interest, the rate chargeable is 6%'.1. In determining the rate of interest on costs, I will also be guided by Statute and our jurisprudence. It is clear from the wordings of Section 27(2) of the Civil Procedure Act that the interest applicable to costs had since been set at 14% per annum. In the case of BOG Tambach Teachers Training College vs Mary Kipchumba (2018) eKLR, Muriithi J held that:-'Section 27(2) of the Civil Procedure Act on interest on costs was amended by the Statute Law (Miscellaneous Amendments) Act No 19 of 1985 as follows:'Repeal the words 'six per cent per annum' and substitute the words 'fourteen per cent per annum'.

35. In the Judgment dated May 30, 2018, Muya J held that the Appellant was liable to the extent of Kshs 3 million plus costs and interest in the lower court and in the Appeal. The Decree dated October 8, 2018 did not also state the rate of interest applicable.

36. It is my finding therefore that the interest paid on the principal sum from the date of filing the suit to the date of Judgment be pegged at 12%. The interest on the aggregate sum at the date of Judgment until payment in full be pegged at 6%.

37. It is also my finding that the rate of interest on costs be pegged at 14% from the date of filing the suit until payment in full.b.Whether the Appellant was liable to pay for costs and interest in Bomet CMCC No 61 of 2015?

38. This matter begun when the Respondent herein brought a suit ie CMCC Bomet No 61 of 2015 (Gerald Ochoki alias Marube vs Macharia James and James Mwangi Macharia). The suit was set down for formal proof hearing and the Defendants, Macharia James and James Mwangi Macharia in a Judgment dated July 4, 2016 were ordered to pay Gerald Ochoki alias Marube the sum of Kshs 9,548,757 together with costs and interest thereon.

39. The Respondent (Gerald Ochoki alias Marube) thereafter filed a Declaratory Suit i.e CMCC Bomet No, 98 of 2016. Judgment in the aforementioned matter was entered on March 27, 2017. The trial court stated that it had entered Judgment for the Plaintiff against the Defendant as prayed in the Plaint with costs to the Plaintiff. The prayers granted in the Plaint were:a.That a declaration that the Defendant is bound to settle the decree or Decretal sum in Bomet Chief Magistrate’s Court Civil Suit No 61 of 2015 together with costs and interest thereon to date until full payment.b.Costs of the declaratory suit together with interest thereon at court rates.

40. The Defendant filed an Appeal i.e Bomet High Court Civil Appeal No 9 of 2017 where among other prayers challenged the award of Kshs 9,548,757. Judgment in the Appeal was delivered on May 30, 2015 where this court stated that:'This court makes a finding that the appellant is liable to the extent of Kshs 3 million plus costs and interest in the lower court and in this appeal'.

41. The Applicant had contended that they were not a party to Bomet PMCC No 61 of 2015 hence they did not owe the Respondent monies that arose from the said suit. The import of the Judgment in the Declaratory Suit was that the Applicant herein was liable in Bomet PMCC No 61 of 2015 by virtue of subrogation. I agree with the sentiments expressed by Odunga J (as he then was) in the case ofDollk Limited vs Invesco Assurance Company Limited & 5 Others (2018) eKLR, where he stated:-'Subrogation applies in situations where, by virtue of being an insurer, the insurance company is entitled to be placed in the position of the insured and to succeed to all their rights and remedies against third parties in respect to the subject matter of insurance. See General Principles of Insurance Law by ER Hardy Ivamy at page 415. '(See also Opiss vs Lion of Kenya Insurance Company Civil Appeal No 185 of 1991)

42. There was no evidence to show that the Applicant herein had repudiated liability with respect to the claims against it by the Respondent. The Judgment further stated that Section 10 of the Insurance (Motor Vehicles Third Party Risks) conferred a duty upon the insurer to satisfy Judgments against insured persons.

43. Flowing from the above, it is my finding that though the Applicant was not named as a party to Bomet PMCC No 61 of 2015, he was bound to satisfy the Judgments against persons it had insured. It is my further finding that the Applicant was a party in Bomet PMCC No 98 of 2016 and it was bound to settle the Decretal sum together with costs and interest thereon until payment in full.c.Whether there was a Notice to Show Cause dated March 4, 2021?

44. One of the prayers of the Applicant was that the Notice to Show Cause dated March 4, 2021 be set aside. However, in its Application, the Applicant failed to attach the said Notice to Show Cause. From its Application, there is a Notice to Show Cause dated May 11, 2021. It is trite law that parties are bound by their pleadings as they are the bedrock from which proceedings are derived from. In the case of David Sironga Ole Tukai vs Francis Arap Muge & 2 Others (2014) eKLR, the Court of Appeal held that:'In an adversarial system such as ours, parties to litigation are the ones who set the agenda, and subject to rules of pleadings, each party is left to formulate its own case in its own way. And it is for the purpose of certainty and finality that each party is bound by its own pleadings. For this reason, a party cannot be allowed to raise a different case from that which it has pleaded without due amendment being made. That way, none of the parties is taken by surprise at the trial as each knows the other’s case is as pleaded. The purpose of the rules of pleading is also to ensure that parties define succinctly the issues so as to guide the testimony required on either side with a view to expedite the litigation through diminution of delay and expense.'

45. It is my finding that this court has not been shown the alleged Notice to Show Cause dated March 4, 2021. Therefore there is nothing for this court to set aside.

Conclusion. 46. In conclusion, I decline to grant prayers (c), (d) and (e) as drafted. I order as follows:-I.For clarity and pursuant to the Judgment of this court and as affirmed on appeal, the Applicant is bound to meet the costs of the initial suit being Bomet PMCC 61 of 2015 as ordered by the court in Bomet PMCC 98 of 2016. II.The Appellant shall meet the costs of the Declaratory Suit as ordered by the court in Bomet 98 of 2016. III.The interest to be paid on the principal sum from the date of filing the suit in Bomet PMCC 61 of 2015 to the date of Judgment of the Appeal (Bomet Civil Appeal Number 9 of 2017) on May 30, 2018 is pegged at 12% per annum.IV.The interest paid to be on the aggregate sum from the date of the Judgment (May 30, 2018) until payment in full be pegged at 6% per annum.V.Interest on costs was ordered by the trial court in Civil Case No 98/2016. However it appears that a consent was recorded by the parties.VI.No order on interest on costs was given by this court in Civil Appeal No 126 of 2018. If there was such an order then the rate of interest on costs would be pegged at 12% from the date of delivery of the Judgment in the Declaratory Suit until payment in full.VII.The amount of Kshs 4,154,766 be factored in as the same had already been paid by the Applicant.VIII.Parties are at liberty to draw the draft Decree in the normal manner and according to the clarification above. The same should be subject to the approval of either party and the Deputy Registrar of this court.IX.This matter shall thereafter be mentioned before the Deputy Registrar of this court within 14 days from today.

47. Each party shall bear their costs in this

Application.Orders accordingly.

RULING DELIVERED, DATED AND SIGNED AT BOMET THIS 12TH DAY OF OCTOBER, 2022. ..........................R. LAGAT-KORIRJUDGERuling transmitted electronically to parties at: