[2023] KEHC 21146 (KLR)

CIC General Insurance Ltd v Njihia & another; Supati & another (Interested Parties) (Suing as Administrators of the Estate of Simon Mwaniki Ng’ang’a) (Miscellaneous Civil Suit E028 of 2021) [2023] KEHC 21146 (KLR) (17 July 2023) (Ruling)

Neutral citation: [2023] KEHC 21146 (KLR)

Republic of Kenya

In the High Court at Kajiado

Miscellaneous Civil Suit E028 of 2021

SN Mutuku, J

July 17, 2023

Between

CIC General Insurance Ltd

Plaintiff

and

Margaret Ambogo Njihia

1st Respondent

Daniel Njihia Mbugua

2nd Respondent

and

Naipanio Supati

Interested Party

Zipporah Mukami Ng’ang’a

Interested Party

Suing as Administrators of the Estate of Simon Mwaniki Ng’ang’a

Ruling

1. The Applicant brought this application through ex-parte originating summons (ex parte OS) dated May 7, 2021 under sections 27 and 28 of the Limitations of Actions Act and order 37 rule 14 of the Civil Procedure Rules, seeking orders that:i.That leave be granted to the applicant CIC General Insurance Ltd to file a declaratory suit against Margaret A. Njihia and Daniel Njihia Mbugua after limitation period.ii.That the annexed plaint be deemed as duly filed upon payment of applicable fees.iii.That there be a stay of proceedings in Kajiado CMCC No. E036 of 2020 and any other suit arising from the road accident of 5/7/2019 involving motor vehicle registration number KCF 871Q pending the hearing and determination of the intended declaratory suit.

2. The application was supported by an affidavit sworn by Lydia Wairimu, the Claims Manager with the Applicant on May 7, 2021 in which she has deposed that the Applicants entered into a contract with one Stephen Okwemba Inzalikhi on 25/12/2018 in which they insured motor vehicle KCF 871Q and that the cover was to run from 25/12/2018 for a period of one year as per annexed copy pf the insurance policy marked ‘LW1’.

3. It is their case that the insured, Stephen Okwemba Inzalikhi, breached the contract buy failing or refusing to pay the premiums when instalments fell due; that on 4/6/2019 they issued him with a 7 days’ Notice to come off cover if he doesn’t pay the premiums; that the Notice expired without the premium being paid and therefore the Insurance Policy No. 017/083/1/015496/2017 came to an end with a consequence that the Certificate of Insurance No B-93xx was recalled and cancelled and that they notified all the relevant parties and authorities of the cancellation of the certificate as per annexed letter dated 24th June, 2019.

4. It is deposed that the accident the subject of suit Kajiado CMCC E036 of 2020 occurred on 5/7/2019; that the Police Abstract filed as a supporting document in the said case has quoted the Policy No. 017/083/1/015496/2017 and the Applicant as the insured; that there is no connection of any nature between the Applicant and the Defendants in Kajiado CMCC E036 of 2020 as the said policy had already been cancelled; that by the time they learned of the possibility of its involvement in the said suit, the statutory 14 days period under section 10 of Cap 405 within which to repudiate liability had already passed and the 3 months within which to file a declaratory suit against the Respondent’s had also lapsed.

5. The interested parties herein on October 11, 2021 raised a preliminary objection (PO) that this honourable court lacks jurisdiction to hear the Application dated May 7, 2021.

6. The Applicants through a Replying Affidavit sworn by Elizabeth Gesare Ondieki stated that the Intended Interested Parties have not sought leave to come on record as interested parties as provided by the law; that they have not shown how they would be prejudiced if they are not allowed to come in as interested parties and that the PO has not been properly brought before this court as the Intended Interested parties have no locus standi to address this court.

Submissions 7. This court directed that the PO and the OS be canvassed together by way of written submissions. The Applicant filed their submissions dated October 26, 2022. They have submitted that by the time they learned of the possibility of being involved in the CMCC E036 of 2020, the period within which to repudiate the claim under section 10 of Cap 405 which provides for a period of 3 months had lapsed; that section 28 of the Limitations of Actions Act as read together with order 37 rule 6 of the Civil Procedure Rules allows for extension of limited period.

8. They relied on the case of Willis Onditi Odhiambo v Gateway Insurance Co. Ltd Civil Appeal No. 37 of 2013 eKLR where the Court of Appeal held that:“Under section 27(1) of the Limitations Act, time to file a suit can only be extended where the action is founded on tort and must relate to the torts of negligence, nuisance or breach of duty and the damages accorded should be in respect of personal injury to the plaintiff as a result of the tort.”

9. It was their case that their annexed Plaint had merit for reasons that they explained in their Replying Affidavit and which they have reiterated herein that they are strangers to the Respondents as the policy No. 017/083/1/015496/2017 had been cancelled. They urged that they be given a chance to be heard by this court as it would be an injustice for them to be held liable where there was no insurance cover provided by them. They argued that the interested parties herein have filed a declaratory suit against them in Milimani CMCC E11066 of 2021 that the suit is still active and that they stand to suffer irreparable damage if judgement is delivered before the intended declaratory suit is heard and determined.

10. They pray that this court stays the proceedings in Milimani CMCC E11066 of 2021. They submitted that if the above is not granted the orders arising from this court may be rendered nugatory. Further that no party will be prejudiced if the orders are granted as the interested parties have a judgement in CMCC E036 of 2020 which they can rightly enforce against the judgement debtor.

11. On the PO, they argued that they brought their application under Section 27 and 28 of the Limitation of Action Act and order 37 rule 14 of the Civil Procedure Rules; that the application is seeking for discretionary orders to file a declaratory suit out of time; that it is a well-established legal principal that a party cannot file a PO against proceedings that require the court to grant discretionary orders. They relied on various authorities including Martha Akinyi Migwambo v Susan Ongoro Ogenda [2022] eKLR where the court referred to Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd [1969) EA 696 that:“A Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is usually on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion....”

12. The interested parties filed their submissions dated January 16, 2023. They argued that jurisdiction is a pure point of law and relied on the case of Jack J Khanjira &another v Safaricom PLC [2020] eKLR. They argued that the exercise sought is not on the discretionary power of this court but that the court lacks jurisdiction. They argued that section 27 and 28 of the Limitations Act provides that for one to be entitled to an extension of time the claim must be falling under tort. On this they relied on the case of Kenya Orient Insurance Ltd v Senenerro Ole Kurraro & 7 others [2016] eKLR.

13. They submitted that the cause of action between the Applicant and the Respondents is not one of a tort of negligence as portrayed by the Applicant but one of a contractual violation. They submitted that though under the Limitation of Actions Act the limitation for a contract is 6 years the relevant law in regard to the insurer filing a declaratory suit is the Insurance (Motor Vehicles Third Party Risks) Act this was further illustrated in the case of Madison Insurance Co. Kenya Ltd- vs- David Kibe Mathenge [2017] eKLR. They also relied on the Court of Appeal decision in Mary Osundwa v Sugar Company Limited [2002] eKLR where that court stated that:“This section clearly lays down the circumstances in which the court would have jurisdiction to extend time. The action must be founded on tort and must relate to the torts of negligence, nuisance or breach of duty and the damages claimed are in respect of personal injuries to the plaintiff as a result of the tort. The section does not give jurisdiction to the court to extend time for filing suit in cases involving contract or any other causes of action other than those in tort…” Accordingly, Osiemo J. had no jurisdiction to extend time as he purported to do on May 28, 1991. ”

14. They argued that the Applicant herein is not seeking for any personal injuries in respect of the Accident. It was their case that the Applicant will not be prejudiced should leave sort be denied, as there is a declaratory suit filed in the Magistrate court which is at the hearing stage and that the Applicant will get a chance to be heard and argue its case.

Analysis and Determination 15. From the outset, it is clear to this court that some of the issues raised in this matter have been overtaken by events. A case in point is the argument that the Interested Parties are not properly before this court. This issue has been settled after this court heard and determined their application dated December 3, 2021 seeking to have them enjoined to this suit. By a ruling delivered on June 28, 2022 this court allowed them to be parties to this suit.

16. The matter for determination is the ex parte OS dated May 7, 2021 and the PO dated October 11, 2021. The PO questions the jurisdiction of this court to handle the OS. The case of Mukisa Biscuits Manufacturing Ltd v West End Distributors (1969) EA 696 comes to mind on the issue of what constitutes a preliminary objection. The court stated thus:“----a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court or a plea of limitation or a submission that the parties are bound by a contract giving rise to the suit to refer the dispute to arbitration”.

17. In the same case Sir Charles Newbold, P. stated that:“a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and on occasion, confuse the issue, and this improper practice should stop”.

18. The issue that arises for determination herein is whether the preliminary objection raised is sustainable. In Owners of the Motor Vessel “Lillian S” the Court held:“Jurisdiction is everything. Without it, a Court has no power to make one more step. Where a Court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A Court of Law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”

19. The Applicant’s brought this Application under sections 27 and 28 of the Limitations of Actions Actand order 37 rule 14 of the Civil Procedure Rules. I have read section 31 of the Limitation of Actions Act. It provides as follows:31. Part to apply to other laws of limitation Where a period of limitation is prescribed for any action or arbitration by any other written law, that written law shall be construed as if Part III of this Act were incorporated in it.

20. The interested parties have submitted that the relevant law prescribing the limitation Period in regard to the insurer filing a disclaimer or declaratory suit is the Insurance (Motor Vehicles Third Party) Act, cap. 405. Part III of the Limitation of Actions Act is concerned with limitation of actions. To my understanding therefore, there is a written law prescribing a period of limitation in respect of the matter before this court. Section 10 (4) of the Insurance (Motor Vehicles Third Party) Act provides that:No sum shall be payable by an insurer under the foregoing provisions of this section if in an action commenced before, or within three months after, the commencement of the proceedings 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 a representation of fact which was false in some material particular, or, if he has 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 declaration as a foresaid in an action shall not thereby become entitled to the benefit of this sub-section as respects any judgement 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 any person to whom notice of such action is so given shall be entitled if he thinks fit to be made a party to.

21. As pronounced by the court in Madison Insurance Co. Kenya Ltd v. David Kibe Mathenge [2017] eKLR, I agree that:“The actual limitation period pertinent to this matter pursuant to section 31 cap. 22 is provided by the Insurance (Motor Vehicle Third Party) Act, cap. 405 at section 10 (4). An insurer is by law entitled to seek the declaration akin to that the applicant now seeks to have time extended for not later than three months after the suit for compensation is filed. That provision has no independent window for extension of time.”

22. From the pleadings of the Applicant, it is clear to this court that the Applicant is seeking to extend time to file a declaratory suit against the Interested Parties arising out of a claim for damages from a road traffic accident involving Motor Vehicle No. KCP 871Q belonging to Stephen Okwemba Inzalikhi, the insured who is alleged to have breached the insurance contract with the Applicant, the insurer.

23. My reading and understanding of section 27 and 28 of the Limitations of Actions Act is that the extension of time is granted under these provisions where a tort arises. The jurisdiction of the court under section 27 (1) of the Limitations Act was discussed by the Court of Appeal in Mary Osundwa v Nzoia Sugar Co. Ltd [2002] eKLR, where the court stated thus:“This section clearly lays down the circumstances in which the court would have jurisdiction to extend time. The action must be founded on tort and must relate to the torts of negligence, nuisance or breach of duty and the damages claimed are in respect of personal injuries to the plaintiff as a result of the tort. The section does not give jurisdiction to the court to extend time for filing suit in cases involving contract or any other causes of action other than those in tort…” Accordingly, Osiemo J. had no jurisdiction to extend time as he purported to do on May 28, 1991. ”

24. Further, in Oadi Odhiambo v Gateway Insurance Co. Ltd Civil Appeal No. 37 of 2013 eKLR, the Court of Appeal faced with the same set of circumstances observed that:“Under section 27 (1) of the Limitations Act, time to file a suit can only be extended where the action is founded on tort and must relate to the torts of negligence, nuisance or breach of duty and the damages accorded should be in respect of personal injury to the plaintiff as a result of the tort.”

25. I have considered the issues submitted on by the parties. It was relevant for this court to consider the issue of jurisdiction first in order to determine if it is clothed with the requisite jurisdiction to determine the OS by the Applicant. It is clear to this court that going by the provisions of the law and the authorities discussed above in this ruling, the preliminary objection as raised is meritorious. This court has no powers to extend the time to file a declaratory suit as sought by the Applicant. The intended declaratory suit is clearly based on breach of contract and not tort, making sections 27 and 28 of the Limitations of Actions Act unavailable to the Applicant.

26. This court, therefore, must lay down its tools at this stage. I cannot proceed to determine the ex parteOS simply because I lack the requisite jurisdiction to do so. I hereby allow the PO to stand with the effect that this matter is concluded.

27. Orders shall issue accordingly.

DATED, SIGNED AND DELIVERED THIS 17TH JULY, 2023. S. N. MUTUKUJUDGE