https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10433

Fidelity Sheild Insurance Co.Ltd v Otiato (Civil Appeal E215 of 2025) [2026] KEHC 10433 (KLR) (15 July 2026) (Judgment) Neutral citation: [2026] KEHC 10433 (KLR) Republic of Kenya In the High Court at Kisumu Civil Appeal E215 of 2025 AM Hassan, J July 15, 2026 Between Fidelity Sheild Insurance Co.Ltd Plaintiff and Joram Otiato Defendant (Being an Appeal from the Judgment and Decree of the Senior Principal Magistrate’s (Hon. Melanie Ochieng) delivered on 17th September 2025, in Senior Principal Magistrate’s Court, Maseno Civil Suit No. E163 of 2021) Judgment A. Introduction/ Facts Of The Case 1.The Plaintiff (now Respondent), vide a Plaint dated 29th November 2021, instituted a suit against the Defendants seeking a declaratory order compelling Defendants to settle the decretal sum of Kshs. 1,115,008/= as ordered in Maseno PMCC No. 53 of 2019: Joram Otiato v. Daniel Opiyo Oluoch & Ceaser Michael Kodhek. 2.The Plaintiff averred that in the primary suit he sought compensation for damages arising out of an accident which occurred on 24th March 2019 near Ebusakami area along Kisumu -Busia Road involving Motor Vehicle Registration No. KCH 694C Toyota Station Wagon belonging to the Defendants in the primary suit. He further avers that the Motor Vehicle Registration No. KCH 694C in the primary suit was at the material time, insured by Fidelity Shield Insurance Co. Ltd vide policy No. KSM/P/503/099552/18 COMP Comm: 6/12/2018 Ex-26/9/2019 by the Defendant in this declaratory suit. 3.The primary suit proceeded for hearing and judgment was delivered on 9th March 2021 and Decree issued in the following terms: -a.Liability -100%b.General damages -Kshs. 1,000,000/=c.Special Damages-Kshs. 4,050/=d.Party & Party Costs -Kshs. 110,508/= Total KSHS. 1,115,508/= 4.In response, the Defendant filed a Statement of Defence dated 18th January 2022 denying the claims made by the Plaintiff and averred that in the alternative, the Plaintiff never issued a Statutory Notice of his intention to sue and/or the existence of this suit, which is a mandatory requirement pursuant to the provisions of Section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act CAP 405 Laws of Kenya. The Defendant averred that it did not insure the Motor vehicle in the primary suit, and if at all it was insured, then the duty to indemnify the Plaintiff in the primary suit lapsed. 5.Subsequently, the matter proceeded for hearing in the magistrates court and Judgment was delivered on 17th September 2025 where the court entered judgment for the Plaintiff against the Defendants. 6.The learned magistrate, in conclusion, held as follows:a.A Declaratory Order be and is hereby issued compelling the Defendant to settle the Decretal sum of Kshs. 1,115,505/= as ordered in Maseno PMCC 53 of 2019: Joram Otiato v. Daniel Opiyo Oluoch & Ceaser Michael Kodhekb.Costs of this suitc.Interest as Court rates 7.Being dissatisfied with the judgment of the trial court, the Defendant lodged the present appeal vide a Memorandum of Appeal dated 7th October 2025, raising the following grounds: -1.That the learned magistrate erred in law and fact by holding that the Respondent had complied with the mandatory provisions of section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405, despite absence of proper and sufficient proof of services of the Statutory Notice upon the Appellant.2.That the learned magistrate misdirected herself by relying on a demand letter dated 6th May 2019 as constituting valid statutory notice under section 10(2)(a) of Cap 405, notwithstanding that there was no evidence of its proper service upon the Appellant before or within 30 days of the commencement of the primary suit.3.That the learned magistrate erred in law by failing to appreciate that compliance with Section 10(2) of Cap 405 is a condition precedent to liability attaching to an insurer, and that the burden of proof squarely lay upon the Respondent, which he failed to discharge.4.That the learned magistrate erred in law in disregarding binding authorities, submitted by the Appellant which affirm that failure to serve a statutory notice absolves the insurer from liability5.That the learned magistrate erred in law by shifting the burden of proof to the Appellant contrary to the Evidence Act, and by making a declaratory order in the absence of strict compliance with statutory requirements.6.That the judgment and decree of the learned magistrate is against the weight of the evidence on record and the applicable law 8.The Appeal was canvassed by way of written submissions. As this is a first appeal, this court is obligated to reconsider, re-evaluate and re-analyze the evidence adduced before the trial court and draw its own independent conclusions, while bearing in mind that it did not have the benefit of seeing or hearing the witnesses testify. This duty was succinctly set out in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 B. Submissions By Parties Appellant’s Submissions 9.The Appellant submitted itself on 3 issues. Under the first issue, the Appellant submitted that the Respondent failed to comply with section 10(2)(a) of the Insurance (Motor Vehicle Third Risks) Act (Cap 405), which requires an insurer to be notified of proceedings before, or within thirty days after the commencement of the suit in which judgment is eventually entered. 10.The Appellant argued that although the primary suit was instituted on 10th May 2019, the Respondent only produced two documents at trial: a copy of the statutory notice to the Appellant and a copy of the demand notice. While the statutory notice was intended to notify the Appellant of the suit, the Respondent failed to produce a certificate of postage proving that the notice had actually been dispatched. Instead, the only certificate of postage produced related to 2021, which was not contemporaneous with the institution of the primary suit in May 2019. Consequently, the Appellant contended that the Respondent failed to prove compliance with the mandatory notice requirements under section 10(2)(a) of Cap 405. 11.Secondly, the Appellant submitted that the trial court failed to determine whether the statutory notice had in fact been served upon the Appellant. It was argued that section 10(2)(a) refers to the proceedings in which judgment is ultimately given, namely the primary suit, and not the subsequent declaratory proceedings. In support of this argument, the Appellant relied on Martin Onyango v. Invesco Assurance Company Limited (2015) eKLR, where the court held that the purpose of serving a statutory notice is to enable an insurer to take steps to defend its insured or institute declaratory proceedings to avoid liability under the Act. The Appellant therefore contended that the trial court failed to make a finding on whether the statutory notice had been properly served as required by law. 12.Thirdly, the Appellant submitted that, failure to serve the statutory notice before, or within thirty days after the commencement of the primary suit has substantive legal consequences. Relying on Mvuria Magwabi Chandago v African Merchant Assurance Company (2017) eKLR, the Appellant argued that section 10(2)(a) creates a mandatory condition precedent to an insurer’s liability rather than a mere procedural requirement. It was submitted that where the requisite notice is served, the insurer is discharged from liability because it is denied the statutory opportunity to learn of the suit and defend its interests. Accordingly, the Appellant maintained that the Respondent’s failure to issue and prove service of the statutory notice rendered the declaratory suit incompetent and incapable of succeeding. 13.Further, Reliance was placed on Directline Assurance Company Limited V. Wilkinson Mwenda Erastus & 7 Others (2016) eKLR, where the court held that: “whilst it may look as being a mere technical objection curable under Article 159 of the Constitution as the trial court found out, it is not. It makes the whole difference. It goes to the very heart of the entire case of the Respondent, as to whether notice was served in terms of Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, and therefore substantive justice.” 14.Therefore, the Appellant urged the court to interfere with the trial courts findings and set aside the same and substitute with an order of dismissing the Plaintiff’s suit. Respondent’s Submissions 15.The Respondent submitted on two issues: liability and quantum. The Respondent noted that liability always follows fault and submitted that the burden of proving negligence rested upon the Plaintiff, who was required to establish the case on a balance of probabilities. Reliance was placed on Section 107 of the Evidence Act, which provides that a party who desires a court to give judgment as to a legal right or liability dependent on the existence of certain facts must prove those facts. The Respondent further relied on Section 109 of the Evidence Act, which places the burden of proof on the person who wishes the court to believe in particular facts, and cited Paul Nganga & Others v. Attorney General & Others, Petition No. 518 of 2012, where the court held that he who alleges must prove. 16.The Respondent further submitted that the suit before the lower court was filed on 29th November 2021 seeking general and special damages, costs of the suit and interest arising from a road traffic accident which occurred on 24th March 2019 along Kisumu-Busia Road at Ebusakami involving motor vehicle registration number KCH 694C Toyota Station Wagon. It was submitted that the appellant insured the defendants in Maseno PMCC No. 53 of 2019: Joram Otiato v. Daniel Opiyo Oluoch & Ceaser Michael Kohek, and that the defendants were served with summons dated 4th May 2019 together with the plaint and affidavit of service. A signed copy of the summons acknowledging receipt by the defendants was filed in court. 17.The Respondent also submitted that, a demand notice dated 6th May was served upon the appellant by registered post and that a certificate of postage was on record. It was further submitted that, before the Plaintiff filed the primary suit and request for judgment on 6th December 2020, the appellant had been served with summons and copies of the plaint on 14th May 2019, but failed to enter appearance or file a defence. Consequently, the matter proceeded for formal proof on 29th September 2020, judgment was delivered on 9th March 2021, and the Plaintiff’s advocates served the appellant with a notice of entry of judgment on 25th October 2021 at their last known address. Thereafter, the Respondent filed Maseno PMCC No. 163 of 2021: Joram Otiato v. Fidelity Insurance Company, on 21st November 2021, and service was effected on 6th December 2021. The Respondent maintained that the appellant only came on record after interlocutory judgment had been entered. 18.The Respondent further submitted that, according to the record of appeal, PW1, Joram Otiato, adopted his witness statement dated 29th November 2021 concerning the accident that occurred on 24th March 2019 along the Kisumu-Busia Road at Ebusakami involving motor vehicle registration number KCH 694C Toyota Station Wagon. He testified that he sustained injuries as a result of the accident and produced all the documents contained in the record of appeal. 19.The Respondent also submitted that, during cross-examination, PW1 confirmed that the summons in the primary suit had been served but failed to enter appearance, as evidenced by affidavits of service filed before the lower court. He further confirmed that the Appellant was served because they were the insurers and produced the insurance sticker, which was not objected to. The Respondent submitted that the appellant closed their case without calling any witness and relied on Susam Kanini Mwangangi & Another v. Patrick Mbithi Kavita, Machakos HCCA No. 64 of 2017 (2019), in which it was stated that it is not enough for defendants to deny a claim, shift blame or rely on submissions to sustain their defence, but that they have positive duty to prove the allegations contained in their defence. The Respondent contended that, once service of the requisite notices had been proved, the appellant ought to have called witnesses or adduced evidence to prove otherwise. 20.The Respondent further relied on sections 107 and 108 of the Evidence Act, submitting that a party seeking judgment as to a legal right or liability dependent on the existence of certain facts must prove those facts. Reliance was placed on Muthuku v Kenya Cargo Services [1991] eKLR, where the court observed that it was for the appellant to prove on a balance of probabilities, one of the forms of negligence alleged in the plaint and that the court could not assume liability without proof and hold the respondent wholly liable. 21.Lastly, the Respondent submitted that evidence had been adduced showing that the defendants and their insured had been served with the summons and all pleadings in the primary suit, as confirmed by signed and stamped acknowledgements of receipt. It was argued that there has been no proper service. The Respondent further submitted that the appellant had an opportunity to appeal against or apply to set aside the judgment in the primary suit upon receiving the notices of entry of judgment but failed to do so. It was also submitted that interlocutory judgment in the present proceedings was entered despite service. 22.Accordingly, the Respondent contended that the appellant slept on their rights and urged the court to allow the Respondent to enjoy the fruits of the judgment and to uphold the judgment delivered by Hon. M. Ochieng, Principal Magistrate, on 17th September 2025. 23.In the circumstances, I have considered the submissions from both the Appellant and the Respondent and I therefore wish to have the following as issues for determination; C. Issues For Determinationi.Whether the Respondent proved compliance with the mandatory notice requirements under Section 10(2) of the insurance (Motor Vehicle Third Party Risks) Act, Cap 405, so as to impose liability upon the Appellant.ii.Whether the learned trial magistrate erred in law and fact in entering judgement against the Appellant and issuing a declaratory order compelling it to satisfy the decree issued in Maseno PMCC No. 53 of 2019 D. Analysis And Determination Whether the Respondent proved compliance with the mandatory notice requirements under Section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405, so as to impose liability upon the Appellant 24.The principal issue in this appeal is whether the Respondent complied with the mandatory requirements of section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405, thereby entitling him to obtain a declaratory order against the Appellant. It is trite that an insurer's obligation to satisfy a judgment entered against its insured does not arise automatically. The claimant must first demonstrate compliance with the statutory conditions prescribed under section 10 of the Act, including proof that the insurer was notified of the proceedings within the period stipulated by law. 25.The legal position was succinctly stated in UAP Insurance Co. Ltd v Patrick Charo Chiro [2021] eKLR, where the High Court held that before liability can attach under section 10 of the Act, a claimant must establish that: the motor vehicle was insured by the insurer; judgment was obtained against the insured; the statutory notice required under section 10(2) was duly served upon the insurer within the prescribed time; and the claimant is a person entitled to the benefit of the policy 26.In the present appeal, the Appellant does not dispute that judgment was entered against its insured in Maseno PMCC No. 53 of 2019 or that the suit vehicle was insured by it at the material time. The Appellant's challenge is confined to the contention that the Respondent failed to prove service of the statutory notice contemplated under section 10(2)(a) of Cap 405 and that, consequently, no liability could attach to the Appellant. 27.It was the Appellant's case that although copies of the statutory notice and demand letter were produced before the trial court, there was no credible evidence demonstrating that the statutory notice had actually been served upon the Appellant before, or within thirty days after, commencement of the primary suit. It further argued that the learned trial magistrate improperly relied on the demand letter as constituting the statutory notice. 28.I have independently reconsidered the evidence tendered before the trial court. The record demonstrates that the Respondent produced the statutory notice, the demand letter, the certificate of postage and other documentary evidence relating to service. PW1 further testified that the Appellant had been served with the requisite notices before the institution of the declaratory proceedings. That evidence remained substantially unchallenged. 29.It is settled that the legal burden of proving compliance with section 10(2) rests upon the claimant by virtue of sections 107 and 109 of the Evidence Act. However, once prima facie documentary evidence of service is produced, the evidential burden shifts to the insurer to rebut that evidence. In the instant case, although the Appellant denied service in its defence, it elected not to call any witness to challenge the authenticity of the documents produced by the Respondent or to demonstrate that the notices were never received. 30.The position adopted by the learned trial magistrate accords with the decision in APA Insurance Limited v Japhy Elliot Ogundoh Okuwa [2012] eKLR, where the High Court upheld a declaratory judgment after finding that the respondent had proved service of the statutory notice through documentary evidence, and held that once such service is established, the insurer becomes liable to satisfy the decree obtained against its insured. 31.Although the Appellant relied on authorities emphasizing that service of the statutory notice is a mandatory condition precedent to liability, those decisions do not advance its case unless it is first demonstrated that service was not proved. Having reconsidered the record, I am not persuaded that the learned trial magistrate misapprehended the evidence or applied an incorrect legal principle in finding that the statutory notice requirements had been satisfied. 32.Consequently, I find that the Respondent discharged the burden of proving compliance with section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act on a balance of probabilities. The Appellant has therefore failed to establish that the learned trial magistrate erred in finding that the statutory notice required by law had been duly served. Whether the learned trial magistrate erred in law and fact in entering judgement against the appellant and issuing a declaratory order compelling it to satisfy the decree issued in Maseno PMCC No. 53 of 2019 33.Having found that the Respondent proved compliance with the statutory requirements under section 10 of Cap 405, the next issue is whether the learned trial magistrate erred in entering judgment against the Appellant and issuing the declaratory orders sought. 34.A declaratory suit under section 10 of the Insurance (Motor Vehicle Third Party Risks) Act is intended to enforce the statutory obligation imposed upon an insurer to satisfy a judgment obtained against its insured where the conditions stipulated under the Act have been fulfilled. Once those conditions are established, the insurer becomes liable unless it demonstrates the existence of a statutory defence recognized under the Act. 35.In the present case, it is common ground that judgment had already been entered in Maseno PMCC No. 53 of 2019 against the Appellant's insured. Equally, there is no dispute that the present suit was instituted after the decree remained unsatisfied. The only defence advanced by the Appellant was the alleged non-service of the statutory notice, a contention which, as already found, was not established. 36.The Appellant further contended that the learned trial magistrate improperly shifted the burden of proof to it. I am unable to agree. The Respondent first adduced evidence in support of his claim and produced the documents upon which he relied. Once that evidence was placed before the court, it became incumbent upon the Appellant to rebut it. Having elected not to call any witness, the Appellant cannot now fault the trial court for accepting the uncontroverted evidence adduced by the Respondent. 37.I am not persuaded that the judgment was against the weight of the evidence. The learned trial magistrate evaluated the pleadings, oral testimony, documentary exhibits and submissions before concluding that the Respondent had proved his claim on a balance of probabilities. The Appellant has not demonstrated that the trial court considered irrelevant matters, ignored material evidence or misapplied the law so as to warrant appellate interference. 38.Upon my own re-evaluation of the entire record, I am satisfied that the learned trial magistrate correctly appreciated both the facts and the applicable law. Having found that the Respondent had complied with section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, the trial court was entitled to issue the declaratory order compelling the Appellant to satisfy the decree entered in Maseno PMCC No. 53 of 2019. 39.Accordingly, I find no error in law or fact on the part of the learned trial magistrate in entering judgment for the Respondent. The Appellant has failed to demonstrate any basis upon which this court can interfere with the judgment appealed against E. Disposition 40.Having carefully reconsidered the pleadings, the record of appeal, the judgment of the trial court, the rival submissions by the parties, and the applicable law, I am not persuaded that the Appellant has not demonstrated any error of law or fact on the part of the learned trial magistrate warranting interference by this court. The Respondent proved compliance with the mandatory notice requirements under section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405, and the learned trial magistrate properly entered a declaratory judgment compelling the Appellant to satisfy the decree issued in Maseno PMCC No. 53 of 2019. 41.Consequently, this court makes the following orders:a.The Appeal is hereby dismissed in its entirety.b.The Judgment and Decree of the Senior Principal Magistrate's Court at Maseno in Civil Suit No. E163 of 2021 delivered on 17th September 2025 are hereby upheld.c.The Respondent shall have the costs of this Appeal.d.Interest on the costs of the Appeal shall accrue at court rates from the date of taxation until payment in full.It is so ordered. SIGNED BY/FOR:HON. JUSTICE ABDI M. HASSANKISUMU HIGH COURTHIGH COURT CIVIL DATE: 2026-07-15 12:05:35