[2002] KEHC 954 (KLR)
The court found that the insured had completed a proposal form declaring the vehicle would be used for carriage of own goods, but subsequently sold the vehicle to a third party who used it as a Matatu, a material change not disclosed to the insurer. The insured also failed to cooperate with the insurer's...
Source-derived case information.
- Citation
- [2002] KEHC 954 (KLR)
- Parties
- Plaintiff: Geminia Insurance Company Ltd; Defendant: John Kiprop Chemeitoi
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 120 of ??
- Procedural Posture
- Civil Case / Judgment
- Outcome
- Declaration granted in favour of the insurer; costs awarded to the plaintiff.
- Judges
- J Wakiaga
- Legal Topics
- Insurance Contracts, Material Non Disclosure, Policy Avoidance, Vehicle Insurance, Third Party Claims
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Geminia Insurance Company Ltd
Plaintiff
John Kiprop Chemeitoi
Defendant
Procedural Posture
Civil Case / Judgment
Legal Issues
- 1 Whether the insurer was entitled to avoid the insurance policy due to non-disclosure of material facts by the insured.
- 2 Whether the insured breached the terms of the insurance policy by transferring ownership and changing the use of the vehicle without notifying the insurer.
- 3 Whether the insurer is liable to settle third party claims arising from an accident involving the vehicle after the alleged breaches.
Ratio Decidendi
The court found that the insured had completed a proposal form declaring the vehicle would be used for carriage of own goods, but subsequently sold the vehicle to a third party who used it as a Matatu, a material change not disclosed to the insurer. The insured also failed to cooperate with the insurer's investigation and did not respond to correspondence. The court held that the insurer was entitled to avoid the policy due to non-disclosure of material facts and breach of policy conditions. The evidence presented by the insurer, including the proposal form, insurance documents, investigation reports, and police records, was accepted as truthful and unchallenged, as the insured failed to...
Court Disposition
Declaration granted in favour of the insurer; costs awarded to the plaintiff.
Orders
- The insurer is entitled to avoid the insurance policy in respect of the subject vehicle.
- The plaintiff is awarded the costs of the suit.
Full Case Text
Judgment text and source record
21 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL CASE NO. 120 OF 2000
GEMINIA INSURANCE COMPANY LTD………….. PLAINTIFF
VERSUS
JOHN KIPROP CHEMEITOI …………………….. DEFENDANT
JUDGEMENT
On 19. 6. 1996, John Kiprop Chemeitoi (the Insured) of Nairobi approachedM/S GEMINIA INSURANCE CO. LTD (the Insurer) also of Nairobi and completed a proposed form for the Insurance of a Commercial Vehicle. It was a Toyota Hilux Pick-up Registration No. KAE 181N (the vehicle) with a carrying capacity of 3 passengers and one Tun of goods. The purpose for which the vehicle was Insured was for carriage of own goods.
On the basis of that purposed the Insurer issued a Insurance cover Certif9icate for 12 months from 21. 6. 1996 to 20. 6. 1997. A policy of Insurance also issued subject to the endorsement thereon. There were yearly rewards of the Insurance for the year 1997-1998, 1998 – 1999. On 02. 11. 1998 however the vehicle was involved in an accident along the Eldoret – Iten road when it hit a pedestrian. A police Abstract issued on 28. 1. 99 described the vehicle a Toyota “Matatu” owned by one JULIUS RONO and driven by one DANIEL KIPTUM KIMITO. The driver was charged with various offences of careless driving before Iten Resident Magistrate’s Court and was convicted and sentenced for the offence.
On 15. 02. 99 a copy of demand Notice was served on the Insurer by the Advocates for the injured pedestrian citing the policy of insurance but referring to the owners of the vehicle as JULIUS RONO. The statutory Notice was also served. The Insurer then wrote to the insured to provide details of the accident to enable them respond to the demand made. The insured did not respond and so the Insurer considered an investigator who revealed that the Insured had sold the vehicle to one JULIUS RONO who was using the vehicle as a “MATATU” and was carrying fare-paying passengers when the accident occurred. The insured then chose to avoid the policy on the basis of non-disclosure of material facts in the proposal form and for transfer of a policy which was personal tro the insured to another person. The insurer seeks a declaration that he was at all times entitled to avoid the policy stated above.
A statement of defence was filed on 20. 4. 20000 denying that any proposal form was completed before the insurance of the policy and further denying that the vehicle was used as a Matatu at any time.
He further demand that the vehicle was involved in an accident on 2. 11. 98 or any other time, injured any person. In the same breath the insured states that if any body was injured then the Insurer should settle the claim. When the matter was set down for hearing however, neither the insured not his advocates attended court although the they were served. The hearing proceeded ex-parte. I heard the testimony of two witnesses of the insurer. PW1 fared Muga Omwonga the claims supervisor who produced 10 exhibits conforming the execution of the proposal form, the insurance of the insurance policy and insurance certificates, correspondence relating to the demand Notice from the third party and proceedings from the Traffic Court. By 24. 5. 2000 when they received the last consultation from the third party Advocates, new suit had been filed.
The said witnesses Asaph Nyogona Karogi was the Investigator commissioned to look for and obtain information on the alleged accident fron the Insured,. He produced letters addressed to the Insured which were never responded to. The confirmed from Iten Police Station that the vehicle ownership had changed and that its actual user was for transporter of fare paying passengers (Matatu). The witnesses who testified the Traffic Case said that the vehicle was a “Matatu”
I have perused those documents and I am satisfied that the two witnesses were truthful. The denial that the vehicle had not been involved in any accident or injured any person was as shallow as the assertion that the insured never completed any proposed form before the policy of insurance was issued. If that be the case, as correctly submitted by Learned Counsel for the Insurer, Mr. Muigai then it would follow that the contract if in\surance was not based on any proposal and therefore it never existed. I am satisfied that he insured made the proposal fore the insurance of his other vehicle and that the declared user was for carriage of own goods. I am also satisfied that he vehicle was involved in a Road Traffic Accident while it was engaged in the business of a Matatu, or fare-paying passengers business which was not the Insured user. The ownership had, also changed through it would appear, informally as registered transfer was in evidence. It is no wonder that the insured was reluctant to assist the Insurer to obtain full information on the Accident.
Section 10(2) states:
“…………………………………………………….”
I am satisfied that this suit was brought long before any suit was filed and the Insurer has every right to avoid the policy in all the circumstances of this case.
I grant the declaration sought together with the costs of the suit.
Dated this 30th day of April, 2002.
P. N. WAKI
JUDGE