[2017] KEHC 2764 (KLR)

REDPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KERICHO

CIVIL SUIT NO.6 OF 2015

DAVID MURATHE KAMAU (Suing as Administrator and/or Personal Representative of Estate of:

JULIET WARINGA WANYONDU (DECEASED)……..………..PLAINTIFF

VERSUS

LION OF KENYA INSURANCE COMPANY………………...DEFENDANT

RULING

1. By the application dated 13th September 2016 and supported by his affidavit sworn on 13th September 2016, the plaintiff/applicant seeks the following orders against the defendant/respondent:

a. That summary judgment for the liquidated sum of kshs.1,871,893/- being the decretal sum in Kericho HCCC No.55 of 2007 alongside costs and all accrued interest from 28th September 2011 being the date of judgment thereof be entered against the defendant.

b. That costs of this application and of this suit be borne by the defendant.

2. The application is based on the following grounds:

a)That the plaintiff filed the suit in Kericho HCCC No.55 of 2007 on behalf of the Estate of Juliet Waringa Wanyondu (sustained in a road traffic accident involving a motor vehicle for damages arising out of fatal injuries sustained in a road traffic accident involving a motor vehicle registration no.KAP 995 N whose owners and driver were the defendants in the suit Kericho HCCC No.55 of 2007.

b)That the said motor vehicle registration no.KAP 995N in Kericho HCCC No.55 of 2007 was insured against third party risks by Lion of Kenya Insurance Company Limited through policy no.TPO/181/20400815.

c)That under the provisions of section 10 of the Insurance (Motor Vehicles Third Party Risks) Act (Cap 405) Laws of Kenya, the defendants herein are liable to make good the amount of kshs.1,871,893/= and costs plus interest accrued from 28th September 2011 being the date of judgment.

d)That all requisite notices contemplated by the Insurance (Motor Vehicles Third Party Risks) Act (Cap 405) laws of Kenya were issued to the defendant.

e)That the defendant is truly indebted to the plaintiff in the sum of kshs.1,871,893/- being general damages alongside costs and interest accrued from 28th September 2011 till payment in full.

f)That the defence filed by the defendant is a sham and a mere denial and does not raise any triable issues.

g) That the circumstances of this case entitles the plaintiff to summary judgment against the defendant.

3. Pursuant to directions issued on 3rd April 2017, the application was to be canvassed by way of written submissions which were to be highlighted on 30th May 2017. The parties filed submissions dated 30th and 29th May 2017 respectively. Counsel for the respondent appeared in court on 30th May 2017 in the absence of Counsel for the applicant. He indicated that he did not intend to highlight the submissions and requested for a date for ruling.

Background

4. The plaintiff/applicant had filed HCCC No.55 of 2007. The suit was in respect of a claim for damages for fatal injuries sustained by the plaintiff in a road traffic accident involving motor vehicle registration number KAP 995N. The owner and driver were the defendants in Kericho HCCC No.55 of 2007.

5. According to the applicant, the said motor vehicle was insured by the defendant, Lion of Kenya Insurance Company Ltd, through policy number TAO/181/20400815. Judgment was entered in favour of the plaintiff against the defendant in HCCC No.55 of 2007, and it is the decretal amount of kshs 1,871,893 which the plaintiff claims the defendant/respondent is bound to pay under section 10 of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405 Laws of Kenya.

6. In the plaint dated 7th April 2015, the applicant brought a claim against the defendant/respondent seeking a declaration that the defendant is bound to satisfy the judgment in Kericho HCCC No.55 of 2007, and judgment for the liquidated sum of Kshs.1,871,893/- being the decretal sum in Kericho HCCC No.55 of 2007.

7. In its defence dated 22nd April 2015, the defendant denied that it had insured motor vehicle registration number KAP 995N vide policy number TPO/181/20400815. It further denied that the deceased was a pedestrian along the Kericho-Nakuru road or that motor vehicle KAP 995N was caused to collide into the deceased occasioning her fatal injuries.

8. The respondent further denied that the applicant sued its insured in HCCC No.55 of 2007; denied that judgment was entered for the plaintiff in the sum of kshs 1,750,850/- and the plaintiff’s bill taxed at kshs 121,043/- denied that it was served, with a statutory notice under section 10 of the Insurance (Motor Vehicle Third Party Risks) Act Cap 405 and asserted that there was no valid judgment or decree in favour of the plaintiff.

9. The defendant maintained that it is not bound to pay the judgment sum to the plaintiff, nor is the said sum payable by the defendant or the defendant’s insured or at all. According to the defendant, the judgment purportedly obtained in Kericho HCCC No.55 of 2007 is invalid and was fraudulently, improperly and irregularly obtained as there was no service in the said suit, and judgment was requested for while the defendant was not served. It further contends that the plaintiff proceeded with formal proof while there was no service, and had instituted a suit against a non-existent body in order to obtain a declaratory suit (sic) against the defendant in this suit.

10. From the judgment attached to the plaintiff’s application, the matter proceeded by way of formal proof before GBM Kariuki J (as he then was), and in his judgment dated 28th September 2011, he entered judgment in favour of the plaintiff in the sum of kshs 1,750,850/-. A certificate of costs assessed at kshs 121,043/- was issued on 17th September 2013. It is these two amounts that the plaintiff/applicant now seeks to enforce by way of summary judgment against the defendant/respondent.

The Submissions

11. In the submissions dated 30th May 2017, the plaintiff argues that the defendant’s defence is full of mere denials which cannot defeat his claim. He relies on the decision in Equatorial Commercial Bank vs Jodam Engineering Works Limited Mombasa HCCC No. 13 of 2012to submit that the defendant should have given some facts to support the denial in its defence, which it had not. It is his contention further that while the defendant denied having insured the defendant in HCCC No. 55 of 2007, it should have filed a declaratory suit once it was served with a notice of institution of the said suit, which it had failed to do.

12. The plaintiff relied on the provisions of section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to submit that the defendant is bound to satisfy the decree in Kericho HCCC No. 55 of 2007. The plaintiff further relied on the decision in James Mwangi Gitundu vs Gateway Insurance Co. Limited Nairobi HCCC No. 224 of 2007 for the proposition that the obligation to pay the persons entitled to the amounts given in a judgment in circumstances such as this is a statutory one which the defendant cannot evade. His prayer was that the court should allow his application as prayed.

Submissions in Response

13. The defendant submitted, in reliance on its grounds of opposition dated 31st March 2017, that the application before the court is defective in form and substance. This is on the basis that the application is brought under Order 34 Rule 1, which provides for interpleader proceedings, while the applicant seeks summary judgment against the defendant.

14. The defendant further stated that it had set out the particulars of fraud on the part of the plaintiff in its defence, and its defence therefore raises triable issues, and it should be given a chance to be heard. According to the defendant, the right to be heard is a constitutional imperative on the right of access to justice under Article 48 and to enter summary judgment is to deny it the right to be heard under Article 50.

15. Counsel for the defendant relied on the decision in Dhansal Investments Limited vs Shabaha Investments Limited Civil Appeal No. 232 of 1997 for the proposition that if the defendant shows a bona fide triable issue, it must be allowed to defend without conditions. The defendant also relied on the decision in ICDC vs Daber Enterprises Limited (2000) IEA 75 to submit that summary judgment, which is a draconian remedy, should only be given in the clearest cases. It prayed that the application be dismissed with costs.

Analysis and Determination

16. The plaintiff seeks declaratory orders against the defendant in hid plaint and has sought summary judgment in the application now before me. I have considered the submissions of the parties, and the law relating to the grant of orders of summary judgment. I note that the application is brought under Order 34 rule 1 of the Civil Procedure Rules, which provides for interpleader proceedings.

17. The correct rule providing for summary judgment under the Civil Procedure Rules is Order 36 Rule 1, which provides that summary judgment may be entered in respect of a liquidated claim where the defence raises no triable issue.

18. In my view, however, the citation of a wrong rule by the plaintiff did not in any way prejudice the defendant, and is therefore not fatal for the application. I will therefore proceed to deal with the substance of the application.

19. I start by considering the law with respect to the grant of orders of summary judgment. The law with respect to the grant of summary judgment is fairly well settled. In Postal Corporation of Kenya vs. Inamdar & 2 Others [2004] 1 KLR 359, the Court of Appeal stated:

‘The law is now well settled that if the defence filed by a defendant raises even one bona fide triable issue, then the defendant must be given leave to defend. There are several authorities in support of this proposition. One of them is this Court’s decision in the case of Continental Butchery Limited vs. Samson Musila Ndura, Civil Appeal No 35 of 1997 where this Court stated:

“With a view to eliminate delay in the administration of justice which would keep litigants out of their just dues or enjoyment of their property, the court is empowered in an appropriate suit to enter judgment for the claim from the plaintiff under summary procedure provided by order 35 subject to there being no triable issues which would entitle a defendant to leave to defend.

If a bona fide triable issue is raised the defendant must be given unconditional leave to defend but not so in a case in which the Court feels justified in thinking that the defences raised are a sham.”

That decision was made in 1977. In 1997, this Court again confirmed the same principle in the case of Dhanjal Investments Limited vs. Shabana Investments Limited Civil Appeal No 1232 of 1997 (unreported) where it stated:

“The law on summary judgment procedure has been settled for many years now. It was held as early as in 1952 in the case of Kundanlal Restaurant vs. Devshi & Company Limited [1952] 19 EA 77 and followed in the Court of Appeal for Eastern Africa in the case of Souza Fiqueredo & Co. vs. Moorings Hotel [1959] EA 425, that if the defendant shows a bona fide triable issue he must be allowed to defend without conditions.”’

20. In the case before me, the plaintiff seeks declaratory orders against the defendant and seeks payment of a claim of kshs 1, 750,000 costs and interest. The amount was an award made in favour of the plaintiff against a party insured by the defendant in High Court Civil Suit No. 55 of 2007. The defendant’s defence is to deny that it was ever served with a statutory notice, or that its insured in that case was ever served. It denies that it is under an obligation to meet the amount due to the plaintiff.

21. The plaintiff relies on section 10 of the Insurance (Motor Vehicles Third Party Risks) Act (Cap 405) Laws of Kenya. Section 10 is titled “Duty of insurer to satisfy judgments against persons insured” and provides as follows:

(1) 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 on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under the foregoing provisions of this section—

(a) 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;…

22. I have considered the pleadings before me and the record of the court in HCCC No. 55 of 2007. I note that the case against the defendant’s insured, Kenya Bus Service Limited, proceeded by way of formal proof before GBM Kariuki J (as he then was). The court inquired and was satisfied that service had been effected on the defendant.

23. I note further from the documents annexed to the plaintiff’s affidavit in support of his application that a statutory notice under section 10 of the Insurance (Motor Vehicles Third Party Risks) Acthad been served on the defendant. A copy of the notice, duly stamped by the defendant in this case, shows that the notice was served on 18th June 2007.

24. That being the case, can the defendant be heard to argue that there was no valid judgment against its insured, and that it had no notice of the filing of the suit? Clearly not.

25. In the case of Joseph Mwangi Gitundu vs Gateway Insurance Co. Ltd (Supra), Gikonyo J expressed himself as follows with respect to the liability of insurers to meet third party claims against its insured:

“….under section 10(1) of Cap 405 Laws of Kenya, the insurer has a statutory obligation to 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 on that sum by virtue of any enactment relating to interest on judgments.”

26. I agree with the sentiments expressed by my brother in the case above. The insurer has a statutory obligation which it can only avoid in the circumstances provided under section 10 as follows:

“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…”

27. Given the facts of this case therefore and the provisions of the law set out above, I believe that the defence by the defendant in this case raises no triable issue. It would be to delay the day of reckoning, and deny the applicant the fruit of his judgment to allow the matter to proceed to hearing where there is clearly no triable issue.

28. Accordingly, the application is allowed as prayed with costs to the applicant.

Dated, Delivered and Signed at Kericho this 4th day of October 2017.

MUMBI NGUGI

JUDGE

Ms Mitey instructed by the firm of Sila Munyao & Co. Advocates for the plaintiff/applicant.

Kibichy & Company Advocates for the defendant/respondent.