[2023] KEHC 24119 (KLR)

Kenya Orient Insurance Limited v Ramadhan (Civil Appeal 5 of 2022) [2023] KEHC 24119 (KLR) (27 October 2023) (Judgment)

Neutral citation: [2023] KEHC 24119 (KLR)

Republic of Kenya

In the High Court at Garsen

Civil Appeal 5 of 2022

M Thande, J

October 27, 2023

Between

Kenya Orient Insurance Limited

Appellant

and

Ramadhan Mohamed Ramadhan

Respondent

(An Appeal from the Ruling of Hon. M. M. Wachira, Principal Magistrate on 20. 5.22 in Lamu CMCC NO. E017 of 2021)

Judgment

1. The Appeal herein arises from the Ruling of Hon. M. M. Wachira, Principal Magistrate on 20. 5.22 in Lamu CMCC NO. E017 of 2021, Ramadhan Mohamed Ramadhan v Kenya Orient Insurance Limited. The Respondent instituted the suit in the trial court against Kenya Orient Insurance Limited, the Appellant, seeking the following prayers:a.An order of declaration that the defendant herein be entitled to indemnify the defendants in LAMU PMCC NO. 23 of 2019 and a subsequent order that the defendant herein pays the decretal sum herein in terms of paragraph 8 of the plaint.b.Costs of the suit.c.Interest on (a) and (b) above.d.Any other or further relief as this Honourable Court may deem fit to grant.

2. In his plaint dated 12. 11. 21, the Respondent alleged that he filed Lamu PMCC No 23 of 2019 seeking damages for injuries incurred in a road traffic accident on 1. 6.19 involving motor vehicle KBC 253L. He alleged that the Respondent had insured the said motor vehicle under policy number MSA/0700/258053/2019. The Respondent averred that prior to filing the suit in question, a demand letter had been sent to the Appellant. Further pursuant to Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act, (Cap 405) a statutory notice of institution of the suit was served upon the Appellant. Judgment was entered in his favour and he was awarded damages in the sum of Kshs. 1,502,550/= plus costs and interest. The motor vehicle in question being insured by the Appellant, it was legally liable to indemnify the insured and meet the Respondent’s claim as adjudged by the Lamu PM’s Court.

3. In its defense dated 1. 2.22, the Appellant denied that it was liable to pay the amount awarded to the Respondent as it had not insured the said motor vehicle at the time of the purported accident. The Appellant contended that the insurance certificate indicating that it had insured the motor vehicle was a forgery or fraudulent. The Appellant further denied having been served with the statutory notice under Cap 405 and that even if it had, the said notice would be of no effect as it had not insured the vehicle.

4. By an application dated 4. 3.22, the Respondent sought that the Appellant’s defense be struck out for being an abuse of the court process and that judgment be entered for the Respondent. In its ruling of 20. 5.22, the Court found the Respondent’s application to be merited and allowed the same.

5. It is this ruling that has provoked the Appeal herein. The summarized grounds of appeal are that the trial Magistrate erred in law and in fact in:1. Striking out the statement of defence filed by the Appellant.2. Failing to hold that the defence as drawn disclosed serious triable issues.3. Failing to appreciate that the prayers in the plaint were for declaration only and could not lead to entry of judgment for a specific amount.

6. The Appellants prayed for the following orders:i.That the judgment with regard to damages be set aside and be substituted with orders for reassessment of the same.ii.That the order for damages be enhanced.iii.That assessment of liability be made based on the evidence.iv.Costs.

7. Parties filed their written submissions which I have considered together with the cited authorities. The only issue for determination is whether the learned Magistrate erred in striking out the statement of defence.

8. It is the Appellant’s case that the defence that was struck out raised triable issues, namely whether there was a valid policy insurance in respect of the said motor vehicle and who was the insured; whether there was a judgment in place against the Appellant and whether a statutory notice had been served upon the Appellant and whether there was fraud involved. The Appellant faulted the trial Magistrate for not following the principles set out in the case of D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] eKLR on the striking out of pleadings.

9. For the Respondent, it was submitted that the trial Magistrate applied the correct principle under the Civil Procedure Rules in striking out the Appellant’s defence as it was an abuse of the court process. It was argued that in the ruling, the learned Magistrate found that the police abstract and certificate of insurance as produced before Court were enough proof that the Appellant was the insurer of the motor vehicle. The Court also found that the Appellant had been duly served with the statutory notice in accordance with Section 10(2) of Cap 405, which bore the Appellant’s stamp. Having so found, the defence was struck out for lacking triable issues and being an abuse of the Court process.

10. The power of a court to strike out pleadings is stipulated in Order 2 Rule 15 of the Civil Procedure Rules as follows:1. At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—a.it discloses no reasonable cause of action or defence in law; orb.it is scandalous, frivolous or vexatious; orc.it may prejudice, embarrass or delay the fair trial of the action; ord.it is otherwise an abuse of the process of the court, and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.2. No evidence shall be admissible on an application under subrule (1)(a) but the application shall state concisely the grounds on which it is made.3. So far as applicable this rule shall apply to an originating summons and a petition.

11. It can be seen from the cited provision that a court’s power to strike out pleadings is first, discretionary. Second, this discretion may be exercised at any stage of the proceedings before it. Third, that the grounds upon which this may be done are that the pleadings in question do not disclose a reasonable cause of action or defence; are scandalous, frivolous or vexatious; may prejudice, embarrass or delay fair trial; or is otherwise an abuse of the court process. Fourth, an application to strike out pleadings must speak for itself. In other words, the grounds upon which such application is made must be stated concisely as no evidence is admissible to support the same.

16. The jurisdiction of a court to strike out pleadings must be exercised with great caution. This has been stated in a long line of authorities. In the case of D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] eKLR the Madan, JA stated:No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action, and is so weak as to be beyond redemption and incurable by amendment. If a suit shows a mere semblance of a cause of action, provided it can be injected with real life by amendment, it ought to be allowed to go forward for a court of justice ought not to act in darkness without the full facts of a case before it.The learned Judge had earlier cited the following decisions which speak to the need to exercise great caution and restraint in exercising this jurisdiction:“It has been said more than once that rule is only to be acted upon in plain and obvious cases and, in my opinion, the jurisdiction should be exercised with extreme caution.Per Lord Justice Swinfen Eady in Moore v. Lawson and Another (supra) at p. 419. "It cannot be doubted that the court has an inherent jurisdiction to dismiss an action which is an abuse of the process of the court. It is a jurisdiction which ought to be very sparingly exercised. and only in exceptional cases. I do not think its exercise would be justified merely because the story told in the pleadings was highly improbable, and one which it was difficult to believe could be proved".per Lord Herschell in Lawrence v. Lord Norreys, 15. A.C. 210 at p. 219. "The summary remedy which has been applied to this action is only applied in plain and obvious cases when the action is one which cannot succeed or is in some way an abuse of- the process of the court."per Danckwerts, L.J. in Nagle v. Fielden (1966) 2 Q.B.D. 633 at p. 646. 'It is well settled that a statement of claim should not be struck out and the plaintiff driven from the judgment seat unless the case is unarguable. Accordingly it is necessary to consider whether or not this plaintiff has an arguable case. That is the only question that arises on this appeal." per Salmon, L.J., ibi at p. 651.

12. It is against this backdrop, that the Court will interrogate whether the learned Magistrate, in striking out the Appellant’s statement of defence, exercised his discretion judiciously and with great caution as required. The Court will then determine whether to interfere with the exercise of the learned Magistrate’s discretion.

13. The principles upon which this Court may interfere with a court’s discretion were set out in the case of Patriotic Guards Ltd v James Kipchirchir Sambu [2018] eKLR where the Court of Appeal stated:The principles upon which this Court will interfere with the exercise of a judge’s exercise of discretion in the lower court are also well known and settled. The Court of Appeal can only interfere with the exercise of a trial court’s judicial discretion if satisfied that the judge misdirected himself on law; or that he misapprehended the facts; or that he took into account considerations of which he should not have; or that he failed to take into account considerations which he should have; or that his decision, albeit a discretionary one, was plainly wrong. (See Mbogo & Another v Shah (1968) EA 93; Mrao Ltd v First American Bank of Kenya Ltd & 2 others (2003) eKLR).

14. In the present case, this Court is tasked to consider whether the learned Magistrate misdirected himself on law or misapprehended the facts. The Court will also consider whether the learned Magistrate took into account or failed to take into account matters he should or should not have, or that his decision was just wrong.

15. The Court has looked at the statement the Appellant’s statement of defence that was struck out. The Appellant averred therein that it had not insured the said motor vehicle KBC 253L, under policy no. MSA/0700/258053/2019 at the time of the purported accident as alleged. It further stated that the certificate of insurance certificate exhibited was a forgery or fraudulent. The Appellant further denied having been served with the statutory notice under Cap 405 and further that even if it had, the said notice would be of no effect as it had not insured the vehicle.

16. In arriving at his decision to strike out the Appellant’s defence, the learned Magistrate relied on the case of Martin Onyango v Invesco Assurance Company Limited [2015] eKLR where Majanja, J. agreed with Mabeya, J. who in the case of APA Insurance Company Limited v George Masele [2014] eKLR stated:20. As to the Certificate of Insurance which Ms Akonga insists should have been produced, I am of the contrary view. The Certificate of Insurance is usually issued to the insured and not the road accident victim. It is a document in the special knowledge and possession of both the insured and the insurer. The road traffic accident victim cannot access it. The details in the Police Abstract as to the details of insurance are in the ordinary cause of events obtained by the police from the Certificate of Insurance affixed to the motor vehicle or are supplied by the insured. In this regard, I am unable to agree with Ms. Akonga that the Respondent should have produced the Certificate of Insurance for Policy No. 010/810/000005/2001/04 in order to prove who the insurer was.

17. The learned Magistrate stated:I therefore find that police abstract is sufficient proof of who the insurer is and there is no need to produce the certificate of insurance by the plaintiff. The plaintiff has annexed copy of the police abstract marked RMR1 which he adduced in the suit and the said police abstract shows the insurer of motor vehicle registration number KBC 253L is the defendant herein under policy number of MSA07002580532019.

18. On the issue of service of the statutory notice, the learned Magistrate stated as follows:The plaintiff in the affidavit in support of the application annexed a copy of statutory notice marked RMR4 dated 13th December 2019. The said notice bears the stamp of the defendant’s head office legal department dated 16th December 2019. The suit was filed on 13th December 2019 and therefore the statutory notice was served within the required time of 14 days after commencement of the suit. The plaintiff has prima facie shown that the statutory notice was served on the defendant.Having considered the two issues raised by the defendant and my finding therein I find these are not triable issues to warrant a full trial.

19. I have carefully read the 2 cited decisions. In the Martin Onyango case (supra), the learned Judge while holding that the appellant need not have produced the certificate of insurance, found that the appellant failed to prove on a balance of probabilities that the respondent was the insurer of the motor vehicle. In the APA Insurance Company Limited case (supra), the learned Judge found that a police abstract contains the details of insurance and are obtained by the police from the certificate of insurance on the motor vehicle. He further found that an accident victim cannot be expected to produce the certificate of insurance of the motor vehicle in order to prove who the insurer was.

20. In the said judgment, Mabeya, J. had observed as follows:18. In the Police Abstract No. A491478 dated 10th June, 2002, the report showed that on 11th November, 2001 at about 7. 30 a.m. along Landhies Road an accident occurred involving the Respondent and motor vehicle Reg. No. KAH 096A make Leyland. The said motor vehicle was shown to be owned by Kenya Bus Services ltd and was insured under policy No. 010/810/000005/2001/04 issued by Pan Africa Insurance Ltd. That Police Abstract was admitted in evidence in both the original suit (CMCC No. 9774 of 2001) as well as in the declaratory suit (CMCC No. 1674/2006). That abstract was an official record as contained and kept by the Kenya Police at Shauri Moyo Police Station vide Occurrence Book number IAR 219/2002. This document was neither objected to nor denied. The details therein were never challenged. The evidence of the Respondent was unchallenged and uncontroverted.

21. The circumstances in the present case are distinctly different. The Appellant denied that it had insured the motor vehicle and put the Respondent to strict proof of the claim. The Appellant further alleged forgery and fraud. It set out the particulars of fraud as manufacturing an insurance sticker and/or certificate and falsely indicating that the same had been issued by the Appellant; attempting to obtain compensation through false means; altering an insurance sticker to indicate that the vehicle was insured by the Appellant. The Appellant further denied being served with the statutory notice under Cap 405 and that even if the same were served, it would have no effect given the fact that the Appellant had not insured the vehicle.

22. To my mind, the issues raised by the Appellant in its statement of defence required interrogation through trial. In this regard, I associate with the holding in Richard Makau Ngumbi & another v Cannon Assurance Company Limited [2016] eKLR where Njuguna, J. stated:As to whether there was a policy of insurance in respect of motor vehicle KBA 682E my humble view is that, this is a serious issue that can only be determined at the main trial. I have perused the affidavits filed by both parties in support of the application dated 27th day of May, 2014 and there is no evidence by way of a Certificate of Insurance or a policy document to support the assertion by the Appellants that the Respondent was the insurer of motor vehicle KBA 682E at the material time when the accident occurred. It is only a copy of the police abstract that was annexed which to me is not conclusive.Note here that the liability of the Respondent arises only and only if it was the insurer of the offending motor vehicle and if no nexus is proved between the insurer and the insured then a cause of action by way of a declaratory suit such as the one that is before the trial court could hardly succeed. I use the word “hardly” in this appeal because the duty of this court is limited to hearing the appeal and not the main cause in the declaratory suit and this court should be careful not to step into the shoes of the trial court.

23. It is noted that the learned Magistrate was persuaded by the exhibited police abstract that the Appellant had insured the motor vehicle. The Respondent herein is of a similar view and submitted that “a police abstract is sufficient proof of insurer as upheld in APA Insurance Company Limited V George Masele [2014] EKLR”. The finding of Mabeya, J. was that the police abstract in that case which showed the ownership of the vehicle and the firm that insured it, had been admitted in evidence and was not objected to. This is not the case herein. The Appellant has objected to the claim that it insured the motor vehicle in question.

24. That the contents of a police abstract are rebuttable and not conclusive, is now well settled. In the case of Kenya Orient Insurance Co. Ltd v Farida Hemed [2015] eKLR, Kasango, J. considered a case similar to the present oney, where the insurance company had denied issuing a policy as in the present case. The learned Judge stated:16. Appellant in its defence pleaded that it did not issue a Policy No. 201040142 and therefore denied liability. I am well guided by the authority of Appellant Kasereka –vs- Gateway Insurance Co. LTD [2003]2EA which held that the matters recorded in a Police Abstract is rebuttal evidence of the matter. It is however to note that even in that case the Court decided that the matter of whether there is a policy of Insurance had to be determined after oral evidence was adduced. The Court in that case stated-“It follows that for the purpose of this application, on a balance of probability, the Court finds that the Gateway Insurance Company Limited appears to be the insurer of motor vehicle registration number KAB 405K. I say “appears” because the contents of a police abstract is rebuttable and is not conclusive. I refer to the reverse of this document. However, it suffices to say that having been unchallenged by the defendant, the balance tilts in favour of the plaintiff. This means the denial by the defendant that there was a contract of insurance between itself. Page 505 of [2003]2EA 502 (CCK) and Hoe Engineering Works Limited is strictly a triable issue. It is true that the policy document was not produce by the defendant, but this can be dealt with at the stage of discovery and inspection during preparation for the trial. The question of privity of contract is similarly disposed of. This can only be determined once the policy document is availed to the Court and the issue heard on merit at the trial.”18. I have examined the Respondent’s Plaint, Appellant’s Defence in the secondary suit and the affidavit evidence relied in support and in opposition of the application for striking out. In my view having those documents in mind Appellant’s Defence cannot be said to have been frivolous, vexatious or abuse of the Court process. Appellant needed to be given opportunity to ‘air’ its defence. Striking it out was in error.

25. I concur with the learned Judge. Given that the Appellant challenged the authenticity of the certificate of insurance and the fact that it had insured the said vehicle, I find that the statement of defence was not an abuse of the court process, as it raised triable issues. The Appellant ought to have been given an opportunity to defend the suit and to press its case before the Court. As such, the striking out of the statement of defence was in error and it goes contra to the right of the Appellant to a fair trial as guaranteed under Article 50 of the Constitution.

26. The upshot is that the Appeal succeeds. The learned Magistrate’s decision to strike out the Appellant’s defence is hereby set aside. The Appellant shall have costs of this Appeal and of the application in the lower court.

DATED AND DELIVERED IN MALINDI THIS 27TH DAY OF OCTOBER 2023_____________________M. THANDEJUDGEIn the presence of: -…………………………………………………………… for the Appellant…………………………………………………………… for the Respondent……………………………………………………Court Assistant