[2023] KEHC 26003 (KLR)

Kipruto v African Merchant Assurance Co. Ltd; Khatenje (Suing as the Administrator of the Estate of Raymond Odhiambo Ogada-Deceased) & another (Interested Parties) (Civil Case 25 of 2020) [2023] KEHC 26003 (KLR) (1 December 2023) (Judgment)

Neutral citation: [2023] KEHC 26003 (KLR)

Republic of Kenya

In the High Court at Eldoret

Civil Case 25 of 2020

JRA Wananda, J

December 1, 2023

Between

Conseslus Kipruto

Plaintiff

and

African Merchant Assurance Co. Ltd

Defendant

and

Mildred Khatenje (Suing as the Administrator of the Estate of Raymond Odhiambo Ogada-Deceased)

Interested Party

Eshikoni Auctioneers

Interested Party

Judgment

1. This suit was commenced vide the Plaint dated 6/07/2020 and filed herein on 8/07/2020 through Messrs Isiaho Sawe & Co. Advocates. The Plaint was subsequently amended.

2. The Plaintiff pleaded that at all material times he was the registered owner of the motor vehicle registration number KCJ 003K Toyota V8, that vide Policy number AM3/070/1/054640/2016 whose commencement and expiry dates were 28/08/2016 and 14/12/2017 respectively, he insured the said motor vehicle, on 16/09/2017 the vehicle was involved in a road accident out of which the deceased aforesaid suffered fatal injuries, the 1st Interested Party, in her capacity as the Administratrix of the estate of the deceased instituted a suit against the Plaintiff, namely, Eldoret CMCC No. 1215 of 2017 seeking compensation for the death of the deceased, the Defendant was duly notified of the accident prior to the institution of the suit, hence the reason the Defendant instructed the firm of Kemei & Co. to defend the suit, the accident occurred during the period covered by the insurance policy and the Plaintiff was therefore indemnified by the Defendant, and that the policy covered such persons as specified in the policy in respect of any injury or damage caused and/or arising out of use of the motor vehicle.

3. The Plaintiff pleaded further that Judgment was subsequently entered on 20/12/2019 in favour of the 1st Interested Party in the sum of Kshs 2,814,868/- inclusive of costs, the Defendant is legally bound to satisfy the decree, on 17/02/2020, to the Plaintiff’s utter shock and consternation, his properties were proclaimed by the 2nd Interested Party-Auctioneer in execution of the decree, the Plaintiff approached the Defendant about the issue whereupon the Defendant undertook to satisfy the decree, the Plaintiff was forced to incur expenses towards hiring a vehicle for use after his said motor vehicle was impounded, at a daily cost of Kshs 7,000/-.

4. The Plaintiff therefore seeks Judgment for a declaration that the Defendant is legally bound/liable to satisfy the decretal sum plus costs as apportioned by the trial Court in Eldoret CMCC No. 1215/2017 as well as all other incidental costs including Auctioneer’s charges, refund of Kshs 300,000/- being auctioneer’s charges paid by the Plaintiff at the release of the motor vehicle on 18/08/2020, and special damages of Kshs 7,000/- per day incurred by the Plaintiff towards car hire charges from 24/02/2020 when the motor vehicle was impounded, until 18/08/2020 when the same was released. The Plaintiff also seeks an order reversing the attachment against the motor vehicle. He also seeks costs and interest.

5. At the time that the Plaintiff filed this suit, he also sought and obtained interim orders of stay pending hearing and determination of the suit and release of the motor vehicle on condition that he deposits the original log-book in Court and settles the Auctioneer’s charges. This therefore explains the prayer for refund of amounts paid to the Auctioneer.

6. The Defendant did not file a Statement of defence but appearance was entered on its behalf on 11/05/2021 by Messrs Tum & Associates Advocates.

7. The 1st Interested Party, through Messrs Keter Nyolei & Co. Advocates filed her Statement of defence on 15/10/2020. The defence basically justified the attachment and proclamation of the Plaintiff’s motor vehicle in execution of the decree. It was then stated that the primary responsibility to satisfy the Judgment rests with the Plaintiff as the Judgment-debtor and thereafter the Plaintiff can seek declarations and indemnity from the Defendant, provisions of the Insurance (Motor Vehicle Thid Party Risks) Act, Cap. 405 were crafted to provide additional protection to third parties in the event of an accident and did not take away the primary responsibility of a tortfeasor to compensate third parties for tortious acts. It was therefore prayed that the suit as against the interested parties be dismissed.

8. The 2nd Interested Party did not enter appearance nor file a defence.

9. The suit was then set down for hearing for 11/05/2021. On that date, the Defendant’s Counsel conceded to prayer (a) of the Plaint in respect to which the Judge, Omondi J, duly entered Judgment. The hearing then commenced.

10. PW1 was the Plaintiff. He basically reiterated the matters already recounted above. He stated that the motor vehicle that was attached is worth about Kshs 5. 5 million, he is an athlete and could not use a matatu, he had to hire another vehicle, which he did at Kshs 7,000/- per day so as to facilitate his practicing sessions. He also produced several documents as exhibits. In cross-examination, he clarified that the vehicle involved in the accident the subject of the Magistrate’s Court case was different from the one that was attached. He conceded that although he had the car hire agreement, he had no receipts to prove payments for the same. He also conceded that he had not produced a copy of the certificate of insurance and/or policy. In re-examination, he indicated that the Defendant had began making payments to the 1st Interested Party’s Advocates and that it had already paid Kshs 150,000/- and promised to settle the rest.

11. PW2 was one Philemon Kimutai. Following Omondi J’s elevation to the Court of Appeal, the matter was taken over by Ogola J, before whom PW2 testified. He stated that he is a businessman and that the Plaintiff is his client. He then confirmed that he hired to the Plaintiff his motor vehicle registration number KCT 701E at Kshs 7,000/- per day, and that the Plaintiff paid him all the money and does not owe him. He produced the Agreements.

12. Following Ogola J’s transfer, I took over the case. The Defendant did not call any witness and the 1st Interested Party, as DW2, therefore took the stand.

13. In her testimony, the Interested Party, too, recounted the matters already set out hereinabove. In cross-examination, she denied that her Lawyer had been paid any money by the Defendant in settlement of the decree. She insisted that all she wants is for the Plaintiff to pay the decree.

14. Pursuant to directions given, the parties then filed written Submissions. The Plaintiff filed his on 23/06/2023 while the Defendant and the Interested both filed on 21/07/2023.

Plaintiff’s Submissions 15. Counsel for the Plaintiff submitted that the policy covered such persons or class of persons as specified therein in respect of any injury or damage caused and/or arising out of the use of the motor vehicle within the meaning of Section 5(b) of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405, the Plaintiff was therefore indemnified from satisfying the Judgment in the primary suit and that the Defendant is legally bound to satisfy the decree. She reiterated that when the matter came up for hearing, the Defendant, who had not filed any pleadings to challenge the Plaintiff’s claim, conceded to prayer (a) of the Amended Plaint and that it follows that the Plaintiff’s claim remains undefended. She then listed and set out the exhibits produced by the Plaintiff in support of each of his claims.

16. Counsel then cited Section 10(1) of the said Act and also the case of Thomas Muthoka & Another v Insurance Company of East Africa Limited [2008] eKLR and submitted that it was held, in that case, that the insurer is under mandatory statutory liability to first pay the full judgment sum to the person(s) entitled to the benefit thereof and thereafter, the insurer may recover due sums so paid to a third party in the terms of the insurance contract

Defendant’s Submissions 17. Counsel for the Defendant agreed that prayer (a) of the Amended Plaint was admitted. She then submitted that the Plaintiff has not proved or adduced any evidence that he is entitled to special damages of Kshs 7,000/= per day allegedly incurred by the Plaintiff towards car hire charges from 24/02/2020, that the Plaintiff did not produce receipts for payment of car hire charges, he only produced and relied on car hire agreements, the law is clear that a claim for special damages must be strictly proved with as much particularity as the circumstances permit. She cited the case of Kenya Women Microfinance Ltd vs Martha Wangari Kamau 2021 eKLR, and contended that a claim for special damages is in the nature of restitution and where proved, it is meant to restore the Claimant to the position he would have been save for the action complained of, the documents the Plaintiff placed before the Court do not show that he had been paying for a car hire. She cited the case of Capital Fish Kenya Limited vs Kenya Power and Lighting Company Ltd 2016, eKLR and submitted that the Plaintiff’s evidence was in general terms without any specificity.

18. Counsel argued further that in order to receive compensation from an insurance company, an insured person must demonstrate to the Court that he indeed had an existing contract (policy) with the insurance company, secondly, such a person must demonstrate that he had an insurable interest in the particular thing that they seek compensation for, during cross-examination, the Plaintiff conceded that he had not shown the Court the certificate or policy document to affirm that he truly had insurable interest on the damages, what the Plaintiff is seeking before this Court in prayer (b), (d) and (e) of his Amended Plaint is not provided for under the insurance policy. On the concept of insurable interest, Counsel cited the case of Lucena vs. Crawford (1806) 2 BOS RNR 269 where, she submitted, it was held that “an insurable interest is essentially the pecuniary or proprietary interest that the insured stands to lose if the risk attaches". She then submitted that there was no evidence in the policy document to demonstrate that the Plaintiff had an insurable interest on the damages prayed for in the Amended Plaint. She also cited the case of Anctol vs Manufacture Life Insurance Company (1899) AC 604 and contended that at the time of filing the suit and hiring the car services, the insured had no insurable interest in the claim for damages to warrant indemnification by the Defendant, and that the Plaintiff breached the principle of good faith in the insurance contract by claiming compensation on damages that he incurred afterwards when he knew that the premium interest period had already lapsed.

19. Counsel further cited the case of Madison Insurance Company Limited vs Solomon Kinara t/a Kisii Physiotherapy Clinic [2004] eKLR and argued that the purpose of an insurance contract and the subsequent compensation is not meant to give an insured person unnecessary benefit or profit of sorts from his loss, the Court should only compensate the Plaintiff the decretal sum and not plus damages as it will exceed the insurable interest for which he had paid premium under the insurance contract, and that the Court should not grant all the prayers sought by the Plaintiff as some do not fall under the insurable interest recognized under the insurance contract.

20. It was Counsel’s further contention that costs follow the suit and that interest is discretionary, the Court should therefore exercise its discretion judiciously, the Plaintiff did not specifically plead the manner in which the Defendant breached its contractual terms, the Defendant was never informed of the primary suit and as such, it could not be faulted for not acting.

21. In conclusion, Counsel added that, as a legal principle, special damages ought to accrue interest from the date of filing suit, the Court should be guided not only by the conduct of the parties in actual litigation, but also in other matters including likely consequences of the order for costs for issues not proved or not correctly plead by the Plaintiff, it is not every issue whose success will bring a right to costs, in case of total success, and that the successful party may be deprived the costs of a separate issue.

1st Interested Party’s Submissions 22. On his part, Counsel for the 1st Interested Party submitted that the Plaintiff did not take any step to reach out to the Defendant to settle the decree until after his motor vehicle was attached, the 1st interested Party did not invite herself into the matter, she was brought in by the Plaintiff, in giving the directions that the decree-holder be joined in this suit, the Court was alive to the fact that her inclusion was necessary as it will afford her the right to be heard as she stands to be affected by the final orders that shall be given in this case.

23. Counsel cited the Evidence Act, Cap. 80 and submitted that the burden of proof in this case, lies squarely on the Plaintiff. He cited Section 107 and 108 thereof and submitted that to prove the insurance, the Plaintiff relied on the police abstract only, and that a police abstract is not conclusive proof of evidence of the insurance contract. He cited the case of Dr. James Ng’ang’a Mungai vs United Insurance Co. Ltd No. 1860 of 2000 and also M/s. Fidelity Shield Insurance Company Limited vs. Peter Mbugua Kimotho (2020) eKLR and argued that the Plaintiff ought to have produced the duplicate certificate of insurance bearing his name, receipts for payment of the required premium and the policy document. He dismissed the Plaintiff’s allegations that the Defendant was notified of the accident prior to the institution of the primary suit hence the reason it instructed the firm of E.J. Kemei & Co. Advocates to defend the suit in on its behalf. He dismissed this submission because the Plaintiff failed to produce the claim form duly filled by him, the receipt in payment of policy excess fee or instructions letter from the Defendant to the firm of E.J Kemei & Co. to defend the suit.

24. On the Plaintiff’s allegation that upon attachment of the motor vehicle, he visited the Defendant which issued him with the letter dated 26/02/2020 undertaking to satisfy the decree and a cheque for Kshs,150,000/- in favour of the firm of the Advocates for the 1st Interested Party in partial satisfaction of the decretal sum, Counsel urged the Court to observe that the letter is dated 26/02/2019 and not 26/2/2020 as alleged, that the said letter is written purely on a “without prejudice ” basis and therefore is not binding and/or a serious undertaking to satisfy the decree, the Plaintiff has not proved that the said cheque was paid or honoured, the Plaintiff also has failed to prove that he delivered the cheque and letter to the Advocates. He cited the case of Richard Makau Ngombi vs Cannon Assurance Co. Ltd, No. 419 of 2014 and alluded that no nexus has been proved between the insurer and the insured.

25. Counsel then cited the Black’s Law Dictionary on the definition of a contract, and submitted that a Policy of Insurance is a document containing a “contract” between the insurer and the insured and that an insurable interest has the connotation of a pecuniary or proprietary interest. He cited the case of Halford vs Kymer (1930) 10 B.C. 724 and added that courts have outlined the determinants of an insurance interest to be a direct relationship between the insured and the subject matter, the relationship must have arisen out of a legal or equitable right or interest in the subject matter, the interest bears any loss or liability arising in the event the loss or event attaches and that the insured’s right or interest in the subject matter must be capable of pecuniary estimation or quantification. He contended that the Plaintiff alleges to be a policy holder with the Defendant which if true, it follows that the Plaintiff had a contract with the Defendant, the 1st Interested Party is not party to the obligations created between them, and is not privy to the contract between the Plaintiff and the Defendant, the 1st Interested Party did not participate in crafting the obligations between the two, the 1st Interested Party was not a party to the contract hence the same is not binding on it save where the insurer willingly settles/satisfies a decree passed by a competent court.

26. Counsel reiterated that the Plaintiff has failed to prove that he is the holder of the policy, no proof was exhibited linking the Plaintiff to the policy, and that the police abstract produced does not show the name of the policy holder. He cited Section 7 of the Insurance (Motor Vehicle Third Party Risks) Act, Cap. 405 and submitted that without a certificate of insurance, the Court is unable to tell to whom the alleged policy number belongs to.

27. Counsel again referred to the letter dated 26/02/2019 and submitted that to date, no payment has been made to the Interested Party. He added that the Plaintiff has brought a claim for car hire and produced hire agreements but did not produce banking slips, Mpesa statement or receipts to prove that indeed he paid for the same, the Court will wonder how the Plaintiff could have hired a car for use whereas he had other cars, the Plaintiff annexed a proclamation to his Supporting Affidavit to the Application dated 6/07/2022 acknowledging that his motor vehicles had been proclaimed to wit motor vehicle registration number KCM 105Y Toyota Land Cruiser, KBZ 434T Toyota Surf and KCJ 003K Toyota V8, the question that begs an answer is why could he could not have used these other vehicles that were not attached and decided to go for hire? According to Counsel, this leads to the logical conclusion that the Plaintiff is not truthful/honest and is only out to make a kill or unjust enrichment.

Analysis and Determination 28. As aforesaid, before the hearing, the Defendant conceded to prayer (a) of the Amended Plaint. The prayer sought for a declaration that the Defendant is legally bound/liable to satisfy the decretal sum plus costs as apportioned by the trial Court in Eldoret CMCC No. 1215/2017 as well as all other incidental costs including Auctioneer’s charges. Accordingly, Judgment against the Defendant was entered for this prayer on 11/05/2021.

29. In his Submissions however, Counsel for the 1st Interested Party nevertheless dwelt much on this prayer (a). He argued that the Plaintiff relied on the police abstract only yet a police abstract is not conclusive proof of evidence of the insurance contract, that the Plaintiff ought to have produced the duplicate certificate of insurance bearing his name, receipts for payment of the premium and the policy document, that the Plaintiff failed to produce the claim form to prove that he reported the occurrence of the accident to the Defendant, that the Plaintiff did not produce a receipt to prove payment of policy excess fee, and that although the Plaintiff alleged that the Defendant appointed the firm of E. J. Kemei & Co. Advocates to defend the suit before the Magistrate’s Court, he did not produce the instructions letter from the Defendant to the Advocates. He submitted further that the letter is dated 26/02/2019 and not 26/2/2020 as alleged, that the letter is written purely on a “without prejudice” basis and therefore it is not binding and/or a serious undertaking to satisfy the decree, that the Plaintiff has not proved that the said cheque was paid or honoured, and that the Plaintiff also has failed to prove that he delivered the cheque and letter to the Advocates.

30. Since clearly Counsel argued all the above matters with the aim of countering prayer (a) aforesaid, such arguments were futile and in vain since by the Defendant conceding to prayer (a) and Judgment having already been entered thereon, the issue of whether the Plaintiff had proved that he was insured by the Defendant and whether therefore, the Defendant is legally bound/liable to satisfy the decretal sum, was long overtaken by events and had already been settled in favour of the Plaintiff. It is possible that Counsel did not recall that Judgment had already been entered for prayer (a).

31. In the circumstances, upon carefully considering the record, including the Affidavits, Submissions and authorities presented, in my view, the issues that now remain for determination are the following:i.Whether the Defendant should refund to the Plaintiff the sum of Kshs 300,000/- alleged to be the amount paid to the Auctioneer for release of the motor vehicle.ii.Whether the Plaintiff is entitled to the amount claimed to have been incurred towards car hire charges after the motor vehicle was impoundedii.Whether the attachment of the Plaintiff’s motor vehicle should be reversed.

32. I now proceed to determine the said issues.i.Whether the Defendant should refund to the Plaintiff the sum of Kshs 300,000/- alleged to be the amount paid to the Auctioneer for release of the motor vehicle

33. This issue is in respect to the second prayer in the Amended Plaint, prayer (bb). As already stated, at the time that the Plaintiff filed this suit, he also sought and obtained interim orders of stay pending hearing and determination of the suit and release of the motor vehicle on condition that he deposits the original log-book in Court and settles the Auctioneer’s charges. He alleges that he complied with these orders, paid the said sum of Kshs 300,000/- and secured release of the vehicle. He now therefore seeks refund thereof.

34. Prayer (a) aforesaid in respect to which Judgment was entered sought for a declaration that the Defendant is legally bound/liable to satisfy the decretal sum plus costs as apportioned by the Magistrate’s Court “as well as all other incidental costs including Auctioneer’s charges”. Judgment having been entered in prayer (a), it follows that on prayer (b) which seeks refund of the sum of Kshs 300,000/- allegedly paid as Auctioneer’s charges, liability has already been settled and the only burden that the Defendant now still bears is to prove that indeed he paid that amount.

35. Indeed, Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act provides as follows;“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.”

36. It is clear from the foregoing that the Judgment which an insurer is obligated to settle under the Act includes any sum payable under the Judgment or incidental thereto, including any amount payable in respect of costs and in respect of interest thereon. By implication, and applying the ejusdem generis rule, such charges would logically include auctioneers’ charges arising from execution founded on that Judgment.

37. From the proceedings and the Submissions, there is indication that the Plaintiff produced as Exhibit No. 10, a copy of a Receipt for Kshs 300,000/- paid to the 2nd Interested Party Auctioneer, as Exhibit No. 11, a copy of a letter dated 18/08/2020 confirming release of the motor vehicle and as Exhibit No. 12, a release order dated 18/08/2020 from the Auctioneers. I have however not managed to find the said three exhibits in the Court file. I do not wish to speculate as to why the same do not seem to be in the file despite having been clearly noted by the Judge to have been so produced. Be that as it may, since the record indicates that the same were produced, I will accept that they were so produced.

38. The upshot of the foregoing is that I find that the Plaintiff has proved that he paid the said amount of Kshs 300,000/- to the Auctioneers upon which the motor vehicle was released to him. Accordingly, I also enter Judgment for this prayer (bb) of the Amended Plaint.ii.Whether the Plaintiff is entitled to the amount claimed to have been incurred towards car hire charges after the motor vehicle was impounded

39. This issue is in respect to prayer (b) of the Amended Plaint in which the Plaintiff is claiming refund or compensation, as special damages, of Kshs 7,000/- per day from 24/02/2020 when the motor vehicle was impounded until 18/08/2020 when it was released, being alleged expenses incurred in hiring an alternative motor vehicle for the Plaintiff’s use during the said period.

40. In opposing the prayer, Counsel for the Defendant argued that the Plaintiff has not demonstrated that he is entitled to the prayer since he did not produce any receipts to prove payments thereof, that he only produced and relied on car hire agreements, that a claim for special damages must be strictly proved with as much particularity as the circumstances permit. On his part, Counsel for the 1st Interested Party submitted that the Plaintiff has brought the claim for car hire expenses and produced car hire agreements but did not produce banking slips, Mpesa statement or receipts to prove that indeed he paid for the same.

41. On this point, it is trite law that special damages must be both pleaded and proved before they can be awarded. In the case of Hahn v. Singh, Civil Appeal No. 42 Of 1983 [1985] KLR 716, the Court of Appeal held as follows:“Special damages must not only be specifically claimed (pleaded) but also strictly proved …. for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and nature of the acts themselves.”

42. Similarly, in the case of Richard Okuku Oloo vs South Nyanza Sugar Co. Ltd [2013] eKLR the Court of Appeal again held as follows;“We agree with the learned judge that a claim for special damages must indeed be specifically pleaded and proved with a degree of certainty and particularity but we must add that, that degree and certainty must necessarily depend on the circumstances and the nature of the act complained of.In the Jivanji case (supra), a decision of this court differently constituted, it was held that the degree of certainty and particularity depends on the nature of the acts complained of. ……………………………………………..……………………………“It has time and again been held by the courts in Kenya that a claim for each particular type of special damage must be pleaded. In Ouma v Nairobi City Council [1976] KR 304 after stressing the need for a Plaintiff in order to succeed on a claim for specified damages. Chesoni J quoted in support the following passage form Bowen LJ’s judgment at 532-533 in Ratcliffe v Evans [1892] QB 524, an English leading case of pleading and proof of damage.“The character of the acts themselves which produce the damage, and the circumstances under which those acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry.”

43. In this instant case, the Plaintiff pleaded special damages of Kshs 7,000/- per day incurred towards car hire charges from 24/02/2020 to 18/08/2020. In support of the claim, he only produced car hire agreements. The agreements indicate the rates at which the vehicle would be hired but there is no evidence to demonstrate that these sums were in fact paid. Neither the Plaintiff nor PW2, the owner of the vehicle hired, produce any documentation to prove that the charges were paid.

44. The Agreements indicate that PW2, the hirer, operates as “KIMS Cabs for Hire”. This description indicates that the hirer is actively engaged in the business of car hire and was not therefore just for instance, a friend, neighbour or relative who simply lent his extra car to the Plaintiff for use at a fee. In the circumstances, I would expect the hirer to possess formal receipt books from which he regularly issues receipts to clients whenever they hired his vehicles. I would also expect him to be paying tax to the relevant authorities and also that his books of accounts are regularly audited and that in doing so, he would require to ascertain his turnover and profits. How will he manage to meet all these requirements if he does not issue or keep receipts for record purposes? It is not enough that PW2, the hirer, attended Court and gave evidence confirming that indeed he was paid. He ought to have brought with him receipts or any other acceptable evidence of payment. On his part, the Plaintiff could also have furnished some evidence of payment, be it bank or Mpesa statements. The Plaintiff is an internationally acclaimed athlete who is no doubt well-exposed and ought to have been aware of this requirement. The Plaintiff did not allege that he paid in cash and that therefore he would not possess any documentary evidence of payment. The Court was not therefore told what was so difficult in availing evidence of payment.

45. The production of the agreements, which are essentially contracts, is not sufficient proof. In the absence of proof of payment, the car hire agreements provide no probative value in proving that the Plaintiff indeed incurred the expenses. Awarding the prayer in the absence of proof of payment is likely to set a dangerous precedent and create a conducive environment for the possibility of collusion by parties in respect of claims for car hire services. In the premises, I find that the claim for special damages for car hire has not been proved on a balance of probabilities.

46. Further, in opposing the prayer, Counsel for the Defendant submitted that since the policy document was not produced, there is no evidence to demonstrate that the Plaintiff had an insurable interest on the damages prayed for in the Amended Plaint and that the Plaintiff was claiming compensation on damages that he incurred after the premium interest period had already lapsed. I would not hold the non-production of the policy against the Plaintiff since the Plaintiff’s claim for damages is made for a consequential relief for breach by the Defendant of the contract of insurance. Whether or not such consequential damages would be awarded may not therefore necessarily depend on whether such damages are provided under the insurance contract. Production of the policy document would therefore not necessarily turn on much.

47. There is however the concern raised by Counsel for the 1st Interested Party on why and how the Plaintiff moved to hire a car for use whereas he owned 3 other motor vehicles. It is true that the Plaintiff produced a copy of the proclamation form prepared by the Auctioneers. Among the properties proclaimed were 3 other vehicles and the Plaintiff admitted that indeed all these 3 other vehicles belonged to him. The Plaintiff did not offer any explanation as to why he could not have used these other vehicles during the time that the one in issue herein was impounded. He did not allege that these other 3 vehicles were also impounded upon expiry of the proclamation notice. Was the Plaintiff under a duty to mitigate his losses and did he take any steps to do so?

48. It is an established principle of law that every litigant making a claim for damages is obligated to show that when confronted by the potential loss and damage, he took positive steps, within his ability, to mitigate such losses (see Judgment of P. J. Otieno J, in Power Solutions Limited v CMA CGM Kenya Limited & 2 others [2020] eKLR).

49. It is true that the Defendant did not file a Defence and did not also call any witness to controvert the Plaintiff’s evidence. However, this does not mean that the Plaintiff was absolved of the duty to prove his case simply because the Defendant did not call witnesses. In the case of Charterhouse Bank Ltd (Under Statutory Management) v Frank N. Kamau, NRB CA Civil Appeal No. 87 of 2014 [2016] eKLR, the Court of Appeal stated as follows:“The Supreme Court of Uganda addressed the same issue in Departed Asians Property Custodian Board v Issa Bukenya t/a New Mars Ware House, CA No 26 of 1992 where the proceedings were ex parte and the trial court merely stated as follows:“The evidence adduced has not been controverted. I have perused the exhibits with particular care considering the fact that proceedings have been ex parte. In the circumstances I have no alternative but to enter judgment for the Plaintiff as prayed ...”Speaking for the Court, Platt, JSC stated thus:“I should, however, draw attention to the duty of the Court when conducting ex-parte proceedings. If allegations are made in the plaint so that the facts alleged support the prayers asked for, and when the prayers called for are legally justified, then all that is necessary is for the trial Court to hear evidence which proves the facts and hear submissions of law that the remedies are justified... It must be understood that the evidence led is such, that without contradiction by the Defendant, it is sufficient to prove the claim. It is not necessary that the facts alleged should be queried, but the facts alleged must be full and accurate enough to support the plaint. A Judge may assist the Plaintiff in pointing out that the evidence so far adduced is not sufficiently full and accurate, and that other evidence, documentary or oral, may be needed to support the claim. What cannot be done is that remedies are granted as prayed, which are not supported by the pleadings... In this case the learned Judge should have observed that the pleadings did not support the remedies wanted...” (Emphasis added).In the appeal before us, the evidence by the appellant’s witness was subjected to cross-examination and, with respect, we agree with the respondent that taken as a whole, it did not prove the case of breach of contract pleaded by the appellant on a balance of probabilities. If anything, the evidence on record shows that in its dealings with the respondent, the appellant acted in a very casual and cavalier manner.”

50. In respect to the same duty to mitigate damages, in the case of African Highland Produce Limited v John Kisorio [2001] eKLR, the Court of Appeal held as follows:“It is manifestly clear that the plaintiff did not take reasonable steps to mitigate the loss which he sustained consequent upon the accident. Being a man of considerable means, he could have within 21 days, repaired his BMW car instead of incurring unnecessarily heavy hire charges. He did not act prudently. A prudent man would certainly not have acted in the way the plaintiff did. He acted, in our view, unreasonably”.

51. In the circumstances, I find that, like in all other cases of losses, the Plaintiff had the obligation to mitigate his damages and that in the absence of any explanation on why he could not make use of the 3 other motor vehicles at his disposal, he failed to discharge this obligation (see also the Court of Appeal case of Timsales Ltd v Up & Down Saw Mills (Kenya) Ltd [1985] eKLR)ii.Whether the attachment of the Plaintiff’s motor vehicle should be reversed

52. This case reflects a very sad and disturbing situation in the insurance industry that keeps playing out in Kenya every other time without any meaningful intervention by the relevant authorities. In this matter, the Plaintiff is a policy holder with the Defendant insurance company. The policy is mandatory and no motor vehicle owner may use a vehicle on any public road in Kenya without such insurance cover. Under Section 10(2) of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405, liability covered by such insurance policy is recoverable from the insurer by the person entitled to the benefit of the judgment against the insured. Either due to insolvency or mere unwillingness, the Defendant has to date not met its obligations under the aforesaid section with the result that the 1st Interested Party, as a lawful decree holder, has proceeded against the Plaintiff personally by way of execution of the decree. What such execution means is that the Plaintiff has technically lost the protection accorded to him by both the Insurance Act Cap 487 and the Insurance (Motor Vehicles Third Party Risks) Act. If the reason is insolvency, then one may have a valid argument that the relevant authorities are guilty of failure to effectively supervise insurance companies in Kenya and also of failing to notify the public of the financial status of such companies. Although the authorities have in some cases moved to save the situation by appointing statutory managers, in most cases, such appointments come too late in the day after Kenyans have suffered irreparable damage and has serve little purpose.

53. Back to the merits of this case, on the issue whether a decree-holder can be barred from executing his lawful decree against a Judgment-debtor simply because the Judgment-debtor’s insurer has failed to satisfy the decree on behalf of the Judgment-debtor, the Kenyan Courts appear to be in unison that such decree-holder cannot be so barred. For instance, in Jenipher Anyango Oloo v Buzeki Enterprises Limited & another [2021] eKLR, Aburili J, held as follows:34. The 1st respondent was thus justified in seeking a declaratory judgment against the 2nd respondent, its alleged insurer. I also note that the judgment delivered in the Siaya PMCC 75 of 2016 has not been challenged by way of an appeal or review. However, whereas an insured may well be entitled to file for a declaration that its insurer is obliged to settle decree against the insured under the insurance policy, that statutory right of action does not bar a person who is injured from executing the decree issued in its favour against the insured directly as was held in the case of Dolk Limited (supra).35. In the circumstances, it is my view that the trial court erred in staying execution of decree issued in favour of the appellant against the 1st Respondent insured, pending the hearing and determination of the declaratory suit. This is because the application dated 20. 12. 2018 was firstly, res judicata the application dated 24. 9.2018 filed by the 1st respondent in Siaya PMCC 75 of 2016 and secondly, because the filing of a declaratory suit is no bar to execution of decree by a genuine decree holder.”

54. In the case of Dolk Limited v Invesco Assurance Company Limited & 5 Others [2018] eKLR, Odunga J (as he then was), held as follows:12. As regards Order 22 of the Civil Procedure Rules, the closest provision is rule 25 thereof which provides as follows:Where a suit is pending in any court against the holder of a decree of such court in the name of the person against whom the decree was passed, the court may, on such terms as to security or otherwise, as it thinks fit, stay execution of the decree until the pending suit has been decided13. What this provision means is that A files a suit against B and obtains a judgement therein. However, B files a separate suit against A. B is in those circumstances entitled to seek that pending the hearing and determination of the subsequent suit, the execution in the earlier suit be stayed. That is not the scenario in the instant matter. The applicant herein is not seeking judgement against the interested party. It is seeking judgement against its insurer, the Defendant. There is no judgement which the insurer has obtained against the applicant which is sought to be stayed in these proceedings. It follows that the said provision is inapplicable.14. As regards section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act it is clear that the section does not provide for stay of execution. The said section provides that: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.15. I however disagree with the interested parties that this is not a suit for subrogation. Subrogation applies in situations where, by virtue of being an insurer, the insurance company is entitled to be placed in the position of the insured and to succeed to all their rights and remedies against third parties in respect to the subject matter of insurance. See General Principles of Insurance Law by E R Hardy Ivamy at page 415. Therefore, in the earlier suits, the Defendant Insurance Company by defending the Plaintiff herein, the insured, stepped into shoes of the insured under subrogation. See Kenya Bus Services vs. Susan Muteti Civil Appeal No. 15 of 1992 [1995-1998] 1 EA 103. However as was held in Opiss vs. Lion of Kenya Insurance Company Civil Appeal No. 185 of 1991:“the right to subrogate does not create a privity of contract between the insurance company and the third party; it only gives the insurance company the right to take over the rights and privileges of the insured and therefore must be brought in the name of the insured.”……………………………………………………………………….17. It was however held in Indemnity Insurance Co. of North America and Another vs. Kenya Airfreight Handling Ltd and Another [2004] 1 EA 52 that:“Under insurance law principles, for an insurer to be subrogated to the rights of the insured, the latter must have been indemnified by the former; only then can the insurer step into the shoes of the insured.”18. It follows that this suit does not meet the test of a subrogation suit. However, whereas an insured may well be entitled to seek a declaration that its insurer is entitled to settle the claims covered under the insurance policy, that statutory right of action does not bar a person who is injured from executing the decree issued in its favour against the insured directly.19. It follows that the instant application is unmerited. Consequently, the same is dismissed.

55. Similarly, Gikonyo J, in the case Muthuri Ntara & Another v Francis Mworia Igweta [2016] eKLR held as follows:1. Whether the Appellants were entitled to protection from execution pursuant to orders issued by the High Court in HCCC NO. 465 of 2011 (OS) at Milimani Law Courts.I reckon that the Respondent is neither a policy holder nor a creditor of Blue shield Insurance Company. He is merely a decree-holder against the Appellants jointly and severally. Therefore, a moratorium issued to protect the Insurance Company whose fortunes have now dwindled; leading to statutory management does not operate as stay of execution of decrees against the insured. A moratorium is declared by the Statutory Manager under Section 67 c (10) of the Insurance Act and it protects the insurer against claims by the policyholders and creditors of the insurer. Accordingly, mere declaration of a moratorium does not mean an automatic stay of execution against the insured; the insured must prove before the trial court upon lawful grounds that a stay of execution is merited.……………………………………………………………………..(9)It should be appreciated that the Respondent’s suit and decree is not a declaratory suit or decree against the insurer. It is a decree against the tortfeasor. Based on these brutal echoes of the law, the appeal would still fail. For all the above reasons this Appeal is accordingly dismissed with costs to the Respondents. It is so ordered.”

56. On her part, L. Njuguna J, in the case of In the matter of Blue Shield Limited (Under Statutory Management) 2017 eKLR, though dealing with an issue touching on the effect of a moratorium placed on an insurance company, made findings relevant herein, as follows:“The wording of the section is to the effect that a statutory manager can only, by law, declare a moratorium on payment to its policyholders and creditors. Therefore, this ruling will seek to determine whether the 1st to 22nd Proposed Interested Parties fall within “policyholders and creditors” or whether the moratorium extends to them. A moratorium declared under section 67 C (10) of the Insurance Act is meant to protect the insurer in this case against its policy holders and its creditors and not the policy holders against proceedings from third parties.This issue was dealt in two other similar applications against the respondent herein by Justices Waweru and Justice Odunga. In declaring the moratorium issued herein ultra vires, Justice Waweru held that,“it is common ground that the 1st interested party is not a policy holder of Blue Shield. And except to the extent that she may become a judgment-creditor under section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 following a decree in a declaratory suit, she is not a creditor of Blue Shield. Her suit is against a tortfeasor in negligence. She has no direct connection, as policy holder or creditor to Blue Shield. The moratorium declared by the Statutory Manager, is so far as it extends to the 1st interested party’s suit, was clearly ultra vires subsection (10) of section 67C of Cap 487. ”Justice Odunga found the orders made on 28th October, 2011 in so far as it affected the 1st Interested Party to have been made without jurisdiction and the same to be unlawful. He further held that,“A moratorium in my view is meant to protect the insurer against policy holders and creditors. it is not meant to protect policy holders and shield them from meeting their liabilities which they may be obliged to perform for third parties whether in contract, tort or under a statute … Accordingly, just like my learned Brother Justice Waweru, I find that the applicant herein is neither a policy holder nor a creditor of the insurer.”In the matter of Concord Insurance Company (2014) eKLR and George Ngure Kariuki Vs. Charles Osoro Makone & Anor (2014) eKLR the courts refused to grant orders extending moratorium to third parties.…………………………………………………………..The Respondent submitted that the policyholders had a legitimate expectation that in the event of occurrence of an accident relating to the risks their motor vehicles were covered for, it would be the responsibility of the insurer to settle any claims arising therefrom. The Respondent therefore sought to rely on the doctrine of legitimate expectation.I have considered the submissions by the opposing parties and it is clear that there is no dispute that the said moratorium was issued under section 67C subsection 10. The section ONLY seeks to protect the insurers against claims from its policyholders and creditors thereby excluding claims against the policy holders from third parties. In fact, there is no privity of contracts between the insurer and the third parties for a moratorium to extend to the third parties. If insurers were allowed to issue moratoriums to third parties then it is the third parties who would be prejudiced as they would not be in a position to enforce claims against negligent policyholders. ……………...”

57. In the same breath, Mbogholi-Msagha J, in the case of Jane Wanjiru Mwangi v Explico Insurance Company Limited: Duncan Odhiambo Owino (Interested Party/Respondent [2021] eKLR stated as follows:8. It is apparent the applicant is seeking a declaratory judgment against the defendant, her alleged insurer, and not against the interested party. It is also apparent that the judgment delivered in the primary suit has not been challenged by way of an appeal or review.9. That notwithstanding, I find that while the applicant is entitled to file a declaratory suit against the defendant pursuant to the provisions of the Insurance (Motor Vehicles Third Party Risks) Act, in a bid to have the insurer settle any pending claims arising out of an insurance policy entered into between an insurer and its insured, this does not necessarily bar a decree holder from pursuing the decretal sum from an insured person, such as the applicant in this instance. This position is supported by the case of Peter Kilonzo Kioko v Monarch Insurance Co. Ltd; Kisakwa Ndolo King`oku (Sued as Legal Representative of the Estate of Mwania Kisakwa - Deceased (Interested Party) [2021] eKLR in which the court determined thus:“The applicant herein is not seeking judgment against the interested party. It is seeking judgment against its insurer, the Defendant. There is no judgment which the insurer has obtained against the applicant which is sought to be stayed in these proceedings … However, whereas an insured may well be entitled to seek a declaration that its insurer is entitled to settle the claims covered under the insurance policy, that statutory right of action does not bar a person who is injured from executing the decree issued in his favour against the insured directly.”10. I am convinced that even after the applicant herein satisfies the decretal sum in the primary suit, she can still pursue the present declaratory suit against the defendant and seek compensation therefrom. In my view, it would not be in the interest of justice to hinder the respondent from realizing the fruits of his judgment.11. The upshot therefore is that I find no merit in the instant Motion and the same is hereby dismissed with costs to the interested party/respondent.”

58. There is also the case of James Ng’ang’a Njenga V Commissioner of Insurance & 3 Others [2011] eKLR, in which W. Karanja J, held as follows:“As a starting point in this aspect, it is important to note that the root of this petition is a lawfully obtained court decree by the 3rd party against the petitioner. In pursuing settlement or execution of the said decree, the 3rd party was actually exercising her right. She was not seeking to unlawfully dispossess the petitioner of his property. Just like the petitioner, she too has fundamental and inherent rights under the Constitution which need to be protected and respected including her right to the protection of the law under S.70(c) of the now repealed Constitution. Indeed, the proviso to that article provides categorically that the said rights are“subject to such limitations designed to ensure that the enjoyment of those rights and freedoms by any individual does not prejudice the rights and freedoms of others or the public interest”By trying to invoke the provisions of Section 70 of the constitution in this matter to avoid settlement of a court decree, the petitioner is actually seeking to trample on the same rights belonging to the 3rd party. As succinctly expressed by Justice Nyamu in Kenya Bus Services Ltd. And 2 others versus A.G. & 2 others (2005) EKLR.“Fundamental rights cannot be enjoyed in isolation and by a selected few while they trample on others or tread upon their rights. The enjoyment of fundamental rights and freedoms contemplates mutuality and an atmosphere of respect for law and order including the rights of others and the upholding of the public interest rights and freedoms can only thrive alongside those of others and the society at large …………… The function of the court when faced with the task of establishing or determining the rights on the one hand and determining the limitation and restrictions on the other hand is to do a balancing act. In this balancing act are the principle values, objectives to be attained, a sense of proportionality and public interest and public policy considerations just to mention a few. All these must be put on the scales with the fundamental rights on the left and the limitation on the right”.Would this court therefore allow the petitioner’s rights to trump those of the 3rd party? Absolutely not. Both of them are protected by the same law and Constitution and neither of them should be accorded a more superior place than the other. They are both entitled to equal protection of the law.It is instructive to note that the 3rd party herein has a judgment and decree which has not been challenged. It therefore forms a judgment in rem and she is legally at liberty to execute or enforce it. Execution of a valid court decree cannot amount to a violation of the judgment /debtor’s property rights. Section 75(6) on which the petitioner also relies expressly states that;“nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of subsection (1) or (2) while; (iv) In the execution of judgments or orders of a court in proceedings for the determination of civil rights or obligations”.Execution of a decree cannot be a violation of the judgment/debtor’s rights to property. It is not unconstitutional.It is my considered finding therefore that none of the constitutional rights of the petitioner have been infringed by the state – (represented here by 3rd Respondent).As stated above, the 3rd party’s act of seeking execution as against the petitioner is lawful and strictly within her rights under the Constitution. ……………..”

59. As aforesaid, the situation is a sad one in that innocent holders of insurance policies who have been religiously paying insurance premiums and have all along been under the impression that they were fully cushioned from execution of decrees, suddenly find themselves at the mercy of Auctioneers due to the insolvency of insurance companies, more often than not, as a result of mismanagement, yet the concerned authorities simply “fold their hands and look the other way” unbothered. Unfortunately for such policy-holders/judgment-debtors, the decree-holders, too, have a right to enforce their Judgments and they cannot be punished for mistakes of others by being barred from executing the decrees. This sad state of affairs was observed way back in the year 2007 by Angawa J in the case of Kensilver Express Ltd & 3 Others V Commissioner of Insurance & 4 others [2007] eKLR in which she made the following observations:95. The Applicant/petitioner have done everything correct according to the law. They have brought Insurance premiums. They entered into contracts with the insurer. The Commissioner of Insurance, over five years after being aware the Insurance Company was at a brink of collapse continued issuing a license to continue business. I believe the clause that was deleted in 1996 stating that once an Insurance Company is under Statutory Management it should not accept any new premiums should be revived.96. On the other hand, you have the victims of accident who have been rightly or otherwise awarded their compensation and cannot access their fruits of judgement because the insurer is unable to pay. What do they do? Should they proceed to directly execute against the defendants who are not at fault? The original plaintiffs responded to the advertisement in the press and were in court to express their anxiety after being injured and loosing their loved ones through a traffic accident and the difficulties they have been put through as to how they may access their compensation.97. I wish to distinguish this matter from that of Stallion Insurance and Lakestar Insurance. I do not have their details save the comments made by the Commissioner of Insurance. I believe in this former Insurance Company above a moratorium and or Statutory Manager was swiftly appointed. The Commissioner moved with speed and declared a moratorium through the Statutory Manager and thereafter the closure of the said Insurance Company. Yes, the reputation of the Insurance Company is at stake but a reputation has to be earned. It does not come on a silver platter. Where action is taken immediately and due process is followed, the constitution provision may not be available to the insurer.”

60. I sympathise with the Plaintiff but in view of the foregoing, prayer (c) of the Amended Plaint cannot be granted.

Final Orders 61. In the end, I make the following orders;i.Judgment is entered in favour of the Plaintiff against the Defendant in the following terms:a.The declaration sought under Prayer (a) of the Amended Plaint dated 18/09/2020 is granted as prayed.b.Prayer (aa) of the said Amended Plaint dated 18/09/2020 seeking a refund of Kshs 300,000/- being auctioneer’s fees incurred by the Plaintiff is also awarded, with interest from 18/08/2020, the date of payment.ii.Prayer (b) and (c) of the said Amended Plaint are dismissed.iii.The Plaintiff is awarded costs but whose computation shall be limited to only the prayers awarded.iv.The Defendant shall bear the costs of the 1st Interested Party.

DELIVERED, DATED AND SIGNED AT ELDORET THIS 1ST DAY OF DECEMBER 2023……………..……..WANANDA J.R. ANUROJUDGE