https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11547

***REPUBLIC OF KENYA*** ***IN THE HIGH COURT OF KENYA AT THIKA*** ***THIKA LAW COURTS*** ***CIVIL APPEAL NO. E293 OF 2025*** ***MADISON GENERAL INSURANCE KENYA LIMITED…. APPELLANT*** ***-VERSUS-*** ***MERCY NAFULA WAFULA………..………..……………..RESPONDENT*** ***(Being an appeal from the judgment of Honourable Yusuf Barasa Mukhula (P.M) delivered on 7/8/2025 in Thika CMCC NO. E047 of 2023)*** **BETWEEN** **MERCY NAFULA WAFULA………………...........…………………………PLAINTIFF** **-VERSUS-** **MADISON GENERAL INSURANCE KENYA LIMITED…………….DEFENDANT** **JUDGMENT** **Introduction** 1. The Respondent filed a suit against the Appellant in ***CMCC E047 of 2023*** seeking a declaration that the Appellant was bound to satisfy the judgement *in* ***Thika CMCC No.761 of 2019 Mercy Nafula Wafula (suing as the next friend of Miriam Naliaka Nafula) vs. Samuel Ndegwa Kairu & John Njuguna Njoroge*** and that judgement be entered in her favour as against the Appellant as per the judgement delivered in the said Civil Suit No. ***Thika CMCC No.761 of 2019***. 1. Its case was that the Appellant herein was the insurer of the Defendant’s motor vehicle registration number KCH 410F, that was involved in the accident that was the subject matter in the primary suit ***Thika CMCC No.761 of 2019***, and was obligated to satisfy the Judgment of the court. 2. Upon conclusion of the hearing, the court found that indeed the Appellant was liable to satisfy the Judgment of the trial court and entered Judgment as was sought in the declaratory suit. 3. Dissatisfied by the said finding, the Appellant has filed the present Appeal seeking to overturn the orders of the trial court, that it was obligated to satisfy the decretal amount in the suit. **Trial Court Evidence** 1. During the trial, the Respondent testified that the Appellant was the insurer of motor vehicle registration number KCH 410F (the suit vehicle) owned by Samuel Ndegwa Kairu and that she instituted the suit ***CMCC No.761 of 2019*** but the Appellant refused to indemnify the insured. 2. On the other hand, the Appellant’s legal officer testified that the Appellant’s client Morris Chui Kangethe obtained a motor vehicle insurance policy cover for the suit vehicle; that the suit vehicle was involved in an accident on 11/8/2019 and upon carrying out investigations they discovered that on 12/11/2018 the said Morris Kangethe had sold the subject vehicle to Samuel Ndegwa Kairu and that a transfer had already taken place therefore the insurance policy was void immediately the vehicle was sold and the Appellant was not liable for any claims in compensation. 3. Upon considering the evidence and submissions on record, the trial court delivered its judgement on 7/8/2025 and found that the Appellant had not provided evidence of the policy contract and proof that the insured had transferred the subject vehicle to a third party without notifying them. The court concluded that the Appellant was liable to settle the decree in ***CMCC No.761 of 2019*** being Kshs.205,750/- plus costs of Kshs.65,493/-. 1. The Appellant being dissatisfied by the said judgement appealed to this court vide a Memorandum of Appeal dated 14/11/2025 and set out the following grounds:- “*1. THAT the learned trial magistrate erred in law and fact in failing to take into account the submissions filed on behalf of the Appellant while considering his judgment.* *2. THAT the learned trial magistrate erred in law and fact by totally disregarding the submissions and evidence of the Appellant thereby arriving at a wrong decision.* *3. THAT the learned trial magistrate erred both in law and in fact and misdirected himself by failing to appreciate that there was a disclaimer suit CMCC No. E053 of 2021 that had exonerated the Appellant from all compensation, indemnity and subrogation arising from the use of motor vehicle registration number KCH 410F as from the 12th of November 2018 thereby arriving at a wrong decision.* *4. THAT the learned trial magistrate erred both in law and in fact and misdirected himself by failing to appreciate that motor vehicle registration number KCH 410F as at the time of the accident had been sold to one Samuel Ndegwa Kairu who did not have any insurance policy with the Appellant thereby arriving at an erroneous decision.* *5. THAT the learned trial magistrate erred both in law and in fact and misdirected himself by failing to appreciate that insurable interest cannot be transferred when a motor vehicle is sold to another party thereby arriving at an erroneous decision.* *6. THAT the learned trial magistrate erred both in law and in fact and misdirected himself by failing to appreciate that there was no policy between the Appellant herein and one Samuel Ndegwa Kairu thereby arriving at a wrong decision.* *7. THAT the learned trial magistrate erred both in law and in fact and misdirected himself by failing to appreciate the guiding legal principles on privity of contracts thereby arriving at a wrong conclusion on special damages.* *8. THAT the learned trial magistrate erred both in law and in fact in finding that the Appellant was liable to settle the decree in CMCC No.761 of 2019 being Kshs.205,750/- plus costs of Kshs.65,493/.*” **Appellant’s Submissions** 1. The Appellant filed written submissions dated 6/5/2026 and submitted that the evidence, including the NTSA records, the defence in Thika ***CMCC No. E053 of 2021*** and the judgment in the disclaimer suit, established that motor vehicle registration number KCH 410F had been sold to Samuel Ndegwa Kairu before the accident. 2. It was argued that there was no insurance policy between the Appellant and Samuel Ndegwa Kairu, and that under section 10 of the Insurance (Motor Vehicles Third Party Risks) Act and the doctrine of privity of contract, the Appellant could not be compelled to indemnify a non-party to the policy. The Appellant further relied on the judgment in Thika ***CMCC No. E053 of 2021***, delivered on 19/3/2024, which exonerated it from all claims arising from the use of the motor vehicle from 12/11/2018. It therefore urged the court to find that the trial court failed to appreciate the evidence and applicable law, and to set aside the judgment with costs. 1. At the time of writing this judgement, the Respondent had not filed submissions in opposition to the appeal despite the court directing her to do so. **Analysis and Determination** 1. This being a first appeal, this court is duty bound to delve into factual details and revisit the facts as presented in the trial court, analyse the same and arrive at its own independent conclusions, but always remembering that, the trial court had the advantage of seeing the witnesses testify. This was appreciated in ***Abok James Odera t/a A.J. Odera & Associates vs John Patrick Machira******& Co. Advocates [2013] eKLR*** where the duty of a first appellate court was summarized as follows***:-*** ***“This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and re-analyse the extracts on the record and then determine whether the conclusions reached by the learned trial judge are to stand or not and give reasons either way.”*** 1. **Further, in *Kenya Ports Authority vs Kuston (Kenya) Limited [2009] 2 EA 212* the Court of Appeal held inter alia that: -** ***“On a first appeal from the High Court, the Court of Appeal*** ***should reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect. Secondly the responsibility of the court is to rule on the evidence on record and not to introduce extraneous matters not dealt with by the parties in the evidence.”*** 1. I have considered the Record of Appeal dated 23/2/2026 together with the submissions filed by the Appellant and the only issue is ***whether the trial court erred in finding the Appellant liable to satisfy the decree in Thika CMCC No. 761 of 2019.*** 2. **Section 10** of the **Insurance (Motor Vehicles Third Party Risks) Act** provides the duty of an insurer to settle a decretal amount 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*.” 1. The provisions of the section are clear that an insurer is under the obligation to satisfy a judgement obtained against an insured provided that a valid policy is in force as at the time of the occurrence of the incident leading to liability. 2. It is therefore important for this court to determine the ownership of the subject vehicle at the time of the accident and whether it was insured by the Appellant herein in order to entitle the Respondent to indemnity. 3. During the trial, the Respondent testified that the subject vehicle was registered in the name of Samuel Ndegwa and that she had sued him and John Njuguna in the primary suit. This is in the proceedings produced on page 66 of the Record of Appeal. 4. The Respondent produced in the trial court a motor vehicle search from NTSA for the subject motor vehicle which indicates that as at 8/10/2019, it was owned by Samuel Ndegwa Kairu. The search certificate is on page 14-15 of the Record of Appeal. 1. The record indicates that the Appellant filed a disclaimer suit in Thika ***CMCC No. E053/2021*** whereby it sued Morris Kangethe Chui, Samuel Ndegwa Kairu and John Njuguna Njoroge. I have perused through the pleadings filed and the judgement in the disclaimer suit as produced in the Record of Appeal on pages 32 to 43. The pleadings indicate that the subject vehicle was sold to Samuel Ndegwa and the court in its judgement found that it had been sold at the time of the accident which was 11/8/2019. 2. During the trial, the Appellant’s witness testified that their client was Morris Chui Kangethe and that he had obtained an insurance policy for the subject vehicle. It was testified that it was later discovered that on or about 12/11/2018 the vehicle was sold to Samuel Ndegwa Kairu which led the Appellant to file a disclaimer suit Thika ***CMCC No. E053/2021***. 3. There was no evidence produced by the Respondent herein in the trial court to contradict the assertion that the vehicle had already been sold at the time of the accident therefore extinguishing the insurance policy. 4. Based on the foregoing, I find that at the time of the accident on 11/8/2019, the subject vehicle was owned by one Samuel Ndegwa Kairu and there was no insurance contract/policy between him and the Appellant herein. 1. In the Court of Appeal case of ***Kenya Women Finance Trust v Bernard Oyugi Jaoko & 2 Others [2018] eKLR***, it was held:- “*In its classical rendering, the doctrine of privity of contract postulates that a contract cannot confer rights or impose obligations on any person other than the parties to the contract. Accordingly, a contract cannot be enforced either by or against a third party*.” 1. In the instant case, the insurance policy was between the Appellant and the previous owner of the vehicle, Morris Kangethe. The vehicle was sold and the Appellant cannot be compelled to compensate and/or indemnify Samuel Ndegwa Kairu who became the new owner of the subject vehicle in any claim brought against him as a result of the accident that occurred on 12/8/2019. 1. I find that the trial court erred in not considering the evidence and submissions of the Appellant and also erred in finding that the Appellant was liable to satisfy the decree in Thika ***CMCC No. 761 of 2019*** in the absence of an insurance policy between the Appellant and the owner of the vehicle. 2. The upshot of the matter is that the appeal is merited. I will allow the same and set aside the judgment of the trial court delivered on the 7th August, 2025 entered on 7th August 2025 with costs to the Appellant. **Judgment** delivered, dated and signed virtually at **Nairobi** this **24th** dayof **July,** 2026. **…………………………..………………** **L. M. WACHIRA** **JUDGE** **In the Presence of:** Leady*s* – Court Assistant Mr. Kamindofor the Appellant. Mr. Otienofor the Respondent.