Maghema & another v The Heritage Insurance Company Limited (Civil Appeal E093 of 2023) [2026] KECA 1574 (KLR) (31 July 2026) (Judgment)

Maghema & another v The Heritage Insurance Company Limited (Civil Appeal E093 of 2023) [2026] KECA 1574 (KLR) (31 July 2026) (Judgment) Neutral citation: [2026] KECA 1574 (KLR) Republic of Kenya In the Court of Appeal at Mombasa Civil Appeal E093 of 2023 AK Murgor, KI Laibuta & GW Ngenye-Macharia, JJA July 31, 2026 Between Peris Wakesho Maghema 1st Appellant Francis Kaluyu Mayanga 2nd Appellant and The Heritage Insurance Company Limited Respondent (Being an appeal from the Judgment and Decree of the High Court of Kenya at Mombasa (Olga Sewe, J.) delivered on 9th June 2022inHCCA No. 250 of 2019) Judgment 1.This is a second appeal, which arises from the Judgment of the High Court at Mombasa (Olga Sewe, J.) delivered on 9th June 2022. The initial proceedings were filed before the Chief Magistrate’s Court at Mombasa in CMCC No. 816 of 2017 (the declaratory suit). The concurrent finding of both the trial and the first appellate courts was that the insurance cover issued by the respondent, The Heritage Insurance Company Limited, to the insured motorcycle registration number KMCR 675Q (the motor cycle) did not extend to third parties and, hence, the respondent was not under a statutory obligation to honour the judgement arising from Mombasa CMCC No. 1215 of 2013 delivered on 14th March 2016 (the primary suit). 2.By way of a plaint dated 3rd November 2016, the appellants, Peris Wakesho Maghema and Francis Kaluyu Muyanga (suing as the legal representatives of the estate of Bonface Mwakio Kaluvu, the deceased), filed the declaratory suit against the respondent. The appellants’ case was that the respondent insured the motorcycle vide a policy of insurance number MPIIMC0382/TPO (the policy), issued within the meaning of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 (the Act) for any liability arising from death or bodily injuries from the use of the motorcycle. The appellants’ pleaded that, on or about 30th June 2012, the deceased, who was a pillion passenger in the motorcycle suffered fatal injuries as a result of a road traffic accident, which took place along the old Mombasa-Nairobi Road near Gage Hotel involving the motorcycle and motor vehicle registration number KTCA (sic) 116 A ZB 5364. They blamed the respondent’s insured’s authorised driver, servant and/or agent for negligently riding the motorcycle as a result of which the accident occurred. 3.The appellants averred that they notified the respondent’s insured of the intention to sue the respondent through a notice dated 20th June 2013 for recovery of damages; that, in the primary suit, by a judgment dated 14th March 2016, the appellants were awarded damages in the sum of Kshs.1,486,160, which the respondent’s insured was liable to pay, inclusive of costs of Kshs.184,025, and interest of 12% per annum from 14th March 2016 until payment in full; and that the respondent’s insured did not satisfy the judgment, consequent to which a declaratory suit, which is subject of this appeal was filed. The appellants thus prayed for judgement against the respondent as follows:i.A sum of Kshs.1,670,185 plus costs.ii.Interest at 12% per annum from 14th March 2016.iii.Costs and incidentals to this suit. 4.In its Statement of Defence dated 31st May 2017, the respondent denied having insured the motorcycle and challenged the fact that it was statutorily bound to satisfy the judgement issued in the primary suit. The respondent further denied that it was ever served with the mandatory statutory notice pursuant to Section 10(2) (a) of the Act and, hence, the appellants’ suit had no legal basis and was premature. The respondent further disputed that the insurance cover insured third parties. 5.The suit proceeded by way of viva voce evidence. Peris Wakesho Mauchema (PW1), while adopting her witness statement dated 17th May 2017, basically restated the appellants’ case as enunciated above. She also testified that the deceased was her husband, the bread winner of the family with whom they had one issue then aged 2 years. We note that her statement is not part of the documents in the record of appeal as put to us. PW2, Zakayo Otieno, the Chief Executive Officer, Mombasa Law Courts, produced the decree issued in the primary suit dated 24th September 2018 as PEXH No. 10. 6.Edwin Mwangi (DW1), the respondent’s Branch Manager, Mombasa, testified that the motorcycle’s insurance cover did not extend to third parties, and that, it was issued to cover private use only; that clause 1 of the policy indicated that the use for the motorcycle was for ‘special domestic and pleasure’ purposes, and not for rallies or carrying of passengers for hire or reward. He produced the policy document as DEXH 1. 7.In his Judgment delivered on 28th November 2019 the Hon.E.K. Makori, CM (as he then was) held that the appellants failed to prove that third parties were covered by the insurance cover and, in this case, the deceased. He thus dismissed the appellants’ declaratory suit upon a further finding that recourse could be pursued against the defendants in the primary suit. 8.On appeal to the High Court, the appellants raised four grounds of appeal, namely that the learned Magistrate erred in law and in fact: by dismissing the appellant’s suit; in misapprehending the evidence adduced before him; by holding that the respondent was not liable to the appellant; and in awarding costs of the suit to the respondent. 9.The appellants were dissatisfied with the trial court’s judgment upon which they preferred the first appeal in the High Court at Mombasa, being HCCA No. 250 of 2019. The learned Judge held that the respondent confirmed that it insured the motorcycle, and that, as at the material time of the accident on 30th June 2012, the policy was still valid as it ran from 12th August 2011 to 5th July 2012. The learned Judge scrutinised and examined the scope of the insurance policy, and agreed with the trial court that it excluded risks to third parties. 10.The first appellate court also upheld the findings of the trial court that the appellants had not proved their case against the respondent as it was not sufficient for them to solely rely on the cover note in a case where the respondent’s contention was that the scope of the cover issued excluded carriage for hire and reward. The appeal was dismissed with orders that each party bears their own costs. 11.Further dissatisfied, the appellants proffered the instant appeal, which is hinged on eleven grounds of appeal as per the Memorandum of Appeal dated 22nd June 2023, but which we have condensed into six grounds, namely that the learned Judge erred in law and in fact in:i.failing to consider and decide on the validity of the policy document relied upon by the respondent;ii.upholding terms in the policy that the insurance cover issued for the motorcycle was limited to risks related to private use without first settling the issue of the validity of the policy document;iii.considering and upholding the respondent’s contention that the motorcycle at the time of the accident, was being used for hire and reward and that the deceased was being carried for hire and reward, facts that had neither been pleaded nor supported by evidence;iv.in failing to hold that the deceased was a third party as contemplated under the provisions of the Act thus covered by the policy issued by the respondent;v.failing to find that the Act imposed a mandatory requirement on all persons using vehicles on roads unless there was in force in relation to such a user of the vehicle a policy of insurance or such a security in respect of third-party risks; andvi.holding that the appellants did not prove their claim against the respondent on a balance of probabilities and ignoring the evidence produced by the appellants. 12.The appellant prayed: that the judgement delivered on 9th June 2022 be set aside and substituted therefor with an order allowing the appellants’ appeal with costs; and that the costs of the appeal be paid by the respondent. 13.We heard this appeal on 11th December 2025. Learned counsel Mr. Maundu was present for the appellants while learned counsel Mr. Ahenda held brief for Mr. Lumia for the respondent. Mr. Maundu relied on the appellants’ written submissions dated 4th September 2025 and the case digest dated 24th October 2025. On his part, the respondent’s counsel relied on written submissions dated 6th November 2025 with which we were supplied after the hearing date. 14.The appellants submitted on three broad issues. The first was that the respondent’s defence to the declaratory suit was a mere denial and a general traverse without providing any supporting information or particulars, material facts and justification to support the denial. In this regard, it was contended that the respondent did not plead the terms of the policy and how the respondent’s liability could be avoided as required under Order 2 Rule 4(1) of the Civil Procedure Rules; that it is trite law that, where a party fails to plead a material fact, any evidence led in support of such an un- pleaded fact must be disregarded; and that, any evidence which is at variance with the pleadings is inadmissible. For this proposition, the appellants referred to a long list of decisions, among them the decision of Al Husnain Motors Limited vs. Joshua Matagaro Michira (2021) KECA 169 (KLR) where this Court re-affirmed the principle, and which was restated in IEBC & Another vs. Stephen Mutinda Mule (2014) eKLR; Adetoun Oladeji (Nig) Limited vs. Nigeria Breweries PLC SC 91/2022; and Mohammed Guyo Boru vs Richard Mwilaria Aritho (2022) KEHC 2229 (KLR). 15.The second issue submitted on was that the learned Judge erred in relying on evidence that was neither adduced in court nor supported by the record, in contravention of the Evidence Act and the established rules of procedure. On this, the appellants contended that the actual insurance policy issued in respect of the motorcycle was never produced in court; that the purported policy that the respondent produced was defective since it was issued under the name of Bemca Insurance Agencies under Policy No. 101177012000382 and not MPIIMC0382 as pleaded; and that it made no reference to the insured motorcycle, was unsigned, undated, unexecuted and was only printed on 8th August 2018, a date after the suit was filed; that other documents produced by the respondent, for example, one titled ‘Motor Cycle Policy’, showed that the policy was dated September 2002 (sic), a date preceding the insurance contract and the cause of action; that the inconsistencies go to the root of admissibility of the policy document as was held in the persuasive decision of ICEA Lion General Insurance Company Limited vs. Chris Ndolo Mutuku T/A Crystal Charlotte Beach Resort (2021) KEHC 9661 (KLR) where it was held, inter alia, that‘…the appellant relied on a Bizbora Insurance Policy document, which was neither signed nor dated and therefore whether that document constitutes an insurance contract is subject of an issue to be determined herein below…’ 16.Thirdly, it was the appellants’ contention that the learned judge erred in law by holding that the appellant bore the burden of proving that the subject insurance policy extended to third party risks notwithstanding the mandatory provisions of Sections 4 and 8 of the Act; that, even if the policy document was to be admitted in evidence, it was erroneous to state that the cover did not extend to third parties as a third-party cover is mandatory for motor vehicles under Section 4 of the Act, where exemption applied only pursuant to sub-section(3); that it was incumbent upon the respondent to discharge the burden of proving that the motorcycle was not covered for third party policy as was observed in the persuasive decisions in Re: Blue Shield Insurance Company Limited (2020) KEHC 8380 (KLR); Direct Line Assurance Co. Limited vs. Peter Micheni Muguo (2018) KEHC 3010 (KLR); and Ainu Shamsi Hauliers Limited vs. Directline Assurance Co. Limited (2025) KEHC 7274 (KLR); that the respondent did not demonstrate what constituted a ‘private passenger’ under the alleged policy, nor did it establish how the deceased fell within that category; and that the deceased died while on a private trip. 17.It was submitted that the policy document extended the cover to death or bodily injury to third parties as well as damage to property; and that the respondent did not prove the factual circumstances connected to the alleged exclusionary terms, and that the bare assertion to the contrary without proof was rejected as being insufficient to exclude or avoid liability as was observed by the High Court (Chuka) in Direct Line Assurance Co. Limited vs. Peter Micheni Muguo (supra); and the decision of the Magistrate’s Court (Naivasha) in Trident Insurance Company Limited vs. Muranga T/A Stevens Education Centre (2023) KEMC 290 (KLR). 18.We were urged to find that the appeal is meritorious and, therefore, allow it with costs. 19.On the part of the respondent, it was submitted that no issues of law fell for determination in this appeal; that the appellants were raising matters of fact which had been settled by the two courts below; that the core issues as to whether the motorcycle was being used by the insured in the manner permitted under the policy at the time of the accident, and whether the evidence justified liability on the insurer, were based on testimonies, documents and inferences drawn by the two courts below, and that they did not constitute questions or matters of law to be addressed on second appeal; and that this Court will refrain from upsetting concurrent findings of fact unless such findings were based on no evidence, or the courts below demonstrably misunderstood the evidence, or the two courts below arrived at a conclusion so unreasonable as to fall outside the latitude affordable to judicial tribunals as was enunciated by this Court in Kenya Ports Authority vs. Kutson (Kenya) Limited (2009) 2 EA 212; and Stanley N. Muriithi & another vs. Bernard Munene Ithiga (2016) KECA 821 (KLR). 20.The decisions of this Court in Mbogo vs. Shah (1968) EA, 93; and in Peters vs. Sunday Post Limited (1958) EA, 424 were also cited for the proposition that this Court, on a second appeal, will not consider factual materials unless there is a misdirection or error of law; that, in this case, asking the Court to reconsider the question of fact whether the deceased was a pillion passenger on the motorcycle as indicated on the police abstract report, and that the insurance policy restricted the use of the motorcycle to social, domestic, pleasure purposes and the insured’s business, but that it excluded carriage of passengers for hire or reward, was not a new legal theory, but a factual material which the two courts below had settled. 21.The respondent further submitted that the statutory framework under Section 10(1) of the Act requires the policy to cover those liabilities the insurer has contracted to bear, but not to satisfy judgement arising from uses excluded by the policy as provided under Section 5 (b) of the Act and, as was held in the persuasive decision in Kenyan Alliance Insurance Company Limited vs. Naomi Wambui Ngira & Another (Suing as the Legal Representatives and Administrators of the Estate of Nelson Macharia Maina (Deceased) (2021) KEHC 7044 (KLR), compelling an insurer to honour a liability excluded under Section 5 (b) of the Act would be to rewrite their contract of insurance and to visit punishment upon a party for that which it never contracted to do; and that the appellants did not challenge the policy document’s authenticity nor provide competing evidence to show that the motorcycle had been used within the insured purposes. 22.On the alleged discrepancies in the policy, it was submitted that the motorcycle was owned by Maclex Makori Magabi as identified in the Certificate of Insurance and in the police abstract; that the Certificate of Insurance identified the same motorcycle, the policy period and category of use which is what was essential for purposes of establishing the scope of cover; that in the ICEA Lion General Insurance Co. Limited (supra) case, the dispute therein was between the insurer and the insured on the validity of the policy while, in the present case, there is no dispute as to the nature of the policy; and that, in any event, no evidence was called by the appellants to suggest that the policy document was fabricated or improperly issued. 23.The respondent submitted that it was not bound to settle the decretal sum as the deceased was not a third party as contemplated under the insurance policy issued by the respondent as she was a pillion passenger; and that, therefore, she fell outside the ambit of coverage provided in the policy. The respondent further submitted that liability under an insurance contract is defined by the terms of the policy as demonstrated in the decision of this Court in Corporate Insurance Company Limited vs. Elias Okinyi Ofire (1999) KECA 178 (KLR); and the persuasive decision in Gateway Insurance Co. Limited vs. Alberty J. N. Njagi (2006) KEHC 2918 (KLR). 24.We were urged to uphold the decisions of the two courts below and, accordingly, dismiss the appeal with costs. 25.The jurisdiction of this Court is circumscribed by Section 72(1) of the Civil Procedure Act, which delineates the limited grounds upon which a second appeal may lie from a decision of the High Court to matters of law only. In the case of Charles Kipkoech Leting vs. Express (K) Ltd & Another (2018) KECA 187 (KLR), this Court stated:“This is a second appeal. Our mandate is as has been enunciated in a long line of cases decided by the Court. See:- (Maina vs. Mugiria (1983) KLR 78, Kenya Breweries Ltd vs. Godfrey Odongo, Civil Appeal No. 127 of 2007 and Stanley N. Muriithi & Another vs Bernard Munene Ithiga (2016) e KLR) for the holdings, inter alia, that, on a second appeal, the Court confines itself to matters of law only, unless it is shown that the Courts below considered matters they should not have considered or failed to consider matters they should have considered or looking at the entire decision, it is perverse. See also the English case of Martin vs. Glywed Distributors Limited (t/a MBS Fastening) 1983 ICR 511 where it was held, inter alia, that, where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court (s) and resist the temptation to treat findings of fact and law, and, it should not interfere with the decisions of the trial or first appellate court unless it is apparent that, on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad in law.” 26.In Stanley N. Muriithi & another vs. Bernard Munene Ithiga [2016] eKLR, this Court held that:“We are conscious of our limited jurisdiction when dealing with a second appeal. Our reading of Section 72(1) of the Civil Procedure Act, Chapter 21, Laws of Kenya, which provides for the circumstances when a second appeal shall lie from the appellate decrees of the High Court, indicates that the appeal must be on matters of law.” 27.In the same vein, this Court held thus in Kenya Breweries Ltd vs. Godfrey Odoyo [2010] eKLR that:“In a second appeal however, such as this one before us, we have to resist the temptation of delving into matters of facts. This Court, on second appeal, confines itself to matters of law unless it is shown that the two courts below considered matters they should not have considered or failed to consider matters they should have considered or looking at the entire decision, it is perverse. In the case of Stephen Muriungi and another vs. Republic (1982-88) 1 KAR 360, Chesoni Acting JA (as he then was) said at page 366:‘We would agree with the view expressed in the English case of Martin v Glywed Distributors Ltd (t/a MBS Fastenings) 1983 ICR 511 that where a right of appeal is confined to questions of law only, an appellate court has loyalty to accept the findings of fact of the lower court (s) and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law, and, it should not interfere with the decisions of the trial or first appellate court unless it is apparent that, on the evidence, no reasonable tribunal could have reached that conclusion, which would be the same as holding the decision is bad in law.’” 28.We have considered the record of appeal, the submissions by both parties and the authorities cited in support of the respective parties’ cases. We have deduced that the singular issue that fall for our consideration are: whether the respondent acted within the terms of the insurance policy in avoiding liability. 29.We have isolated only one issue for determination taking to mind that Mr. Ahenda, learned counsel for the respondent, in his oral highlights, mainly focused on the fact that there were no issues of law which were raised and presented by the appellants for determination in this appeal. Counsel asserted that the appellants’ arguments mainly urged that the two courts below reached an erroneous finding by failing to properly scrutinise the policy document. In answer to this, learned counsel Mr. Maundu for the appellants stated that the point of law the appellants sought to raise is that the learned Judge misinterpreted the provisions of Sections 5 and 10(2) of the Act by placing the onus of proof on the appellants to prove that a third-party insurance policy was mandatory in the circumstances of this case. 30.Similarly, the appellants also fault the learned Judge for not scrutinizing the terms of the policy. This is an evidentiary issue, but as this Court has cautioned itself in Charles Kipkoech Leting (supra), we will only delve into matters of fact if we find that the two courts below misapprehended the evidence, or that the finding on factual matters was grossly wrong or based on no evidence. 31.With the foregoing in mind, a perusal of the grounds of appeal that were proffered before the 1st appellate court shows that none of the above two issues were raised before the High Court. They are being raised for the first time before this Court, which Court cannot consider matters of law that are being raised before it for the first time unless in exceptional circumstances. 32.Forbes VP had this to say in Alwi A Saggaf vs. Abed A Algeredi (1961) EA 767 CA 610 while addressing himself to the prejudicial effect of new points of law raised for the first time on appeal, stated that:“… these are assumptions which were never tested at the trial. The minds of the parties simply were not directed to this issue which, apparently, was raised by counsel for the respondent for the first time in his reply at the end of the hearing of the first appeal. In the circumstances, it appears to me that the appellant had no fair notice of this issue, and that the court cannot be satisfied that the facts, if fully investigated, would have supported the new plea.In my view, accordingly, the learned judge ought not to have allowed this issue to be raised, or to have decided the appeal on it.” 33.In Kenya Commercial Bank Ltd vs. Osebe (Civil Appeal 60 of 1982) [1982] KECA 35 (KLR) (29 December 1982) (Judgment), the Court of Appeal (Law, Potter, JJ.A. & Hancox, Ag. JA.) cited with authority the English decision in Balchin v Buckle (Times) June 1, 1982 where it was held as follows on an appellate court’s jurisdiction in respect to a matter of law raised before it for the first time as follows:“It (has) been clear for nearly a century, and perhaps more, that the litigant could not take a completely new point of law for the first time on appeal and the Court of Appeal had no jurisdiction to decide a point which had not been the subject of argument and decision in the County Court.There were two exceptions to the ban on considering a point not considered in the County Court. If the County Court had done something which was illegal or outside its jurisdiction, in either case whether or not the appellant took the point the Court of Appeal could and must reverse the decision of the County Court: Oscroftv Benabo [1967] 1 WLR 1087.” 34.In the same vein, we also quote in extenso M’Inoti, JA. in Kenya Hotels Limited vs. Oriental Commercial Bank Limited [2018] KECA 692 (KLR) held as follows:“Where the applicant seeks to introduce an entirely new point, there are well known strictures that seek to ensure firstly, that an appellate court does not, in disguise, metamorphose into a trial court and make first- instance determinations without the benefit of the input of the court from which the appeal arises. This concern was well articulated by Lord Birkenhead LC as follows in North Staffordshire Railway Co v. Edge [1920] AC 254:“The appellate system in this country is conducted in relation to certain well- known principles and by familiar methods...The efficiency and the authority of a Court of Appeal, are increased andstrengthened by the opinions of the learned judges who have considered these matters below. To acquiesce in such an attempt as the appellants have made in this case is in effect to undertake decision which may be of the highest importance without having received any assistance at all from the judges in the courts below.”Secondly is the overriding concern to avoid prejudicing a party who is made to meet an entirely different case late in the day at the appeal stage, without the opportunity of adducing evidence that may be necessary to counter or dispel the new point. On this consideration, Lord Evershed M.R. expressed himself thus in United Dominion Trust Ltd v. Bycroft [1954] All ER 455:“As a matter of principle the Court of Appeal has always been strict in applying the rule than an appellant from a county court, unless he other party consents, cannot be allowed in this court to raise a new point of law not raised below...It is not in accordance with public interest that a party who has fought a case in a county court and been defeated should then raise in this court a new point and put his case in an entirely different way as a matter of law and so make the other party, hitherto successful, litigate the matter again at the risk of having to pay costs not only below, but in this court.”Due to these fundamental concerns, the Courts has developed fairly elaborate principles that guide it in determining whether or not to allow a new point on appeal. In Openda v. Ahn, (supra) this Court identified some of the principles to include that all grounds of appeal must arise from issues that were sufficiently pleaded, canvassed, raised or succinctly made issues at the trial; that the point sought to be introduced must be consistent with the applicant’s case as conducted in the trial court, not changing it into a totally different case; the matter must have be properly pleaded and the facts in support of the new point must have come out in the trial court; a new point which has not been pleaded or canvassed in the trial court should not be allowed to be taken on appeal, unless the evidence establishes beyond reasonable doubt that the facts before the trial court, if fully investigated, would support the point; where the question is one of law turning on the construction of a document, the new point may be allowed but only if the facts when fully investigated support the new plea.In Nyangau v. Nyakwara (supra) this Court allowed a new point to be taken on appeal because the new point raised an issue of jurisdiction. And in Attorney General v. Faroe Atlantic Co Ltd [2005-2006] SCGLR 271, a decision of the Supreme Court of Ghana which was quoted with approval by this Court in DEN v. PNN [2015] eKLR, it was accepted that in addition to a matter going to jurisdiction, a new point may be taken on appeal where an act or contract is made illegal by a statute. However, even then there is a qualification that the legal question sought to be raised for the first time must be substantial and one that can be disposed of without the need for further evidence.In Securicor (Kenya) Ltd v. EA Drapers Ltd & Another (supra) the Court, after reviewing a line of decided cases, reiterated that although it has discretion to admit a new point at appeal:“Certainly the cases show that the discretion must be exercised sparingly. The evidence must all be on record and the new point must not raise disputes of fact. The new point must not be at variance to the facts or case decided in the court below.”(See also Kenya Commercial Bank Ltd v. Osebe (supra)).” 35.Accordingly, we find and that the ground that the learned Judge failed to properly evaluate the evidence on record by not scrutinising the terms of the insurance policy having been raised for the first time in this Court on second appeal does not fall for our consideration. 36.Turing to the sole issue for determination, being whether the respondent acted within the terms of the insurance policy in avoiding liability, we have considered the policy of insurance exhibited before the trial court as DEXH 1. The insurance policy was taken out by Maclex Makori Magabi through Bemca Insurance Agencies. The type of cover was third party which ran from 6th July 2011 to 5th July 2012, both days inclusive. The insurance company offering the cover is the respondent herein. The fatal accident having taken place on 30th June 2012 was well within the period of the validity of the insurance policy. The policy was subject to exclusions stipulated under Cause M004 which we hereby reproduce as follows:“Your policy is subject to the following exclusion.‘It is hereby understood and agreed that the Company shall not cover under Section I and II of this policy loss or damage and any liability incurred by the insured arising from vehicles used on airport/airstrip premises where members of the public do not normally have access.’The succeeding Clause MC001 went on to provide:Use for social domestic and pleasure purposes and for the insured’s business. The policy does not cover use for racing competitions rallies or trials (or use for practice for any of them) or for carriage of passengers for hire or reward. (emphasis ours). 37.The appellants argued in their submissions that the respondent did not define or prove that the deceased was a fare-paying passenger within the context of the policy. In their plaint dated 2nd June 2013 filed in the primary suit, the appellants described the deceased as a ‘pillion passenger’. The policy did not extend to the use of the insured motorcycle for hire or reward, and certainly not for carriage of passengers, under which a pillion passenger fell. 38.The duty of an insurer is to satisfy a judgement pursuant to Section 10(1) of the Act only if the liability is covered by the insurance policy. One of the cornerstone principles in insurance contracts is that they are governed by the doctrine of utmost good faith. The contract imposes a legal obligation on the insured to disclose all material facts and circumstances which will affect the risk being insured against. As per Lord Mansfield’s words in Carter vs. Boehm (1766) Burr. 1905, a decision which was endorsed by this Court in Co- operative Insurance Company Ltd vs. David Wachira Wambugu (2010) KECA 481 (KLR), he stated:“Insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only; the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge to mislead the underwriter into a belief that the circumstance does not exist and to induce him to estimate the risqué as if it did not exist. The keeping back such circumstance is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived and the policy is void; because the risqué run is really different from the risqué understood and intended to be run at the time of the agreement…The policy would be equally void against the underwriter if he concealed… The governing principle is applicable to all contracts and dealings. Good faith forbids either party, by concealing what he privately knows to draw the other into a bargain from his ignorance of the fact and his believing the contrary…” 39.The insured, Maclex Makori Magabi did not disclose to the respondent that one of the purposes of taking out the insurance cover on the motor cycle was to cover the carriage of passengers. In our view, the failure to make this disclosure, and to proceed to use the motor cycle for purposes otherwise than for those it was covered, was unfortunately prejudicial to the deceased and, of course, now the appellants as persons who were affected by the use of the motorcycle. 40.From the totality of the evidence produced before the two courts below, we find that the respondent sufficientlydemonstrated that it was entitled to avoid any risk arising out of the policy on the use of the motor cycle for purposes other than what was prescribed under the policy. More importantly, this exception was well provided in the insurance policy. We have no reason upon which to fault the conclusions arrived at by the two courts below. The respondent discharged its burden in this regard on a balance of probabilities. 41.In conclusion, we arrive at the inescapable conclusion that the appeal lacks merit and is hereby dismissed with costs to the respondent.It is so ordered. DATED AND DELIVERED AT MOMBASA THIS 31ST DAY OF JULY, 2026.A. K. MURGORJUDGE OF APPEAL......................................DR. K. I. LAIBUTA CArb, FCIArb.JUDGE OF APPEAL......................................G. W. NGENYE-MACHARIAJUDGE OF APPEALI certify that this is the true copy of the originalsignedDEPUTY REGISTRAR