[2022] KEHC 13701 (KLR)

Mayfair Insurance Company Limited v Mwangi & another (Civil Appeal E050 of 2021) [2022] KEHC 13701 (KLR) (Civ) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 13701 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E050 of 2021

JK Sergon, J

October 7, 2022

Between

Mayfair Insurance Company Limited

Appellant

and

Jane Njeri Mwangi

1st Respondent

Insurance Regulatory Authority

2nd Respondent

(An Appeal from the judgement by the Insurance Appeals Tribunal delivered on the 16th day of December,2020 in Appeal No 4 of 2020)

Judgment

1. The appellant has filed an appeal challenging the judgement delivered by the Insurance Appeals Tribunal on December 16, 2020 which found merit in the 1st respondent’s appeal, revoked the 2nd respondent’s decision dated June 16, 2020 and directed the appellant to pay Kshs 1,809,000 to the 1st respondent.

2. By this appeal, the appellant prays for orders that:a)The appeal be allowed.b)The judgment of the Insurance Appeals Tribunal dated and delivered on December 16, 2020 be set aside in its entirety and in place thereof, judgment be entered for the appellant dismissing the 1st respondent’s appeal with costs and interest.

3. The appellant highlighted six issues for determination and included the provision of an arbitration clause in the insurance policy. The issues it relies upon are:a)Whether the first respondent had locus standi to institute the complaint and the appeal.b)Whether the 1st respondent is party to the insurance policy between the appellant and the insured.c)Whether the 1st respondent proved the claim to entitle the appellant to make payment.d)Whether the complaint by the 1st respondent dated March 13, 2017 was time barred.e)Whether the appeal by the 1st respondent to the 2nd respondent was time barred and;f)Whether the appellant was given a fair hearing at the tribunal.

4. The appellant begins its submissions by bringing to the courts attention the arbitration clause provided for at page 11 of the insurance policy, that any dispute concerning the policy shall be referred to arbitration. It submits that the tribunal did not have jurisdiction to entertain the 1st respondent’s appeal after the decision was rendered by the 2nd respondent. It cites the case of Owners of Motor Vessel Lillian S v Caltex Oil Ltd.

5. On the first issue, the appellant submits that the 1st respondent was not an employee of the insured and therefore had no locus to claim compensation on behalf of the deceased. It contends that whilst the 1st respondent alleges that she is the wife of the deceased, there was no proof of the same in form of a marriage certificate and no death certificate as proof of death of the deceased. It cites section 10 of the Work Injuries Benefit Act which was declared unconstitutional by Juma Nyamawi Ndungo & 5 others v Attorney General; Mombasa Law Society (Interested Party) [2019] eKLR. The section provides thus:"i.An employee who is involved in an accident resulting in the employee’s disablement or death is subject to the provisions of this Act, and entitled to the benefits provided for under this Act.ii.An employer is liable to pay compensation in accordance with the provisions of this Act to an employee injured while at work"

6. It submits further that the insurance policy states at para 4 that the insured will in the event of the insured’s employee indemnify the insured legal personal representatives in the terms of the policy in respect to liability incurred by the insured provided that such personal representatives shall as though they were insured observe fulfil and be subject to the terms of this policy in so far as they can apply.

7. It submits that the 1st respondent has not produced the relevant documents (death certificate, marriage certificate, grant of probate or letter of administration) to show that she has the authority to act on behalf of the deceased’s estate. She therefore cannot be construed to be the legal representative of the deceased.

8. It quotes the case ofRe the Matter of the Estate of David Julius Nturibi M’ithinji (Deceased) [2012] eKLR where it was held that:“According to section 45 of the Law of Succession Act, cap 160 anyone who has no authority under this Act, or by any other written law, or has grant of representation under this Act takes possession or dispose of or otherwise intermeddle with any free property of a deceased person for any purpose is guilty of an offence under the said section."In the case of Gitau and 2 others v Wandai & 5 others [1989] KLR 23, Tanui J, as he then was stated as follows: -“According to section 45 of the Law of Succession Act, cap160 intermeddling with the property of a deceased man consists of taking possession, disposing or otherwise intermeddling with any free property.”

9. I agree with the finding of the honourable judge in the way he defined intermeddling, however I would like to add any act that purports to dispossess or result into wastage of deceased estate or causes loss or damage or makes it impossible for administrator to administer the deceased estate by a person who is not authorized by the Law of Succession Act or by any written law or by a grant of representation under the said Act is an act of intermeddling with free property of a deceased person.”

10. Finally, on locus standi, the appellant submits that since the 1st respondent did not at any point have the requisite locus standi to seek compensation on behalf of the deceased, the proceedings before the tribunal are a nullity.

11. On the second issue, the appellant submits that the respondent is not a party to the insurance policy between the appellant and the insured. The insurance policy being a contract between the appellant and the insured falls within the doctrine of privity of contracts. It cites the case of Octagon Private Investigation Security Services v Lion of Kenya Insurance Co1994 eKLR where it was held that :“The right of subrogation in a contract of insurance cannot create privity of contract between the insurance company and third parties. All that it gives an insurance company is the right to take over the rights and privileges of the insured under an insurance policy but if the insurance company wishes to exercise against third parties the rights and privileges so taken over from the insured, then it (the insurance company) can only do so on behalf of and in the name of the insured. We think Mr J B Byamugisha in his book “Elements of Insurance Law in East Africa” correctly states the law when he says at pg 109 under the heading “More on Subrogation”:“The insurance company is not given rights against third parties. The rights must and can only be enforced by the insured personally (to whom they are actually owed). Normally, the insurance company will use its rich resources to prosecute the claims; but, even then, it will do so on behalf of and in the name of the insured person.…”

12. It contends that the insurance policy was a contract of insurance between the appellant and the insured and as such the 1st respondent cannot obtain rights save as expressly provided in the contract.

13. It submits that it is not for the court to rewrite a contract for the parties as was held in the Court of Appeal case in National Bank of Kenya Ltd v Pipeplastic Sakolit (K) Ltd & another [2001] eklr where the court held thus:“A court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion, fraud or undue influence in regard to the terms of the charge.”

14. On the third issue, the appellant submits that the respondent did not prove the claim to warrant payment. It cites section 203(1) of the Insurance Actwhich provides that:"1)Where the claimant has submitted all the relevant documents, every insurer shall, in respect of claims arising out of policies of insurance issued by it—a)Admit or deny liabilityb)Determine the amount duec)Establish the identity of the claimant; andd)Pay the claim within ninety days of the date of the reporting of the claim or where the determination of liability is by a court, within ninety days of such determination"

15. It avers that an insurance company must be furnished with all the relevant documents before a claim is processed. The appellant informed the respondent and the Director of Occupation Safety and Health Science that the insured did not forward the supporting claim documents and as a result it could not process the claim. The requisite documents were:a)Claim form duly completed, signed and stamped by the insuredb)Attendance registerc)Witness statement of the supervisor and co-workers who witnessed the accidentd)Personal protective registere)Patients records form the hospital/clinic the deceased was treatedf)Wages/payslips for three months before the date of the injury.g)Minutes of the health and safety committee for the period in which the injury took place.

16. It submits further that provision of the relevant supporting documents is an express term of the insurance policy and that no claim shall be payable unless the committee authenticates the occurrence of the accident in a report. The report must contain the details of the injuries, time and date of the accident plus details of any emergency treatment. It cites section 109 of the Evidence Actand the case of Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR where it was stated thus:"The appellant submits that the requisite documents were never sent to the appellant that the tribunal’s decision ordering the appellant to process a claim without supporting documents sets a bad precedent and stands to open a floodgate of litigation against not only the appellant but other insurance companies, that people will demand payment from insurance companies on undocumented claims."

17. On the fourth issue, the appellant submits that the complaint by the 1st respondent was lodged on March 13, 2017, 5 years after the death of the deceased on January 30, 2012. It contends that a claim for compensation must be made within 12 months after the death of the death. In support of this, it cites section 26(1) of the Work Injury And Benefits Actwhich states that:“A claim for compensation in accordance with this Act shall be lodged by or on behalf of the claimant in the prescribed manner within twelve months after the date of the accident or, in the case of death, within twelve months after the date of death.”

18. The appellant submits that the respondent is guilty of laches and that a court cannot aid a party when they are guilty of laches if there is a specific timeframe which needs to be complied with. It cites the case of Joshua Ngatu v Jane Mpinda & 3 others[2019] eKLR.

19. On the fifth issue, the appellant submits that the 2nd respondent communicated its decision on the complaint on April 11, 2018 to the respondent. That the 1st respondent was further notified of the 2nd respondents decision on June 16, 2018. The respondent lodged its appeal on September 25, 2020, citing section 173(1) of the Insurance Act which provides that:"Appeals from Commissioner’s decisions(1)A person aggrieved by a decision of the Commissioner under this Act may, within one month from the date on which the decision is intimated to him, appeal to the Tribunal which may, subject to such terms and conditions as it may consider necessary, uphold, reverse, revoke or vary that decision.It submits that the 1st respondent slept on her rights in presenting her case to the tribunal in an untimely manner.

20. Finally, on the sixth issue, the appellant submits that the tribunal was unfair and biased and that from a reading of the proceedings, the tribunal had already reached a decision before the appellant had submitted conclusively. It quotes pages of the typed proceedings that the tribunal wanted the appellant to pay out the claim, despite not being furnished with the supporting documents of the claim. It states that the right to a fair trial is a fundamental right, which was not upheld to its detriment.

21. The 1st respondent submits that section 173(1) of the Insurance Actis not coached in mandatory terms when it provides that an aggrieved party may appeal and the word may is the principle term. It further submits that time started running upon the receipt of the 2nd respondent’s decision by the 1st respondent. It submits that the delay in communication if any in filing the appeal under theInsurance Act is not such inordinate delay so as to the drive the appellant form the seat of justice.,

22. Concerning whether the complaint made by the 1st respondent on March 13, 2017 to the commissioner of insurance was time barred, the 1st respondent submits that the Work Injury and Benefits Actand the Insurance Act have no provisions that set a time limit for a complainant to make a complaint to the commissioner of insurance. The claim was made within one year of the accident and makes reference to the letter form the Ministry of Labour addressed to the appellant. She finally submits that the claim did not fall outside of nay statutory timeline and was therefore not time barred.

23. Concerning the 1st respondent’s capacity to make complaints to the tribunal, the 1st respondent submits that the policy was intended to compensate the husband to the 1st respondent and that being the wife of the deceased, she is entitled to make a claim of benefit to the deceased. It submits that under the Insurance Act there is no other requirement to make a complaint to the 2nd respondent other than to show a nexus or relation to whom the complaint relates.

24. The 1st respondent submits that the 1st respondent availed a letter dated October 6, 2017 from the County Occupational Safety & Health Officer to the appellant. Page 2 of the letter expounds on its powers to seek compensation form the employer or his insurer. That the scope of the letter is clear proof that the appellant received all the documents with regard to the claim.

25. Finally, the 1st respondent submits that the policy is not a reimbursement policy cover as alleged by the appellant.

26. The main issues for determination can be summarized into the following:i.Whether the tribunal had jurisdiction to hear and determine the respondent’s appeal;ii.Whether the 1st respondent has locus standi to institute the complaint and the appeal;iii.Whether the complaint was time barred; andiv.Whether the claim was documented;

27. Whether the tribunal had jurisdiction to hear and determine the respondent’s appeal.Jurisdiction is defined in the Black's Law Dictionary, 8th edition as:“… the power of the court to decide a matter in controversy and presupposes the existence of a duly constituted court with control over the subject matter and the parties … the power of courts to inquire into facts, apply the law, make decisions and declare judgment; The legal rights by which judges exercise their authority.”In defining jurisdiction, the court in the case of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR held thus:“By jurisdiction is meant the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognisance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given”

28. The appellant submits that the tribunal did not have the requisite jurisdiction to entertain the 1st respondents’ appeal owing to the fact that the insurance policy provided that disputes arising from the policy shall be referred to arbitration. In the case of Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others [2012] eKLR it was held thus:“A court’s jurisdiction flows from either the Constitution or legislation or both. Thus, a court of law can only exercise jurisdiction as conferred by the constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. We agree with counsel for the first and second respondents in his submission that the issue as to whether a court of law has jurisdiction to entertain a matter before it, is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the court cannot entertain any proceedings.”

29. Section 169(1) of the Insurance Act provides as follows:(1)“The Cabinet Secretary may, by notice in the Gazette, establish a tribunal for the purpose of hearing appeals under this Act.”Section 170 highlights the powers of the tribunal as follows:"(1)On the hearing of an appeal the tribunal shall have all the powers of a Resident Magistrate's Court of the first class to summon witnesses, to take evidence upon oath or affirmation and to call for the production of books and other documents.(2)Where the tribunal considers it desirable for the purpose of avoiding expense or delay or any other special reason so to do, it may receive evidence by affidavit and administer interrogatories and require the person to whom interrogatories are administered to make a full and true reply to the interrogatories within the time specified by the tribunal.(3)In its determination of any matter the tribunal may take into consideration any evidence which it considers relevant to the subject of an appeal before it, notwithstanding that such evidence would not otherwise be admissible under the law relating to evidence.(4)The tribunal shall have power to award the costs of any proceedings before it and to direct that costs shall be taxed in accordance with any scale prescribed.(5)All summonses, notices or other documents issued under the hand of the Chairman of the tribunal shall be deemed to be issued by the tribunal.(6)Any interested party may be represented before the tribunal by an advocate or by any other person whom the tribunal may admit to be heard on behalf of the party."

30. From the above, it is apparent that the tribunal indeed had jurisdiction to hear and determine the matter as it was an appeal arising from the Insurance Regulatory Authority. The issue of jurisdiction should have been raised at first instance at the Insurance Regulatory Authority as it was the first adjudicating body. Bearing the fact that the appellant had not raised this issue then, it can be assumed that the issue of jurisdiction was not in dispute and that both parties had surrendered to the jurisdiction of the Authority instead of referring it to arbitration. In light of the above, this court cannot make a finding that the tribunal lacked jurisdiction as this has been surpassed by events.

31. Whether the 1st respondent has locus standi to institute the complaint and the appeal. In determining whether the 1st respondent has locus standi, the court has to look into the details of the policy in order to ascertain the parties to the policy and the terms therein. The parties to the policy are mentioned in the policy as Mayfair Insurance Company Limited and Infusion Medicare. Paragraph 4 of the preamble to the policy states that:“The company will also in the event of the death of the insured employee indemnify the insured’s legal personal representatives in the terms of the policy in respect of the liability incurred by the Insured provided that such personal representatives shall as though they were insured observe and fulfil and be subject to the terms of this policy so far.”A legal representative is defined in section 2 of the Civil Procedure Actas follows: -"Legal representative” means a person who in law represents the estate of a deceased person, and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued."

32. In Sarah Kobilo Chebii & another v David K Chesang [2019] eKLR the court in defining a legal representative held a follows:“12. It is clear that even though the civil court had under the division of the order XX III of the Civil Procedure Rules (order 24 of the Civil Procedure Rules, 2010), the power to substitute the legal representative of the deceased plaintiff or defendant such representative must be legal representatives within the meaning of the applicable law. In this regard section 2 of Civil Procedure Act that legal representatives means “a person who in law represent the estate of a deceased person”, that is to say a legal representative in the technical acceptation of the term.13. The applicable law contemplated by section 2 of the Civil Procedure Act is the Law of Succession Act which defines a persona representation as “a person to whom a grant to representation has been made and is still subsisting.” Consequently, if a person has not been issued with a grant of representation in accordance to the Law of Succession such a person cannot lawfully be substituted in place of a deceased party to a suit for lack of capacity.14. The absurdity of the holding is that the purported personal representatives cannot implement the order of the court by disposing off any of the assets of estate as they would be intermeddles within the meaning of the Law of Succession…….”

33. Section 20 of the Work Injury And Benefits Act provides that compensation for the death of an employee is not part of the employee’s estate. In regards to this, the respondent contends that she need not seek letters of administration for the purpose of pursuing benefits from the appellant. How then does one proceed with regards to ‘property’ that is not part of the deceased’s estate?

34. The Law of Succession Actprovides that any person who disposes of the estate of the deceased without letters of representation is guilty of intermeddling. Since compensation is not part of the deceased’s estate, then the 1st respondent was not intermeddling by filing a complaint in the authority.

35. However, the policy states that only a legal representative can be indemnified by the insured. Furthermore, a court of law cannot rewrite a contract between parties. However, a court can interfere when it finds that the terms are illegal and unfair. That particular clause, is vague and unenforceable because a dependant would have no recourse. If at all the dependant goes to court seeking letters of representation, the court will refer him/her to the director as in the case of Inre Estate of Alex Nyumu Mulei (Deceased) [2018] eKLR since compensation is not part of the deceased’s estate.

36. For a dependant to benefit in such a case, they only need to furnish proof that they are dependants and in this case, it is not in dispute that the 1st respondent is a dependant of the deceased, therefore she has the locus to file a complaint in an adjudicative body.

37. Whether the complaint is time barred section 26(1)(2) of the Work Injury and Benefits Actstates that:"1. A claim for compensation in accordance with this Act shall be lodged by or on behalf of the claimant in the prescribed manner within twelve months after the date of the accident or, in the case of death, within twelve months after the date of death.2. If a claim for compensation is not lodged in accordance with subsection (1), the claim for compensation may not be considered under this Act, except where the accident concerned has been reported in accordance with section 21"Section 21 provides that:"Written or verbal notice of any accident provided for in section 22 which occurs during employment shall be given by or on behalf of the employee concerned to the employer and a copy of the written notice or a notice of the verbal notice shall be sent to the Director within twenty-four hours of its occurrence in the case of a fatal accident."

38. The director referred to in this case is the Director of Occupational Safety and Health Services as defined in section 2 of the Act. The respondent contends that the claim was made to the Director within one year of the accident. There is indeed a letter from the Directorate of Occupational Safety and Health Services Nairobi County Offices to the appellant requesting it to make full payment of the claim under supervision of the Director. The letter confirms that there were correspondences between the Directorate and the appellant dating as far back as June 27, 2012 and March 2, 2017 serving as reminders to settled the claim.

39. Section 26 of the Work Injuryand Benefits Actdoes not refer to lodging a claim to an adjudicative body but to the director. Furthermore, theInsurance Act and the Work Injury and Benefits Act make no provision of time limits for making a claim to the Insurance Regulatory Authority. The claim by the 1st respondent was therefore within the statutory timelines provided by the Work InjuryandBenefits Act.

40. Whether the claim was documented. The letter dated October 6, 2017 from the Director of Occupational Safety and Health Services to the appellant states that the insured, Infusion Medicare (k) Ltd sent a notification of the Occupational accident by submitting a duly filled prescribed Director of Occupational Safety and Health Services form 1. The appellants submit that the requisite documents were:a)Claim form duly completed, signed and stamped by the insuredb)Attendance registerc)Witness statement of the supervisor and co-workers who witnessed the accidentd)Personal protective registere)Patients records form the hospital/clinic the deceased was treatedf)Wages/payslips for three months before the date of the injury.g)Minutes of the health and safety committee for the period in which the injury took place.

41. It is evident that Infusion Medicare (K) Ltd closed down and is no longer in operation, therefore some of the documents like the attendance register, witness statement of the supervisor and co-workers who witnessed the accident cannot not be easily traced or made available.

42. It is not in dispute that the deceased was an employee of the Insured and that he died in the course of duty, while in the employment of Infusion Medicare Ltd. In addition to this, the policy does not expressly state that the insured will not be indemnified if they do not produce these documents.Section 23 of the Work Injury and Benefits Actprovides thus:"Inquiry by Director(1)After having received notice of an accident or having learned that an employee has been injured in an accident the Director shall make such inquiries as are necessary to decide upon any claim or liability in accordance with this Act.(2)An inquiry made under subsection (1) may be conducted concurrently with any other investigation(3)An employer or employee shall, at the request of the Director, furnish such further particulars regarding the accident as the Director may require.(4)A person who fails to comply with the provisions of subsection (3) commits an offence."Particulars in support of claim(1)An employee who is injured in an accident or his dependant, shall, when reporting the accident or thereafter at the request of the employer or Director, furnish such information and documents as may be prescribed or as the employer or Director may request.(2)An employer shall, within seven days after having received a claim, medical report or other document or information concerning such claim, submit the claim, report, document or information to the Director.

43. The director makes an inquiry and ascertains the claim made by the insured. In this case, the Director informed the appellant and requested payment be made to the 1st respondent under the director’s supervision.The appellant requested for the above listed documents as proof that the deceased died during employment. It is trite law that he who alleges must prove. In light of the fact that the insured is no longer in operation, the appellant need not make things difficult for the 1st Respondent by asking for documents that are clearly unavailable. The fact that the Insured followed due procedure by notifying the director who investigated the claim is sufficient proof that the claim was documented and that the 1st respondent is not trying to defraud the appellant. It is my view, in light of the circumstances that the claim form, the patient’s records, the wages and the minutes of the Health and Safety Committee are sufficient to process the claim.

44. As regards the issue of fair hearing, the proceedings clearly show that the chairman had not made any final orders.

45. In the end, I find that the appeal is without merit and is dismissed with costs to the 1st respondent.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 7TH DAY OF OCTOBER, 2022. ......................................J. K. SERGONJUDGEIn the presence of:……………………………. for the Appellant.................................... for the 1st Respondent……………………………. for the 2nd Respondent*