[2022] KEHC 15299 (KLR)

Owaga & 3 others (Suing as Administrators ad litem of the Estate of Michelle Aittah Owaga-Deceased) v Jubilee Insurance Company Limited (Civil Appeal E319 of 2020) [2022] KEHC 15299 (KLR) (Civ) (11 November 2022) (Judgment)

Neutral citation: [2022] KEHC 15299 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E319 of 2020

JK Sergon, J

November 11, 2022

Between

Ben Otieno Owaga

1st Appellant

Noel Sheunda Nyongesa

2nd Appellant

Ben Otieno Owaga

3rd Appellant

Noel Sheunda Nyongesa

4th Appellant

Suing as Administrators ad litem of the Estate of Michelle Aittah Owaga-Deceased

and

Jubilee Insurance Company Limited

Respondent

(Being an appeal against the ruling and order of Honourable L.B. Koech (Mrs.) (Principal Magistrate) delivered on 30th October, 2020 in Nairobi CMCC no. 9296 OF 2018)

Judgment

1. The appellants in this instance, both in their respective individual capacities and in their joint capacity as administrators ad litem of the estate of Michelle Aittah Owaga (“the deceased”) instituted the suit namely CMCC No 9296 of 2018 (“the declaratory suit”) before the Chief Magistrate’s Court at Milimani Commercial Courts vide the plaint dated October 18, 2018 and sought for a declaratory order to the effect that the respondent be obliged to satisfy the decree issued in Nakuru HCCC No340 of 2012 (“the primary suit”) constituting the sum of Kshs 4,116,000/= plus costs of the suit and interest thereon.

2. The appellants pleaded in the plaint that the respondent herein was at all material times the insurer of the motor vehicle registration number UAG 226H (“the subject motor vehicle”) under policy number NRB/2010/2009/38530 and insurance certificate number C 6179107 and which subject motor vehicle was involved in the material accident forming the subject of the primary suit.

3. The appellants pleaded in the plaint that the trial court in the primary suit delivered judgment in their favour and against the respondent’s insured (Kapkwata Saw Mills Ltd) and another person not before this court, on October 12, 2017.

4. It was pleaded by the appellants that despite demand to settle the decretal sum, the respondent has failed and/or neglected to comply, thereby necessitating the declaratory suit.

5. The respondent entered appearance through its advocate and filed the statement of defence dated November 14, 2018 to refute the averments made in the appellants’ plaint.

6. Subsequently, the respondent filed the application dated August 19, 2020 and sought for leave of the court to amend its statement of defence as per the draft defence annexed thereto. The application stood opposed by the appellants.

7. Upon hearing the parties on the aforementioned application, the trial court granted the respondent leave to amend its statement of defence as prayed.

8. Being aggrieved by the above decision, the appellants sought to challenge the same by way of an appeal. Through their memorandum of appeal dated November 25, 2020 the appellants have put in the following grounds:i.That the learned trial magistrate erred in fact by failing to appreciate sufficiently or at all that the respondent had admitted on oath in Nakuru HCCC No 340 of 2012 that Kapwata Saw Mills Limited was their insurer in respect to the accident motor vehicle registration number UAG 226H.ii.That the learned trial magistrate erred in fact by failing to appreciate sufficiently or at all that the respondent had post entry of judgment in Nakuru HCCC No 340 of 2012 expressly admitted liability for the decretal sum.iii.That the learned trial magistrate gravely erred in law by failing to appreciate at all that the respondent was by operation of the law estopped from pleading the intended amendments.iv.That the learned trial magistrate erred in law by failing to correctly, sufficiently or at all appreciate the law on amendment of pleadings and its application to the undisputed facts of the case.v.That the learned trial magistrate erred in both law and fact by failing to appreciate at all that the respondent was not litigating in good faith but was perpetuating fraud on the appellants.vi.That the learned trial magistrate erred in law and fact by adopting a perfunctory approach to the application then before court and thus demonstrably failed to give due consideration to the unique circumstances and facts of the case nor to the plaintiffs’ submissions on record thereby arriving at a patently wrong finding and order.

9. This court issued directions to the parties to file written submissions on the appeal.

10. The appellants on their part submit that the trial court erred in granting leave to the respondent to amend its statement of defence and yet it had previously admitted to insuring the subject motor vehicle and was therefore estopped from denying that position, citing among others, the case of George Kamau Kimani & 4 others v The County Government of Trans-Nzoia & another [2016] eKLR where the Court of Appeal rendered itself thus:“In Trade Bank Limited v L Z Engineering Construction Limited [2001] EA 266, this Court, adopting the definition of issue estoppel in Halsbury’s Laws of England (4th edition) at page 861 stated:“An estoppel which has come to be known as Issue Estoppel may arise where a plea of res-judicata could not be established because the causes of action are not the same. A party is precluded from contending the contrary of any precise point which having once already been distinctly put in issue, has been solemnly and with certainty determined against him. Even if the objects of the first and second actions are different, the finding on a matter which came directly (not collaterally or incidentally) in issue on the first action, provided it is embodied in a judicial decision is final, is conclusive in a second action between the same parties and their privies. The principle applies whether the point involved in the earlier decision, and as to which the parties are estopped, is one of fact or one of law, or one of mixed fact and law.”

11. The appellants also submit that the trial court ought to have taken into consideration the fact that the respondent is actingmala fides since it is clear that it was at all material times the insurer of the subject motor vehicle and was therefore not entitled to a grant of the order for amendment sought.

12. To support their arguments made above, the appellants refer this court to the case of Uchumi Supermarkets Limited & another v Sidhi Investments Limited[2019] eKLR in which the court reasoned that:“…The purpose of the amendment is to facilitate the determination of the real question in controversy between the parties to any proceedings, and for this purpose the court may at any stage order the amendment of any document, either on application by any party to the proceedings or of its own motion...The person applying for amendment must be acting in good faith. Amendment will not be allowed at a late stage of the trial if on analysis of it is intended for the first time thereby to advance a new ground of defence. If the amendment for which leave is asked seeks to repair an omission due to negligence or carelessness, leave to amend may be granted if the amendment can be made without injustice to the other side…”

13. For all the foregoing reasons, the appellants plead with this court to allow the appeal and to set aside the impugned ruling and order.

14. In reply, the respondent on its part contends that the trial court properly exercised its discretion in granting the prayer sought for leave to amend, and hence there is no reasonable basis for interference with that decision.

15. The respondent cites a few authorities. I will refer to the most recent of them all, that is the case of City Clock Limited v County Clock Kenya Limited & another [2020] eKLR where the court held that:“InHarrison C Kariuki v Blueshield Insurance Company Ltd[2006] eKLR the court referred to the Court of Appeal decision in Central Kenya Ltd v Trust Bank Ltd[2000] EALR 365 and held that: -“The guiding principle in applications to amend pleadings is that the same will be liberally and freely permitted, unless prejudice and injustice will be occasioned to the opposite party. There will normally be no justice if the other party can be compensated by an appropriate award of costs for any expense, delay or bother occasioned to him. The main this is that it be in the interests of justice that the amendments sought be permitted in order that the real question in controversy between the parties be determined.”

16. I have considered the rival submissions and the authorities cited therein in respect to the appeal. I have also re-evaluated the relevant material and evidence which was placed before the trial court. It is noteworthy that the appeal is essentially against the trial court’s decision to grant the respondent leave to amend its statement of defence. I will therefore tackle the six (6) grounds of appeal together.

17. The record shows that the application dated August 19, 2020 seeking leave to amend the statement of defence was premised on the fact that the respondent had come to learn of the primary suit and that it later discovered that the defendants in the primary suit were not its insured but that the insurance policy mentioned hereinabove was taken out by Fidelity Timber and Hardware, who was not a party to the primary suit.

18. The respondent therefore stated that the purpose of the proposed amendments are to prove that the defendants in the primary suit were not its insured at all material times.

19. In reply, Ben Otieno Owaga who is the 1st appellant herein, stated that the respondent had admitted to being the insurer of the subject motor vehicle and that the appellants had undertaken a motor vehicle search in respect to the subject motor vehicle and which search disclosed that the said motor vehicle was registered in the name of one of the defendants in the primary suit.

20. The 1st appellant further stated that upon service of a statutory notice to the respondent, no response was made by the respondent and at no point during the pendency of the primary suit did the issue of the insurance policy arise.

21. It was stated by the 1st appellant that furthermore, upon delivery of judgment in the primary suit, the respondent through its insured unsuccessfully sought to have the interlocutory judgment set aside and that the court in the primary suit reasoned inter alia, that the respondent herein was at all material times the insurer of the subject motor vehicle and that service of the statutory notice had been effected upon the respondent but that it had failed to cooperate with the appellants in disclosing the identity of its insured, and hence the respondent had approached the court in bad faith.

22. For the foregoing reasons, the appellants stated that the respondent was estopped from re-litigating the issue of identity of its insured, since it did not challenge the above decision on appeal.

23. In rejoinder, the respondent put in the further affidavit sworn by its Legal Officer, Patience Mirara, stating that at the time of service of summons in the declaratory suit, the respondent had no knowledge of the existence of the primary suit and that the issue of identity of its insured was not an issue for consideration and/or determination in the primary suit.

24. In the end, the learned trial magistrate in the declaratory suit reasoned that in the absence of anything to indicate the prejudice to be suffered by the appellants if the prayer for amendment is granted and in order for the court to determine the real issues in controversy, it would be proper for her to grant leave to the respondent to amend its statement of defence accordingly.

25. The law encompassing the amendment of pleadings is well settled. Under Section 100 of the Civil Procedure Act, this court has general power to amend pleadings to correct any defect or error in a suit at any stage of the proceedings on terms as to costs or otherwise as it may deem just and all amendments should be made for the purpose of determining the real question or issues raised by or depending on the proceedings. The above provision is echoed by Order 8, Rules 3 and 5 of theCivil Procedure Rules, 2010.

26. Various judicial precedents have addressed the subject of amendment of pleadings. For reference purposes, I shall cite the case of Coffee Board of Kenya v Thika Coffee Mills Limited & 2 Others, CA No 94 of 2003 [2014] eKLR where the Court of Appeal considered the principles stated in Mulla, The Code of Civil Procedure, 18th Ed, Vol 2 at pages 1751-1752 were adopted as follows:i.All amendments should be allowed which are necessary for determination of the real controversies in the suit;ii.The proposed amendment should not alter and be a substitute of the cause of action on the basis of which the original list was raised;iii.Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts would not be allowed to be incorporated by means of amendment;iv.Proposed amendment should not cause prejudice to the other side which cannot be compensated by means of costs;v.Amendment of a claim or relief barred by time should not be allowed;vi.No amendment should be allowed which amounts to or results in defeating a legal right to the opposite party on account of lapse of time;vii.No party should suffer on account of the technicalities of law and the amendment should be allowed to minimize the litigation between the parties;viii.The delay in filing the petitions for amendment of the pleadings should be properly compensated by costs;ix.Error or mistake, which is not fraudulent, should not be made the ground for rejecting the application for amendment of pleadings.”

27. From the foregoing, it can be said that while an application for amendment can be made at any stage, it is imperative for this court to consider the circumstances under which the appellant’s application was brought.

28. Upon my re-examination of the pleadings and material, it is not controverted that the impugned ruling was delivered in the declaratory suit. It is also not controverted that the judgment in the primary suit which gave rise to the declaratory suit was delivered in favour of the appellants herein.

29. From my study of the record, it is apparent that the declaratory suit was filed in the year 2018 and the statement of defence was filed in the same year, whereas the amendment was sought two (2) years later.

30. Upon considering the foregoing circumstances, I am of the view that the respondent did not provide any credible explanation for the delay of close to two (2) years in bringing the application for leave to amend.

31. Suffice it to say that, I have re-examined the nature of amendments being sought and as earlier mentioned, it is apparent that the same concern the issue of identity of the insured of the subject motor vehicle.

32. Upon my consideration of the pleadings and material on record and without overlooking the fact that the declaratory suit is yet to be determined, I am inclined to agree with the reasoning taken by the appellants that the existence of the primary suit and circumstances surrounding it were well within the knowledge of the respondent at all material times.

33. Upon my further consideration of the ruling delivered by the High Court in the primary suit in respect to the application seeking to set aside the interlocutory judgment and whose reasoning I have summed up hereinabove, there is nothing to indicate that the said ruling and/or the judgment both of which were delivered in the primary suit and which addressed the issue of the material insurance policy and the subject motor vehicle, have been challenged on appeal or set aside.

34. In view of the foregoing circumstances, I agree with the argument raised by the appellants that the respondent appears not to be acting in good faith. I associate myself with the High Court’s following analysis inSt Patrick’s Hill School Limited v Bank of Africa Kenya Limited[2018] eKLR with reference to Bramwell, LJ in Tildesley v Harper (1878), 10 Ch D at p 296:“My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide…”

35. Further to the foregoing, I am satisfied that the appellants have sufficiently demonstrated the manner in which they stand to be gravely prejudiced and disadvantaged in view of the proposed amendments sought, and I borrow from the case of City Clock Limited v County Clock Kenya Limited & another [2020] eKLR cited in the submissions by the respondent and where the court determined thus:“In Harrison C Kariuki v Blueshield Insurance Company Ltd [2006] eKLR the court referred to the Court of Appeal decision in Central Kenya Ltd v Trust Bank Ltd [2000] EALR 365 and held that: -“The guiding principle in applications to amend pleadings is that the same will be liberally and freely permitted, unless prejudice and injustice will be occasioned to the opposite party. There will normally be no justice if the other party can be compensated by an appropriate award of costs for any expense, delay or bother occasioned to him. The main this is that it be in the interests of justice that the amendments sought be permitted in order that the real question in controversy between the parties be determined.”

36. In view of all the foregoing circumstances, I am convinced that the ruling by the learned trial magistrate ought to be disturbed.

37. Accordingly, the appeal is hereby allowed. Consequently, the ruling delivered on October 30, 2020 vide Nairobi CMCC No 9296 of 2018 is hereby set aside and is substituted with an order dismissing the Notice of Motion dated August 19, 2020 with costs to the appellants. The appellants shall also have the costs of the appeal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 11TH DAY OF NOVEMBER, 2022. …………….J. K. SERGONJUDGEIn the presence of:……………………………. for the Appellants……………………………. for the Respondent