https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7876

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KIAMBU CIVIL APPEAL NO. E 171 OF 202 4 PATRICK KAGOIYA KINUTHIA……. …….................APPELLANT -VERSUS- SAHAM ASSURANCE CO. LTD …………………......RESPONDENT (Being an appeal from the judgment of Hon. Judith Omolo (Ms) (SRM), delivered on 26th September, 2024 in Limuru PMCC No.381 of 2021) 1. This appeal arises from the judgment delivered on 26th September, 2024, in Limuru PMCC No. 381 of 2021. The suit is based on prayers contained in the Amended Plaint dated 6th December, 2021 and filed by Patrick Kagoiya Kinuthia against Saham Assurance Co. Ltd, being the plaintiff in the lower court (hereafter the Appellant) and against Saham Assurance Co. ltd (the 1st Defendant) in the lower court and hereafter the Respondent). 2. In the suit, the Appellant sought for reliefs against the Defendant in the nature of a declaration that the defendant is liable to settle the decretal amount owing in Limuru PMCC Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 1 No. 78 of 2019, costs of the suit and interest from 19th May, 2021 when the Decree was drawn at court rates. 3. The Plaintiff avers that during the pendency of the insurance policy, an accident occurred on 29th April, 2018 involving motor vehicle registration No. KCC 099A that collided with motor vehicle registration No. KAE 231Y which the Plaintiff was travelling in along Tigoni area. The Plaintiff sustained bodily injuries and attributed the occurrence of the accident to negligence of the Defendants, who are the insurance holders. The Plaintiff averred that it had initially instituted a suit against the Defendants in Limuru PMCC No. 78 of 2018 between the Plaintiff and Hurterize Thomas Charlex Maxime and Danny M. Peter. Upon full court hearing, the trial magistrate court delivered Judgment on 17th April, 2020 in favour of the Plaintiff awarding him a sum of Kshs.53,500/ plus costs and interest. Subsequently, a Decree was drawn in the sum of Kshs.108,743/= on 19th May, 2020 but the Defendant refused to honour the Decretal sum. 4. The Respondent filed the statement of defence dated 18th November, 2021 denying the averments made in the plaint stating that motor vehicle Registration No. KCC 099A was covered under policy No. MGL/07/070/024986/2018 COMP and the insured was Mr. Philip A. Walton who was not a party in the primary suit and not the Defendant in the primary suit. 5. The suit proceeded to full hearing with the testimonies of both the Appellant and the Respondent. Upon close of submissions, the trial court delivered judgment on 26th Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 2 September, 2024 dismissing the suit with no order as to costs. 6. Aggrieved with the outcome, the Appellant preferred this appeal which is premised on the following grounds: i. THAT the Honourable Magistrate erred in law and fact in failing to appreciate the purpose to which the insurance (Motor Vehicle Third Party Risks) Act, Cap 405, was enacted to cure and hence fell into error in dismissing the plaintiff’s suit. ii. THAT the Honourable Magistrate erred in law and fact in holding that judgement obtained against a driver of the insured vehicle at the date of accident, is not enforceable against the insurance company for purposes of the provisions of cap 405, Laws of Kenya. iii. THAT the Honourable Magistrate erred in law and fact in considering irrelevant and extraneous matters not before her and arrived at a wrong decision yet this was only a declaratory suit before her and there was a judgement against the driver of the accident vehicle by a competent court. iv. THAT the Honourable Magistrate erred in law and fact in dismissing the Plaintiffs case despite the defendant admitting that they had insured motor vehicle registration KCC 099A for purposes of Cap 405, Laws of Kenya as at the date of accident and that the vehicle was being driven by an authorized driver one Daany M. Pather. No evidence was led by Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 3 the defendant that the vehicle had been stolen at the time of accident nor a report made to the police. v. THAT the trial court penalized the plaintiff for suing the driver of the vehicle and the registered owner as at the date of accident yet the plaintiff as a member of public had no way of knowing a Mr. Philip A. Walton, who is now being alleged to be the owner of the subject vehicle and no sale agreement was produced in court by the defendant to proof ownership by him of the said vehicle. vi. THAT the honourable magistrate erred in law and fact in shifting the burden of proof from the defendant to the plaintiff as to the fine details of whose name was in the defendant's records as the policy holder of the subject vehicle yet this were private documents not in public domain when an accident occurs. 7. The Appellant therefore seeks to have the trial Court’s judgment set aside and that judgment be entered in his favour plus costs of both this Appeal and in the lower court. 8. The Appeal was canvassed by way of written submissions. The Appellant’s counsel submitted that the appeal arose from a road traffic accident which occurred on 29th April 2018 involving motor vehicle registration KCC 099A, driven by Danny M. Panther, which collided with motor vehicle registration number KAE 231Y in which the Respondent was a passenger. Following the accident, the injured passenger successfully sued the registered owner and driver of the pg. 4 Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 offending motor vehicle in Limuru PMCC No. 78 of 2018 and obtained judgment for Kshs.108,745 jointly and severally against them. 9. Counsel submitted that the judgment debtors in the subject suit failed to satisfy the decree. The Appellant therafter instituted a declaratory suit against Saham Assurance Co. Ltd (also known as MUA Insurance Co. Ltd) pursuant to the provisions of Cap 405 Laws of Kenya. However, the trial court dismissed the suit on the ground that one Philip A. Walton, alleged to be the insured owner of the vehicle, had not been sued in the primary suit. 10. The Appellant argued that the trial court failed to appreciate the purpose of the Insurance (Motor Vehicle Third Party Risks) Act, whose objective is to protect third parties injured through the use of motor vehicles. It was also submitted that several facts were undisputed, namely: that the accident occurred; that judgment had been entered against the registered owner and authorized driver; that the insurer had been served with a statutory notice which it acknowledged; that the insurer admitted insuring the motor vehicle at the material time; and that the insurer never obtained a declaratory order avoiding liability under Section 10 of Cap 405 Laws of Kenya. 11. It was further submitted that the trial magistrate erred in holding that only a judgment against Philip A. Walton could Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 5 be satisfied by the insurer. Counsel maintained that an authorized driver of an insured vehicle is also covered under the policy and any judgment against such driver is payable by the insurer. Reliance was placed on the decision in James Akhatioli Ambundo v Lion of Kenya Insurance Co. Ltd (2021) eKLR where the High Court held that a driver of an insured motor vehicle is deemed an insured person for purposes of Cap 405. The Appellant also relied on Blueshield Insurance Co. Ltd v Raymond Buuri in (1998) eKLR which the Court of Appeal held that once statutory liability under Section 5(b) of Cap 405 is established, the insurer is obligated under Section 10(1) to satisfy the judgment. 12. Counsel further submitted that the trial court failed to properly analyse the Appellant’s submissions and authorities. It was argued that the police abstract produced before the trial court contained details of the accident vehicle, the driver, and the insurance policy, thereby shifting the burden to the insurer to prove that the driver lacked authority to drive the vehicle. The insurer failed to adduce evidence showing that the vehicle had been stolen or was being driven without authority. 13. Lastly,the Appellant contended that the trial court unfairly penalized the Appellant by insisting that Philip A. Walton ought to have been sued in the primary suit, yet the Appellant, as a member of the public, had no means of pg. 6 Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 knowing the identity of the alleged insured owner. Counsel emphasized that no sale agreement or logbook was produced to prove ownership by Philip A. Walton and that the official NTSA records showed the original defendant as the registered owner. The Appellant therefore urged this court to find that the trial court improperly shifted the burden of proof to the Appellant regarding matters solely within the insurer’s knowledge. 14. The Respondent filed written submissions dated 4th November, 2025.The Respondent submitted that the sole issue for determination was whether an insurance company can be compelled to satisfy a judgment where its insured was not sued in the primary suit. 15. Counsel submitted that the Respondent’s obligation to satisfy a judgment is governed by the Insurance (Motor Vehicle Third Party Risks) Act, particularly Section 10(1), which obligates an insurer to satisfy judgments obtained against persons insured under the relevant policy. It was argued that the relationship between an insurer and its insured is purely contractual and the duty to indemnify only arises where judgment is entered against the insured person. 16. The Respondent contended that its insured, Philip A. Walton, was never sued in the primary suit, which had instead been instituted against Hurtebize Thomas Charles Maxime and Danny M. Panther, persons allegedly unknown pg. 7 Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 to the Respondent and not parties to the insurance contract. Counsel therefore maintained that the Appellant’s failure to sue the Respondent’s insured was fatal to the declaratory suit. 17. It was further submitted that liability could not be imposed upon the insurer in isolation, as doing so would offend the doctrine of privity of contract by extending contractual obligations to third parties who were strangers to the insurance policy. Reliance was placed on the decision in Savings & Loan (K) Limited v Kanyenje Karangaita Gakombe & Another(2015) where the court held that a person who is not a party to a contract cannot claim benefits or impose liabilities arising from it. 18. The Respondent also relied on Kenya Orient Insurance Company Limited v Mutua & Another [2024] KEHC 9259(KLR) in which the court outlined the conditions necessary before an insurer’s statutory obligation under Section 10(1) can arise, including proof that judgment was obtained against the insured person. Counsel submitted that although the Appellant satisfied other statutory requirements such as issuance of statutory notice and proof of insurance, no judgment had been entered against the Respondent’s insured, Philip A. Walton. 19. Counsel argued that without a judgment against the insured, the insurer’s statutory obligation could not be triggered. It was further submitted that extending liability to Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 8 the Respondent in circumstances where its insured had not been sued would undermine the framework of motor vehicle insurance law, particularly because the insured was denied an opportunity to defend the claim or participate in the proceedings in the primary suit. 20. In conclusion, the Respondent submitted that the Appellant could not impose liability upon the insurer after failing to institute proceedings against the insured person. The Respondent therefore urged the court to dismiss the Appeal with costs. 21. The court has considered the record of appeal, the pleadings and original record of the proceedings as well as the submissions by the respective parties. This being a first Appeal, the first Appellate court’s duty was set out in the Court of Appeal case in Selle v Associated Motor Boat Co. [1968] EA 123 in the following terms: “An appeal from the High Court is by way of re- trial and the Court of Appeal is not bound to follow the trial judge’s finding of fact if it appears either that he failed to take account of circumstances or probabilities, or if the impression of the demeanour of a witness is inconsistent with the evidence generally. An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal pg. 9 Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 are well settled. Briefly put they are that this court must 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 this respect. In particular this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.” 22. It is thus trite law that an Appellate court will not ordinarily interfere with a finding of fact made by a trial court unless such finding was based on no evidence, or it is demonstrated that the court below acted on wrong principles in arriving at the finding it did. See Ephantus Mwangi & Another v Duncan Mwangi Wambugu [1982 – 1988] IKAR 278. 23.Upon examination and appreciation of all the pleadings filed in the Appeal and the rival submissions, it is the court’s view the appeal turns on one issue, namely, whether the Respondent insurer can be compelled to satisfy the Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 10 judgment obtained in the primary suit notwithstanding that its alleged insured, Philip A. Walton, was not sued therein. 24.Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act provides that “where judgment is obtained against a person insured by a policy issued under the Act, the insurer is obligated to satisfy the judgment notwithstanding that the insurer may be entitled to avoid or cancel the policy.” 25.It is not disputed that the Respondent insured motor vehicle registration number KCC 099A at the material time for purposes of Cap 405. It is equally not disputed that the Respondent was duly served with a statutory notice prior to the institution of the primary suit and that it never sought a declaratory order to avoid liability under the policy. 26.The trial court dismissed the declaratory suit solely on the basis that Philip A. Walton, who was alleged to be the insured owner of the vehicle, had not been sued in the primary suit. 27.In this court’s view, the trial magistrate fell into error in adopting an unduly restrictive interpretation of Section 10(1) of Cap 405. 28.The purpose of the Insurance (Motor Vehicle Third Party Risks) Act is to protect innocent third parties who suffer injuries arising from the use of motor vehicles on public roads. The statute was enacted to ensure that such victims are not left without recourse merely because of private arrangements between insurers and insured persons. Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 11 29.The evidence on record demonstrated that the primary suit was instituted against the registered owner of the vehicle as per official NTSA records and against the driver of the offending motor vehicle. Judgment was lawfully entered against both defendants jointly and severally. 30.The police abstract produced before the trial court identified Danny M. Panther as the driver of the offending vehicle and also contained the Respondent’s insurance particulars. The Respondent did not adduce evidence to demonstrate that the said driver lacked authority to drive the vehicle or that the vehicle had been stolen or unlawfully used at the time of the accident. 31.In the absence of such evidence, the court is entitled to infer that the driver was an authorized driver operating the insured vehicle within the scope contemplated under the policy and Cap 405. 32.The High Court in James Akhatioli Ambundo v Lion of Kenya Insurance Co. Ltd (2021) eKLR held that “an authorized driver of an insured motor vehicle is covered for purposes of Cap 405 and that a judgment obtained against such driver is enforceable against the insurer.” 33.Further, this court is persuaded by the reasoning in Corporate Insurance Co. Ltd v Makau Kaithu Musomba & Another (2018) eKLR where the court held that the common factor under Cap 405 is the insured vehicle and the third-party risk arising from its use, rather than merely the Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 12 identity of the named policy holder. The court observed that if insurers were allowed to escape liability solely because the person sued was not the named policy holder, the objective of the Act would be defeated. 34.The court in the said decision further held that an authorized driver is deemed to be “the insured” for purposes of enforcement under Section 10(1) of Cap 405 and that a third party who has obtained judgment is entitled to enforce such judgment against the insurer provided the policy was valid and covered the risk that materialized. 35.Similarly, in Philip Kimani Gikonyo v Gateway Insurance Co. Ltd (2007) eKLR Justice Visram referred to the Halsburys Laws of England, Volume 22, (3rd edition) where it is stated at page 360 as follows:- “Rights under the policy of the permitted driver. A permitted driver is not directly a party to the original contract of insurance and, on ordinary common law principles of contract law, he cannot therefore have any right of action against the insurers on the policy, unless it is possible to show that the assured, when making the contract, intended to act as agent or trustee of the permitted driver. Frequently this is not possible, because the particular permitted driver was not, at that time, in contemplation at all. It is, however, now laid down by statute that insurers, if they issue a motor policy covering compulsorily insurable risks, are liable to indemnify any persons or classes of Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 13 persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons. The permitted driver accordingly has a direct right of action within the ambit of this provision against the insurers. He becomes, in effect, a party to the contract of insurance, but he must take the contract as he finds it; he cannot excuse a breach of a condition by pleading that he was quite unaware of its terms of existence.” 36.I respectfully adopt the above reasoning. In the present case, the Respondent admitted that the subject motor vehicle was insured at the material time. The Respondent also admitted receipt of the statutory notice and did not institute proceedings under Section 10(4) of Cap 405 to avoid the policy on grounds of non-disclosure or breach of policy terms. 37.The Respondent cannot therefore evade statutory liability merely because the Appellant sued the registered owner and the driver disclosed through official records instead of the alleged policy holder whose identity was not within the public domain. 38.Similarly, in Blueshield Insurance Co. Ltd v Raymond Buuri the Court of Appeal emphasized that once statutory liability under Section 5(b) of Cap 405 is established, the insurer becomes obligated under Section 10(1) to satisfy the judgment. Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 14 39. I am therefore unable to agree with the Respondent’s contention that only a judgment against Philip A. Walton could trigger liability under the Act. To adopt such a position would elevate private insurance records above publicly available ownership records and would unfairly prejudice innocent third parties who have no means of knowing undisclosed insurance arrangements. 40.The Appellant, as a member of the public, could only reasonably sue the persons disclosed through official records and investigations as the owner and driver of the motor vehicle. The Respondent cannot avoid statutory liability merely because the named insured differed from the registered owner sued in the primary suit. 41.The authorities relied upon by the Respondent on privity of contract are distinguishable. A declaratory suit under Cap 405 is founded not merely on contract but on a statutory obligation imposed upon insurers for the protection of third parties. 42.Consequently, this court finds that the trial magistrate erred both in law and fact in dismissing the Appellant’s suit. The appeal therefore succeeds. Final Orders 43. Accordingly, the judgment delivered on 26th September 2024 in Limuru PMCC No. E381 of 2021 is hereby set aside and substituted with judgment for the Appellant as follows: Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 15 a. A declaration be and is hereby issued that the Respondent is liable to satisfy the decree issued in Limuru PMCC No. 78 of 2018 together with accrued interest thereon. b. The Appellant shall have costs of the suit in the lower court and costs of this appeal. It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 5TH DAY OF JUNE 2026, THROUGH THE MICROSOFT TEAMS PLATFORM. KENNEDY KANDET JUDGE IN THE PRESENCE OF: MUINDI FOR THE APPELLANT MUTHUKI FOR THE RESPONDENT COURT ASSISTANT: JAEL NOSIM Judgment in Kiambu HC Civil Appeal No. E171 OF 2024 pg. 16