https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1614

Lukiri t/a Triluk Drilling Ltd v Jubilee Insurance Ltd (Civil Appeal 166 of 2020) [2026] KECA 1614 (KLR) (31 July 2026) (Judgment) Neutral citation: [2026] KECA 1614 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal 166 of 2020 DK Musinga, P Lilan & JO Okello, JJA July 31, 2026 Between Patrick Omondi Lukiri t/a Triluk Drilling Limited Appellant and Jubilee Insurance Limited Respondent (Being an appeal from the Judgment/Decree of the High Court of Kenya at Nairobi (W. A. Okwany, J.) 23rd January, 2020 in HCCC No. 447 of 2016) Judgment 1.This appeal arises from the judgment delivered by the High Court at Nairobi (W.A Okwany, J.) on 23rd January, 2020 in HCCC No. 447 of 2016, in which the High Court dismissed the appellant’s claim against Jubilee Insurance Limited, the respondent herein. 2.The background, in brief, is that the appellant was operating a borehole drilling business under the name Triluk Drilling Limited. He arranged insurance for his Ashok Leyland drilling machine, registration number KBB 108P (the drilling machine), with the respondent, who provided cover under policy number P/NRB/2580/2014/120565 for one year, from 7th May, 2015, to 6th May, 2016, for a total sum assured of Kshs 8 million. 3.On 19th March, 2016, during the pendency of the policy, the drilling machine was involved in a fire incident while drilling a borehole at Malanga Primary School. Following the fire incident, the appellant lodged a claim seeking compensation from the respondent for the loss of his drilling machine based on the subsisting insurance cover. The respondent, however, repudiated liability and declined to honour the claim on the ground that the incident fell within a category of risks which were excluded from indemnity under the insurance policy. 4.Aggrieved by the respondent’s decision, the appellant filed a suit against the respondent which was commenced by a plaint dated 1st November, 2016. The appellant sought special damages of Kshs 8,000,000/- as the sum assured; special damages of Kshs 23,200/-, a sum of Kshs 38,182,620/- as compensation for loss of business/-, and also interest and costs of the suit. 5.In its defence dated 27th July, 2017, the respondent admitted the existence of the policy of insurance between itself and the appellant, but pleaded that the respondent only agreed to indemnify the appellant for unforeseeable and sudden physical loss or damage from any cause other than mechanical breakdown or failure or any other cause expressly excluded. 6.The respondent further pleaded that it engaged the services of Trans Europa Assessors Limited, who established that damage to the drilling machine was caused by a mechanical breakdown, specifically a hose pipe failure, which was excluded from the cover. 7.The matter was referred to mediation, but the parties failed to reach any settlement, and it was referred back to court for determination. At the hearing, the appellant testified that he was the owner of the subject machine and that he had taken out insurance for the machine against risk of damage by fire; that the said cover was issued by the respondent; and that on 19th March, 2016, the subject vehicle caught fire and was extensively burnt. He testified that he reported the matter at Funyula Police Station. He also lodged a claim with the respondent, but it was declined. The appellant stated that he lost four contracts amounting to a total of Kshs 38,186,220 as a result of the failure by the respondent to indemnify him. He produced a bundle of documents comprising the police abstract report of the incident, the Insurance Policy, the motor accident form, and the loss adjuster's report. 8.On cross-examination, the appellant stated that he could not remember the last time the drilling machine was serviced before the accident, though he later stated that it had been repaired barely a month before. 9.PW2, Peter Sakwa, testified that he was a loss adjuster/assessor, having been in the industry for 25 years and 10 years in the mainstream claims industry. The witness stated that he inspected the machine in September 2016 after it had been dismantled at the dealer’s premises. He stated that he observed charred and ashy components, leading him to conclude that the damage resulted from direct exposure to flames. His opinion was that hot liquid could cause charring to the hydraulic hose pipes, causing them to burst. He produced his expert report as an exhibit. 10.In cross-examination, the witness maintained that the cause of the charring was direct exposure to flames. 11.DW1 Anne Kanake, the respondent’s legal officer, adopted her witness statement filed on 15th February, 2019 and testified that the insurance policy contained an exclusion clause against mechanical breakdowns. She testified that the exact cause of the fire was not identifiable. It was her testimony that, although the respondent insured items against risk of damage caused by fire, such claims were not to be honored under the particular policy if the cause was proved to be a mechanical breakdown. 12.DW2, Raphael Ojuando Nguta, testified that he was a loss adjuster, having been in the business for 15 years. The witness produced his report dated 11th July, 2016. 13.During cross-examination, the witness stated that the hosepipe failure was a mechanical defect. He stated that he did not visit the scene of the fire or interview any eyewitnesses and that his conclusions were based on boardroom discussions with the dealers. 14.At the end of the hearing, the learned judge dismissed the appellant’s suit, finding that the appellant failed to prove his case against the respondent. Specifically, the court found that although the appellant’s employees were present during the fire, none were called to testify. The court also found that evidence from the two loss assessors was purely secondary, if not hearsay, because neither of them witnessed the incident. The court further found that the appellant’s own maintenance logs revealed that the drilling machine had not been serviced for nearly a year and had a history of overheating. Further, that there was no documentary proof to confirm that the drilling exercise at Malanga Primary School actually took place. 15.Aggrieved by that decision, the appellant filed the instant appeal on the grounds that the learned judge erred in law and fact: in finding that the appellant had failed to prove his case; in failing to consider the exception to the exclusion clause relied upon by the respondent to avoid indemnifying the appellant; erred in taking into consideration matters that were not pleaded by the defendant; in failing to apply the reverse burden of proof doctrine in respect of exclusion clause considering the pleadings, evidence and submissions; by ignoring or disregarding relevant evidence and uncontested facts in the pleadings and defendant’s submissions thereby arriving at the wrong decision; erred in re-examining the plaintiff after his cross-examination amounting to a disguised further cross-examination; in concluding that the parties’ evidence amounted into a draw by virtue of different versions of how the peril insured happened; in failing to appreciate the admissibility and reliance on the expert witness’ opinion as an exception to hearsay evidence rule; and failing to appreciate that an expert opinion may be formed without the eye witness’ evidence. 16.The appellant prays that the findings and judgment of the learned judge be set aside and substituted with a judgment allowing the appellant’s claim with costs. 17.We heard this appeal virtually on 16th March, 2026. Learned counsel Ms. Njiru for the appellant and Ms. Okeyo for the respondent relied on their written submissions without highlights when they appeared before this Court that day. 18.In his written submissions, the appellant stated that he tendered evidence to support his claim that the damage to the drilling machine was caused by fire, which was supported by an expert report from Xclaim Adjusters, which observed that several parts of the machine suffered major damage due to fire. It is the appellant’s submission that the respondent’s own report could not rule out occurrence of the fire incident. 19.The appellant faults the Judge, arguing that she considered matters that were not pleaded. Specifically, that the learned judge considered the aspect of maintenance, that is, lack of regular servicing of the drilling machine, when the same was not raised in the pleadings. Additionally, that the appellant’s drilling contract at Malanga Primary School was not in contention, but the trial judge decided on the same. The appellant relied on the cases of Independent Electoral and Boundaries Commission & Anor v Stephen Mutinda Mule & 3 Others, and Galaxy Paints Company Ltd vs Falcon Guards Ltd (2000) eKLR for the submission that issues for determination in a suit generally flow from pleadings. 20.On the burden of proof concerning exclusion clauses, the appellant submits that once he produced evidence of the accident, the onus shifted to the respondent to prove that the loss fell within a specific exclusion clause under the contract of insurance. The appellant argues that the respondent failed to give a plausible explanation as to how they concluded that the loss was not occasioned by accidental fire but by a mechanical failure. Counsel cited the case of Ukwala Supermarket (Kisumu) Limited v Kenindia Assurance Company Limited (2017) eKLR. 21.On its part, the respondent submits that the appellant failed to discharge its burden because he failed to call crucial material witnesses, such as the machine operator or anyone present at the scene, which omission entitled the court to draw an adverse inference. The respondent cited the case of Karugi & Another v. Kabiya & 3 Others (1978) KLR 347 on the burden of proof. 22.Regarding the expert reports, the respondent asserts that such evidence is advisory and not binding because the experts did not witness the incident, and the drilling machine was already dismantled before their inspection. It is the respondent’s submission that the trial court was therefore right in finding the reports inconclusive. The respondent cited Mohamed Ali Baadi & Others v Attorney General & 11 Others (2018) eKLR on the finding that expert evidence must be supported by objective reasoning and factual foundation. 23.This being a first appeal, our mandate as a first appellate court is well-established as being a rehearing or retrial of the case based on the material on record. This duty is well defined in rule 31(1)(a) of the Court of Appeal Rules (2022), which requires this Court to re-examine both issues of law and fact. While this Court has the power to arrive at our own independent conclusions, we must exercise restraint and be slow to overturn a trial court’s findings of fact because we did not have the advantage of seeing or hearing the witnesses. (See Gitobu Imanyara & 2 Others vs. Attorney General [2016] eKLR).Therefore, we can only overturn a trial court’s factual finding if it is shown to be clearly wrong, or if it failed to consider material circumstances or probabilities. (See Ongwen & 5 Others vs. Omollo & 6 Others [2023] KECA). 24.We have considered the appeal and submissions by the parties. The main issue for consideration, in our view, is whether the trial court arrived at the wrong conclusion based on the evidence before it. 25.The appellant’s position before the trial court was that a fire occurred on 19th March, 2016, where his drilling machine burst into flames, resulting in extensive damage to the separator, starter, pipes, and other parts of the machine. 26.The respondent repudiated liability asserting that there was no actual fire which occurred, and that the incident was one of those expressly excluded from indemnity under the exclusion clause of the insurance policy. The appellant therefore invited the trial court to find that the respondent had breached the policy on two fronts: firstly, that there was indeed a fire incident, and secondly, that even if there was no actual fire, the incident fell under consequential damage arising from an accident that was indemnified under the policy. 27.The respondent relied on Clause (b) of the exclusion clause to repudiate liability, which provides as follows:The Company shall not be liable for:a.…b.Loss or damage due to electrical or mechanical breakdown, failure, breakage, or derangement, freezing of coolant or other fluid, defective lubrication, or lack of oil or coolant, but if, as a consequence of such breakdown or derangement, an accident occurs causing external damage, such consequential damage shall be indemnifiable. 29.While the appellant’s position was that the damage to its drilling machine was caused by accidental fire, the respondent’s position was that it was caused by a mechanical breakdown. Each party provided expert reports from loss assessors to support their rival positions. 30.The trial court had the following to say concerning the rival reports:In the present case, the parties held different positions regarding the cause of the fire. Both parties commissioned investigations by their respective loss assessors, whose reports were tendered in court as exhibits during the trial. PW2, the plaintiff’s assessor, testified as follows regarding the cause of the fire:“The cause of charring was direct exposure to flames. The hot hydraulic liquid burst and threw fluid all over the engine, the compressor fans sparked and caused fire.”The defendant’s assessment report, on the other hand, indicates that:“The probable cause of the fire may be due to a high-temperature hose failure, which would have sprayed hot compressor oil to fire ignition………we suspect that the hosepipes, rubber, and silicon parts got melted due to heat generated by the hot oil. The failure by the hosepipe could be termed as a mechanical breakdown/failure.” 29.The trial court has been faulted for making a finding that these two reports resulted in a draw, as both parties presented different versions in an attempt to reconstruct and explain how the incident happened. Clearly the trial court was faced with two conflicting expert opinions. The question then arises as to how a court should resolve conflicting expert evidence and how much weight should be attached to such evidence. 29.This Court in Kinyanjui & another (As administrators of the Estate of Sophia Wambui Kinyanjui - Deceased) v Mburu [2026] KECA 873 (KLR) referenced the High Court in Mohamed Ali Baadi and Others vs. Attorney General and Others [2018] eKLR (High Court Petition No. 22 of 2012), in which a bench of 5 Judges had this to say about how a court should treat expert evidence and the weight to be accorded to such evidence. It stated:“Expert testimony, like all other evidence, must be given only appropriate weight. It must be as influential in the overall decision-making process as it deserves; no more, no less. To our mind, the weight to be given to expert evidence will derive from how that evidence is assessed in the context of all other evidence. Expert evidence is most obviously needed when the evaluation of the issues requires specialized, technical, or scientific knowledge that only an expert in the field is likely to possess.While expert evidence is important evidence, it is nevertheless merely part of the evidence which a Court has to take into account. Four consequences flow from this.Firstly, expert evidence does not “trump all other evidence.” It is axiomatic that judges are entitled to disagree with an expert witness. Expert evidence should be tested against known facts, as it is the primary factual evidence which is of the greatest importance. It is therefore necessary to ensure that expert evidence is not elevated into a fixed framework or formula, against which actions are then to be rigidly judged with a mathematical precision.Secondly, a judge must not consider expert evidence in a vacuum. It should not, therefore be “artificially separated” from the rest of the evidence. To do so is a structural failing. A Court’s findings will often derive from an interaction of its views on the factual and the expert evidence taken together. The more persuasive elements of the factual evidence will assist the Court in forming its views on the expert testimony and vice versa. For example, expert evidence can provide a framework for the consideration of other evidence.Thirdly, where there is conflicting expert opinion, a judge should test it against the background of all the other evidence in the case, which they accept in order to decide which expert evidence is cogent and give reasons why the court prefers the evidence of one expert as opposed to the other.Fourthly, a judge should consider all the evidence in the case, including that of the experts, before making any findings of fact.” 29.From the above excerpt, which we respectfully adopt, a trial court should consider all the evidence in the case in totality, even as it considers any expert opinion to make its findings. In this case, we are satisfied the trial court’s decision to dismiss the suit was not based on one expert opinion over the other, but on the totality of the evidence tendered. Firstly, the trial court pointed out that despite the appellant’s employees being identifiable site workers, none was called to testify. Secondly, no documentary proof (such as a contract) that the drilling was indeed taking place at Malanga Primary School. These concerns were well founded in the circumstances, given the obvious gaps that were evident in the case presented by the appellant. 29.The learned judge considered the evidence tendered by the appellant and gave her reasons for finding that the appellant failed to prove, on a balance of probabilities, that indeed his drilling machine burst into flames as pleaded. The assertion that the learned judge ought not to have considered these elements, in our view, is misplaced. We are satisfied that the trial court arrived at the correct conclusion based on the totality of the facts before it. 30.For the foregoing reasons, we do not find any merit in this appeal. We uphold the judgment of the trial court and award costs of the appeal to the respondent.Orders accordingly. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2026.D. K. MUSINGA…………………………JUDGE OF APPEALPAUL LILAN…………………………JUDGE OF APPEALDR. J.O. OKELLO………………………JUDGE OF APPEALI certify that this is a true copy of the original SignedDEPUTY REGISTRAR