[2022] KEHC 13836 (KLR)

Philip Ondieki Nyarieko t/a Perspective Insurance Agency v Insurance Regulatory Authority; Jubilee Insurance Company Limited & 2 others (Interested Parties) (Civil Appeal E105 of 2021) [2022] KEHC 13836 (KLR) (Commercial and Tax) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 13836 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Appeal E105 of 2021

DAS Majanja, J

October 7, 2022

Between

Philip Ondieki Nyarieko t/a Perspective Insurance Agency

Appellant

and

Insurance Regulatory Authority

Respondent

and

Jubilee Insurance Company Limited

Interested Party

Isaac Maina Wandutu

Interested Party

Health Ensure Insurance Agency

Interested Party

(Being an appeal against the judgment of the Insurance Appeals Tribunal at Nairobi dated 19th October 2021 in Insurance Appeal No.1 of 2021)

Judgment

Introduction and Background 1. The Appellant is an insurance agent licenced by the Respondent (“the IRA”) under the Insurance Act (Chapter 487 of the Laws of Kenya). On September 23, 2019, the Appellant filed a complaint with the IRA alleging that the 1st Interested Party (“Jubilee”) had not paid his agency commission for the year 2019 for procuring medical insurance business with the Independent Electoral and Boundaries Commission (“IEBC”). He further complained that Jubilee had instead irregularly paid the 3rd Interested Party (“Health Ensure”), an insurance agency owned by the 2nd Interested Party.

2. In a bid to resolve the dispute, IRA called for and held a number of meetings with the parties on various dates between October 2019 and September 2020. During this time, the Appellant and the 2nd Interested Party had entered into an agreement where the Appellant was paid 50% of his commission for the year 2020 from Jubilee. IRA also recommended that an investigation into the matter be conducted by the Insurance Fraud Investigation Unit (IFIU) in June 2020. It also directed Jubilee to cease making renewal commissions to the Appellant pending investigations of the Appellant’s complaint. By a letter dated November 18, 2020, the parties’ advocates communicated to the IRA that in the interest of maintaining good working relations, the parties had, through alternative dispute resolution mechanisms, resolved the subject of the dispute through a consent agreement dated November 16, 2020 (“the Consent Agreement”). On November 20, 2020 and in response to the parties’ letter aforementioned, the IRA noted that the Appellant had withdrawn his complaint against Jubilee and thus considered the matter closed.

3. The Appellant denied that he had withdrawn his complaint and thus filed an appeal against the IRA’s decision with the Insurance Appeals Tribunal (“the Tribunal”). He maintained that he had not withdrawn his complaint against Jubilee, that the IRA had failed to investigate the Appellant’s case as required by law as it had failed/refused to furnish the Appellant with an outcome of the said investigation and that the 2nd Interested Party fraudulently purported to be the proprietor of Health Ensure and tricked the Appellant into entering the Consent Agreement for him to access 50% of his commission for the year 2020 and that his 2019 commission owed by Jubilee remained outstanding.

4. In response, the IRA stated that it was not a party to the Consent Agreement hence it had no business following up on its performance. The IRA stated that it is guided by section 3A(1)(a) and 204A of the Insurance Act and its role in the dispute before the Tribunal was therefore limited to ensuring that Jubilee adhered to the Tender Business Guidelines and other insurance industry regulations.

5. The IRA averred that it closed the file after hearing the parties in several meetings, following which it referred the matter to the Insurance Fraud Investigation Unit (IFIU), a unit established under the Directorate of Criminal Investigation with the mandate to investigate insurance fraud and related offences, in line with the prescribed procedures. The IRA rejected the Appellant’s claim that it has failed to timeously investigate his case and furnish him with an investigation report. Further, that the subsequent discovery by the Appellant that the 2nd Interested Party was not the registered owner of Health Ensure is a matter that the Appellant should have sought clarification from the IRA as the custodian of such records. The IRA thus urged the Tribunal to dismiss the Appellant’s appeal.

6. On its part, Jubilee stated that whereas the Appellant had been its agent for previous IEBC tenders, he was not appointed or authorized by Jubilee to act as an agent on its behalf in respect of Tender Number IEBC/11/2018-2019. That ultimately, and within its discretion and lawful rights, Jubilee appointed Health Ensure as its agent in respect of that tender. It urged that the Appellant could impose itself as its agent. Jubilee stated that it was surprised when it began receiving demands from the Appellant for payment of commission on the basis that the IEBC appointed it as an agent for the staff medical scheme and yet IEBC had since distanced itself from the said appointment and at any rate, the prerogative to appoint an agent for the tender remained Jubilee and not IEBC.

7. Jubilee further stated that it was aware that the Appellant and the 2nd Interested Party representing Health Ensure agreed to settle the dispute amicably by sharing the renewal commission. However, Jubilee accused the Appellant of reneging on the Consent Agreement once it received the settlement by pursuing additional claims yet it was bound by the settlement and could not approbate and reprobate. Jubilee prayed that the appeal be dismissed with costs.

8. The 2nd Interested Party’s case was that he was appointed by Jubilee as its agent for Tender No IEBC/11/2018-2019. He stated that the tender ran for a period of two years and that he duly performed his obligations, invoiced for the commission for 2018 which Jubilee paid to him. He further stated that when he invoiced for the 2019 commission, Jubilee informed him of the complaint lodged by the Appellant with the IRA claiming a commission for the same assignment.

9. The 2nd Interested Party confirmed that the dispute between the parties was not resolved despite several meetings. He also attended summons issued by the IFIU where he furnished documentation even though he was not informed of the nature of the matter under investigation. The 2nd Interested Party believed that the Appellant was out to tarnish his and Jubilee’s reputation by pursuing an extortion scheme highlighted by disparaging comments in social media. He stated that bearing in mind that Jubilee is the single biggest underwriter in the region and running out of favour with it would be detrimental to any insurance agency, the 2nd Interested Party half-heartedly agreed to enter into the Consent Agreement resolving the matter. He states that the Appellant was represented by counsel during the negotiations leading to the Consent Agreement hence the allegation that it was obtained by trickery and treachery lacks merit. Further, the Appellant communicated the Consent Agreement to the IRA and Jubilee in haste, “to partake in a meal he never prepared”. The 2nd Interested Party maintained that the Consent Agreement was a full and final determination of all the issues arising from the appointment of an agent in regard to the tender and that the Appellant.

10. After considering the parties’ rival submissions and pleadings, filed documents and the relevant laws, the Tribunal rendered its judgment on October 19, 2021. The Tribunal framed three issues for determination. First, whether the Consent Agreement is valid. Second, whether the IRA made the right decision to close the Appellant’s file in relation to the complaint made by the Appellant against Jubilee and last, who was to bear the costs of the appeal. The Tribunal found that the complaint was universal and it followed that its withdrawal was also universal, that the Consent Agreement was not conditional and nothing remained to be acted upon further by the IRA after the wholesome withdrawal of the complaint by the Appellant.

11. The Tribunal held that the Consent Agreement was valid and binding and was not executed by the Appellant by duress but was entered into willingly by the parties, where the Appellant was represented by counsel. That the Appellant conceded that he signed the same so that the IRA could allow Jubilee to pay their respective portions of the outstanding commission. That the Appellant knew very well that Jubilee had already paid the 2nd Interested Party the full commission for the year 2019 and that there was nothing outstanding on that score and had it been otherwise, nothing would have stopped the Appellant from adding a rider in the Consent Agreement to the effect that the commission for the year 2019 remained unresolved and that therefore the Consent Agreement being made is without prejudice to payment of the 2019 commission.

12. The Tribunal found that in the Appellant’s evidence and pleadings, the Appellant admitted an intention to enter into an agreement so as get his commission paid as he was in need of money. Further, the Tribunal noted that even after the Appellant purported to rescind the said Consent Agreement through his letter dated September 19, 2020, the Appellant did not refund his portion of commission to Jubilee. In sum, the Tribunal held that the Appellant failed to provide evidence to prove that the Consent Agreement was entered into under any form of duress on him and that the Appellant’s conduct in relation to signing the Consent Agreement and purporting to rescind the same is inconsistent with the fact of coercion when he happily benefitted from the proceeds of the said Consent Agreement. Thus, the Tribunal held that the Appellant was estopped from challenging the validity of the Consent Agreement when he utilized the proceeds gained from the same Consent Agreement.

13. On the IRA’s decision to close the Appellant’s file, the Tribunal held that the Consent Agreement is akin to a consent filed by parties in judicial proceedings and that a consent judgment can be set aside only on the grounds of fraud or collusion, that there was no consensus between the parties, public policy or for such reasons as would enable the court to set aside or rescind a contract. The Tribunal found that the Appellant and the 2nd Interested Party consented to the compromise in very clear terms; they were certainly aware of all material facts and there could have been no mistake or misunderstanding. Therefore, the Tribunal found and held that the IRA acted correctly in closing the Appellant’s file in relation to the Appellant’s complaint made against Jubilee after receiving the Consent Agreement from the parties and the IRA certainly could not interfere with the Consent Agreement entered into by the parties thereto.

14. On the issue of costs, the Tribunal considered the circumstances of this matter especially given the fact that the Appellant entered into the Consent Agreement when he needed the money, used the money and then proceeded to purport to rescind the Agreement after having utilized the money the subject of the Consent Agreement. After taking into account that Jubilee had incurred verifiable costs while participating in the appeal for no fault of its own, the Tribunal ordered that the Appellant bear Jubilee’s costs of the appeal.

15. In conclusion, the Tribunal upheld the decision of the IRA dated November 20, 2020, holding that the Consent Agreement is valid and binding upon the parties and that costs of the appeal be borne by the Appellant in favour of Jubilee only. The Tribunal further stated that it had considered the IFIU’s Investigation Report and its contents and noted that the IRA did not use the same as a basis of closing its file and therefore the Tribunal decided not to comment it.

16. The Appellant now appeal against the Tribunal’s decisions on grounds set out in the Memorandum of Appeal dated November 17, 2021. The appeal has been canvassed by way of written submissions where the parties regurgitated the positions they took before the Tribunal, much of which I have highlighted above and do not wish to rehash.

Analysis and Determination 17. In determining this appeal, I am alive to the fact that this court’s jurisdiction is circumscribed by the Insurance Act more so section 173(3) and (4) which provide as follows:(3)A person aggrieved by a decision of the Tribunal made under subsection (1) may, if it involves a question of law, within one month from the date on which the decision is intimated to him, appeal therefrom to the court.(4)A reference in this section to a question of law does not include a reference to a question whether there is sufficient evidence to justify a finding.

18. The Supreme Court in Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 others SCOK Pet. No 2B of 2014 [2014] eKLR accepted the Court of Appeal’s definition and explanation of the expression “question of law”, as employed to prescribe the limits of appellate jurisdiction and as was stated in M’Iriungu v Republic [1983] KLR 455, 466 as follows:In conclusion, we would agree with the views expressed in the English case of Martin v. Glyneed Distributors Ltd 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 courts and resist the temptation to treat findings of fact as holdings of law or mixed findings of fact and law…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….

19. With the above principles in hindsight, I now turn to the Appellant’s appeal to determine whether it raises any points of law and whether the same merits an interference by the court. The ultimate question for determination is whether the Tribunal arrived at a conclusion that was consistent with the evidence on record. Going through the Tribunal’s judgment, which I have summarized above, I do not find any finding or conclusion that is perverse or inconsistent with the evidence on record. I doubt that any other reasonable tribunal, sitting in the Tribunal’s place could have arrived at a different conclusion.

20. In summary, the Appellant had a complaint against the Interested Parties. They engaged in negotiations that ultimately gave rise to the Consent Agreement which compromised and settled the complaint in express terms. The Consent Agreement was communicated and registered with the IRA. The Consent Agreement was never set aside or varied by valid factors of either mistake, fraud, collusion or coercion.

21. Contrary to the Appellant’s assertion, I find and hold that the Tribunal correctly assessed the evidence before it including the Appellant’s plea of signing the Consent Agreement under duress and intimidation. In any event, section 173(4) above prohibits the court from analyzing and weighing the sufficiency of the evidence before the Tribunal as that is not a point of law. I further find and agree with the Tribunal that the said investigation report was of no consequence once the Appellant agreed to settle the dispute or complaint by way of a valid consent. With the Consent Agreement, all allegations by the Appellant fell by the wayside and the Appellant is estopped from springing collateral attacks.

Disposition 22. The appeal lacks merit as the Tribunal did not err in its findings. It is accordingly dismissed with costs to the Respondent and Interested parties.

DATED AND DELIVERED AT NAIROBI THIS 7TH DAY OF OCTOBER 2022. D. S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Mr Njeru instructed by E. Njogu and Company Advocates for the AppellantMs Mutua instructed by Oraro and Company Advocates for the Respondent and the 1st Interested PartyMr Kamau instructed by Howard, Nick and Kenneth Advocates for the 2nd Interested Party.