https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1552

Stargent Enterprises Limited v Cannon Assurance Limited (Civil Appeal E001 of 2020) [2026] KECA 1552 (KLR) (31 July 2026) (Judgment) Neutral citation: [2026] KECA 1552 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal E001 of 2020 W Karanja, AO Muchelule & LM Njuguna, JJA July 31, 2026 Between Stargent Enterprises Limited Appellant and Cannon Assurance Limited Respondent (Being an appeal against the judgment/decree of the High Court at Nairobi (Kasango, J) dated 4th May 2020 in Civil Case No. 291 of 2015) Judgment 1.This appeal arises from the decision of the High Court delivered on 4th May 2020, which dismissed a claim by Stargent Enterprises Limited (“the appellant”) against Cannon Assurance Limited (“the respondent”). 2.The following events form the background of the case. By a plaint dated 16th June 2015, the appellant claimed that it insured its Range Rover, Registration No. KBX 687C with the respondent under a comprehensive insurance policy, which was valid from 31st July 2014 to 30th July 2015. On 22nd December 2014, during the pendency of the cover, the vehicle was involved in a road traffic accident along Mombasa Road. The appellant claimed that it reported the accident to the respondent, who initially issued a discharge voucher dated 19th February 2015, in which it agreed to pay Kshs.17,700,000.00 on a total loss basis, but later rescinded it. 3.In the suit, the appellant sought a declaratory order against the respondent for the sum of Kshs 17,700,000.00 plus costs and interest. 4.In its defence dated 10th July 2015, the respondent admitted the existence of the policy cover number 04/07/006071/11 issued to the appellant, but denied any liability. The respondent averred that it repudiated the cover on account of misrepresentation of facts on the part of the appellant. It claimed that the appellant knowingly misrepresented the vehicle’s year of manufacture and value. It asserted that the vehicle was a 2006 model worth approximately Kshs. 4,200,000.00 and not a 2012 model valued at Kshs.19,600,000.00 as declared by the appellant at the time of taking out the cover. The respondent contended that there was material misrepresentation of facts, breach of the principle of utmost good faith in an insurance contract, and that it was therefore entitled to repudiate the insurance contract. 5.The appellant’s witness testified as the sole witness in support of its case during the trial in the High Court. He stated that the appellant purchased the Range Rover in December 2013 from Exotic Cars Limited for Kshs.19,200,000.00. It was his evidence that during the transaction, he dealt with Mr. Mohammed Mirza, whom he claimed allegedly owed him Kshs.10,000,000.00, which was used to offset part of the purchase price, and the balance was paid in cash and in dollars. The witness testified that the transaction was informal, with no purchase receipt or sale agreement. He testified that the respondent instructed him to take the vehicle to AA Kenya’s office in Nyeri for a pre-insurance vehicle inspection, which he did. 6.It was the witnesses’ further evidence that the accident occurred on 22nd December 2014, and they maintained that he was driving alone at the time. He claimed that a good Samaritan named Simon Mwangi rescued him and drove him to a police roadblock for assistance. 7.The respondent’s case was presented by three witnesses, DW1, Evans Ratemo (the respondent’s Senior Claims Officer), DW2, Mirichu Nderitu (the respondent’s assessor), and DW3, John Machuru Mukigi (the respondent’s investigator). 8.DW1’s testimony focused on the initial processing of the claim. He testified that the respondent initially sent a discharge voucher for Kshs 17.7M, which was rejected by the appellant, who sought a higher settlement amount. This rejection prompted the respondent to initiate investigations into the claim, which eventually led to the repudiation of the policy. 9.DW2, the proprietor of Integrated Motor Assessors and former chairman of the Motor Assessors Association of Kenya, provided expert testimony on the vehicle’s age. In his evidence, he stated that he undertook a course in automotive engineering, motor vehicle design, and motor vehicle assessment, both of which he undertook in Britain. That in 1989, he registered himself with the Automotive Engineering of Britain, after which he registered his business, Integrated Motor Assessors. He testified that he had 26 years of experience as a motor vehicle assessor and that he is a part-time lecturer at the College of Insurance. 10.He stated that he received instructions from the respondent to assess the subject vehicle, which was being held at RMA Garage. That upon inspecting it, he noted that it looked old and resembled another 2006 Range Rover model that was also at the same garage. That he spoke to the manager and obtained a computer printout from RMA Motors confirming the vehicle was a 2006 model. 11.It was DW2’s further evidence that he conducted his own search on his computer and also inquired from CMC Motors, who confirmed that the vehicle was manufactured in 2006. He stated that he searched the internet using the Vehicle Identity Number (VIN), which confirmed that the vehicle was a 2006 model, and based on these findings, he valued the vehicle at approximately Kshs 4.25 Million. 12.DW3 was John Mukigi, a private investigator and the proprietor of Rapid Investigations Services. He stated that he held a Bachelor's Degree in Insurance, he is a Certified Insurance Investigator by the Insurance Institute of East Africa, and that he had been in the field since 1984, before he registered his firm in 2006. 13.It was his evidence that he was instructed by the respondent to conduct investigations on the appellant’s claim, and upon conducting the said investigations at the Kenya Revenue Authority (KRA), he established that the subject vehicle was registered in the appellant’s name on 7th January 2015, even though the accident had occurred on 22nd December 2014. He stated that he also contacted Jaguar-Land Rover Africa Regional Office in South Africa, who instructed him to use the Vehicle Identity Number (VIN) to verify the vehicle’s age, and he confirmed that it was manufactured in the year 2006. 14.He stated that he also interviewed the appellant’s director (PW1), who told him that he bought the vehicle from an individual he identified as Mr. Mohammed Mizrah, who owed him Kshs 10M, which was used to offset some of the purchase price. That the balance of Kshs 9M was paid in instalments in cash in dollars. He stated that he was not able to interview Mr Mizrah, as PW1 said that he was out of the country. 15.DW3 further stated that he interviewed the lorry driver, who was also involved in the accident. Although the driver confirmed that the accident occurred, he contradicted the evidence of PW1 by stating that there were three passengers in the Range Rover at the material time, and not just the appellant’s director. The witness further stated that he discovered the identity details provided for ‘Simon Mwangi’, the good Samaritan who assisted PW1, belonged to a different individual, James Wacira Murage. When confronted with these facts, the alleged good Samaritan stopped answering the investigator’s calls. 16.The learned Judge considered the evidence and identified only one issue for determination: whether there was misrepresentation by the appellant in taking out the insurance policy, and if so, whether the respondent was entitled to repudiate the policy. 17.The learned Judge found that the respondent provided sufficient evidence through its assessor and investigator that the Range Rover was a 2006 model valued at Ksh 4.5M, and not a 2012 model as claimed by the appellant. The court found that the appellant knew the actual value and misrepresented this fact to the respondent so as to obtain a higher insurance cover. The court emphasized that insurance contracts are governed by the principle of uberrimae fidei, which requires the insured to volunteer all material facts. That the appellant’s failure to disclose the correct year of manufacture was a breach of duty which entitled the defendant to repudiate the policy. 18.On the admissibility of electronic evidence, the learned Judge held that the appellant waived its right to object by failing to do so when the documents were first produced during trial. The court found that the appellant’s overall narrative was shrouded in mystery, and the learned Judge inferred that the appellant had over-insured the vehicle and stage-managed the accident to claim insurance money that far exceeded its actual value. 19.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 respondent was justified in repudiating the appellant's insurance policy; in finding that the respondent was not obliged to honour the discharge voucher of Kshs 17.7 Million; in failing to find that the appellant was the beneficial owner of the vehicle at the point of taking up the insurance cover; in failing to find that the vehicle was inspected by the respondent’s authorized motor assessors, AA Kenya; in failing to find that the appellant had a genuine claim; in placing undue weight to the testimony of the investigator who claimed the appellant’s eye witnesses were fictitious without evidence; for finding that the electronic website printouts obtained from websites different from that of Land Rover were authentic and relying on them; failing to find that the respondent did not tender a certificate of authentication and originality over electronic evidence as required by section 106 B (4) of the Evidence Act; and by ignoring submissions and evidence produced by the appellant. 20.The appellant seeks orders: that the judgment of the High Court be set aside and substituted with an order compelling the respondent to honour the discharge voucher issued to the appellant and pay a sum of Kshs 17.7 Million being the assessed value on the total loss basis over motor vehicle registration number KBX 687C; and that the costs of the appeal and in the High Court be awarded to the appellant. 21.The appeal was heard by way of written submissions, which were fully relied upon by both parties when the matter came up for hearing on 27th March 2026. 22.The appellant, in his written submissions dated 21st February 2021, contends that the learned Judge erred in finding that the vehicle was manufactured in 2006 instead of 2012, as this finding directly contradicts official government records, including the Log Book and Kenya Revenue Authority records, which identify the vehicle as a 2012 model. 23.Regarding the doctrine of uberrimae fidae, the appellant argues that the insured's duty is to disclose material facts only to the extent of the knowledge in their possession at the time of the contract. The appellant maintains that at the point of taking up the insurance policy, all documentation available to them indicated that the vehicle was a 2012 model valued at Kshs 19.65M, a fact supported by the respondent’s pre-insurance assessor, AA Kenya. 24.The appellant has challenged the trial court’s inference that the accident may have been ‘stage-managed’ and refers to the police abstract and the respondent’s own investigation report by Rapid Investigations Services, which explicitly concluded that the accident was genuine. 25.The central issue in the appellant’s submissions is that the trial court improperly admitted and attached weight to electronic evidence from unauthenticated websites like http:www. vindecoderz.com and http:www.epeditiongear. co.za. The appellant argues that these websites were not operated by the manufacturer, Land Rover, that the respondent failed to produce a certificate of authentication and originality as strictly required by section 106 B (4) of the Evidence Act, and that the respondent’s witnesses provided no testimony regarding the working conditions, storage, or reliability of the computers used to generate these printouts. The appellant cited the High Court decision in William Odhiambo Oduol vs. Independent Electoral & Boundaries Commission & 2 others [2013] eKLR regarding the handling of electronic evidence, where the court emphasized the need for caution because electronic documents can be easily modified or manipulated during collection or transfer without leaving obvious traces. 26.The respondent in its submissions urges this Court to uphold the trial court’s decision, arguing that the insurance contract was voidable due to material misrepresentation regarding the vehicle’s year of manufacture and value. The respondent contends that the appellant breached the doctrine of uberrimae fidei, and has cited the case of Co-operative Insurance Company Limited vs. David Wachira Wambugu (2010) 1KLR 254, which established that a contract of insurance is a contract of speculation where the insurer relies on the assured’s representations regarding facts within their knowledge. The respondent further submits that the duty of disclosure extends to all matters that an underwriter would consider when assessing risk. 27.On the admissibility of the electronic evidence, the respondent argues that the High Court correctly admitted electronic printouts showing the vehicle was manufactured in 2006. The respondent contends that the appellant did not object to the production of the documents during the trial, and they became part of the judicial record. Relying on the case of Kenneth Nyaga Mwige vs. Austin Kiguta & 2 Others [2015] eKLR, the respondent submitted that once a document is admitted without objection, the court’s role is to determine its relevance and veracity during the final hearing. The respondent distinguished the case of William Odhiambo Oduol vs. Independent Electoral & Boundaries Commission & 2 Others [2013] eKLR cited by the appellant, arguing that while electronic evidence requires caution, the websites used in this instance were publicly accessible for independent verification. 28.On the reliance on the vehicle’s logbook as absolute proof of the year of manufacture, the respondent argues that under section 8 of the Traffic Act, registration details only create a rebuttable presumption of ownership and facts. The respondent has cited the case of Hermat Kumal Raval vs. Jubilee Hardware Limited [2016] eKLR, to support its view that registration records do not restrict a party from proving the actual details of a motor vehicle through other means. 29.The respondent further submits that the trial court properly inferred that the accident appeared to have been stage-managed for the following reasons: the lack of a sale agreement for the alleged Kshs 19.2 Million purchase, the use of a false identity by the good Samaritan, and inconsistencies regarding the number of passengers. The respondent has relied on the case of Samuel Ndegwa Waithaka vs. Agnes Wangui Mathenge & 2 Others [2017] eKLR to argue that a court must consider the inherent probability or improbability of an event, in this case, an accident involving an over-insured vehicle. 30.This being the first appeal, it is the duty of the court to review the evidence adduced before the trial court and satisfy itself that the decision is well-founded. In Selle vs. Associated Motor Boat Co. [1968] EA 123, this principle was enunciated thus:“This court is not bound to accept the findings of fact by the court below. An appeal to this court…is by way of retrial, and the principles upon which this court acts in such an appeal 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…” 31.In our view, there are two main issues for determination in this appeal. The first issue pertains to whether the trial court erred in admitting computer printouts in evidence, and secondly, whether the trial court erred in finding that the respondent was entitled to repudiate the insurance policy on the ground of misrepresentation of facts on the part of the appellant. 32.On the admissibility of the computer printouts, the Evidence Act provides that electronic and digital evidence is admissible under section 78 (A) as follows:“78A.Admissibility of electronic and digital evidence.1)In any legal proceedings, electronic messages and digital material shall be admissible as evidence.2)The court shall not deny admissibility of evidence under subsection (1) only on the ground that it is not in its original form.3)In estimating the weight, if any, to be attached to electronic and digital evidence, under subsection (1), regard shall be to –a)the reliability of the manner in which the electronic and digital evidence was generated, stored, or communicated;b)the reliability of the manner in which the integrity of the electronic and digital evidence was maintained;c)the manner in which the originator of the electronic and digital evidence was identified; andd)any other relevant factor.4)Electronic and digital evidence generated by a person in the ordinary course of business, or a copy of or printout of or an extract from the electronic and digital evidence certified to be correct by a person in the service of such person, is on its mere production in any civil, criminal, administrative or disciplinary proceedings under any law, the rules of a self-regulatory organization or any other law or the common law, admissible in evidence against any person and rebuttable proof of the facts contained in such record, copy, printout or extract.” 33.In admitting the computer printouts as evidence, the learned Judge pointed out that when the respondent called the investigator, DW3, the witness led evidence about his investigations and proceeded to produce evidence without any objection. The computer printouts were documents that were generated by the investigator to assist in his investigations and were subsequently produced before the trial without objection by the appellant. We find that the learned Judge did not err in accepting the documents and considering them in arriving at her decision. 34.On the second issue for our determination, the trial court found that the appellant herein knew that the subject vehicle was a 2006 model and intentionally led the respondent to believe that it was a 2012 model for it to be insured for Kshs 19,650,000.00. The trial court relied on the evidence that was adduced during the trial including: the contradiction of the evidence of the lorry driver and the appellant’s director; the fact that the appellant’s Director’s alleged good Samaritan identity turned out to be unverifiable; the mystery surrounding the purchase of the vehicle including, the fact that there was no sale agreement or any evidence to proof how the alleged balance was paid to the seller. 35.The learned Judge was correct in stating that a contract of insurance is one of good faith, as we stated in the case of Co- operative Insurance Company Ltd vs. David Wachira Wambugu [2010] eKLR where we endorsed this Court’s decision in Joel vs. Law Union & Crown Insurance Company (2) [(1908) 2 K B at page 883] by Fletcher Moulton, L.J.:“The contract of life insurance is one of uberrimae fidei. The insurer is entitled to be put in possession of all material information possessed by the insured. This is authoritatively laid down in the clearest language by Lord Blackburn in Brownlee vs Campbell 5 A C 925 at page 954:“In policies of insurance, whether marine insurance or life insurance, there is an understanding that the contract is uberrimae fidei, that, if you know any circumstance at all that may influence the underwriter’s opinion as to the risk he is incurring, and consequently as to whether he will take it, you will state what you know. There is an obligation there to disclose what you know, and the concealment of a material circumstance known to you, whether you thought it material or not, avoids the policy.” 36.The learned authors of Bullen & Leake, Precedent of Pleadings, 14th Edition, Vol. 2, state at page 908:“Contracts of insurance are contracts of the utmost good faith. This gives rise to a legal obligation upon the insured, prior to the contract being made, to disclose to the insurer all material facts and circumstances known to the insured which affect the risk being run. Lord Mansfield’s words in Carter vs Boehm (1766) Burr. 1905 have stood the test of time:“Insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only; the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge to mislead the underwriter into a belief that the circumstance does not exist and to induce him to estimate the risqué as if it did not exist. The keeping back such circumstance is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived and the policy is void; because the risqué run is really different from the risqué understood and intended to be run at the time of the agreement… The policy would be equally void against the underwriter if he concealed… The governing principle is applicable to all contracts and dealings. Good faith forbids either party, by concealing what he privately knows to draw the other into a bargain from his ignorance of the fact and his believing the contrary…” 37.From the totality of the evidence presented before the trial court, it is our considered view that the respondent was entitled to avoid the insurance policy on account of the appellant’s misrepresentation of material facts regarding the vehicle’s year of manufacture and value. 38.Accordingly, we dismiss this appeal with costs to the respondent. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY 2026.W. KARANJA……………………………JUDGE OF APPEALA. O. MUCHELULE……………………………JUDGE OF APPEALL. NJUGUNA……………………………JUDGE OF APPEALI certify that this is a True copy of the originalSignedDEPUTY REGISTRAR