BLUE SHIELD INSURANCE COMPANY LIMITED v GODWIN JUMA SIAKILO & 8 others [2010] KEHC 2849 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAKURU

Civil Suit 24 of 2008

IN THE MATTER OF THE INSURANCE (MOTOR VEHICLE THIRD PARTY RISKS) ACT (CAP 405 LAWS OF KENYA)

BLUE SHIELD INSURANCE COMPANY LIMITED…………………………….PLAINTIFF

VERSUS

GODWIN JUMA SIAKILO……………………………………………………….1ST DEFENDANT

FRANCISCA J. KAMUREN………………………………….………………….2ND DEFENDANT

AUTO SELECTION (K) LTD…………………………….…………………….3RD DEFENDANT

CAROLINE LUTTA MUMIA…………………………………….……………..4TH DEFENDANT

SALOME SITAKA MUKHWANA………………………………...…………..5TH DEFENDANT

FREDRICK O. ONYANGO………………………………………...…………….6TH DEFENDANT

EDMOND W. WANYAMA………………………………………….…………..7TH DEFENDANT

EVALINE AKINYI………………………………………………………..………..8TH DEFENDANT

COLLINS W. SIAKILO…………………………………………….……………..9TH DEFENDANT

RULING

By an Originating Summons dated 6th March 2008 and filed on 10th March 2008 the applicant Blue Shield (the Insurer) sought the following orders:-

(1)    That this Honourable Court be pleased to grant and/or issue            a declaration that Blue Shield Insurance Company Limited,      the plaintiff herein, is not liable or bound to settle any         claims or decretal sums or judgment that may be or have      been obtained by the 4th, 5th, 6th, 7th, 8th, or 9th defendants             herein or any claim or judgment for contribution or     indemnity obtained by the 2nd and 3rd defendants against          the 1st defendant herein.

(2)    That this Honourable Court be pleased to declare that the      plaintiff herein is entitled to avoid Policy No. B31/080/1/09/001488/2006 issued to the 1st defendant  herein as contemplated under section 10(4) Cap 405.

(3)    The provisions be made as to the costs of this suit.

The Originating Summons is supported by the Affidavit of one Harrison Mwangi Kamau and the grounds on the face thereof.

When this matter was argued before me on the 20th January 2010 Mr. Matiri Counsel for the applicant relied on the grounds and the said Supporting Affidavit of Harrison Mwangi Kamau. He also relied on the decisions of the Court of Appeal in Corporate Insurance Company Limited vs. Elias Okinyi Ofire Civil Appeal No. 12 of 1998 (Nakuru) and Intra Africa Assurance Company Limited vs. Simon N. Njoroge & Anor Civil No. 111 of 1996 (Nairobi). In both of those cases the Court of Appeal found the insurance companies not liable to indemnify the respondents as there was a breach of the terms of the respective policies of insurance.

The Application was opposed by the Respondents. Mr. Juma Counsel for the Respondents relied upon the Replying Affidavit of the 1st Respondent Godwin Juma Siakilo sworn on 8th July 2008 and 2nd Respondent Francisca Jelagat Kamuren sworn on 15th September 2008.

The facts are summarized in the Supporting Affidavit of the Insurer's General Manager the said Harrison Mwangi Kamau.   The 1st Defendant Godwin Juma Siakilo is the registered owner of motor vehicle KAH 266W which the Plaintiff/Applicant Insured on the basis of a proposal form made on 27th September 2006 and policy made subject to the conditions that the vehicle shall not be used for hire or reward.   The Insurer pleads that the Respondents were passengers in the said motor vehicle and not entitled to indemnity.

The 1st defendant admits in paragraph 5 of his affidavit that the 4-9th Defendants were passengers in his motor vehicle, and that they were lawful passengers covered under the policy.

The issue for determination is whether the Insurer is entitled to avoid the policy as against the 4th-9th Defendant on the grounds that they were not lawful passengers in motor vehicle KAH 266W within the terms of the policy.    The policy limited the use of the motor vehicle in these terms;-

"Use in connection with Insured's business and this included-

·Use for the carriage of passengers in connection with the insured's business (common among construction business).

·Use for social domestic, and pleasure purposes.

·The policy did not cover the use of motor vehicle for hire or reward."

The 1st respondent has in paragraph 6 of his Replying Affidavit contended that the policy did cover the category of the 4-9th Defendants and explained in paragraphs 7-12 the circumstances how those Defendants came to be passengers in the motor vehicle and the motor vehicle was not in use for hire or reward.

The question is would Section 5 of the Insurance (Motor Vehicle Third Party Risks) Act (Cap 405 Laws of Kenya) exclude these defendants from the Insurance cover?   Reliance was put by Mr. Matiri to the provisions of the proviso to that section.   That proviso must be read together with the preceding provision namely section 5(a) & (b) which give validity to an insurance policy as required by Section 4 of the Act. Under the said section 5 of theAct for a policy to be valid it must be:

(a)    issued by a company which is required under the        Insurance Act, 1984 to carry on motor vehicle insurance    business; and

(b)  insures such person, persons or classes of persons as may           be specified in the policy in respect of any liability which may          be incurred by him or them in respect of the death of, or          bodily injury to, any person caused by or arising out of the     use of the vehicle on a road:”

The proviso thereto states that a policy in term of this section shall not be required to cover-

"(i)  …

(ii) except in the case of a vehicle in which passengers are         carried for hire or reward or by reason of or in pursuance of          a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or  entering or getting on to or alighting from the vehicle at the           time of the occurrence of the event out of which the claims       arose; or

(iii) any contractual liability.”

In the instant case, and as explained in the replying affidavit of the 1st respondent it is quite clear that the 4th – 9th Defendants were passengers in the 1st Defendant’s motor vehicle but that they were not fare paying passengers.   In terms of the limitation of the use of the motor vehicle they were persons who were in the motor vehicle “for a social and domestic purpose”.   The 1st Defendant received a distress call on 2nd September 2007 from the 7th Defendant one of his assistants in his welding business seeking help to ferry his wife who was expectant to the Provincial General Hospital Nakuru and that, since it was late he requested the 9th Defendant to accompany him to the 7th Defendant's home. On reaching there he found the 8th defendant was in labour pain and required urgent hospitalization. He took her together with the 4th and 5th Defendants (the two ladies) who were attending to her (9th Defendant) and who carried her to the vehicle and the 6th Defendant was the 7th Defendant's neighbor and drove slowly to the Provincial General Hospital Nakuru and that before reaching the hospital at around State House the motor vehicle KAH 266W was involved in an accident due entirely to the negligence of the 2nd Defendant.

In these circumstances I would have no hesitation in stating that these passengers were in the motor vehicle for a social/domestic purpose - accompaniment of a neighbor to hospital, a neighbor, a lady in labour pains, whom they had been attending to. This journey cannot be said to be a purpose not covered under the proviso to section 5 of the Insurance (Motor Vehicle Third Party Risks) Act Cap 405 Laws of Kenya.

In conclusion therefore I do not agree with the submissions of counsel or the Insurer that this is a case covered by the provisions of section 10 (4) of the Insurance (Motor Vehicle Third Party Risks) Act Cap 405 Laws of Kenya. Being of that view the Applicants Originating Summons dated 6th March 2008 is hereby dismissed with costs to the 1st - 9th Defendants.

Dated, delivered and signed at  Nakuru this 29th day of January 2010

M. J. ANYARA EMUKULE

JUDGE