Irene Njoka v Kenya Reinsurance Corporation Limited [2018] KEHC 6743 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT EMBU

CIVIL CASE NO. 8 OF 2014

IN THE MATTER OF UNITED INSURANCE COMPANY LIMITED (UNDER STATUTORY MANAGEMENT)

IRENE NJOKA....................................................................PLAINTIFF/RESPONDENT

VERSUS

THE KENYA REINSURANCE CORPORATION LIMITED

Statutory Manager, United Insurance Limited Company......DEFENDANT/APPLICANT

R U L I N G

1. The defendant/applicant in its application dated 20/03/2017 and filed on 15/05/2017 seeks for the following orders:-

(a) That this honourable court be pleased to issue an  order that the defendant/applicant be struck out from this suit;

(b) That this honourable court be pleased to make as it  may be deemed fit in the interests of justice.

2. The supporting affidavit was sworn by one Jadiah Mwarania, the Managing Director of the applicant.  It is deposed that the defendant was the statutory manager of United Insurance Co. Ltd and that its term expired on 28/09/2014. That this suit is against the defendant in its capacity as the statutory manager of the said insurance company. It is further stated that after the defendant's term expired, the respondent/plaintiff filed this suit attributing liability to the defendant.

3. The applicant further states that the authority appointing the Statutory Manager (Insurance Regulatory Authority) duty notified the general public of the expiry of the applicant's term vide notice appearing in the local daily newspapers circulating countrywide on 3/10/2014. The same notice informed the general public that one Evanson Munene Waruhiu of P.O. Box number 11436 – 00100 Nairobi was to takeover from 1/10/2014 pursuant to the provisions of Section 67C(2)(1) of the Insurance Act.

4. It is further deposed that through correspondence and through affidavits and pleadings filed in this court the applicant was duly notified by the applicant of the fact that it was wrongly sued in this case for it was not the statutory manager at the material time.  Following the said change, two other statutory managers have been appointed at different times and served their full terms.

5. It is the applicant's contention that it is not responsible and had no control over the affairs of the United Insurance Company which had insured the respondent in this case. The applicant urges the court to conclusively determine its status in these proceedings at this stage and save the parties from unnecessary costs.

6. The respondent in its grounds of opposition dated 11/08/2017 outlines the duty of the insurer to satisfy judgments against the insured as provided under Section 10 of the Insurance (Motor vehicle Third Party Risks) Act, Cap. 405.

7.  It is stated that the Insurance Regulatory Authority who is the defendant herein or the manager of an insolvent insurance has the responsibility of protecting the interest of the insurance policy holders and beneficiaries.

8. The respondent concludes by asking this court to exercise its powers under Order 8 Rule 5 of the Civil Procedure Rules and order the joinder of the Insurance Regulatory Authority and Mr. Evanson Munene Waruhiu as defendants in this case for purpose of determining correcting the defects in these proceedings or for purposes of determining the controversy between the parties in this case.

9. The background of this application is that the respondent an insured of United Insurance Company for her vehicle KAN 046 F was sued in Embu CMCC No. 233 of 2014. The plaintiff obtained judgment of Kshs.229,000/= against the respondent being general and special damages for injuries sustained in a road traffic accident involving respondent's vehicle.  The judgment was reviewed by the superior court in Embu HCA No. 77 of 2009 to a total of Kshs.165,000/=.

10. The respondent in this case seeks for declaratory orders against the applicant that she is entitled to indemnity from the applicant for the decretal amount as a whole together with costs, legal fees and interests.  It is stated in the plaint that the claim against the respondent remain unsettled to date.

11. The applicant in his statement of defence denied the claim and pointed out that it was no longer the statutory manager of the insurance company in question and should not be sued on behalf of the company.  It was also indicated in defence that one Evanson Munene Waruhiu was the statutory manager of the company at the material time.

12. The respondent in this application does not deny that the applicant was not the statutory manager of the now defunct United Insurance Company on 28/11/2014. It is also clear from the statement of defence that the respondent was notified at the earliest opportunity that the applicant bore no responsibility in this claim.  Having ceased to be the statutory manager, the applicant should not have been sued in this case. The applicant  did its noble duty of appointing the statutory manager to manage the company that had gone under.  The respondent ought to have taken due diligence to establish who was the statutory manager before filing this suit.

13.  Even after being notified of the anomaly, the respondent took no action to rectify the said defect.  She was represented by a counsel and it was expected that sound legal advise should have been given and the necessary action taken to prevent unnecessary costs and waste of time for the court on one hand and for the parties on the other hand.

14. The respondent has asked the court half-heartedly to join other parties in this case.  The respondent ought to follow the laid down procedure in joinder of parties and should expect this court to act on a misplaced prayer in the replying affidavit.

15.  This suit was filed on 28/11/2014 as shown by the official court stamp on the plaint. The applicant has annexed correspondence between the Commissioner of Insurance and the then Statutory Manager of the United Insurance Corporation as statutory manager notifying them that therm of the Kenya Insurance Corporation as statutory manager had expired on 30/09/2014. A public notice to the effect that the term of Evanson Munene Waruhiu expired on 25/06/2015 was also annexed.

16.  It is my considered opinion that the applicant was wrongly sued in this case.

17.  I find this application merited and allow it with costs to the applicant.

18.  It is hereby so ordered.

DATED, DELIVERED AND SIGNED THIS 21ST DAY OF MAY, 2018.

F. MUCHEMI

JUDGE

In the presence of:-

Mr. Muriithi for Njage for Plaintiff/Respondent

Mr. Mugambi for Githumbi for Defendant/Applicant