John Njogu v Invesco Assurance Co. Ltd; Joseph Ouma Nyachoko (Suing as Personal Representative of the Estate of Michael Otieno Ouma (Deceased) (Interested Party) [2022] KEHC 1746 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT KERICHO

CIVIL SUIT NO. 2 OF 2019

JOHN NJOGU...........................................................................................PLAINTIFF/APPLICANT

-V E R S U S -

INVESCO ASSURANCE CO. LTD.................................................DEFENDANT/RESPONDENT

JOSEPH OUMA NYACHOKO (SUING AS PERSONAL REPRESENTATIVE OF

THE ESTATE OF MICHAEL OTIENO OUMA (DECEASED)................INTERESTED PARTY

JUDGMENT

1. The Plaintiff in this case, JOHN NJOGU (hereafter referred to as the Plaintiff) filed this suit against INVESCO ASSURANCE CO. LIMITED (hereafter referred to as the Defendant) seeking the following remedies;

(a) A declaratory order that the Defendant is by law and contract obligated to pay the Plaintiff the decretal sum ordered in KERICHO CM Case No. 462 of 2014.

(b) An order directing the Defendant to pay the balance of the decretal sum due in KERICHO CM Case No. 462 of 2014 together with costs and interest.

(d) Costs of the suit.

(e) Interest on both the special damages and costs.

2. The Plaintiff in his plaint filed in this court on 12/4/2019, stated that he had a contract of insurance with the Defendant whereby the Defendant was his insurer under a third party policy in respect of his Motor Vehicle Registration No KBU 460V Toyota ASIS. The policy number was 052/0700/1/004315/2013/09 – 11.

3. The Plaintiff further stated that on 15/2/2014 the said motor vehicle was involved in an accident where it hit and fatally injured one MICHAEL OUMA OTIENO.

4. The Interested Party in this case being the personal representative of MICHAEL OUMA OTIENO (deceased) filed KERICHO CM Case No. 462 of 2014 and the Defendant engaged the firm of B.O Akango Advocates to represent the Plaintiff.

5. The Plaintiff further avers in the plaint that judgment was entered against him in KERICHO CM Case No. 462 of 2014 in the sum of Kshs. 2,257,695 which the Defendant failed and/or refused to pay and his Motor Vehicle Registration No. KCG 428Q Toyota VOXY was subsequently attached and sold by the firm of HEGEONS AUCTIONEERS for Kshs.700,000/= to satisfy the decretal sum.

6. The Plaintiff further avers that the Defendant only paid Kshs. 350,000 on 19/11/2018 to the interested party.

7. The Plaintiff further stated that his seven (7) water tanks of 250 liters each were also sold for Kshs. 3,500/= to satisfy the decretal sum.

8. The Defendant was served with summons to enter appearance in this case but failed to enter appearance or to file a defence and this case proceeded Ex parte.

9. The Plaintiff in his evidence before court retaliated the averments in his plaint. He relied on his statement filed with the plaint.

10. I have considered the evidence together with the submissions filed by the Plaintiff’s counsel.

11. The Plaintiff submitted that he had insured his Motor Vehicle Registration No. KBV 460V Toyota ASIS with the Defendant, the policy number was 052/0700/1/004315/2013/09 – 11 and that at the time of the accident that occurred on 15/2/2014 there was a valid contract of insurance.

12. The Plaintiff further submitted that following the fatal accident, the personal representative on behalf of the estate of the deceased filed a suit vide KERICHO CM Case No. 462 of 2014 seeking compensation and obtained a judgment decree in the sum of Kshs. 2,257,695. The Plaintiff informed the Defendant of the judgment decree expecting the Defendant as his insurer to settle it.

13. The Plaintiff submitted that the Defendant in flagrant breach of contract of insurance refused, failed and/or reneged to pay the decretal sum and subsequently warrants of attachment and sale were issued against the Plaintiff on 27/8/2018 for the decretal sum.

14. The Plaintiff further submitted that following frantic calls and visits to the Defendant’s branch office, the Defendant paid a paltry sum Kshs. 350,000 and failure of the Defendant to fully satisfy the decretal sum resulted in the proclamation, attachment and sale of the Plaintiff’s Motor Vehicle Registration No. KCG 428Q Toyota VOXY for Kshs. 700,000/= and his seven (7) water tanks of 250 liters each for Kshs.3,500, the items were sold at a public auction by the firm of HEGEONS AUCTIONEERS.

15. The Plaintiff submitted that he has suffered loss, anguish and economic hardship, he sought special damages as a result of the Defendant’s failure to fully satisfy the decretal sum in flagrant breach of the third party contract of insurance.

16. The Plaintiff submitted that he was fearful that the decree holder would execute against him the balance of the decretal sum.

17. The Plaintiff in his submissions relied on statutory provisions of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405 Laws of Kenya and the existence of a contract of insurance at the material time between him and the defendant as the insured and insurer respectively.

18. The Plaintiff further cited the cases of Charles Makenzi Wambua vs. Africa Merchant Assurance Co. Ltd & Anor [2014] eKLR; Juliet Waringa Wanyondu (Deceased) vs. Lion of Kenya Insurance Company [2017] eKLR; Phoenix of East Africa Assurance Co. Ltd vs. Alfred Onyango Obondo [2011] eKLRwhich I have duly considered.

19. This case proceeded exparte and I find that the Plaintiff’s evidence has not been controverted. The Plaintiff said that the Defendant only paid Kshs.350,000. He said his Motor Vehicle Registration No. KCG 428Q Toyota VOXY was sold for Kshs.700,000 to satisfy the decretal sum.

20. The plaintiff is seeking the market value of the said motor vehicle from the Defendant being Ksh.1,080,000.

21. However, the Plaintiff did not produce the valuation report in respect of Motor Vehicle Registration No. KCG 428Q to prove that it was valued at Kshs.1,080,000. The Plaintiff did not call the person who did the valuation as a witness.

22. In the circumstances, I find that the Plaintiff is only entitled to a refund of Kshs. 700,000 in respect of the proceeds from Motor Vehicle Registration No. KCG 428Q Toyota VOXY.

23. The plaintiff is also entitled to a refund of the Kshs. 3,500 in respect of the water tanks sold in satisfaction of the decree in KERICHO CM Case No. 462 of 2014.

24. The Plaintiff having complied with the law and having taken out compulsory insurance against third party risks should have been indemnified against personal liability for third party risks so insured.

25. A party who takes out an insurance policy has the legitimate expectation that, in the event that the risk insured against occurs, the insurance company will make payment in respect thereof, and that the insured will not have to be personally liable.

26. In the present case, the Plaintiff had been insured by Invesco Assurance Co. Ltd and there was a valid contract of insurance at the time the accident occurred.

27. With respect to claims by third parties arising from the use of motor vehicles, section 10 (1) of the Insurance Motor Vehicle Third Party Risks) Act, Cap 405 Laws of Kenya imposes a duty on the insurer to satisfy judgments against persons insured.

28. In the case of JOSEPH MWANGI GITUNDU VS. GATEWAY INSURANCE CO. LTD [2015] eKLR, Gikonyo J. considered the duty of indemnity placed on the insurer under section 10 (1) of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405 Laws of Kenya and observed as follows:

“Therefore, under section 10(1) of Cap 405 Laws of Kenya, the insurer has a statutory obligation to pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. The obligation is statutory and a strict one; it cannot be shifted or abrogated by a term in the contract of insurance or in the manner proposed by the Defendant, lest the noble intention of the Act to guarantee compensation of third parties who suffer injuries arising from by use of the insured motor vehicle on the road should be lost. Similarly, if the statutory obligation placed by law on the insurer was to be shifted to the insured as proposed by the Defendant, the purpose for taking out an insurance policy and the compulsion by the Act for such insurance cover to be taken out on vehicles to be used on the roads to cover third party risks under Cap 405 Laws of Kenya will also be defeated.”

29. I find that the Defendant has a statutory obligation to fully satisfy the decretal sum and the only legal way the said liability and obligation to pay third party claims may be avoided, is by strictly following the prescriptions provided for under section 10 of Cap 405 which do not arise in the present case.

30. I accordingly enter Judgment in favour of the Plaintiff against the Defendant in the following terms;

(i) THAT the Defendant be and is hereby directed to pay the decretal sum awarded in KERICHO CM Case No. 462 of 2014 being Kshs.2,257,695 less Kshs.350,000 paid leaving a balance of Kshs.1,907,695/=.

(ii) THAT the Plaintiff to be reimbursed Kshs.703,500 in respect of proceeds of his water tanks and Motor Vehicle Registration KCG 428Q and

(iii) The balance of Kshs.1,204,195 to be utilized to satisfy the balance of the decretal sum in KERICHO CM Case No.462 of 2014.

(iv) THAT the Defendant also to pay costs of this suit and interest at court rates from the date of the judgment in the CM’S court until payment is full.

DELIVERED, SIGNED AND DATED AT KERICHO THIS 4TH DAY OF MARCH, 2022

A. N. ONGERI

JUDGE