Kenindia Assurance Company Ltd v Spin Knit Dairy Limited [2023] KEHC 25214 (KLR)

Kenindia Assurance Company Ltd v Spin Knit Dairy Limited (Civil Appeal 562 of 2018) [2023] KEHC 25214 (KLR) (Civ) (10 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25214 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal 562 of 2018

AN Ongeri, J

November 10, 2023

Between

Kenindia Assurance Company Ltd

Appellant

and

Spin Knit Dairy Limited

Respondent

(Being consolidated appeals emanating from Milimani CMCC No. 3240 and 3241 of 2010 by Hon. D. A. Ocharo (SRM) delivered on 25/10/2018)

Judgment

1. The respondent was the plaintiff in CMCC 3240 and 3241 of 2010 filed against the appellant herein seeking orders that the appellant be compelled to legally indemnify the respondent for loss incurred in the sum of kshs.2,755,000 and kshs.2,394,000 respectively less any contractual deductions in the terms of excesses payable by the respondents.

2. The parties agreed that the evidence be recorded in Milimani CMCC no. 3240 of 2010 and that the decision to apply in Milimani CMCC no. 3241 of 2010 since the two suits involved similar issues.

3. The suits were in respect of two motor vehicles registration no. xxxx and xxxx which were owned by the respondent and the appellant had issued the respondent with insurance covers for 2,394,000 for motor vehicle registration no. xxxx and ksh.2,755,000 in respect of motor vehicle registration no. xxxx.

4. The two motor vehicles were burnt down along Nakuru-Kisumu Highway on 17/1/2008 by a rioting crowd and the appellant declined to indemnify the insured for the loss.

5. The trial court held that the appellant was liable to indemnify the respondent for the loss and entered judgment in favour of the respondent for sums insured.

6. The appellant has appealed to this court on the following grounds:a.The learned magistrate erred in entering judgement against the appellant in favor of the respondentb.The learned magistrate erred in arriving at a decision that was wholly against the weight of the evidence produced.c.The learned magistrate erred in finding and holding that the appellant was liable to indemnify the respondentd.The learned magistrate erred in not finding and holding that the claim herein fell within the terrorism and/or civil commotion exceptions in the policy.e.The learned magistrate erred in finding and holding that the appellant was liable to pay the respondent the sum of Kshs. 2,755,000 yet there was no evidence to sustain the claim.

7. The parties filed submissions in the consolidated appeals as follows: the appellant submitted that there was no witness that was called by the respondent to testify and give evidence in the actual incident of burning of the motor vehicle and the claim remained unsubstantiated. The respondent therefore failed to discharge its burden of proof at trial.

8. Further the policy which the appellant and the respondent contracted provided for General Exceptions more specifically general exception 2 provided for the exception in this dispute. There was Endorsement No. 57 Inclusion of Special Perils which was an addendum to the policy as such formed part if the contract entered as part of the policy. The respondent having made a case that the arson and eventual destruction of the its motor vehicle was caused as part of civil unrest, it was the appellants submission that due to interpretation of Endorsement No. 57 the respondent was not liable.

9. The appellant submitted that special damages must not only be pleaded but also must be proved. It was the appellants argument that the respondent did not adduce evidence to show how it came up with the sums pleaded and subsequently awarded by the trial court. the respondent despite alleging and seeking the sum of Kshs 2,394,000 failed to prove that the motor vehicle matched the sum quoted.

10. The respondent in opposition submitted that it is not disputed that the suit motor vehicle was comprehensively insured by the appellant as at the time of the accident and that the policy was up to date. The respondent argued that contrary to the appellants averments the respondents claim fell within the terrorism and/or civil commotion exceptions contained in the policy.

11. The respondent submitted that the loss occasioned to the respondent arose independently and was not in any way connected to occurrences as envisaged by Endorsement No. 57 on Strike, Riot and Civil Commotion. That a plain reading to the police abstract and the respondent’s driver witness statement revealed that loss in the form of arson and theft of the commodity the respondent’s driver was ferrying was occasioned by sporadic activities of agitated member of the general public acting for their own personal gain and were not in any way an organized form of unrest as purported by the appellant.

12. On special damages the respondent submitted that the subject motor vehicle was comprehensively insured vide policy No. xxxx for an assured sum of Kshs. 2,394,000. The existence of the insurance cover and the value thereof remained undisputed and uncontested. Hence the court finding the at the appellant ought to have compensated the respondent the full value of the policy was spot on as holding otherwise would be akin to rewriting the contract between the parties.

13. This being the first appellate court, the duty of this court is to re-evaluate the evidence adduced before the trial court and to arrive at my own conclusion whether to support the findings of the trial court or not while bearing in mind that the trial court had the advantage of seeing the witnesses. In Selle v Associated Motor Boat Co. [1968] EA 123 it was held in the following terms: -“An appeal from the High Court is by way of re-trial and the Court of Appeal is not bound to follow the trial judge’s finding of fact if it appears either that he failed to take account of particular circumstances or probabilities, or if the impression of the demeanour of a witness is inconsistent with the evidence generally.An appeal to this court from a trial by the High 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.In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”

14. The issues for determination in this case are as follows;(i)Whether Respondent had an insurable interest in the subject Motor Vehicle.(ii)Whether the appellant is liable to indemnify the respondent for the loss.

15. On the issue as to whether Respondent had an insurable interest in the subject Motor Vehicle,I find that it is it is not disputed that the suit motor vehicle was comprehensively insured by the appellant as at the time of the accident and that the policy was up to date at the time the Motor Vehicles was burnt down.

16. In the case of AIG Insurance Company Limited v Benard Kiprotich Kirui [2022] eKLR, the court stated as follows;“In order to receive compensation from an insurance company, an insured person must demonstrate to the court that he indeed had an existing contract (Insurance policy) with the insurance company. Secondly, such a person must demonstrate that they had an insurable interest in the particular thing that they seek compensation for. The concept of insurable interest was defined in the case of Lucena v Crawford (1806) 2 BOS PNR 269 at 302 where Lawrence J. stated that an insurable interest is essentially the pecuniary or proprietary interest that the insured stands to lose if the risk attaches”.

17. I find that the Respondentdemonstrated that they had an insurable interest in the motor vehicle.

18. On the issue as to whether the appellants are liable to indemnify the respondents, I find that the answer is in the affirmative.

19. I find that the respondent’s drivers’ evidence that the loss was occasioned by sporadic activities of agitated members of the general public acting for their own personal gain and were not in any way an organized form of unrest as purported by the appellant was not controverted by the Appellant.

20. There was therefore no evidence that the that the claim herein fell within the terrorism and/or civil commotion exceptions in the policy.

21. The trial court relied on the case of Patrick Muturi v Kenindia Assurance Company Ltd [1993] eKLR where the court held as follows;“The very foundation of every rule which has been promulgated, applied and acted upon by the Courts with regards to insurance law is the fundamental principle of insurance, that the contract of insurance in an insurance policy document is a contract of indemnity. It is a contract giving security from damage or loss. It is not that it ensures that no damage or loss shall occur; rather, it is an agreement by an insurer to make good a loss, to pay compensation for loss or injury which may occur within the terms of the agreement, the insured keeping his part of the bargain. It means that the assured fulfilling his undertaking under the contract, in case of a loss against which the policy has been made, shall be fully indemnified. Full indemnity means, of course, that the assured is not to be more than fully indemnified. He shall not be deprived of a full indemnity. He shall not be deprived of a full indemnity; and he will not be given more than a full indemnity.”

22. I find that the appeal herein lacks in merit and I accordingly dismiss it with costs to the Respondent.

23. This order applies to Civil Appeal No. 563 of 2018.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 10TH DAY OF NOVEMBER, 2023. ........................A. N. ONGERIJUDGEIn the presence of:……………………………. for the Appellant……………………………. for the Respondent