Kenya Orient Insurance v Francis Nzuki Katiku [2017] KEHC 842 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MURANG’A

CIVIL APPEAL NO 234 OF 2013

(From original Decree in Kigumo PMCC No 239 of

2012 – B Khaemba, Ag SRM)

KENYA ORIENT INSURANCE.............................APPELLANT

VERSUS

FRANCIS NZUKI KATIKU.................................RESPONDENT

J U D G M E N T

1. The Respondent in this appeal, Francis Nzuki Katiku, was sued in Kigumo RMCC No 77 of 2009 and Kigumo RMCC No79 of 2009 for damages following a road traffic accident which had involved his motor vehicle Registration No KAA 258L. Judgment was passed against him in both suits and decrees issued.

2. The Respondent subsequently sued the Appellant herein, Kenya Orient Insurance Ltd. in Kigumo PMCC No 239 of 2012 where he alleged existence of a contract of insurance between him and the Appellant in respect to the accident motor vehicle. He sought enforcement of that contract of insurance by an order of specific performance directing the Appellant to pay “…the decretal amounts, their interests and incidental costs in Kigumo RMCC No 77 of 2009 and Kigumo RMCC No 79 of 2009. …”. He also sought general damages, costs and interest.

3. In its statement of defence the Appellant pleaded that there was no contract of insurance between it and the Respondent, and that the policy of insurance it had issued in respect to the accident vehicle, Registration No KAA 258L, was between it and one Francis Kariuki Gikonyo, not the Respondent. The Appellant further pleaded that in any event, the policy of insurance was a commercial one and did not cover fare-paying passengers in the motor vehicle (which the plaintiffs in the judgment suits were), and that therefore there had been breach of the condition in the contract of insurance relating to limitation of use of the insured vehicle. The case proceeded to trial.

4. In its judgment, the lower court found that indeed there existed a contract of insurance between the Respondent and the Appellant in respect to the accident motor vehicle. The court also held that the Appellant was estopped by its conduct from denying its liability under that contract of insurance. It gave the Respondent judgment as prayed and decree issued. This appeal is against that decree.

5. The Appellant filed written submissions on 25/10/2016 and subsequently highlighted them. The Respondent never filed any submissions; nor was there appearance for him at the hearing of the appeal despite service.

6. I have considered the written and oral submissions made on behalf of the Appellant. Learned counsel for the Appellant focused in his highlighting on four main grounds of appeal –

(a) That the trial court failed in terms to determine if there was a contract of insurance between the Appellant and the Respondent and ignored the contract of insurance document produced in evidence by the Appellant.

(b) That in any event, the contract of insurance in respect to the said accident motor vehicle (to which the Respondent was not a party) did not cover fare-paying passengers (as were the plaintiffs in the judgment suits), and the trial court erred in not so holding.

(d) That in any case the doctrine of estoppel did not apply where there was a clear mistake of fact, and the trial court erred in not so holding.

7. I have read the record of the trial court in order to evaluate the evidence placed there on my own and arrive at my own conclusions thereon. This is my duty as the first appellate court. I have borne in mind however, that I neither saw nor heard the witnesses, and I have given due allowance for that fact.

8. At trial the Respondent testified and called no other witness. In respect to the policy of insurance that he had pleaded existed between him and the Appellant, he produced only a windscreen insurance sticker (certificate of insurance) that stated: “Name of insured: As Per Policy”. He did not produce in evidence that policy.

9. The Appellant called two witnesses, an insurance claims investigator, and its legal officer. The legal officer produced in evidence the insurance policy document in respect to the accident vehicle as Exhibit D8. It showed the insured as one Francis Kariuki Gikonyo, not the Respondent, who is called Francis Nzuki Katiku. So, where is the policy of insurance between the Appellant and the Respondent that the Respondent pleaded in the court below?

10. The trial court appears to have ignored Exhibit D8. In doing so the court relied heavily on the doctrine of estoppel. The trial court’s discussion of this doctrine and its application to this case forms a substantial portion of the judgment.

11. The conduct of the Appellant that provoked the trial court’s invocation and application of the doctrine of estoppel was as follows. Upon receipt of the report on the accident the Appellant acted like the Respondent was indeed its insured in respect to the accident vehicle. It wrote letters to that effect. When the Respondent was sued in the two judgment suits it appointed counsel to act for the Respondent as well as to look out for its own interest in those suits. Indeed, the two suits were compromised upon its own instructions to counsel. So, how could the Appellant so late in the day be heard so state that there was no contract of insurance between it and the Respondent, or that in any event there was no liability cover to fare-paying passengers in the motor vehicle?

12. The Appellant’s case of course was not that there was no insurance policy in existence at the material time in respect to the accident vehicle. Indeed there was. Its case, however, was that the holder of that policy was one Francis Kariuki Gikonyo, not the Respondent, a fact it discovered about three years after the accident. So why did it take so long for the Appellant to discover that the Respondent was not its insured in respect to the accident motor vehicle?

13. The Appellant’s explanation was that upon the fact of the accident being reported to it, it quickly checked its “systems” to see if the motor vehicle was insured by it, and if so, what kind of insurance cover was contracted. This would ensure that it quickly took action to safe-guard its interests by ensuring that its insured is properly legally represented. Well, that is ok, but why should it have taken three years plus for the Appellant to finally discover that the Respondent was not their insured?

14. Be that as it may; it does not affect the fact established by the policy document produced in evidence as Exhibit D8 that indeed there was no contract of insurance in respect to the accident motor vehicle between the Respondent and the Appellant!

15. As for the doctrine of estoppel, as already pointed out, it forms a large part of the trial court’s judgment. It was never pleaded by the Respondent in his plaint. Nor did he plead it in his reply to defence. The issue appears to have been raised first in the Respondent’s written submissions before the trial court.

16. It is trite law that a party is bound by its pleadings. An adverse party can only confront the claimant’s claim as pleaded. It was too late in the day and improper for the trial court to invoke an issue that was never raised in the pleadings.

17. In any event, the Appellant appeared to have been delabouring under the mistake of fact that the Respondent was their insured in respect to the accident vehicle at the material time. This mistake of fact was starkly brought out by Exhibit D8, the policy document executed between the Appellant and somebody else, not the Respondent.

18. I therefore hold that there was no privity of contract between the Appellant and the Respondent in respect to the accident vehicle. The policy of insurance in place at the material time was between the Appellant and somebody else. The doctrine of estoppel, which was never pleaded, will not oust this fact. Having so held, it is not necessary to decide on the contents of that insurance policy.

19. In the event, I will allow this appeal in its entirety. The judgment of the trial court is hereby set aside. In its place an order is hereby entered dismissing the plaintiff’s case with costs to the defendant. It is so ordered.

20. The Appellant shall have costs of this appeal.

DATED AND SIGNED AT MURANG’A THIS 20TH DAY OF JULY 2017

H P G WAWERU

JUDGE

DELIVERED AT MURANG’A THIS 21ST DAY OF JULY 2017