Mwai v UAP Insurance Company Limited & another; Insurance Regulatory Authority (Interested Party) [2023] KEHC 25105 (KLR)

Mwai v UAP Insurance Company Limited & another; Insurance Regulatory Authority (Interested Party) (Civil Case E106 of 2022) [2023] KEHC 25105 (KLR) (Civ) (10 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25105 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Case E106 of 2022

DAS Majanja, J

November 10, 2023

Between

Joseph Rwamba Mwai

Plaintiff

and

UAP Insurance Company Limited

1st Defendant

Minet Kenya Insurance Brokers Limited

2nd Defendant

and

Insurance Regulatory Authority

Interested Party

Ruling

1. There are two applications for consideration. The first is the 1st Defendant’s application dated 02. 11. 2022 made under Order 10 rule 11 of the Civil Procedure Rules seeking to set aside the default judgment entered against it on 09. 08. 2022 and for the court to grant it unconditional leave to defend the suit. The application is supported by the affidavit of the Erick Onderi, the 1st Defendant’s officer, sworn on 02. 11. 2022 and a further affidavit sworn on 14. 03. 2023. The application is opposed by the Plaintiff through his replying affidavit sworn on 07. 11. 2022.

2. The second application is filed by the Plaintiff and it is dated 14. 02. 2023 seeking a raft of orders as follows:1. That the suit raises pertinent issues relating to Unfair Practices under the part III of the Consumer Protection Act which is grounded in Article 46 of the Constitution.2. That the Consumer Protection Act lays heavy emphasis on protecting consumers against “unfair practices” in various parts of the Act.3. That “consumer protection” covers very weighty issues such as social, economic, cultural, environmental, health, safety, trade, business, growth, etc for the vast majority (if not all) of the population for both goods and service and both public and private institutions.4. That there is no reported case covering the wordings of Sections 12 – 16 being Part III of the Act which covers the pertinent issues of “unfair practices” as envisaged by the Act.5. That due to the above broad application and implications in the Constitution and the Consumer Protection Act we pray that this case be heard and determined on priority.6. Any other and further relief that this court may deem fit and just to grant in the circumstances.

3. The application is supported by the Plaintiff’s affidavit sworn on 14. 02. 2023 and opposed by the 1st Defendant through Grounds of Opposition dated 27. 03. 2023. Both parties have filed written submissions. I will consider the 1st Defendant application first as it seeks to set aside the default judgment.

4. The 1st Defendant does not deny that it was served with the Summons to Enter Appearance and the Plaint in the matter. It filed its Memorandum of Appearance on 15. 07. 2022 but failed to file its defence whereupon the court entered default judgment against it on 09. 09. 2022. The 1st Defendant does not deny that the judgment is regular on the face. It states that it failed to file the defence on time due to election related interruptions at its offices at the time.

5. It is established and affirmed by our courts that the court’s jurisdiction to set aside default judgment is unfettered and is intended to be exercised to do justice and to avoid injustice or hardship but not to assist a person guilty of deliberate conduct intended to obstruct or delay the course of justice (see for example Patel v E A Cargo Handling Services [1974] EA 75, Shah v Mbogo [1967] EA 116 and Pithon Waweru Maina v Thuku Mugiria [1982-88] 1 KAR 71).

6. As stated, the judgment in this case was regular and even where judgment is regular the court still has discretion to set aside the default judgment. The Court of Appeal in James Kanyita Nderitu v Maries Philotas Ghika & Another NRB CA Civil Appeal No. 6 of 2015 [2016]eKLR held that in such a case, the court has unfettered discretion in determining whether or not to set aside the default judgment, and will take into account such as the reason for the failure of the defendant to file his memorandum of appearance or defence, as the case may be, the length of time that has elapsed since the default judgment was entered; whether the intended defence raises triable issues; the respective prejudice each party is likely to suffer.

7. The Plaintiff has vehemently opposed the application through its replying affidavit. That replying affidavit, I must say, violates the fundamental rule of affidavits that an affidavit must be confined to facts. As it is, the affidavit is argumentative, sets out submissions on matters of law and not only cites cases but sets out copious excerpts of those cases. This is contrary to Order 18 rule 3(1) of the Civil Procedure Rules which is very clear that in interlocutory proceedings, affidavits shall be confined to facts which the deponent can prove of his own knowledge or alternatively the affidavit may contain statements of information or belief showing the sources. An affidavit is not an opportunity for arguments and submissions as this tends to obscure the facts that are under inquiry. In Pattni v Ali & Others [2005] 1 E.A 339, the Court of Appeal expressed the following view, “To my mind, parties and counsel ought not to turn affidavits, which is evidence and which ought to be restricted to factual matters, to submissions on points of law. Where a party relies on both facts and law, facts ought to be contained in an affidavit, while legal issues ought to be in grounds of opposition. Submissions on points of law which are disguised as factual averments contained in affidavits, unless sworn by legal experts deposing to matters relating to their knowledge of the law, run the risk of being struck out.”

8. While I have doubt that the 1st Defendant has explained the reason it failed to file a defence over a period of about two months, I am of the view that it has a good defence which ought to be considered and ventilated at the trial. The Plaintiff’s case is for breach of a motor vehicle policy which he alleges the 1st Defendant failed to honour by refusing to repair it. The Plaintiff invokes the provisions of Article 46(1) of the Constitution and the Consumer Protection Act, 2012 in seeking general, exemplary and punitive damages. In its draft statement of defence, the 1st Defendant denies the claim and states that in accordance with its obligation under the contract, by authorizing repair of the motor vehicle under the policy, refunding 50% of the amount spent by the Plaintiff in accordance with the policy and rejecting a claim for consequential loss, is not covered by the policy. In my view, these are triable issues which ought to be resolved at the trial. In the same vein, the Plaintiff in the application dated 14. 02. 2023 whose prayers I have set out above implicitly admits that the suit raises substantial issues under the Constitution and the Consumer Protection Act which have never been determined by our court. I therefore hold that the 1st Defendant has a defence that raises triable issues or at any rate a defence that ought to be considered in light of the averments that the case raises important issues. In addition, I think this is a matter where any prejudice suffered by the Plaintiff can be assuaged by an award of costs.

9. Turning to the Plaintiff’s application dated 14. 02. 2021, it seeks an order that the suit be heard on a priority basis. I decline to grant the order at this stage. The court has just allowed the 1st Defendant to file its statement of defence. Let the parties proceed with case management after the close of pleadings whereupon the matter will be fixed for hearing depending on compliance with pretrial orders.

10. For the reasons I have set out above, I now make the following dispositive orders:a.The 1st Defendant’s application dated 02. 11. 2023 is allowed on terms that the default judgment be and is hereby set aside and the 1st Defendant is granted leave to file and serve its Statement of Defence within 14 days.b.The 1st Defendant shall pay to the Plaintiff thrown away costs assessed at Kshs. 15,000. 00 within 14 days from the date hereof.c.The Plaintiff’s application dated 14. 02. 2023 is dismissed with no order as to costs.

DATED AND DELIVERED AT NAIROBI THIS 10TH DAY OF NOVEMBER 2023. D. S. MAJANJAJUDGECourt Assistant: Mr M. OnyangoThe Plaintiff in person.Ms Mureithi instructed by KN Law LLP Advocates for the 1st DefendantMr Awino instructed by Cootow and Associates Advocates for the 2nd Defendant.