Saham Assurance Company (K) Limited v Lameck Okari Mairura; Elizabeth Kwamboka Mokua (Interested party) [2022] KEHC 1596 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAROK

CIVIL SUIT NO. 14 OF 2018

(CORAM: F.M. GIKONYO J.)

SAHAM ASSURANCE COMPANY (K) LIMITED.............................................PLAINTIFF

VERSUS

LAMECK OKARI MAIRURA...........................................................................DEFENDANT

AND

ELIZABETH KWAMBOKA MOKUA...............................................INTERESTED PARTY

JUDGMENT

[1] The Plaintiff, Saham Assurance Company Limited, through the amended plaint dated 22nd October, 2020 sought for judgement against the Defendant, Lameck Okari Mairura, as follows:

a.  A declaration that it is not bound to pay/or satisfy judgment in Narok CMCC NO. 225 OF 2018 and/or indemnify the Defendant against any claim in respect of bodily injury to any person, damage to property or satisfy any claim whatsoever arising out of the accident which allegedly occurred on 2ND December 2017 along Narok-Bomet road involving the Defendant’s Motor Vehicle Registration Number KCM741W.

b.  Costs of this suit.

c.  Interest on (b) above at court rates.

d.  Any other or further relief that this Honourable Court may deem just, expedient and fit to grant.

[2] The Plaintiff’s case is that following a proposal by the Defendant it insured his motor vehicle registration number KCM 741W under policy no. MGL/07/070/0021941/2017COMP. According to the proposal, the motor vehicle was for the Defendant’s private use and his business dealings. The Plaintiff avers that it was a term of the policy that it would indemnify the Defendant in the event of an accident caused or arising from the use of the motor vehicle as a private vehicle or in connection with his business.

[3] The Plaintiff states that on or about the 2nd December 2017, during the subsistence of the policy, the Defendant’s said motor vehicle was involved in a road accident along Narok- Bomet Road resulting in the injury to passengers carried therein. One of the passengers (the interested party) had since sued the Defendant herein for compensation in Narok CMCC NO. 225 OF 2018.

[4] The plaintiff subsequently filed the suit herein seeking to repudiate liability purportedly under the policy and more specifically, a declaration that it is not bound to settle claims arising from the accident herein including CMCC NO. 225 of 2018. The reason for seeking repudiation of liability, according to the plaintiff is that, at the time of the accident the vehicle was used for hire and reward while it was insured for private purposes only.

[5] The Plaintiff avers that although the Defendant reported the accident as required by the terms of the policy, he concealed material facts and/or misrepresented information and therefore willfully breached the terms of the policy. It is the Plaintiff’s case that the persons aboard the Defendant’s motor vehicle were fare-paying passengers and the motor vehicle was therefore being used contrary to the terms of the insurance policy.

[6] In response, the Defendant filed a statement of defence dated 23rd December 2020 in which he denied concealing material facts about the said accident to the plaintiff. The defendant denied the vehicle being used for hire and reward. The Defendant firmly denied the particulars of breach of the policy terms and maintained that on the subject day of the accident his cousin whom he had employed as a driver was carrying his aunt and another passenger who was a non- paying. According to the Defendant the Plaintiff’s suit should fail since it is anchored on dishonest allegations and biased investigations and as such the plaintiff ought to be bound to pay/ satisfy judgment arising from Narok CMCC NO. 225 OF 2018.

[7] The interested party on her part denied hiring the said motor vehicle. She contends that she was only offered a lift through a friend who was related to the driver.

EVIDENCE

[8] PW1, Stephen Mwangi Muchoki, stated that he was the investigator contracted by the plaintiff to investigate the circumstances of the accident. The investigator testified that he received instructions from the plaintiff on 27/1/2018 to establish the consistency of damages, circumstances surrounding the accident, conditions and use of the vehicle at the time of the accident, experience of the driver, police findings by way of police abstract, level of negligence and liability or any other matter necessary. He established that the accident was self- involving and that the motor vehicle KCM 741 W was insured by the defendant. He interviewed the defendant, the driver and the passengers carried in the said vehicle. It was his evidence that he established that the vehicle was used wrongly that is under hire and reward. The authorized use was under private insurance. The interested party had hired the vehicle. He interviewed the interested party and recorded her statement. He alleged that the interested party confirmed that she had hired and paid Kshs 10,000 to the driver. The motor vehicle was to pick a crate of tomatoes for her at Ewaso Nyiro. The interested party was said to have boarded the vehicle at Keroka on 1/12/2017. The accident was on 2/12/2017 while they were coming back to Keroka after picking tomatoes.

[9] PW1 stated that he recorded a statement of the owner of the said motor vehicle. The owner stated that he was not aware of the use at the time. He confirmed Dennis was his driver. PW1 produced his investigation report as P Exh 1

[10]   On cross examination, PW1 stated that the insured signed the statement recorded by PW1. The driver confirmed that the tomatoes belonged to him. He stated that he could not confirm whether Gladys was a relative of the driver. He interviewed Gladys on phone. He found the phone number from the police abstract. Although the driver stated that Gladys was his aunt PW1 did not ascertain that fact. He stated that the motor vehicle was for social and domestic work. He could not tell if he was allowed to carry his aunt though he knows that you can carry family members up to 5. He consulted the police but did not record their statements as he found it not necessary. At that time the matter was still pending police investigations but he stated it was not necessary for him to wait for investigations to be completed.

[11]    PW1 did not have any documents to show that Gladys paid the driver Kshs. 10,000/=. There is no admission by the defendant that the vehicle was being used for hire and reward. He did not establish whether the owner and driver recorded any statements with the police

[12]   On re- examination, he stated that the driver in the statement he recorded stated that he went to his farm but did not specify what he picked from the farm but said he had 2 crates of tomatoes in his vehicle. He stated that he picked two passengers from Narok on his way back. According to the driver the two ladies were not owners of the tomatoes but the interested party said the tomatoes were hers. He confirmed that the interested party did not sign the handwritten statement. The statement by the owner is signed. The handwritten statement of the driver is signed. He did not record statement of Gladys though the driver alleged was his aunt even though she was reachable. He did not record statements of any taxi drivers he mentioned in his statement. He stated that Elizabeth wrote her name and put down her identity number which to him amounted to a signature. She confirmed she paid the driver Kshs. 10,000/=

[13]   Upon conducting investigations that included recording statements from the insured, the driver and the interested party, his evidence was that he established that the insured motor vehicle had been hired to the interested party for a sum of Kshs. 10,000/=. The interested party conceded to having hired the motor vehicle contrary to the insured’s driver’s narrative.

[14]   PW2 Rachel Njoki identified herself as a legal officer with the Plaintiff. She testified that they commissioned an investigation and upon receipt of report, they established that motor vehicle was not used in accordance with the policy. She told the Court that the motor vehicle herein was being used for hire and reward as investigated by PW1 hence no compensation should be awarded to the fare paying passengers who were travelling in the defendant’s motor vehicle. She produced the proposal form, policy schedule, claim form, repudiation notice/declinature letter asP Exh 2,3,4and 5 respectively. The pleadings in Narok CMCC 225 of 2018, the notice and certificate of postage were produced as P Exh 7 and 6 respectively.

[15]   On cross examination, stated that the motor vehicle was to be used for domestic social and business purposes by the insured para 7c of the proposal form is blank. It is not stated it could be used for hire or reward but leaving it blank means you cannot use it for hire or reward. PW2 indicated that although the subject motor vehicle had been insured as a motor vehicle- private vehicle, the insurance policy (produced as exhibit 3) is blank and it does not indicate as such. PW2 also testified that he cannot authenticate whether a statutory notice was served. She further indicated that they did not look at the police reports and /or statements which in the instance is more independent than the private investigator’s report. PW2 indicated that if the interested party was an innocent third party and if she did not pay fare and / or hire the subject motor vehicle she is entitled to compensations. PW2 also indicated that the plaintiff had instructed a counsel to represent the defendant in the primary suit Narok CMCC NO. 225 OF 2018.

[16]   Para 9 is on mediation of the dispute with the insured. She was not aware of any mediation. She confirmed that the vehicle was properly insured at the time of the accident. A lift is not fare paying or reward. The investigator ought to peruse police file and OB. They did not obtain the consent of the insured to investigate the accident. Admission of the interested party in the primary suit that she was a fare paying passenger. The proposal form was incomplete on number of passengers allowed with vehicle. The defendant did not admit that the motor vehicle was being used for hire and reward. She stated that non fare paying passengers are entitled to be compensated.

[17]   DW1 Lameck Okari Mairura. On his part, the Defendant told this Court that he is the owner of the subject motor vehicle herein. He testified that on the subject date, the driver was Dennis Mongeri Bogongo and he had visited his farm at Ewaso Ngiro wherein he picked 2 crates of tomatoes. On the subject day, the driver who was also his cousin picked his aunt and interested party herein enroute to Keroka. It is his testimony that the driver was offering a lift to both his cousin and interested party herein thus the motor vehicle was not being used for hire and reward as pleaded by the plaintiff herein.

[18]   He stated that Gladys is her aunt. Elizabeth and Gladys were involved in the accident. Gladys was treated and discharged while Elizabeth was referred to KNH. The vehicle was on its way to Keroka; his home.

[19]   There were tomatoes 2 ½ crates on board. Elizabeth was not the owner of the tomatoes but had been given a lift. The vehicle was authorized to carry 5 passengers including the driver. Elizabeth was covered by his insurance. The place for whether the vehicle can carry passengers for hire is blank. He confirmed he recorded a statement with the investigator and signed it. After the accident the insurance did not repair his vehicle. The police carried out investigations and the driver was granted cash bail of Kshs. 20,000/=. He did not record any statement with the police but his driver recorded a statement with the police. He does not agree with the findings of the investigator. The police abstract does not indicate that they were fare paying passengers. They were just passengers. He prayed that the case be dismissed with costs.

[20]   On cross Examination, the defendant informed the court that he was seeing the interested party for the first time in court thus prima facie there is no conspiracy between him and the interested party. The defendant also informed the court that the driver on 2/2/2017 en route to Narok did not transport any passenger. The defendant also insisted that the tomatoes belonged to the driver. All the parties except Gladys did not record a statement despite having appeared on the subject day when the investigator was recording the same. The defendant does not know why Gladys was not given an opportunity to record statement yet she was better placed to explain the circumstances behind the accident.

[21]   He confirmed that Gladys was his aunt while he had no relationship with Elizabeth. He only saw her in court. He stated that the driver cannot be found on phone to testify. He was aware of all engagements by his driver. He was also aware that the vehicle was not hired on the alleged date. He could only state what the driver told him since he was not at the scene.

[22]   IPW1, Elizabeth Kwamboka. she testified that she was a passenger in the subject motor vehicle. She sustained injuries accruing from the accident of 2/12/2017. She averred that on 2/12/2017 she had visited her relative who reside in Narok and while on her way back to Keroka she met her friend by the name Gladys. She informed her that they could be offered a lift to Keroka by her nephew Dennis. Truly Dennis arrived from Ewaso Ngiro and he was carrying 2 crates of tomatoes and they embarked on their journey to Keroka but the vehicle was involved in an accident at Duka Moja area wherein she sustained injuries and filled Narok CMCC NO. 225 of 2018 for compensation.

[23]   IPW1 stated she never recorded any statement or signed it. The statement does not bear her signature.  She never met the investigator. She was only called on phone to give her details thus the reason her signature is absent on her statement. IPW1 knows the driver and she stated that the tomatoes belonged to him and not to her as alleged by the plaintiff in this suit. She continues to state that she was just given a lift by the driver and she did not pay any fare to Keroka and / hire the subject car. Even though her ID number is indicated on her statement she stated that she read the same to the investigator on phone and not physically. IPW1 also stated that she does not know the defendant. She is also informed this court that she does not do any tomatoes business. She continued to state that she saw the defendant’s motor vehicle for the first time on that day.

[24]   On cross examination, she stated that the statement bears her name Elizabeth and is dated 22/2/2018. Her identity number and the name are not in her hand writing. She has never met the investigator. The investigator asked for those details over the phone. Gladys used to buy mboga from her though she is no longer at Keroka. She did not pay Dennis to pick tomatoes. She stated that tomatoes belonged to the driver.

PLAINTIFF’S SUBMISSION.

[25]   The plaintiff submitted that the evidence of the defendant that the use of his motor vehicle as at the time of the accident was hearsay. The defendant did not call the driver to rebut that the motor vehicle had been hired out to the interested party contrary to the authorized use. Therefore, an inference can be made that the evidence of the defendant’s driver would have been adverse to his case and thus the decision to withhold that evidence from the court. The defendant listed the interested party as a friend in the claim form yet denied knowing her in cross examination

[26]   The plaintiff submitted that the interested party signed her statement attached to the investigation report. The statement had the interested party’s name and identity card and other identifying variables. Further the allegations that she did not sign the statement was not captured in her statement filed in court which clearly conforms that it is an afterthought.

[27]   The plaintiff submitted that PW1 interviewed Gladys Kemunto over the phone and the extract forms part of the investigation report. That there was clear admission by the interested party that she had hired the motor vehicle and with such admission by interested party that she hired the motor vehicle and with such an admission there was no need for further investigation. Kenyan Alliance Insurance Company Limited V Pizzaro Kaungania & Another [2018] eKLR

[28]   The plaintiff submitted the testimony of the defendant in so far as the ownership of the tomatoes and the use at the time of the accident remains of no probative value. The defendant failed to disclose all material facts. They relied in the case of Kenya Alliance Insurance Company Limited V Pizzaro Kaungania & Another [2018] eKLR

[29]   The plaintiff submitted that the defendant was in breach of the terms of the subject policy as the motor vehicle at the time of the accident was being used for hire and reward. On the face of the breach of the condition, the plaintiff is entitled to repudiate the insurance contracts. They cited the case of Paul Mutsya V Jubilee Insurance Company of Kenya Limited [2018] eKLR and The Great Insurance Company of India Ltd Vs Lilian Evelyn Cross and Another [1966] EA 90.

[30]   The plaintiff submitted that leaving the proposal blank does not mean inclusion. That the proposal form and the schedule need be considered together and not in exclusion of each other. The defendants admitted that the motor vehicle was insured for private domestic and social use only.

[31]  The plaintiff submitted that, although the insurance policy required any dispute to be subjected to arbitration, the defendant admitted the jurisdiction of the court to handle the matter. Parties are bound by their pleadings. He cited the case of Corporate Insurance Company Limited V Charles John Muse [2018] eKLR

[32]   The plaintiff submitted that it has satisfied that the proceedings seeking the declaration under Section 10 (4) of the Insurance (Motor Vehicles Third Party Risk) Act has been brought within the stipulated three (3) month’s timeframe from the date of institution of the primary suit. Narok CMCC NO. 225 of 2018 was instituted on 28th August 2018 and the instant suit was filed on 15th November 2018 which is within the 3 months as well as issuing the notice to the plaintiff in the primary suit as required under Insurance (Motor Vehicles Third Party Risk) Act.

[33]  The plaintiff submitted that Gladys who was allegedly an aunt to the insured has not filed a suit seeking compensation on account of injuries sustained in the accident and neither was she called by the defendant or the interested party who claimed she was an aunt and a friend respectively to rebut that the interested party had hired the motor vehicle.

[34]  The plaintiff submitted that the investigations by the police have no bearing whatsoever on the use of the motor vehicle. That according to the investigator, his investigation was thorough and unbiased as the defendant and the interested party sought to paint in their cross examination and in their testimonies.

[35]   In conclusion, the plaintiff urged the court to find that plaintiff has demonstrated on a balance of probability and on that basis of the admission by the interested party to the investigator that the defendant was in breach of the insurance contract with the plaintiff. As a consequence, urged this court to issue a declaration that the plaintiff is not bound to satisfy the judgement in Narok CMCC NO. 225 of 2018 filed by the interested party and or indemnify the defendant against any claim in respect of bodily injury to any person, damage to property or satisfy any claim whatsoever arising out of the road traffic accident that occurred on 2nd December 2017 along Narok-Bomet road involving the insured motor vehicle the plaintiff also prayed for costs.

DEFENDANT’S SUBMISSIONS

[36]  The defendant submitted that the plaintiff has failed to discharge their burden of proving that the subject motor vehicle was being used for hire and reward and/ or transportation of fare paying passengers. The findings of PW1 are biased.  That the same is founded on incomplete, incomprehensive and shallow investigations. That the plaintiff should desist from pleading non-existent fact in their policy and/ or proposal form. The evidential burden lies squarely on the plaintiff and at no time should it shift to the defendant. They relied on Section 107-109 of the Evidence Act, Tabitha Atsinga Musambi Vs Standard Ltd and Another [2019] eKLR, Blue Shield Insurance Co. Ltd V Samuel Nyaga Ngurukiri [2008] eKLR, Palace Investment Ltd Vs Geoffrey Kariuki Mwenda & Another [2015] eKLR, Karugi &Another V Kabiya 7 3 Others [1987] KLR 347

[37]   The defendant submitted that he had indicated in his proposal form that he would hire a driver. The subject motor vehicle was being used for the right reasons as per policy therefore it does not matter whether he was aware where the vehicle was or not. The defendant confirmed to court that he was aware that on several occasions the driver had made trips to Ewason Nyiro with his knowledge.

[38]   The defendant submitted that the plaintiff has failed to discharge their burden of prove that the subject motor vehicle was being used for hire and reward and / or transportation of fare paying passengers. He prayed that the suit be dismissed with costs. He prayed that costs should follow the event. He relied in the case of Jasbir Rai & 3 others V Tarlocham Singh Rai & 4 Others [2014] eKLR.

INTERESTED PARTY’S SUBMISSION

[39]   The interested party submitted that the plaintiff has not discharged their burden of prove that she recorded the statement. The driver was never called to testify as it is not the work of the defendant to avail witnesses to assist the plaintiff in discharging his burden of proof. The allegations that the car was used for hire and reward was rebutted by IPW1 on oath. Further the evidence of the driver was contained in the recorded statement which forms part of P Exh1. She relied on Section 107 and 108 of the Evidence Act and in the case of Kenya Orient Insurance Company Ltd, Robert Gakei Muringi; Florence Nyambura & 5 Others [2020] eKLR

[40]   The interested party submitted that there was no proof that the name and identity card number was written by her or that she was present when it was recorded. She could append her signature as she knows how to read and write.

[41]   The interested party submitted that the credibility of PW1 is questionable as he met DW1 in Keroka but recorded that he recorded the statement in Narok. PW1 did not explain why he chose to believe alleged evidence of IPW1 but not the driver whom the IPW1 confirms was the owner of the tomatoes. He also opted not to record the statement of the other passenger yet she was reachable. PW1 chose not to record statement of Gladys yet she was with DW1.

[42]   The interested party submitted that the allegations that she admitted that she had hired the vehicle was not on oath. She cited the case of Real Insurance Company Limited Vs Board of Governors Victonell Academey [2017] eKLR

[43]   The interested party urged this court to dismiss this suit with costs.

ANALYSIS AND DETERMINATION

[44]   It is not in dispute that the defendant’s motor vehicle was insured by the plaintiff. The plaintiff alleges that the insurance cover issued to the Defendant by the Plaintiff only indemnified him for any loss arising from the private use of his motor vehicle. The Plaintiff insists that the passengers in the Defendant’s motor vehicle at the time of the accident were fare-paying passengers, thus, a violation of the terms of the insurance policy.

[45]   On the other hand, the Defendant’s case is that the passengers were only being given a lift by his friend who had requested him to use the motor vehicle at the time of the accident.

[46]  It follows therefore, that this court should determine: -

i)  whether or not the defendant breached the insurance policy herein, thus, entitling the plaintiff to repudiate liability herein under section 10(4) of the Insurance Third Party Risks Act.

[47]   What does the evidence portend?

Statement by Interested Party

[48]   The plaintiff bears the onus of proof. The plaintiff alleges that the Interested party paid the driver of the insured motor vehicle a sum of Kshs. 10,000 to carry tomatoes for her. They relied on a statement purportedly signed by the Interested Party. The statements by the driver and the defendant are signed. The statement by the Interested Party bears the ID Number and name of the Interested Party. The Interested Party has denied ever signing the statement or ever meeting the investigator at any time. According to her, the investigator called her over phone and asked for her details of the accident and her ID card, which she provided.

[49]   It emerged during trial that the Interested Party was literate and was able to sign. No reasonable explanation was provided by PW1 or other why she could not sign the statement.

[50]   The Interested Party also stated that the ID number and her name were not in her handwriting. There was no evidence to prove that she is the author of the ID number and name in the statement produced by the investigator herein. Such is relevant to prove she appended her signature on the statement. The argument that the name in the statement was her signature is therefore not supported by evidence. Accordingly, I find that the purported statement of the interested party which forms the core basis of this claim was not signed by the Interested Party.

Hiking lift or fare-paying passenger

[51]   During cross-examination, PW1 told the Court that there was no record of any fare paid by any of the passengers and that the claim form by the Defendant did not mention any hire or reward. Further, that the extract from the OB has no reference to fare-paying passengers. PW1, however, stated that, under the cover, the insurance indemnifies third parties who are not fare-paying passengers but are injured in the accident involving the insured motor vehicle.

[52]   The statement by the driver was recorded by PW1. It is part of the investigation report produced by PW1. It is also part of record as such. The driver states that he had given a lift to Gladys and the Interested Party. Further, the statement avers that the tomatoes in the vehicle belonged to him and not the Interested Party. I wonder the basis upon which an inference could be made that his evidence would have been adverse to the defendant and the Interested Party as proposed by the plaintiff’s counsel.

[53]   I have also perused the investigation report, and it adds no weight to the plaintiff’s case as long as the key supporting documents, especially the statements allegedly made by the persons who were passengers in the vehicle, were not signed.

[54]   It is disconcerting and in dis-favour of the Plaintiff’s case when one considers that the defendant stated categorically before the court that when he was recording his statement, Gladys was present but PW1 chose for reasons known to him not to record her statement. He also told the court that he did not see the Interested Party on the day she is alleged to have recorded her statement. Their statements are indicated to have been recorded on the same day.

[55]   The Interested Party was also a witness before this court and she disowned the statement prepared by PW1. In the statements exhibited by the Defendant, all the passengers averred that they were being given free rides in the Defendant’s ill-fated motor vehicle.

[56]    In a situation such as this, the Court will rely on the statements whose tenor and substances has not been impeached, and are duly signed by the makers. The evidence adduced lead this Court to conclude that the passengers in the insured motor vehicle were not fare-paying passengers but passengers. I also find that the said motor vehicle was not being used for hire or reward at the time of the accident.

[57]   The Plaintiff has therefore failed to establish a ground for which it can avoid the contract and policy of insurance issued to the Defendant, and repudiate liability under the said insurance cover. In the upshot, I dismiss the Plaintiff’s case.

[58]   In line with the principle that costs should follow the event, the costs of the suit are awarded to the Defendant and the interested party against the Plaintiff. It is so ordered.

DATED, SIGNED AND DELIVERED AT NAROK THROUGH TEAMS APPLICATION, THIS 14TH DAY OF MARCH, 2022

----------------------

F. GIKONYO M.

JUDGE

IN THE PRESENCE OF:

1. LANGAT FOR THE DEFENDANT

2. KARANJA FOR THE PLAINTIFF

3. KASASO – CA