Sammy Opiyo t/a Liera Farm Investment Ltd v Fidelity Insurance Company Ltd [2023] KEHC 24399 (KLR)

Sammy Opiyo t/a Liera Farm Investment Ltd v Fidelity Insurance Company Ltd (Civil Case E003 of 2021) [2023] KEHC 24399 (KLR) (24 October 2023) (Judgment)

Neutral citation: [2023] KEHC 24399 (KLR)

Republic of Kenya

In the High Court at Homa Bay

Civil Case E003 of 2021

KW Kiarie, J

October 24, 2023

Between

Sammy Opiyo t/a Liera Farm Investment Ltd

Plaintiff

and

Fidelity Insurance Company Ltd

Defendant

Judgment

1. By a plaint dated the 15th day of June 2021, the plaintiff sued the defendant for the following prayers:a.An injunction to restrain the defendant by itself, its agents or servants, or otherwise howsoever from breaching the policy agreement and statutory duty relating to the policy;b.Damages for breach of contract;c.Kenya Shillings 200,000/=;d.A declaration that the defendant is bound to satisfy all judgments against the plaintiff arising from the accident involving motor vehicle registration number KCG 093V which occurred during the validity of the said policy of insurance caps KSM/ P/401/ 010660/17;e.Special damages of Kshs.2, 500,000/=;f.Cost of the suit;g.Interest in prayers a, b, c, and d; andh.Any further relief the court may deem fit to grant.

2. The plaintiff claims that he held a comprehensive insurance policy with the defendant for their vehicle, registered KCG 093V, under the policy number KSM/P/010660/17. This policy was issued after the parties entered into an insurance contract on 26th April 2017 and was valid until the 25th April 2018. The policy covered any liability the plaintiff might incur due to bodily injury to another person while using the said vehicle on the road, up to a maximum compensation amount of Kshs. 8,500,000

3. The plaintiff avers that on or about the 17th day of May 2017 the motor vehicle KCG 093V was involved in an accident along Kendu Bay-Pala Road while in the course of business and as a result of which the same vehicle was severely damaged and the plaintiff accordingly lodged a claim for Redemption and or repair of the said vehicle in accordance with the terms of the insurance contract. The vehicle was accordingly repaired.

4. In the same accident, six people were injured. Judgments were entered in their favour for the cases they filed at Oyugis Magistrates Court. The cases were as follows:a.Oyugis PMCC No. 199 of 2017 – Risper Akinyi Ndalo vs. Liera Farm Investment;b.Oyugis PMCC No. 200 of 2017 – Tabitha Achieng Majwek vs. Liera Farm Investments Limited;c.Oyugis PMCC No. 201 of 2017 – Pamela Achieng Ojwang vs. Liera Farm Investments Limited;d.Oyugis PMCC No. 202 of 2017 – Jemimah Aoko Odungo vs. Liera Farm Investments Limited;e.Oyugis PMCC No. 203 of 2017 – Dinah Akoth Jacob vs. Liera Farm Investmentsf.Limited; andg.Oyugis PMCC No. 205 of 2017 – Mary Akoth Ouma vs. Liera Farm Investments Limited.

5. After the judgments were entered, the plaintiff notified the defendant, who failed to settle the decrees, leading the plaintiff to file this case.

6. In their defence statement, the defendant argued that there was no policy agreement between them and the plaintiff. They also denied that the plaintiff had ever made any payments towards the supposed policy. Additionally, the defendant denied having any knowledge of an accident occurring on the 17th day of May 2017.

7. The defendant employed doublespeak and made two alternative claims. Firstly, they argued that if there was a policy already in place for the same vehicle (KCG 039V) but was denied, it was for commercial purposes and did not cover the class of the people in whose favour the judgments were given. They should not, therefore, be held responsible for settling any claims.

8. Additionally, the defendant claimed that if they did issue a policy for the said vehicle which was denied, the plaintiff breached the terms and conditions. They would not be obligated to pay any settlements.

9. These competing arguments in the pleadings have resulted in the following issues to be determined:a)Was there an insurance policy between the plaintiff and defendant covering motor vehicle registration number KCG 093V?b)If so, what were the terms and conditions of the policy?c)Did an accident occur on May 17th, 2017 involving the aforementioned vehicle?d)If the accident did occur, did the plaintiff report it to the defendant?e)Lastly, is the plaintiff entitled to the requested declaratory orders?

10. During the trial, Sammy Okoth Opiyo (PW1) testified that he held an insurance policy for his motor vehicle, registration number KCG 093V, with the defendant. This was policy number KSM/P/010660/17. He even provided a copy of the policy as evidence. This claim was supported by Sammy Kamau Wanjiku (DW1), who works as the claims manager for the defendant company. This contradicts the defendant's statement, which argued that no such policy existed.

11. Both the plaintiff and Sammy Kamau Wanjiku (DW1) during the hearing, agreed that the policy which is in issue commenced on the 26th day of April 2017 and expired on the 25th day of April 2018. It was equally conceded by Sammy Kamau Wanjiku (DW1) that there was an accident on the 17th of May 2017 and that the same was reported to the defendant.

12. In the case of AIG Insurance Company Limited v Benard Kiprotich Kirui [2022] eKLR the learned Judge R. Korir cited the definition of the insurance contract as rendered by the Supreme Court of India defined this concept as the basis of an insurance contract in the case of United India Insurance Company vs. Kantika Colour Lab and others Civil Appeal No. 6337 of 2001 as follows:Contracts of Insurance are generally in the nature of contracts of indemnity. Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him. The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies the outer limit of the insurance company's liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. The law on the subject in this country is no different from that prevalent in England; which has been summed up in Halsbury's Laws of England – 4th Edition.

13. I will be guided by this definition in the instant case.

14. Parties are bound by their own contract. InNational Bank of Kenya Ltd vs. Pipe Plastic Samkolit (K) Ltd (2002) 2 E.A. 503, (2011) eKLR the Court of Appeal at page 507 stated as follows:The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.

15. In the instant case, since no coercion, fraud, or undue influence was pleaded, I make a finding that the policy of insurance covered the accident in respect of which the plaintiff is seeking declaratory orders.

16. During the trial, the plaintiff stated that the defendant did not settle the decrees in the Oyugis court, resulting in the attachment and sale of his motor vehicle worth Kshs. 2. 5 million. As a result, the plaintiff sought compensation for this amount as special damages. After considering the evidence, I conclude that the plaintiff is entitled to receive compensation from the defendant.

17. The upshot of the foregoing analysis of the evidence I issue the following orders:a.A declaration that the defendant is bound to satisfy all judgments against the plaintiff arising from the accident involving motor vehicle registration number KCG 093V which occurred during the validity of the said policy of insurance KSM/ P/401/ 010660/17;b.That the plaintiff be reimbursed Kenya Shillings 200,000/=;c.That the plaintiff be paid Special damages of Kshs.2, 500,000/=; andd.That the plaintiff be paid the costs of this suit and interest on (a) and (b) above.Right of appeal 30 days.

DELIVERED AND SIGNED AT HOMA BAY THIS 24TH DAY OF OCTOBER 2023KIARIE WAWERU KIARIEJUDGE