UAP Old Mutual & 2 others v Muchira [2024] KEHC 10954 (KLR)

UAP Old Mutual & 2 others v Muchira (Civil Appeal E197 of 2023) [2024] KEHC 10954 (KLR) (19 September 2024) (Judgment)

Neutral citation: [2024] KEHC 10954 (KLR)

Republic of Kenya

In the High Court at Meru

Civil Appeal E197 of 2023

EM Muriithi, J

September 19, 2024

Between

UAP Old Mutual

1st Appellant

Minet Kenya

2nd Appellant

Joseph Murithi t/a Major Line Auto Garage

3rd Appellant

and

Benson Muchira

Respondent

(Being an appeal from the Judgment of Hon. M. A. Odhiambo (SRM) delivered on 13/10/2023 in Meru CMCC No. 94 of 2020)

Judgment

1. The Respondent herein, the Plaintiff in the trial court, sued the 1st Appellant (3rd Defendant), 2nd Appellant (2nd Defendant) and 3rd Appellant (1st Defendant) vide a further amended plaint dated 27/6/2022 seeking a declaration that there was a valid policy of insurance between the Respondent and the 1st Appellant herein as at 3rd August, 2019, a declaration that the 1st and 2nd Appellants are legally bound to meet any storage fees that may be due to the 3rd Appellant with regard to the subject motor vehicle, the costs of repairs and storage for motor vehicle registration number KBA 582 Y (Toyota Fielder) totalling to Ksh. 263,550, General damages for loss of user as from 3/9/2019 to 5/5/2020 totalling to Ksh. 597,500, costs of the suit and any other or further relief that the Honourable Court may deem fit to grant. He pleaded that he took out a comprehensive policy of insurance No. 130/070/1/012887/2018 with the 1st Appellant through the 2nd Appellant. On or about 3/8/2019, he was involved in a road traffic accident along Meru-Maua Road and his motor vehicle was extensively damaged. A representative of the 2nd Appellant instructed him to take the motor vehicle to Major Lines Garage operated by the 3rd Appellant but the 1st Appellant failed to authorize repairs citing cancellation of the insurance policy. The actions of the Appellants amount to fraud and a breach of the contract of insurance with him. As a result of the Appellants’ wilful actions of detaining his motor vehicle from 3/9/2019 to 5/5/2020, he suffered loss of user and had to hire transportation for his daily running at the average rate of Ksh. 2,450 that accrued to Ksh. 597,500.

2. The Appellants denied the claim through their statement of defence dated 25/7/2022, and prayed for its dismissal.

3. In its impugned judgment, the trial court made orders that;“22. The law is clear that he who alleges must prove. The defendant was duty bound to prove that the plaintiff had not fully paid his premium, he failed to report the accident and further he gave his intention to sell the vehicle to a 3rd party leading to the cancellation of the policy. The defendants failed to prove any of the above. Therefore, I find that the policy was valid at the time of the accident...As already held above the plaintiff had a valid policy, and the 3rd defendant was obligated to compensate him for damages in event of an accident. There is proof that an accident occurred, that the plaintiff had a valid insurance at the time of the accident. Further there proof that the 3rd defendant declined to compensate the plaintiff after the accident. I therefore find that there was breach of contract on the part of the 1st and 2nd defendants…I have also held above that the 3rd defendant had an obligation to meet the repair charges. It therefore goes without saying that the 3rd defendant would cater for the storage charges. As such prayer (b) is allowed…The cost of repair and storage for motor vehicle registration number KBA 528 Y totalling to Ks 263,550/=. The plaintiff told court that as a result of the accident his vehicle was extensively damaged. The vehicle was inspected and an assessment report prepared. According to the assessment report dated 12. 3.2020 produced as PEXB 5 the cost of repairs was estimated at Ksh 129,572/=. It was his evidence that the vehicle was repaired at Okoth garage. It was his evidence that he catered for the costs of the repairs. PW4 the proprietor of Okoth garage corroborated his evidence. He confirmed that the vehicle was repaired at his garage. He was paid for the repairs and issued receipts amounting to Ksh 219,000/=. The receipts were produced as PEXB 9 (a)-(c). He also produced an invoice dated 18. 5.2020 from Okoth spares and garage of Ksh 219,000/=, receipt 19. 5.2020 for Ksh 100,000/=, receipt dated 26. 5.2020 for Ksh 47,000/ and receipt dated 22. 5.2020 for Ksh 72,000/= all from Okoth Spares & Garage. He further produced 2 receipts dated 22. 11. 2018 from Bens Electronics for Ksh 44,550/=. Prayer (c) is allowed. General damages for loss of user as from 3. 9.2019 to 5. 5.2020 totalling to Ksh 597,500/=. In Equity Bank Ltd Vs Gerald Wangombe Thuni (2015) Eklr the court held that “damages for loss of user are ascertainable and quantifiable meaning that they can be specifically pleaded as special damages and failure to plead them as such is fatal to a claimants claim under this head. The court went on further and stated that “it is trite law that a party is bound by his pleadings. A claim for special damages must be proved and specifically proven. There is no doubt that amount due to the plaintiff under this head was ascertainable and quantifiable. The plaintiff in his further amended plaint at paragraph 10 pleaded for loss of user. It was averred that the vehicle was in the custody of the defendant from 3. 9.2021 to 5. 5.2020. That he was hiring taxi at Ksh 2450 daily. He therefore suffered losses amounting to Ksh 597,500/=. PW1 in his evidence stated that he was instructed by 2nd defendant to take the vehicle for repairs at the 1st defendants garage. The vehicle was being released to him repairs were let to be made. The defendant’s learned counsel relied on the case of David Bagine Vs Marin Bundi (1997) Eklr where the court held that the damages under the loss of user must be strictly proved. That the damages for loss of user of a chattel can be limited (if proved) to a reasonable period, and that the same can only be the period during which the respondent’s lorry could have been repaired plus some period that may have been required to assess the repair cost. The period ought to be reasonable as stated out in the above case. I however note that the delay was occasioned by the defendants who finally released the vehicle on 6. 5.2020 to the plaintiff for repairs. They are to blame for the delay and should shoulder the costs. The plaintiff produced a bundle of receipts amounting to Ksh 597,000/=. I award the amount as pleaded and proved. The plaintiff is awarded costs of the suit.”

The Appeal 4. On appeal, the Appellants vide their memorandum of appeal filed on 10/11/2023 set out 4 grounds of appeal as follows:1. The learned trial magistrate erred in law and fact by awarding inordinately high damages for loss of user of Ksh. 597,500/= to the Respondent constituting a miscarriage of justice in the circumstances of the case.2. The learned trial magistrate erred in law and fact by failing to consider the Appellant’s submissions and authorities guiding the court on assessment of loss of user claim.3. The learned magistrate erred in law and fact by failing to consider that the claim for loss of user was not specifically proven as per the requirements in law.4. The learned trial magistrate’s award on loss of user was wholly not supported in law by evidence either by receipts or a contract for hire of the private vehicle in awarding the sum of Kshs. 597,500/=.

Duty of Court 5. This being a first appeal, this court is required to consider the evidence adduced, evaluate it and draw its own conclusions bearing in mind that it did not hear and see the witnesses who testified. (See Selle & Another v Associated Motor Boat Company Ltd & Others [1968] EA 123). In Williamson Diamonds Ltd and another v Brown [1970] EA 1, the court held that:“The appellate court when hearing an appeal by way of a retrial, is not bound necessarily to accept the findings of fact by the trial court below, but must reconsider the evidence and make its own evaluation and draw its own conclusion.”

Evidence 6. PW1 Benson Muchira, the Respondent herein testified that, “I filed witness statement dated 23/2/2020 I adopt the same as evidence. I also filed an amended plaint dated 27/6/2022. There are particulars of loss that was added for hiring of a car. I do have a list of documents dated 23/4/2020. P. Exh. 1 – Logbook, P.Exh. 2 – Copy of Credit Notes, P. Exh. 3 – Email communication, P. Exh. 4 – Police Abstract 6/8/19, PM14 – Police Abstract, PMF1 – Assessment Report dated 12/3/2020, PMF1 6 – Receipt for the Assessment, P. Exh. 7 – Demand Notice, PMF18 – Invoice 219,000/=, PMFQ9(a) - (c) – receipts from Okoth spares, P. Exh. 10 (a) – (b) – receipts from Electronic Repairs, P. Exh. 11 – OB Extract, P. Exh. 12 – Insurance Certificate, P. Exh. 13 – Release Letter, P. Exh. 14 – Inspection Report. I was working at Laari was commuting from Meru and was using a taxing. I did for 14 days. I have a lending agreement. P. Exh. 15 a – K – Lending agreement. P. Exh. 16 (a) – receipt for car hire. I am praying for reliefs as per my further amended plaint filed in court and of the suit.”

7. On cross examination, he stated that, “There is an email stating that they had cancelled the policy this was long after the accident. Policy was for one year. Accident occurred on 3/8/2019 I was not aware that the policy was cancelled. I instructed the advocate on 3/3/2020. The vehicle was released after I brought an advocate on board. The amount was used when the vehicle was in the garage. I do not know the car will at the garage for long. I followed up with our office in Meru and Nairobi the value of the vehicle was 550,000/=. I was paying for the taxi at Ksh. 63,000/= I was paying 2,400 per day for the taxi.”

8. On re-examination, he stated that, “The loss of use and not defendant on the value of my vehicle it not I had not anticipated. The insurer released the vehicle on 6/6/2020. The vehicle was in their custody all through. The money was being paid in small payments. I got a comprehensive certificate for due year and I paid the full amount. The cancellation was after the accident. When the accident occurred I had a valid insurance.”

9. PW2 Patricia Nyanchama (PC) testified that, “I work at Meru Police Station. I am a traffic officer. I have the police abstract in court on 4/8/2019 involving KBN 582 T Accident occurred along Meru Maua road. The make of the vehicle is Toyota Fielder. The Investigating officer was Chacha. The conclusion were that the case was pending under investigation. P. Exh. 4 – Police Abstract.”

10. On cross examination, she stated that, “I do not have the OB in court. I do not have the police file. I do not know the circumstance under which the accident occurred the accident was involving.”

11. On re-examination, she stated that, “I am not the investigating Officer. PC Chacha who was the investigating officer is on transfer. I did not get someone to produce the OB and police file. The abstract emanate from our station.”

12. PW3 James Samwel of Regent Assessors testified that, “We filed our report dated 12/3/2020 issued a receipt for Ksh. 6,000/=. I wish for the same to be produced. P. Exh. 5 – Assessment Report, P. Exh. 6 – Receipt for Ksh. 6,000/=.”

13. On cross examination, he stated that, “I am Samael Njeru I am an Assessor. I am the one who prepared the report. The vehicle was in the garage. I do not know how long I assessed the vehicle after the accident. The owner of the vehicle was the one who gave instructions.”

14. PW4 David Okoth testified that, “I am the owner of Okoth Spares and Garage. I repaired KBH 582 T. I issued an invoice of Ksh. 219,000. I am the one who issued the same. P. Exh. 8 – Invoice of Ksh. 219,000/= Okoth Garage. I was paid deposit of Ksh. 100,000/= later 72,000/= and 47,000/= P. Exh. 9(a) – (c) – Receipts.”

15. On cross examination, he stated that, “I have my identity card. Okoth spares is my company the owner of the vehicle Benson was the one who gave instruction. I do not know how long after the accident.”

16. On re-examination, he stated that, “my phone is 0723212876 the same appears in the invoice.”

17. DW1 Frankline Njuki Nyaga, the 1st Appellant’s Senior Legal Officer testified that, “I recorded a statement dated 27/9/2022 and filed on 27/9/2022 adopt the same as evidence also filed a list of documents dated 27/9/2022 adopt the same as my evidence. I would wish to the case dismissed as the premium were not paid.”

18. On cross examination, he stated that, “We issued him with a policy the same was comprehensive Minet was a broker and not our agent. I am testifying as agent we are also acting for Minet. The arrears with was to be received to the insured. P. Exh. 13 – receipt with dated 6/5/2023 Histon Otato was on is a colleague. We referred to the plaintiff as our insured we were to pay storage charge. I do not know if he took the car. The Insurance was cancelled this was before the accident occurred. There is a Police Abstract. The circumstances of the accident do not add up. We did our investigations we decline the claim. We had a contract with the plaintiff. We wrote a demand letter. I do not know if payment we made through Minet – P. Exh. 2 I am not aware that premium were paid. The policy was not valid during the accident. We issued a certificate for one year which was cancelled for non payment. The policy was for one year. That is how policies are cancelled. I do not have evidence that the went to the regulation. I do not know if he gave directions to release the car. We issued the plaintiff with released letter. The car could not be released without the release letter.”

19. On re-examination, he stated that, “Premium are paid through a pay bill number we do not accept cash. If they paid premium there should be evidence. If policy is cancelled we issue a release letter for client to refrain the vehicle on their own. The policy was cancelled then the premiums fell down and were not signed. The proceedings are held by the regulation I do not know out come of the proceedings I am not to blame for the delay.”

Submissions 20. The Appellants fault the trial court for failing to appreciate that damages for loss of user are special damages, which must be specifically pleaded and strictly proved, as illustrated by the Court of Appeal in David Bagine v Martin Bundi (1997) eKLR and Ryce Motors Limited & Another v Elias Muroki (1996) eKLR. They urge that the Respondent did not prove the claim for car hire and his actual trade and/or income that was impeded by the absence of the damaged motor vehicle, and thus loss of user was not proved to justify award of damages thereunder. They urge that the award for loss of user was unjustified, erroneous and excessive. They urge that even when loss of user is proved, the damages awardable must be within reasonable limits, and cite Bungoma Line Sacco Limited v Super Bargains Hardware (K) Limited (2021) eKLR. They urge that the claim for loss of user is fiction, unproven, unreasonable, legally inapplicable and unjustified, and thus it ought to be dismissed with costs.

21. The Respondent urges that the claim for loss of user was not only specifically pleaded but also strictly proved, and cites Moses Maina Waweru v Esther Wanjiru Githae (Suing as the personal representative of the Estate of the late David Githae Kiririo Taiti (2022) eKLR. He urges that the award for loss of user was not inordinately high given the circumstances and the fact that he was deprived of the comfort of using his own car.

Analysis and Determination 22. The issues for determination are whether loss of user was proved, and if so, whether the damages awarded therein were inordinately high and whether the Appellants’ submissions and authorities were considered.

23. It is not lost to this court that an award for loss of user by a trial court amounts to exercise of judicial discretion. An appellate court would not interfere with the trial court’s exercise of discretion unless it is shown that the court applied wrong principles of law; took into account irrelevant factors; failed to take into account a relevant factor or the award is inordinately high or low as to represent an erroneous estimate. (See Catholic Diocess of Kisumu v Sophia Achieng Tete (2004) eKLR).

24. In Samuel Kariuki Nyangoti v Johaan Distelberger [2017] eKLR, the Court of Appeal stated that:“In personal injury cases, the loss of business profits and loss of future earning capacity are usually in the nature of general damages. The loss of use of a profit making chattel such as a lorry or matatu through an accident is similarly a claim in general damages. The standard of proof in such claims is on balance of probabilities and the principle of restitutio in integrum is applied in such cases.”

25. The Respondent testified that, “I was working at Laari was commuting from Meru and was using a taxi. I did for 14 days.” On cross examination, he stated that, “…Accident occurred on 3/8/2019 I was not aware that the policy was cancelled. I instructed the advocate on 3/3/2020. The vehicle was released after I brought an advocate on board. The amount was used when the vehicle was in the garage. I do not know the car will be at the garage for long…I was paying 2,400 per day for the taxi.”

26. The Respondent is accused of failing to disclose what trade he ventured in and how much he made therefrom to justify an award for loss of user. In rejoinder, the Respondent affirmed that he had to use alternative means of transport due to the Appellants’ negligence, unreasonable delay and blatantly refusal to repair his motor vehicle, which was not only inconveniencing but also costly.

27. As in Bungoma Line Sacco Society Limited v Super Bargains Hardware (K) Limited (2021) eKLR (D. Kemei J) cited by the Appellants, this court finds that the Respondent has demonstrated that he actually suffered loss of user of his motor vehicle, and is therefore entitled to compensation.

28. In Matunda Fruits Bus Services Ltd v Moses Wangila Wangila & another [2018] eKLR, the court (Joel Ngugi J. as he then was) held that;“The Appellant claims Kshs. 1,280,000. 00 as loss of user. This was calculated using a figure of Kshs. 40,000/- per day for 32 days. To prove the damages under this heading, the Appellant produced Manifests for a given period in January- February, 2007…25. However, it is not entirely clear to me why it took 32 days to repair what would appear, in the context of a Public Service Vehicle, to be minor repairs. A party injured through the negligent actions of another has a duty to mitigate damages through prudent preventative action. The duty to mitigate should have kicked in here for the Appellant to ensure that the bus would be repaired as quickly as possible. In my view, a claim for loss of use must be for a reasonable period of time which is strictly necessary for the repairs to be made on the damaged vehicle. In most cases, absent exceptional circumstances, such reasonable period should not exceed fifteen days. In the present case, no exceptional circumstances were shown. I will, therefore, cap the number of days over which the Appellant can claim loss of use of the motor vehicle to fifteen days.”

29. The Respondent produced car lending agreements to show that he used taxi services for the entire period between 13/8/2019 to 11/5/2020, which is approximately 8 months. The Respondent pleaded that the Appellants not only failed to repair his motor vehicle, but they also neglected to release it to him in good time so that he could make alternative repair arrangements. He was categorical that the vehicle was only released after he had instructed an advocate to act for him. When the Appellants vehemently refused to repair the Respondent’s motor vehicle, he engaged PW4 who undertook the repairs.

30. The Respondent was categorical that the vehicle was only released after he had instructed an advocate to act for him. The question that lingers is why he took so long to engage an advocate yet it was crystal clear that the Appellants were not keen on repairing his damaged motor vehicle or releasing it to him.

31. The law is clear that the Respondent was under a duty to mitigate loss. It was incumbent upon the Respondent to mitigate the loss through the preventive action discussed herein above. This court finds that the award of Ksh. 597,500 was excessive because the Respondent folded his hands and waited for the incurred costs for hiring a taxi to accrue, without regard of his duty to mitigate damage. The Court considers that in the circumstances of this case any loss after five months of the accident is not recoverable on the ground of failure to mitigate loss.

32. The Respondent paid Ksh. 63,000 on 13/8/2019, Ksh. 42,000 on 3/9/2019, Ksh. 63,000 on 23/9/2019, Ksh. 63,000 on 14/10/2019, Ksh. 63,000 on 20/11/2019 and Ksh. 45,500 on 23/12/2019 totalling to Ksh. 339,500.

33. This court finds that an award of Ksh. 339,500 for the period from August 2019 to December 2019 would sufficiently compensate the Respondent for his loss.

Consideration of the Appellants’ submissions and authorities 34. It is evident from the judgment of the trial court that it considered the entirety of the evidence, the submissions filed by both parties together with the authorities cited therein before reaching the decision it did. In fact, the trial court relied on David Bagine v Martin Bundi (1997) eKLR cited by the Appellants on the need to strictly prove damages under loss of user.

Orders 35. Accordingly, for the reasons set out above, the Appellants’ appeal is allowed in the following terms:1. The sum of Ksh.597,500 damages for loss of user is set aside and substituted with an award of Ksh.339,500. 2.The other awards by the trial court remain unchanged.

36. The appellant will pay the costs of the appeal to the Respondent.Order accordingly.

DATED AND DELIVERED THIS 19TH DAY OF SEPTEMBER, 2024. EDWARD M. MURIITHIJUDGEAPPEARANCESMs. Oteko for Appellant.Mr. Mutuma, J. for the Respondent.