CIC General Insurance Ltd v Njihia & another; Supati & another (Interested Parties) (Suing as Administrators of the Estate of Simon Mwaniki Ng’ang’a) (Miscellaneous Civil Suit E028 of 2021) [2023] KEHC 21146 (KLR) (17 July 2023) (Ruling)
Neutral citation:
[2023] KEHC 21146 (KLR)
Republic of Kenya
Miscellaneous Civil Suit E028 of 2021
SN Mutuku, J
July 17, 2023
Between
CIC General Insurance Ltd
Plaintiff
and
Margaret Ambogo Njihia
1st Respondent
Daniel Njihia Mbugua
2nd Respondent
and
Naipanio Supati
Interested Party
Zipporah Mukami Ng’ang’a
Interested Party
Suing as Administrators of the Estate of Simon Mwaniki Ng’ang’a
Ruling
1.The Applicant brought this application through ex-parte originating summons (ex parte OS) dated May 7, 2021 under sections 27 and 28 of the Limitations of Actions Act and order 37 rule 14 of the Civil Procedure Rules, seeking orders that:i.That leave be granted to the applicant CIC General Insurance Ltd to file a declaratory suit against Margaret A. Njihia and Daniel Njihia Mbugua after limitation period.ii.That the annexed plaint be deemed as duly filed upon payment of applicable fees.iii.That there be a stay of proceedings in Kajiado CMCC No. E036 of 2020 and any other suit arising from the road accident of 5/7/2019 involving motor vehicle registration number KCF 871Q pending the hearing and determination of the intended declaratory suit.
2.The application was supported by an affidavit sworn by Lydia Wairimu, the Claims Manager with the Applicant on May 7, 2021 in which she has deposed that the Applicants entered into a contract with one Stephen Okwemba Inzalikhi on 25/12/2018 in which they insured motor vehicle KCF 871Q and that the cover was to run from 25/12/2018 for a period of one year as per annexed copy pf the insurance policy marked ‘LW1’.
3.It is their case that the insured, Stephen Okwemba Inzalikhi, breached the contract buy failing or refusing to pay the premiums when instalments fell due; that on 4/6/2019 they issued him with a 7 days’ Notice to come off cover if he doesn’t pay the premiums; that the Notice expired without the premium being paid and therefore the Insurance Policy No. 017/083/1/015496/2017 came to an end with a consequence that the Certificate of Insurance No B-93xx was recalled and cancelled and that they notified all the relevant parties and authorities of the cancellation of the certificate as per annexed letter dated 24th June, 2019.
4.It is deposed that the accident the subject of suit Kajiado CMCC E036 of 2020 occurred on 5/7/2019; that the Police Abstract filed as a supporting document in the said case has quoted the Policy No. 017/083/1/015496/2017 and the Applicant as the insured; that there is no connection of any nature between the Applicant and the Defendants in Kajiado CMCC E036 of 2020 as the said policy had already been cancelled; that by the time they learned of the possibility of its involvement in the said suit, the statutory 14 days period under section 10 of Cap 405 within which to repudiate liability had already passed and the 3 months within which to file a declaratory suit against the Respondent’s had also lapsed.
5.The interested parties herein on October 11, 2021 raised a preliminary objection (PO) that this honourable court lacks jurisdiction to hear the Application dated May 7, 2021.
6.The Applicants through a Replying Affidavit sworn by Elizabeth Gesare Ondieki stated that the Intended Interested Parties have not sought leave to come on record as interested parties as provided by the law; that they have not shown how they would be prejudiced if they are not allowed to come in as interested parties and that the PO has not been properly brought before this court as the Intended Interested parties have no locus standi to address this court.
Submissions
7.This court directed that the PO and the OS be canvassed together by way of written submissions. The Applicant filed their submissions dated October 26, 2022. They have submitted that by the time they learned of the possibility of being involved in the CMCC E036 of 2020, the period within which to repudiate the claim under section 10 of Cap 405 which provides for a period of 3 months had lapsed; that section 28 of the Limitations of Actions Act as read together with order 37 rule 6 of the Civil Procedure Rules allows for extension of limited period.
8.They relied on the case of Willis Onditi Odhiambo v Gateway Insurance Co. Ltd Civil Appeal No. 37 of 2013 eKLR where the Court of Appeal held that:
9.It was their case that their annexed Plaint had merit for reasons that they explained in their Replying Affidavit and which they have reiterated herein that they are strangers to the Respondents as the policy No. 017/083/1/015496/2017 had been cancelled. They urged that they be given a chance to be heard by this court as it would be an injustice for them to be held liable where there was no insurance cover provided by them. They argued that the interested parties herein have filed a declaratory suit against them in Milimani CMCC E11066 of 2021 that the suit is still active and that they stand to suffer irreparable damage if judgement is delivered before the intended declaratory suit is heard and determined.
10.They pray that this court stays the proceedings in Milimani CMCC E11066 of 2021. They submitted that if the above is not granted the orders arising from this court may be rendered nugatory. Further that no party will be prejudiced if the orders are granted as the interested parties have a judgement in CMCC E036 of 2020 which they can rightly enforce against the judgement debtor.
11.On the PO, they argued that they brought their application under Section 27 and 28 of the Limitation of Action Act and order 37 rule 14 of the Civil Procedure Rules; that the application is seeking for discretionary orders to file a declaratory suit out of time; that it is a well-established legal principal that a party cannot file a PO against proceedings that require the court to grant discretionary orders. They relied on various authorities including Martha Akinyi Migwambo v Susan Ongoro Ogenda [2022] eKLR where the court referred to Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd [1969) EA 696 that:
12.The interested parties filed their submissions dated January 16, 2023. They argued that jurisdiction is a pure point of law and relied on the case of Jack J Khanjira & another v Safaricom PLC [2020] eKLR. They argued that the exercise sought is not on the discretionary power of this court but that the court lacks jurisdiction. They argued that section 27 and 28 of the Limitations Act provides that for one to be entitled to an extension of time the claim must be falling under tort. On this they relied on the case of Kenya Orient Insurance Ltd v Senenerro Ole Kurraro & 7 others [2016] eKLR.
13.They submitted that the cause of action between the Applicant and the Respondents is not one of a tort of negligence as portrayed by the Applicant but one of a contractual violation. They submitted that though under the Limitation of Actions Act the limitation for a contract is 6 years the relevant law in regard to the insurer filing a declaratory suit is the Insurance (Motor Vehicles Third Party Risks) Act this was further illustrated in the case of Madison Insurance Co. Kenya Ltd- vs- David Kibe Mathenge [2017] eKLR. They also relied on the Court of Appeal decision in Mary Osundwa v Sugar Company Limited [2002] eKLR where that court stated that:
14.They argued that the Applicant herein is not seeking for any personal injuries in respect of the Accident. It was their case that the Applicant will not be prejudiced should leave sort be denied, as there is a declaratory suit filed in the Magistrate court which is at the hearing stage and that the Applicant will get a chance to be heard and argue its case.
Analysis and Determination
15.From the outset, it is clear to this court that some of the issues raised in this matter have been overtaken by events. A case in point is the argument that the Interested Parties are not properly before this court. This issue has been settled after this court heard and determined their application dated December 3, 2021 seeking to have them enjoined to this suit. By a ruling delivered on June 28, 2022 this court allowed them to be parties to this suit.
16.The matter for determination is the ex parte OS dated May 7, 2021 and the PO dated October 11, 2021. The PO questions the jurisdiction of this court to handle the OS. The case of Mukisa Biscuits Manufacturing Ltd v West End Distributors (1969) EA 696 comes to mind on the issue of what constitutes a preliminary objection. The court stated thus:
17.In the same case Sir Charles Newbold, P. stated that:
18.The issue that arises for determination herein is whether the preliminary objection raised is sustainable. In Owners of the Motor Vessel “Lillian S” the Court held:
19.The Applicant’s brought this Application under sections 27 and 28 of the Limitations of Actions Act and order 37 rule 14 of the Civil Procedure Rules. I have read section 31 of the Limitation of Actions Act. It provides as follows:
20.The interested parties have submitted that the relevant law prescribing the limitation Period in regard to the insurer filing a disclaimer or declaratory suit is the Insurance (Motor Vehicles Third Party) Act, cap. 405. Part III of the Limitation of Actions Act is concerned with limitation of actions. To my understanding therefore, there is a written law prescribing a period of limitation in respect of the matter before this court. Section 10 (4) of the Insurance (Motor Vehicles Third Party) Act provides that:
21.As pronounced by the court in Madison Insurance Co. Kenya Ltd v. David Kibe Mathenge [2017] eKLR, I agree that:
22.From the pleadings of the Applicant, it is clear to this court that the Applicant is seeking to extend time to file a declaratory suit against the Interested Parties arising out of a claim for damages from a road traffic accident involving Motor Vehicle No. KCP 871Q belonging to Stephen Okwemba Inzalikhi, the insured who is alleged to have breached the insurance contract with the Applicant, the insurer.
23.My reading and understanding of section 27 and 28 of the Limitations of Actions Act is that the extension of time is granted under these provisions where a tort arises. The jurisdiction of the court under section 27 (1) of the Limitations Act was discussed by the Court of Appeal in Mary Osundwa v Nzoia Sugar Co. Ltd [2002] eKLR, where the court stated thus:
24.Further, in Oadi Odhiambo v Gateway Insurance Co. Ltd Civil Appeal No. 37 of 2013 eKLR, the Court of Appeal faced with the same set of circumstances observed that:
25.I have considered the issues submitted on by the parties. It was relevant for this court to consider the issue of jurisdiction first in order to determine if it is clothed with the requisite jurisdiction to determine the OS by the Applicant. It is clear to this court that going by the provisions of the law and the authorities discussed above in this ruling, the preliminary objection as raised is meritorious. This court has no powers to extend the time to file a declaratory suit as sought by the Applicant. The intended declaratory suit is clearly based on breach of contract and not tort, making sections 27 and 28 of the Limitations of Actions Act unavailable to the Applicant.
26.This court, therefore, must lay down its tools at this stage. I cannot proceed to determine the ex parte OS simply because I lack the requisite jurisdiction to do so. I hereby allow the PO to stand with the effect that this matter is concluded.
27.Orders shall issue accordingly.
DATED, SIGNED AND DELIVERED THIS 17TH JULY, 2023.S. N. MUTUKUJUDGE