Kerario v Monarch Insurance Co. Ltd (Civil Appeal 81 of 2022) [2023] KEHC 22735 (KLR) (26 September 2023) (Judgment)
Neutral citation:
[2023] KEHC 22735 (KLR)
Republic of Kenya
Civil Appeal 81 of 2022
RPV Wendoh, J
September 26, 2023
Between
Athanas Mwita Kerario
Appellant
and
The Monarch Insurance Co. Ltd
Respondent
(An Appeal from the judgement and decree of Hon. M. Obiero (P.M.) Migori Law Courts in Migori Civil Suit No. 130 of 2019 delivered on 4/11/2021)
Judgment
1.The appellant herein, Athanas Mwita Kerario preferred the instant appeal dated 2/3/2022 against the judgement and decree of Hon. M. Obiero (PM), dated and delivered on 4/11/2021. The firm of Kerario Marwa & Co. Advocates is on record for the appellant while the firm of Nishi Pandi & Co. Advocates is on record for the respondent.
2.The facts giving rise to this appeal are contained in the plaint dated 22/7/2019. The appellant pleaded that on or about the month of October 2017, the respondent insured his motor vehicle registration number KCM 274U Toyota Axio (suit motor vehicle) valued at 1.2 million; that the cover was a comprehensive insurance class policy no. KSM/0700/008291/2017 COMP after the appellant paid the premiums of Kshs. 58,000/=. The appellant further pleaded that on or about 19/8/2018 the suit motor vehicle was involved in a road traffic accident where it was damaged beyond repair.
3.The appellant filed a claim form where he called upon the respondent to replace the suit motor vehicle as per the insurance policy but it refused; thus, the respondent was in breach of their contract. The appellant prayed for a declaration that the respondent is in breach of the contract of insurance, compensation for motor vehicle KCM 274U at Kshs. 950,000/=, costs of the suit and interest at court rates since October 2018.
4.The respondent entered appearance and filed a statement of defence dated 13/8/2019. The respondent denied the contents of the claim by the appellant including payment of the insurance premiums, and the occurrence of the accident which allegedly happened on 19/8/2018. The respondent further denied that the appellant filed a claim form and that it was in breach of the contract of insurance.
5.The respondent in particular averred that the insurance policy does not cover among others, incidents of carjacking, damage to motor vehicles in the course of carjacking, intentional damage to motor vehicles in the course of carjacking, damage occasioned by an unauthorized driver and malicious damage to property. The respondent reiterated that it was not in breach of the terms of the insurance policy and asked the trial court to dismiss the suit with costs.
6.The suit was heard. The appellant testified in support of his case. He produced the several documents and marked them as PEXH1 - PEXH8 in support of his case. The respondent did not call any witness to support its case.
7.After the hearing, the trial Magistrate found that since the appellant had not produced the policy document and a valuation report, the suit was nonsuited and dismissed it in favour of the respondent.
8.Aggrieved by the outcome, the appellant filed the instant appeal and preferred five grounds of appeal as follows:-a.The learned trial Magistrate erred in law and in fact by making a finding that the plaintiff did not prove his case on a balance of probabilities;b.The trial court erred in law and in fact when he failed to evaluate the weight of evidence on record which was neither controverted nor challenged by the defendant;c.That the trial court erred in law and in fact when he dismissed the plaintiff’s suit for failing to produce the insurance policy when it is on record that the plaintiff requested the same from the defendant but the defendant failed and/or refused to supply him with a copy;d.That the trial court erred in law and in fact when he failed to find that the premium which was paid at the time of taking out of the policy was based on the value of the vehicle and if the defendant was opposed to the said value, then it was upon it to do a valuation;e.That the trial court erred in law and in fact when he held that the plaintiff should have filed an assessment report of the vehicle when it is clear that the plaintiff had insured the vehicle comprehensively for a particular sum.
9.The appellant prayed:-a.This appeal be allowed.b.The judgement and decree of the lower court be set aside and substituted with suitable orders to the appellant.c.Costs of this appeal be granted.d.Interest at court rates since the date of filing be allowed.
10.Directions on the appeal were taken. On 9/5/2023, when both parties were represented in court. This court directed that the matter would be mentioned on 4/7/2023 to confirm filing of submissions by the respondent. On 4/7/2023 the respondent was absent. It is only the appellant who complied.
11.On grounds 1, 2 and 3 the appellant submitted that evidence had been produced which was not challenged by the respondent; that the respondent did not file any document to disapprove those of the appellant or even present the policy document to court nor did it bring to the attention of the court the clause in the policy document which disallowed the claim. The appellant further submitted that in the case of Jupiter General Insurance Ltd v Kasanda Cotton Co. Ltd (1966) EA 252 where the court upheld an oral insurance contract and non-availability of the policy document was not a bar to the claim. The appellant also relied on the case of Peterson Gutu Ondiek v Daniel Gichohi Nairobi HCCA No. 4018 of 1990 where the court held that where evidence exists and a party withholds it, the presumption is that it is unfavourable to the party withholding it.
12.On grounds 4 and 5, the appellant submitted that the court erred in finding that the valuation report was necessary; that the trial Magistrate imported the principles of the law of torts in proof of damages as opposed to contract law; that in the law of contract, the parties are at liberty to agree on the measure of damages to be paid; that in this case, the value of the vehicle was Kshs. 1,200,000/= at the time of payment of the insurance premiums; that in John Njoroge Michuki v Kenya Shell Ltd CA No. 227 of 1999 the court held that the courts should maintain the performance of contracts according to the intention of the parties and should not overrule the expressed intention on the basis that judges know the business of the parties better than the parties themselves.
13.This being the first appellate court, the court has a duty to re-evaluate and analyse all the evidence tendered in the lower court and arrive at its own conclusions but bearing in mind that it neither saw nor heard the witnesses testify. It has to establish whether the decision of the lower court was well founded. See the decision in Selle & Another v Associated Motor Boat Co. Ltd (1968) EA 123.
14.It is also settled that an appellate court will not ordinarily interfere with findings of fact by the trial Court unless they were based on no evidence at all, or on a misapprehension of it or on demonstrably wrong principles not supported by evidence or on wrong principles of the law. This was the finding of the Court of Appeal in Mbogua Kiruga v Mugecha Kiruga & another [1988] eKLR where the Court of Appeal held: -
15.I have certainly read, understood and considered the grounds of appeal, the proceedings in the trial court and the submissions by the appellant. The main issue in contention is whether the trial court rightly dismissed the appellant’s suit.
17.The respondent did not call any witnesses to support its defence case and/or rebut the appellant’s case. Pleadings are mere allegations. They remain to be of no probative value unless they are subjected to the required test of cross examination. In North End Trading Company Limited (Carrying on the Business under the registered name of Kenya Refuse Handlers Limited vs City Council of Nairobi (2019) eKLR it was held:-
18.However, there is also a duty imposed by the law for the plaintiff to prove his case on a balance of probability as per Sections 107 and 108 of the Evidence Act. In Evans Nyakwana vs. Cleophas Bwana Ongaro (2015) eKLR it was held that:-
19.The Court of Appeal in Karugi & another vs Kabiya & 3 others (1983) eKLR held: -
20.Even in the absence of evidence from the defendant, the plaintiff is required to prove his case on a balance of probabilities. The trial Magistrate dismissed the appellant’s case on two broad arguments: -a.The unavailability of the policy document.b.Failure to produce a valuation report.
21.On the unavailability of the policy document, it was not among the documents produced by the appellant to support the appellant’s case. However, the appellant produced PEXH2 - copy of the premium receipt for Kshs. 58,900/= dated 4/10/2017 and PEXH5 - copy of the insurance certificate valid from 3/10/2017 - 2/10/2018. This is enough evidence to prove that the appellant’s suit motor vehicle was insured by the respondent. The argument of the respondent was that they could not settle the claim since the insurance policy did not cover the manner in which the damage was caused on the suit motor vehicle.
22.The trial court was of the view that the appellant should have issued a notice to compel the respondent to produce the contract of insurance. On the law of discoveries, Section 22 of the Civil Procedure Act provides:-
23.Order 14 rule 6 (1) of the Civil Procedure Rules provides:-
24.According to Halsbury’s Laws of England, Volume 13 para 1, the learned authors wrote on the purpose of discovery: -
25.Flowing from the above, when making discoveries, the court on its own motion and/or in exercising its discretion, will order production of documents to assist it to meet the ends of justice whilst interrogating the issues of controversy at hand. In the alternative, a party may file an application asking for production of the documents.
26.The main reason why the respondent refused to settle the appellant’s claim, was that the damage to the suit motor vehicle was not covered by the insurance policy. It therefore follows that the contract of the insurance policy would be use to assist the court reach a definite conclusion whether the respondent rightly declined to settle the claim. None of the parties produced the copy of the contract of the insurance policy. However, in its defence, the respondent did particularize the grounds in which it failed to settle the claim. It therefore follows that the respondent was the party which had in its possession, the copy of the contract of the insurance policy and it had the advantage of producing it in court to justify its repudiation of the claim. Section 112 of the Evidence Act provides:-
27.In certain proceedings where a person has special knowledge of the facts before the court, the burden of proof shifts to that particular person to prove or disprove the set of facts within his knowledge. In my view, the respondent having particularized the reasons why it did not settle the claim, it ought to have at least justified its stand, by producing the contract of the insurance policy to assist the court in determining the controversy between the parties. The actions of the respondent in withholding the contract of insurance policy is quite telling. Al the above said and done, it was the appellant who alleged and had the burden to prove his claim.
28.On the other hand, the appellant is partly to blame for not prosecuting its case diligently. The appellant knowing that the suit would have been determined on the basis of the terms of the contract of the insurance policy, should have filed a notice to produce to compel the respondent to produce the insurance contract. I appreciate that there is a letter dated 14/3/2019 (PEXH8) and the contents thereof is the appellant’s Counsel urging the respondent to forward to them a copy of the policy document, proposal form and investigation report. This is not synonymous to a notice of production of documents which is used in the court of law during proceedings.
29.In Michael Kinyua Njue vs Apa Insurance Company Limited (2022) eKLR the court faced with the same set of facts as herein held: -
30.The police abstract and the statement taken by the police from the witness, indicates that the suit motor vehicle was stolen in a robbery incident and as a result, it became extensively damaged. Whether the damage and/or the manner in which the suit motor vehicle sustained the damage was covered by the insurance policy, this court just like the trial court, is unable to tell in the absence of the contract of the insurance policy and whether the respondent rightly avoided the claim.
31.I am alive to the findings in Kenya Akiba Micro Financing Limited v Ezekiel Chebii & 14 Others (2012) eKLR it was held:-
32.The above notwithstanding, I reiterate that since there was no contract of the insurance policy produced, this court cannot tell whether or not the respondent correctly avoided the claim on the basis that the suit motor vehicle was damaged outside its terms and conditions. This court cannot also impute or imply that the terms in which the contract of the insurance policy was avoided were the same terms in the contract of the insurance policy. Such speculations would be a dangerous venture, something which a court of law should not do.
33.On the other hand, this being a declaratory suit, it was solely premised on the terms of the contract of the insurance policy and both parties did not produce it. The trial Magistrate was therefore arrived at a correct finding.
34.On the issue of the compensation amounting to Kshs. 950,000/=. Once again, the appellant should have been prudent enough to produce an assessment report. The claim for compensation was in the nature of special damages and an assessment report would have at least proved the post-accident value of the suit motor vehicle. This court finds that the appeal is devoid of merit and it is hereby dismissed with no orders as to costs.
DATED, DELIVERED AND SIGNED AT MIGORI THIS 26TH DAY OF SEPTEMBER, 2023.R. WENDOHJUDGEJudgement delivered in the presence of;Mr. Odero holding brief Mr. Marwa for the Appellant.No appearance for the Respondent.Emma & Phelix Court Assistants.