Introduction
1. This suit arises from a Plaint dated 28th February 2023 in which the Plaintiff, Directline Assurance Company Limited, seeks declaratory orders entitling it to avoid and/or repudiate Insurance Policy No. 00207966 issued to the Defendant in respect of motor vehicle registration number KBQ 485Y.
2. The Plaintiff further seeks a declaration that it is not liable to satisfy any judgment arising from an accident which occurred on 6th December 2021 along the Kisii–Kilgoris Road, the subject of Kisii CMCC No. E179 of 2022, and costs of the suit.
3. The Defendant opposed the claim through a Defence filed on 14th July 2023, denying breach of the policy and asserting that the subject motor vehicle was at all material times used privately in accordance with the terms of the insurance contract.
Pleadings
Plaintiff’s Case
4. The Plaintiff’s case is that the Defendant obtained a private third party motor vehicle insurance policy, yet allowed the insured vehicle to be used as a taxi for hire and reward, contrary to the express terms of the policy.
5. It is contended that such use amounted to non-disclosure of a material fact and breach of policy terms, thereby entitling the Plaintiff to repudiate the policy pursuant to both the policy provisions and Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405.
Defendant’s Case
6. The Defendant denied that the motor vehicle was ever used as a taxi and maintained that the accident involved only a third-party motorcyclist, who filed Kisii CMCC No. E179 of 2022.
7. The Defendant asserted that no fare-paying passenger claim arose from the accident and that the Plaintiff failed to prove breach of the policy on a balance of probabilities.
Evidence
Plaintiff’s Evidence
8. The Plaintiff called one witness, PW1 Kelvin Ngure, Deputy Claims Manager, who adopted his witness statement dated 28th February 2023.
9. PW1 produced the insurance policy, investigation report, pleadings from Kisii CMCC No. E179 of 2022, and a statement allegedly recorded by the driver of the insured stating that vehicle indicating that the vehicle was used as a taxi.
10. PW1 testified that the Plaintiff repudiated the policy after investigations revealed that the insured vehicle was being used for hire and reward, contrary to the policy terms.
11. On cross-examination, PW1 conceded that:
• The Defendant held a valid policy at the time of the accident.
• The claim in Kisii CMCC No. E179 of 2022 was by a motorcycle rider, a third party.
• There was no claim by any alleged fare-paying passenger.
Defence Evidence
12. The Defence called two witnesses.
13. DW1, Earnest Motuka Mageto (the owner of the vehicle), adopted his witness statement and denied ever using the vehicle as a taxi.
14. DW2, Gilbert Oronde Abuga, the driver at the time of the accident, adopted his statement dated 7th November 2023. He denied recording or signing any statement at the Plaintiff’s offices admitting taxi use.
15. On cross-examination, DW2 admitted that:
• The statement attributed to him bore his correct personal details.
• The contents of the statement were factually accurate.
• He was not coerced into recording the statement.
• He did not report any alleged forgery to the police.
16. DW2 nevertheless maintained that the vehicle was being used privately.
Issues for Determination
17. From the pleadings, evidence, and submissions, the Court isolates the following issues for determination:
a. What was the nature and type of insurance policy between the parties?
b. Whether the Defendant breached the terms of the policy.
c. Whether the Plaintiff is entitled to repudiate or avoid the policy under Section 10(4) of Cap 405.
d. Who should bear the costs of the suit?
Analysis and Determination
21. This is a civil matter and the standard of proof is on a balance of probability. It is trite law that he who alleges must prove . The plaintiff herein bears the burden of proof of it’s case under Sections 107 and 109 of the Evidence Act.
Issue 1: Nature of the Policy
18. It is common ground that the Defendant held a Private Motor Vehicle Third Party Insurance Policy issued by the Plaintiff.
19. The policy expressly restricted use to social, domestic and pleasure purposes only, and expressly excluded carriage of passengers for hire or reward. This issue was not contested.
Issue 2: Whether the Policy Was Breached
22. The Plaintiff’s case hinges on a statement allegedly recorded by DW1, in which he admitted that the vehicle was used as a taxi.
23. Although DW2 denied signing the statement, the Court notes that:The statement bore his correct full names and date of birth and he admitted the factual correctness of the contents.
He did not report the alleged forgery to the police and he conceded he was not coerced to record it .
24. The Court finds the denial by DW2 to be evasive as his testimony lacked credibility and was inconsistent.
25. The Court is satisfied that the Plaintiff proved, on a balance of probabilities, that the vehicle was used for hire and reward, contrary to the policy terms.
26. The absence of a fare-paying passenger claim does not negate breach; the breach lies in use, not in the existence of a claim.
27. Insurance contracts are contracts uberrimae fidei (of utmost good faith). Misuse of the insured subject matter contrary to declared use is a material breach.
28. In the case of Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited [2014]eKLR, Court stated that:“It is not for the Court to rewrite a contract for the parties. As this Court held in National Bank of Kenya Ltd vs Pipeplastic Sankolit (K) Ltd. Civil Appeal No. 95 of 1999 “a Court of law cannot rewrite a contract with regard to interest as the parties are bound by the terms of their contract.” “…Nevertheless, courts have never been shy to interfere with or refuse to enforce contracts which are unconscionable, unfair or oppressive due to a procedural abuse during formation of the contract, or due to contract terms that are unreasonably favourable to one party and would preclude meaningful choice for the other party. An unconscionable contract is one that is extremely unfair. Substantive unconscionability is that which results from actual contract terms that are unduly harsh, commercially unreasonable, and grossly unfair given the existing circumstances of the case…”.
29. In this case, I find that the Defendant breached the policy contract between it and the plaintiff .
Issue 3: Whether the Plaintiff Is Entitled to Repudiate the Policy
30. Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act allows an insurer to obtain a declaration avoiding liability where the policy was obtained by non-disclosure or false representation of a material fact.
31. The Plaintiff instituted this declaratory suit within time and joined the Interested Parties.
32. The use of a privately insured vehicle as a taxi is a material non-disclosure going to the root of the contract.
33. I have carefully evaluated the entire evidence on record on record and I find and I find that the Plaintiff is entitled to repudiate the policy and is not obligated to satisfy any judgment arising from the accident of 6th December 2021.
Issue 4: Costs
34. It is trite law that cost follow the event under Section 27 of the Civil Procedure Act.The Plaintiff has succeeded in this case and thus is entitled to costs.
Final Orders
36. Accordingly, the Court enters judgment for the Plaintiff and orders as follows:
a. A declaration is hereby issued that the Plaintiff is entitled to avoid and/or repudiate Insurance Policy No. 00207966 issued to the Defendant.
b. A declaration is hereby issued that the Plaintiff has no contractual or legal obligation to satisfy any judgment or claim arising from the accident which occurred on 6th December 2021 involving motor vehicle registration number KBQ 485Y.
c. The Defendant shall bear the costs of this suit
T. A. ODERA
JUDGE
2.2.26
DELIVERED VIRTUALLY VIA TEAMS PLATFORM ON THIS 2ND DAY OF FEBRUARY 2026 IN THE PRESENCE OF MR AWINO FOR THE PLAINTIFF, MISS SHILWATSO FOR THE DEFENDANT AND COURT ASSISTANT KIPCHIRCHIR
Awino : I pray for a copy of the judgment
Order : same be supplied .
T. A. ODERA
JUDGE
2.2.26
1. This suit arises from a Plaint dated 28th February 2023 in which the Plaintiff, Directline Assurance Company Limited, seeks declaratory orders entitling it to avoid and/or repudiate Insurance Policy No. 00207966 issued to the Defendant in respect of motor vehicle registration number KBQ 485Y.
2. The Plaintiff further seeks a declaration that it is not liable to satisfy any judgment arising from an accident which occurred on 6th December 2021 along the Kisii–Kilgoris Road, the subject of Kisii CMCC No. E179 of 2022, and costs of the suit.
3. The Defendant opposed the claim through a Defence filed on 14th July 2023, denying breach of the policy and asserting that the subject motor vehicle was at all material times used privately in accordance with the terms of the insurance contract.
Pleadings
Plaintiff’s Case
4. The Plaintiff’s case is that the Defendant obtained a private third party motor vehicle insurance policy, yet allowed the insured vehicle to be used as a taxi for hire and reward, contrary to the express terms of the policy.
5. It is contended that such use amounted to non-disclosure of a material fact and breach of policy terms, thereby entitling the Plaintiff to repudiate the policy pursuant to both the policy provisions and Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405.
Defendant’s Case
6. The Defendant denied that the motor vehicle was ever used as a taxi and maintained that the accident involved only a third-party motorcyclist, who filed Kisii CMCC No. E179 of 2022.
7. The Defendant asserted that no fare-paying passenger claim arose from the accident and that the Plaintiff failed to prove breach of the policy on a balance of probabilities.
Evidence
Plaintiff’s Evidence
8. The Plaintiff called one witness, PW1 Kelvin Ngure, Deputy Claims Manager, who adopted his witness statement dated 28th February 2023.
9. PW1 produced the insurance policy, investigation report, pleadings from Kisii CMCC No. E179 of 2022, and a statement allegedly recorded by the driver of the insured stating that vehicle indicating that the vehicle was used as a taxi.
10. PW1 testified that the Plaintiff repudiated the policy after investigations revealed that the insured vehicle was being used for hire and reward, contrary to the policy terms.
11. On cross-examination, PW1 conceded that:
• The Defendant held a valid policy at the time of the accident.
• The claim in Kisii CMCC No. E179 of 2022 was by a motorcycle rider, a third party.
• There was no claim by any alleged fare-paying passenger.
Defence Evidence
12. The Defence called two witnesses.
13. DW1, Earnest Motuka Mageto (the owner of the vehicle), adopted his witness statement and denied ever using the vehicle as a taxi.
14. DW2, Gilbert Oronde Abuga, the driver at the time of the accident, adopted his statement dated 7th November 2023. He denied recording or signing any statement at the Plaintiff’s offices admitting taxi use.
15. On cross-examination, DW2 admitted that:
• The statement attributed to him bore his correct personal details.
• The contents of the statement were factually accurate.
• He was not coerced into recording the statement.
• He did not report any alleged forgery to the police.
16. DW2 nevertheless maintained that the vehicle was being used privately.
Issues for Determination
17. From the pleadings, evidence, and submissions, the Court isolates the following issues for determination:
a. What was the nature and type of insurance policy between the parties?
b. Whether the Defendant breached the terms of the policy.
c. Whether the Plaintiff is entitled to repudiate or avoid the policy under Section 10(4) of Cap 405.
d. Who should bear the costs of the suit?
Analysis and Determination
21. This is a civil matter and the standard of proof is on a balance of probability. It is trite law that he who alleges must prove . The plaintiff herein bears the burden of proof of it’s case under Sections 107 and 109 of the Evidence Act.
Issue 1: Nature of the Policy
18. It is common ground that the Defendant held a Private Motor Vehicle Third Party Insurance Policy issued by the Plaintiff.
19. The policy expressly restricted use to social, domestic and pleasure purposes only, and expressly excluded carriage of passengers for hire or reward. This issue was not contested.
Issue 2: Whether the Policy Was Breached
22. The Plaintiff’s case hinges on a statement allegedly recorded by DW1, in which he admitted that the vehicle was used as a taxi.
23. Although DW2 denied signing the statement, the Court notes that:The statement bore his correct full names and date of birth and he admitted the factual correctness of the contents.
He did not report the alleged forgery to the police and he conceded he was not coerced to record it .
24. The Court finds the denial by DW2 to be evasive as his testimony lacked credibility and was inconsistent.
25. The Court is satisfied that the Plaintiff proved, on a balance of probabilities, that the vehicle was used for hire and reward, contrary to the policy terms.
26. The absence of a fare-paying passenger claim does not negate breach; the breach lies in use, not in the existence of a claim.
27. Insurance contracts are contracts uberrimae fidei (of utmost good faith). Misuse of the insured subject matter contrary to declared use is a material breach.
28. In the case of Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited [2014]eKLR, Court stated that:“It is not for the Court to rewrite a contract for the parties. As this Court held in National Bank of Kenya Ltd vs Pipeplastic Sankolit (K) Ltd. Civil Appeal No. 95 of 1999 “a Court of law cannot rewrite a contract with regard to interest as the parties are bound by the terms of their contract.” “…Nevertheless, courts have never been shy to interfere with or refuse to enforce contracts which are unconscionable, unfair or oppressive due to a procedural abuse during formation of the contract, or due to contract terms that are unreasonably favourable to one party and would preclude meaningful choice for the other party. An unconscionable contract is one that is extremely unfair. Substantive unconscionability is that which results from actual contract terms that are unduly harsh, commercially unreasonable, and grossly unfair given the existing circumstances of the case…”.
29. In this case, I find that the Defendant breached the policy contract between it and the plaintiff .
Issue 3: Whether the Plaintiff Is Entitled to Repudiate the Policy
30. Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act allows an insurer to obtain a declaration avoiding liability where the policy was obtained by non-disclosure or false representation of a material fact.
31. The Plaintiff instituted this declaratory suit within time and joined the Interested Parties.
32. The use of a privately insured vehicle as a taxi is a material non-disclosure going to the root of the contract.
33. I have carefully evaluated the entire evidence on record on record and I find and I find that the Plaintiff is entitled to repudiate the policy and is not obligated to satisfy any judgment arising from the accident of 6th December 2021.
Issue 4: Costs
34. It is trite law that cost follow the event under Section 27 of the Civil Procedure Act.The Plaintiff has succeeded in this case and thus is entitled to costs.
Final Orders
36. Accordingly, the Court enters judgment for the Plaintiff and orders as follows:
a. A declaration is hereby issued that the Plaintiff is entitled to avoid and/or repudiate Insurance Policy No. 00207966 issued to the Defendant.
b. A declaration is hereby issued that the Plaintiff has no contractual or legal obligation to satisfy any judgment or claim arising from the accident which occurred on 6th December 2021 involving motor vehicle registration number KBQ 485Y.
c. The Defendant shall bear the costs of this suit
T. A. ODERA
JUDGE
2.2.26
DELIVERED VIRTUALLY VIA TEAMS PLATFORM ON THIS 2ND DAY OF FEBRUARY 2026 IN THE PRESENCE OF MR AWINO FOR THE PLAINTIFF, MISS SHILWATSO FOR THE DEFENDANT AND COURT ASSISTANT KIPCHIRCHIR
Awino : I pray for a copy of the judgment
Order : same be supplied .
T. A. ODERA
JUDGE
2.2.26