HIGH COURT CIVIL CASE NO. 11(B) OF 2022
FIDELITY SHIELD COMPANY LIMITED ……………………APPELLANT
-VERSUS-
FLORENCE NYAMBURA NJATHI………………………….RESPONDENT
JUDGEMENT
- Before this court are two applications for determination as follows;-
- Exparte Originating Summons dated 30th January, 2021.
- Notice of Motion dated 9th April, 2021.
- The court directed that the two applications be heard and determined together. The court further directed that parties file and exchange written submissions. The Applicant field the written submissions dated 30th January, 2024. The Respondent despite being granted the opportunity to do so did not file any written submissions.
- Ex Parte Originating Summons dated 30th January,
2021 filed by the Applicant FIDELITY SHIELD INSURANCE
COMPANY LIMITED seeking the following orders:-
“1. THAT leave be granted to the Appellant herein FIDELITY
SHIELD INSURANCE COMPANY LIMITED to file a declaratory suit out of time against FLORENCE NYAMBURA NJATHI after the limitation period.
2. THAT the suit herein be deemed as duly filed.
3. THAT costs of this application be provided for.
3. The summons which was premised upon Sections 27, 28, 29 of the
limitation of Actions Act, Section 10 of the Insurance (Motor
Vehicles Third Party Risks), Order 51(1) of the Civil Procedure
Rules 2010, Article 159 (2) (d) of the Constitution of Kenya
2010, Sections 1A, 1B and 3A of the Civil Procedure Act Cap 21,
Laws of Kenya and all other enabling provisions of the law was
supported by the Affidavit of even date sworn by SAMMY WANJIKU
KAMAU the Claims Manager for the Applicant.
- The Respondent FLORENCE NYAMBURA NJATHI opposed the
application through an undated Replying Affidavit.
- Notice of Motion dated 9th April, 2021 by which UMAZI NYALE NYAWA & MIRIAM KAMBI MWACHALA as Administratrixes of the estate of the late JUMA KAMBI MWACHALA sought the following orders.
“1. THAT the court be pleased to grant leave to Umazi Nyale
Nyawa and Miriam Kambe Mwachala (Administratrixes of
the estate of the late Juma Kambi Mwachala) to be enjoined
as Interested Parties in the suit herein.
2. THAT consequent to prayer 1 above, leave be granted to the
Interested parties to respond to the Originating Summons
dated 30/01/2021.
3. THAT costs be in the cause.
6. The application was premised upon Article 50 and 159 (2) (d) of the
Constitution Section 10 (h) of the Insurance/Motor Vehicle and
Party Risks), Act Cap 405, Laws of Kenya, Order 1 Rule 10 (2),
Order 51 Rule 1 of the Civil procedure Rules, Sections 3A of the
Civil Procedure Act and all other enabling provisions of the law and
was supported by the Affidavit of even date sworn by UMAZI NYALE
NYAWA.
7. The Applicant FIDELITY SHIELD INSURANCE COMPANY LIMITED
opposed this application through the Grounds of Opposition dated 15th
April, 2021.
BACKGROUND
8. The Respondent Florence Nyambura Njathi is the registered owner of
motor vehicle Registration Number KBS 744Q Toyota Fielder
(hereinafter ‘the vehicle”). On or about 10th September, 2018 the
Respondent approached the Applicant and sought to be issued with a
comprehensive Insurance Cover for the said vehicle. The Respondent
indicated that the motor vehicle was to be used for social domestic and
pleasure purposes only.
9. In reliance on the representations and declarations made by the
Respondent in the proposal form, the Applicant issued her with an
Insurance Policy Cover No. THK/P/503/002917/18 (hereinafter the
‘Insurance cover’) for the said vehicle which cover commenced on
10th November, 2013 and was due to expire on 9th October, 2019.
10. The Policy Cover specifically stipulated that the vehicle would not be
used for hire and/or reward and that the Applicant would indemnify the
Respondent in the event of an incident arising contrary to the terms of
the cover.
11. On the 28th September, 2019 the vehicle was involved in an accident
along Kenyatta Highway within Nyeri Town. Following said accident
a report was made to the Insurance Company and the Respondent wrote
to them a demand letter dated 11th June, 2020.
12. The Applicants hired a private investigator to investigate the
circumstances of the alleged accident. The Applicants claim that they
later came to the knowledge that the Respondent had misrepresented
facts and that in fact the vehicle was being used for hire when the
accident occurred.
13. The Applicants aver that by the time they received the report from the
investigator revealing the misrepresentations made by the Respondent
the three (3) month period allowed for filing suits to repudiate the
Insurance and their liability to pay any third party claims policy had
lapsed. The Applicants now seek the leave of the court to file the suit
for declaratory orders against the Respondent out of time.
14. As stated earlier the application was opposed. The Respondent
concedes that she had procured a comprehensive Insurance Cover for
her vehicle from the Applicants.
15. However the Respondent vehemently denies the allegation that the said
vehicle was being used for hire at the time the accident occurred. She
states that on the material day a friend had requested to use the
vehicle and that she had authorized the said ‘friend’ to drive the same
without any payment being made and/or received.
16. The Respondent contends that there is no provision in law for extension
of time for a claim based on contract. Further that the Applicant was
guilty of laches in failing to file the suit within the required legal
timelines. The Respondent urged the court to dismiss the application.
17. The only issue for determination is whether the prayer seeking extension
of time is merited. The Applicant claims that it did not file suit seeking
to repudiate the Insurance Contract within the three (3) months
limitation period provided for by law because they only came
into possession of the material facts after the expiry of the three (3)
month period.
18. Section 10 (4) of the Insurance (Motor Vehicle Third Party Risk)
Act provides as follows:
“(4) No sum shall be payable by an insurer under the foregoing provisions of this section if in an action commenced before, or within three months after, the commencement of the proceedings in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it:
Provided that in insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such action is so given shall be entitled if he thinks fit to be made a party thereto”
19. The Applicant relied upon Section 31 of the Limitation of Actions
Act Cap 22 Laws of Kenya which provides that
“Where a period of limitation if prescribed for any action or arbitration by any other written law, that written law shall be construed as if part III of this Act were incorporated in it”
20. Part III of the Act provides for instances where extension of the
limitation period may be allowed i.e
- Disability
- Acknowledgement and part payment.
- Fraud
- Mistake
- Ignorance of material facts.
21. In support of their allegation that the Respondent misrepresented
material facts, the Applicants have annexed the statement dated 29th
September, 2019 written by the person who was driving the vehicle
when the accident occurred one KELVIN WAMBUGU MUREITHI. In
his statement ‘Kelvin’ indicates that he was driving a hired vehicle
Registration KBS 744Q (Annexture SWK ‘2’ to the Supporting Affidavit
dated 30th January 2021)
22. The Applicants have also annexed an Investigation Report dated 9th
March, 2020 (Annexture ‘SWK-4’) which report reveals that at the
material time the motor vehicle was being used a PSV Taxi. The
Applicants claim that they received this investigation report after
the three (3) month limitation period had expired. However this is
not entirely correct.
23. The Plaint indicates that the main suit being Nyeri CMCC No. 36 of
2020 seeking damages for the accident was filed by the victims on 21st
July, 2021. [see Annexture ‘UNN3’]
24. There is also a demand letter dated 11th July, 2020 issued by the law
firm of S. N. NGARE & COMPANY representing the accident victims
as well as the statutory notice dated 21st July 2021 to Fidelity
Insurance Co. Ltd notifying the Applicants of the filing of the suit.
Therefore the period of time began to run from 21st July 2021 when
the Applicants were notified of the existence of the suit. By this time
the Applicants had already received the investigation report revealing
the alleged misrepresentation.
25. Instead of moving to repudiate the Insurance contract the Applicants
entered appearance in the suit and filed a defence to the suit which
defence is dated 21st January, 2021.
26. The documents on record indicate that by January, 2021 the
Applicants were already in possession of the facts which they now
seek to rely upon to repudiate the contract. The investigation report
had been received way back in March, 2020 over one (1) year before
the suit was filed.
27. In the case of Nicholas Kiptoo Arap Koriri Salat v Independent
Electoral and Boundaries Commission & 7 others [2014] eKLR
establishing the principles to guide the Courts when entertaining
applications for extension of time the Supreme court of Kenya held
as follows:-
“(i) Extension of time is not a right of a party. It is an
equitable remedy that is only available to a deserving party at the discretion of the Court;
- A party who seeks for extension of time has the burden
of laying a basis to the satisfaction of the court.
- Whether the court should exercise the discretion to
Extend time, is a consideration to be made on a case to case basis;
- Whether there is a reasonable reason for the delay. The delay should be explained to the satisfaction of the Court;
- Whether there will be any prejudice suffered by the
respondents if the extension is granted;
- Whether the application has been brought without
undue delay; and
- Whether in certain cases, like election petitions, public interest should be a consideration for extending time.
28. Similarly in Edith Gichugu Koine v Stephen Njagi Thoithi [2014]
eKLR Justice ODEK (Deceased) stated that:-
“Nevertheless, it ought to be guided by consideration of factors stated in many previous decisions of this Court including, but not limited to, the period of delay, the reasons for the delay, the degree of prejudice to the respondent if the application is granted, and whether the matter raises issues of public importance, among others – See FAKIR MOHAMED V JOSEPH MUGAMBI & 2 OTHERS, Civil Application No. 332 OF 2004 (unreported). There is also a duty now imposed on the Court under Sections 3A and 3B of the Appellate Jurisdiction Act to ensure that the factors considered are consonant with the overriding objective of civil litigation, that is to say, the just, expeditions, proportionate and affordable resolution of disputes before the Court.”
29. It is baffling why having received this investigation report in March,
2020 the Appellants simply sat on the same and took no action. Even
when the suit was filed in July 2021, the Applicants still made no use
of the information contained in said report.
30. The argument that the information on misrepresentation came into the
Applicants knowledge after the three (3) month period had elapsed is
not true. The Applicants are simply guilty of laches. This application
seeking extension of time to file a declaratory suit is in my view
unmerited. Accordingly the Summons dated 30th January, 2021 is
hereby dismissed in its entirety with costs to the Respondent.
31. Having dismissed the application seeking extension of time, the Notice
of Motion dated 9th April, 2021 seeking enjoinment to the suit becomes
moot and as such I will not consider the same.
Dated in Nyeri this 19th day of July, 2024.
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