1. The application before the Court is a Notice of Motion dated 23rd September 2024, vide which the Applicant seeks the following orders:-
(1) Spent;
(2) That the Applicant be granted leave to file a disclaimer suit against the Respondent out of time;
(3) That the costs of this application be provided for;
(4) That this Honourable Court be pleased to issue any other or further orders as it may deem fit and just to grant.
2. The Applicant contended that it issued comprehensive insurance cover to the 1st Respondent for the motor vehicle registration number KDC663X, Nissan X-trail. On 22nd December 2023, the said vehicle was involved in a road traffic accident as a result of which it sustained damage, while third parties on the road were injured. The incident was reported to the Applicant on 27th December 2023. On 22nd April 2024, the Applicant was served with the summons and pleadings regarding Mombasa CMCC NO E499 of 2024; Edwin Kipkorir Losiwo vs Trade Magnate Ltd & Kennedy Mwambela.
3. The Applicant avers that it carried out investigations whose findings made it decline the attachment of liability under the policy for the said claim on grounds that 1st Respondent misrepresented that there was only one person on board the vehicle at the time of the accident and also for not disclosing that 2nd Respondent was driving the subject motor vehicle. These acts of alleged misrepresentation were stated to amount to a clear breach of the insurance policy and the principle of uberimae fidei that undergird insurance contracts.
4. The Applicant stated that it communicated its intention to repudiate the contract to the Respondent and the Interested Party on 22nd April 2024, but did not file the disclaimer suit on time due to the large number of cases they handle. The Applicant stated that it should have filed the disclaimer suit within 3 months of the date of the filing of the suit for compensation by the Interested Party and that the period had lapsed on 10th July 2024. It urged that the application be allowed as the proposed suit was meritorious and the Respondents wouldn’t be prejudiced.
5. The application is opposed. Mr. Kennedy Mwambela, the 2nd Respondent, swore an affidavit on 8th October 2024, vide which he contended that the application was frivolous and vexatious and an abuse of the process of the Court. He stated that it was indeed true that the car was comprehensively insured. He asserted that the 1st Respondent had always acted in good faith.
6. The deponent stated that at the time of the accident, the motor vehicle was being driven by Ms Michelle Samba and that no passenger was on board. He accused the Applicant of misrepresenting facts.
7. He denied that the Applicant had given a valid reason for failing to file the disclaimer suit on time. He averred that since the Applicant had defended the suit, it was estopped by its conduct from repudiating the contract. He further stated that a disclaimer at this point would be extremely prejudicial to the Respondents. He therefore urged that the application be dismissed.
8. The application was canvassed by way of Written Submissions. I shall summarize the submissions of the parties below.
9. The submissions of the Applicant are dated 29th November 2024. The Applicant identified issues for determination as being, whether the application dated 23rd September 2024 is merited, and who should bear the application costs.
10. Counsel for the Applicant urged that the Applicant had provided an explanation for its failure to file the disclaimer suit on time. The explanation was that it had misplaced the summons due to the large number of matters they handle. It was urged that the delay was not deliberate nor inordinate and that the application was brought on good faith and at the earliest opportunity. Counsel relied on the case of Philip Keipto Chemwolo & another v Augustine Kubende [1986] KECA 87 (KLR)
11. It was urged that the proposed suit was arguable and not frivolous. Counsel submitted that the Respondent had attempted to rebut issues raised in the application, which showed that the application was not frivolous. The suit raised issues worth being addressed.
12. It was lastly urged that whatever prejudice the Respondents suffered could be compensated any an award of costs as the Applicant herein is an insurance company of repute, in good financial standing, who could afford to make any payment deemed payable if the disclaimer suit, once filed and determined on merit, is unsuccessful. Counsels thus prayed that the application be allowed.
13. The submissions of the Respondents are dated 24th January 2025. The Respondent's counsel submitted that the Applicants ought to have filed suit within 3 months of April 2024 but failed to do so. He accused the Applicants of mischief and of seeking to abuse the Court process.
14. Ms. Naliaka, learned counsel for the Respondents, identified issues coming up for determination as being:-
a. Whether the Court has jurisdiction to enlarge time under section 10 of the Insurance (Motor Vehicles Third Party Risks) Act; and
b. Who should bear the costs?
15. Counsel urged that under section 10 of the said Act, the disclaimer suit could be filed before, or within 3 months of the commencement of suit. She submitted that the Act did not provide for the extension of time within which the suit could be filed. Jurisdiction, it was stated, is derived from statute. In support of the said contention, counsel relied on the decision of Odunga, J (as he then was) in APA Insurance Company vs Vincent Nthuka [2018] KEHC 5981 (KLR) and also in the case of Occidental Insurance Company Limited v Ghani & 2 others; Administrator of the Estate of the Late Joel Leipa Ntekese & another (Interested Parties) [2023] KEHC 27326 (KLR).
16. It was therefore urged that I dismiss the suit with costs.
17. I have considered the application, the response thereto, as well as the submissions of the parties. It is a common ground that the issues in this matter are:-
1. Whether the application has merit; and
2. Who should pay the costs of the application?
18. It is necessary that I first set out the provisions of section 10(4) of the Act, which the Applicant seeks to repudiate its obligations. It provides that:-
“(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 an 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. My understanding of the said provision is that the Applicant could have filed the disclaimer action before the Interested Party filed the suit for compensation in the court below, or within three months thereafter. That did not happen.
20. The matter was reported to the Applicant on 27th December 2023. The Applicant commissioned an investigator, who carried out investigations and wrote a report dated 20th January 2024. Flowing from the foregoing, the Applicant had 3 months before the filing of the claim for compensation by the Interested Party to file a disclaimer suit. After the suit was filed, it had a further 3 months.
21. The explanation given, as succinctly summed up by the Respondent’s counsel, was that they were overwhelmed by work and lost the Summons. I note that the nature and extent of their difficulty weren’t particularized and were left to conjecture.
22. It is the duty of an Applicant to explain the delay. Without a proper explanation, the application for extension of time fails. In my view, no reasonable explanation for the delay was given. Although an organization of the Applicant’s size receives very many claims it surely has systems to address the workload.
23. Even if there was an explanation, it does not seem to me that an explanation would be useful in this instance. I agree with the decision of the Court in APA Insurance Company vs Vincent Nthuka [2018] KEHC 5981 (KLR) where it was held that:-
“21. It is clear that this section does not provide for extension of the said period for commencing proceedings seeking declaratory orders. Further, the applicant has not addressed me on any other provision in the said Act that permits such a procedure and I am aware of none.”
24. In Occidental Insurance Company Limited v Ghani & 2 others; Administrator of the Estate of the Late Joel Leipa Ntekese & another (Interested Parties) [2023] KEHC 27326 (KLR) the court, in like manner, held that:-
“34.It is my finding, and I so hold, that I am persuaded that this court lacks jurisdiction to extend time by dint of section 10(4) of the Insurance (Motor Vehicles Third Party Risks) Act and section 27 of the Limitation of Actions Act. The Preliminary Objection is merited and the same is allowed. The next action for this court to do once it has pronounced that it lacks jurisdiction to entertain this matter, is to down its tools. It cannot proceed to determine the application before it.”
25. I agree with the foregoing decisions. There is no power conferred on this Court by section 10 of the Act to expand time. I cannot expand my jurisdiction through craft to do something Parliament did not grant the Court; I must demur.
26. From the pleadings, the matter before the Court below appears to have been substantially prosecuted. The Applicant must have represented the Respondent in the said proceedings. Allowing this case at this point would strongly prejudice the Respondents.
27. I am persuaded that the Applicant is estopped by its conduct from doing something at this point, which essentially amounts to throwing the Respondents under the bus.
28. It is clear that I have not found merit in the application. The same is for dismissed.
29. I award costs to the Respondents.
30. Orders accordingly
Dated and signed at Mombasa this 2nd day of May 2024. Delivered virtually via Microsoft TEAMS.
(1) Spent;
(2) That the Applicant be granted leave to file a disclaimer suit against the Respondent out of time;
(3) That the costs of this application be provided for;
(4) That this Honourable Court be pleased to issue any other or further orders as it may deem fit and just to grant.
2. The Applicant contended that it issued comprehensive insurance cover to the 1st Respondent for the motor vehicle registration number KDC663X, Nissan X-trail. On 22nd December 2023, the said vehicle was involved in a road traffic accident as a result of which it sustained damage, while third parties on the road were injured. The incident was reported to the Applicant on 27th December 2023. On 22nd April 2024, the Applicant was served with the summons and pleadings regarding Mombasa CMCC NO E499 of 2024; Edwin Kipkorir Losiwo vs Trade Magnate Ltd & Kennedy Mwambela.
3. The Applicant avers that it carried out investigations whose findings made it decline the attachment of liability under the policy for the said claim on grounds that 1st Respondent misrepresented that there was only one person on board the vehicle at the time of the accident and also for not disclosing that 2nd Respondent was driving the subject motor vehicle. These acts of alleged misrepresentation were stated to amount to a clear breach of the insurance policy and the principle of uberimae fidei that undergird insurance contracts.
4. The Applicant stated that it communicated its intention to repudiate the contract to the Respondent and the Interested Party on 22nd April 2024, but did not file the disclaimer suit on time due to the large number of cases they handle. The Applicant stated that it should have filed the disclaimer suit within 3 months of the date of the filing of the suit for compensation by the Interested Party and that the period had lapsed on 10th July 2024. It urged that the application be allowed as the proposed suit was meritorious and the Respondents wouldn’t be prejudiced.
5. The application is opposed. Mr. Kennedy Mwambela, the 2nd Respondent, swore an affidavit on 8th October 2024, vide which he contended that the application was frivolous and vexatious and an abuse of the process of the Court. He stated that it was indeed true that the car was comprehensively insured. He asserted that the 1st Respondent had always acted in good faith.
6. The deponent stated that at the time of the accident, the motor vehicle was being driven by Ms Michelle Samba and that no passenger was on board. He accused the Applicant of misrepresenting facts.
7. He denied that the Applicant had given a valid reason for failing to file the disclaimer suit on time. He averred that since the Applicant had defended the suit, it was estopped by its conduct from repudiating the contract. He further stated that a disclaimer at this point would be extremely prejudicial to the Respondents. He therefore urged that the application be dismissed.
8. The application was canvassed by way of Written Submissions. I shall summarize the submissions of the parties below.
9. The submissions of the Applicant are dated 29th November 2024. The Applicant identified issues for determination as being, whether the application dated 23rd September 2024 is merited, and who should bear the application costs.
10. Counsel for the Applicant urged that the Applicant had provided an explanation for its failure to file the disclaimer suit on time. The explanation was that it had misplaced the summons due to the large number of matters they handle. It was urged that the delay was not deliberate nor inordinate and that the application was brought on good faith and at the earliest opportunity. Counsel relied on the case of Philip Keipto Chemwolo & another v Augustine Kubende [1986] KECA 87 (KLR)
11. It was urged that the proposed suit was arguable and not frivolous. Counsel submitted that the Respondent had attempted to rebut issues raised in the application, which showed that the application was not frivolous. The suit raised issues worth being addressed.
12. It was lastly urged that whatever prejudice the Respondents suffered could be compensated any an award of costs as the Applicant herein is an insurance company of repute, in good financial standing, who could afford to make any payment deemed payable if the disclaimer suit, once filed and determined on merit, is unsuccessful. Counsels thus prayed that the application be allowed.
13. The submissions of the Respondents are dated 24th January 2025. The Respondent's counsel submitted that the Applicants ought to have filed suit within 3 months of April 2024 but failed to do so. He accused the Applicants of mischief and of seeking to abuse the Court process.
14. Ms. Naliaka, learned counsel for the Respondents, identified issues coming up for determination as being:-
a. Whether the Court has jurisdiction to enlarge time under section 10 of the Insurance (Motor Vehicles Third Party Risks) Act; and
b. Who should bear the costs?
15. Counsel urged that under section 10 of the said Act, the disclaimer suit could be filed before, or within 3 months of the commencement of suit. She submitted that the Act did not provide for the extension of time within which the suit could be filed. Jurisdiction, it was stated, is derived from statute. In support of the said contention, counsel relied on the decision of Odunga, J (as he then was) in APA Insurance Company vs Vincent Nthuka [2018] KEHC 5981 (KLR) and also in the case of Occidental Insurance Company Limited v Ghani & 2 others; Administrator of the Estate of the Late Joel Leipa Ntekese & another (Interested Parties) [2023] KEHC 27326 (KLR).
16. It was therefore urged that I dismiss the suit with costs.
17. I have considered the application, the response thereto, as well as the submissions of the parties. It is a common ground that the issues in this matter are:-
1. Whether the application has merit; and
2. Who should pay the costs of the application?
18. It is necessary that I first set out the provisions of section 10(4) of the Act, which the Applicant seeks to repudiate its obligations. It provides that:-
“(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 an 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. My understanding of the said provision is that the Applicant could have filed the disclaimer action before the Interested Party filed the suit for compensation in the court below, or within three months thereafter. That did not happen.
20. The matter was reported to the Applicant on 27th December 2023. The Applicant commissioned an investigator, who carried out investigations and wrote a report dated 20th January 2024. Flowing from the foregoing, the Applicant had 3 months before the filing of the claim for compensation by the Interested Party to file a disclaimer suit. After the suit was filed, it had a further 3 months.
21. The explanation given, as succinctly summed up by the Respondent’s counsel, was that they were overwhelmed by work and lost the Summons. I note that the nature and extent of their difficulty weren’t particularized and were left to conjecture.
22. It is the duty of an Applicant to explain the delay. Without a proper explanation, the application for extension of time fails. In my view, no reasonable explanation for the delay was given. Although an organization of the Applicant’s size receives very many claims it surely has systems to address the workload.
23. Even if there was an explanation, it does not seem to me that an explanation would be useful in this instance. I agree with the decision of the Court in APA Insurance Company vs Vincent Nthuka [2018] KEHC 5981 (KLR) where it was held that:-
“21. It is clear that this section does not provide for extension of the said period for commencing proceedings seeking declaratory orders. Further, the applicant has not addressed me on any other provision in the said Act that permits such a procedure and I am aware of none.”
24. In Occidental Insurance Company Limited v Ghani & 2 others; Administrator of the Estate of the Late Joel Leipa Ntekese & another (Interested Parties) [2023] KEHC 27326 (KLR) the court, in like manner, held that:-
“34.It is my finding, and I so hold, that I am persuaded that this court lacks jurisdiction to extend time by dint of section 10(4) of the Insurance (Motor Vehicles Third Party Risks) Act and section 27 of the Limitation of Actions Act. The Preliminary Objection is merited and the same is allowed. The next action for this court to do once it has pronounced that it lacks jurisdiction to entertain this matter, is to down its tools. It cannot proceed to determine the application before it.”
25. I agree with the foregoing decisions. There is no power conferred on this Court by section 10 of the Act to expand time. I cannot expand my jurisdiction through craft to do something Parliament did not grant the Court; I must demur.
26. From the pleadings, the matter before the Court below appears to have been substantially prosecuted. The Applicant must have represented the Respondent in the said proceedings. Allowing this case at this point would strongly prejudice the Respondents.
27. I am persuaded that the Applicant is estopped by its conduct from doing something at this point, which essentially amounts to throwing the Respondents under the bus.
28. It is clear that I have not found merit in the application. The same is for dismissed.
29. I award costs to the Respondents.
30. Orders accordingly
Dated and signed at Mombasa this 2nd day of May 2024. Delivered virtually via Microsoft TEAMS.