[1] The appellant was the defendant before the lower court in Oyugis Chief Magistrate’s Civil Case No. 78 of 2018: Gladys Kayalo Mmbo (suing as the administratrix of the estate of Oscar Kasamba Mmbo, Deceased). It had been sued in connection with a policy of insurance No. 101577004680 issued in favour of Mohamed Ali Noorein, Daniel Mkombola and Yuasa Motors Limited as the owner of Motor Vehicle Registration No. KCE 761L. It was alleged before the lower court that the said motor vehicle was involved in a road traffic accident on or about the 1 st September 2016 and that the deceased, Oscar Kasamba Mmbo , was a lawful passenger in the motor vehicle at the material time.
[2] The respondent further averred before the lower court that the said motor vehicle was so negligently driven along the Kisumu-Kendu Bay Road that it collided with Motor Vehicle Registration No. KCB 686B, Toyota Matatu, thereby occasioning fatal injuries to the deceased. Consequently, the respondent filed a suit on behalf of the estate of the deceased in Oyugis Principal Magistrate’s Court vide Civil Case No. 24 of 2017 . She averred that she obtained judgment against the owners of Motor Vehicle KCE 761L and Motor Vehicle KCB 686B in the sum of Kshs. 5,420,610/= on the 21 st March 2018 together with costs amounting to Kshs. 176,430/=.
[3] The respondent further averred that, while the insurers of the owner of Motor Vehicle KCB 686B, namely Directline Assurance Co. Ltd obliged and paid its portion of the judgment, the appellant declined. It instead filed a declaratory suit in Homa Bay High Court Civil Case No. 2 of 2018 seeking to repudiate liability in respect of claims in Oyugis PMCC Nos. 192, 193, 194, 195 and 212 all of 2016 and Oyugis PMCC Nos. 9, 83, 81 and 82 all of 2017 between various plaintiffs and one Mohamed Ali Noorein . Therefore, it was the contention of the respondent that the primary suit pursuant to which the declaratory suit the subject of this appeal was filed, namely, Oyugis PMCC No. 24 of 2017, was not affected by the judgment passed in Homa Bay High Court Civil Case No. 2 of 2018.
[4] Accordingly, the respondent prayed before the lower court for a declaration that the appellant was legally bound to satisfy the decree and costs as apportioned against it by the trial court in Oyugis Principal Magistrate’s Civil Case No 24 of 2017 together with interest and costs.
[5] Upon hearing the parties, the learned magistrate delivered the impugned judgment on 9 th October 2023. He found that:
“Having considered that which was granted and that which was not granted by the Court at Homabay, I find that this suit No. 24 of 2017 do not make part and parcel of the matters which the defendant/plaintiff had sought. It follows therefore, that I am persuaded that the plaintiff in this matter has proved her case as required by law on a balance of probability that the defendant is bound to make good of the judgment in suit No. PMCC 24 of 2017. The principle of estoppel which the defendant is poising to rely on, appears to boomerang back as per the ruling made by the superior court when the plaintiff herein wanted to be enjoined as a party. I thus enter judgment against the defendant as hereunder :
a) A declaration that the Defendant is legally bound to fully satisfy the decretal sum as apportioned against him in the Oyugis Principal Magistrate’s Court Civil Case No. 24 of 2017.
b) Costs of the suit and interest thereof.
[6] Being aggrieved by the decision of the lower court, the appellant filed this appeal on the following grounds:
[a] The learned magistrate erred in law and in fact by failing to appreciate the full context of the judgment in Homa Bay HCCC No. 2 of 2018 and particularly by failing to acknowledge that the appellant was absolved by the said decision of the High Court from any claims arising out of the subject road traffic accident that led to the present suit.
[b] The learned magistrate erred both in fact and in law in limiting himself only to the finding of the High Court in Homa Bay HCCC No. 2 2018 that it was impossible to tell of future matters that may arise out of the subject road traffic accident as opposed to looking at the case wholesomely on its merits and making a sound decision.
[c] The learned magistrate erred in law and fact by basing his entire judgment on the fact that Oyugis SPMCC No. 24 of 2017 was not expressly mentioned as forming part of a series of matters where the appellant was absolved from liability vide Homa Bay HCCC No. 2 of 2018 when in fact the said primary suit arose from the same road traffic accident.
[d] The learned magistrate erred in law and fact in failing to note that the only reason Oyugis SPMCC No. 24 of 2017 was not listed as part of the series where liability of the appellants was successfully repudiated is because the said matter had not been brought to the attention of the appellant at the time Homa Bay HCCC No. 2 of 2018 commenced.
[e] The learned magistrate, in purporting to make an explicit decision relevant to the case, ended up misdirecting himself and contradicting the guiding judgment of the High Court over the same cause of action and ipso facto failed to heed precedent.
[f] The learned magistrate erred in law and fact by failing to appreciate that the judgment sum sought to be enforced totaled Kshs. 4,4337,672/= and therefore exceeds the statutory limit of Kshs. 3,000,000/= as expressly set out in Section 5(iv) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 of the Laws of Kenya and that the issue ought to have been up for determination as submitted by the appellant’s advocates.
[g] The learned magistrate totally disregarded the appellant’s written submissions and did not fully appreciate all the material evidence on record and hence delivered an unconsidered judgment.
[h] The learned magistrate erred in law and fact by failing to appreciate the injustice that would be occasioned on the appellant if the respondent was awarded the judgment sum in Oyugis PMCC No. 24 of 2017 when all matters arising from the same road traffic accident were repudiated through Homa Bay HCCC No. 2 of 2018 .
[i] The learned magistrate erred in law and fact in arriving at a decision that was wholly against the weight of the evidence and the law without any legal and/or evidential justification.
[7] In the premises, the appellant prayed that its appeal be allowed with costs, and that the entire judgment of the lower court be set aside and/or vacated.
[8] The appeal was urged by way of written submissions, pursuant to the directions given herein on 7 th July 2025. To that end, the appellant filed written submissions dated 30 th September 2025 and proposed one issue for determination, namely, whether the appeal is merited. It relied heavily on the decision of the High Court in Homa Bay HCCC No. 2 of 2018 in which its notice to repudiate the insurance contract between him and the judgment debtor in the primary suit was upheld and a declaratory order made in that regard.
[9] The appellant impugned the decision of the lower court for unduly restricting its analysis to the observation by the High Court that it was impossible to tell of future matters that could arise out of the subject road traffic accident. It posited that the learned magistrate abdicated his duty by failing to conduct a holistic and merit-based evaluation of its claim as presented, and thereby fettered his discretion in the matter before him. In the appellant’s view, the primary suit, namely, Oyugis PMCC No. 24 of 2017 was contemplated and falls within the ambit of the judgment of the High Court in Homa Bay HCCC No. 2 of 2018 .
[10] It was further submitted by the appellant that the learned magistrate ought to have gone beyond the question of whether or not Oyugis PMCC No. 24 of 2017 was among the series of matters mentioned in Homa Bay HCCC No. 2 of 2018 to interrogate the substance of the claim, including the question whether the statutory and policy preconditions for liability under Section 10(1) and (2) of the Insurance (Motor Vehicle Third Party Risks) Act, were met. The appellant argued that, in failing to do so, the learned magistrate misapprehended the scope and effect of the declaratory relief granted in Homa Bay HCCC NO. 2 of 2018.
[11] The appellant urged the Court to take into consideration that failure to mention the existence of Oyugis PMCC No. 24 of 2017 at the time of filing Homa Bay HCCC No. 2 of 2018 was not deliberate, but was due to the fact that it was unaware of the suit, having not been served with the requisite notice under Section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act. It relied on Mvuria Magwabi Chadago v Africa Merchant Assurance Company Limited [2017] eKLR and UAP Insurance Limited v Patrick Charo Chiro , Civil Appeal No. 88 of 2019 to buttress its arguments.
[12] Further to the foregoing, the appellant submitted that in disregarding the declaratory decision of the High Court the learned magistrate ran afoul of the doctrine of stare decisis by reopening an issue already determined by a court of higher jurisdiction. Reliance was placed on the cases of Mwai Kibaki v Daniel Toroitich Arap Moi [2008] 2 KLR (EP) 35 and John Kimathi Marete v Kenya Wildlife Services [2018] KEHC 5753 (KLR) in impugning the decision of the lower court for contradicting the decision of the High Court.
[13] Lastly, the appellant submitted on the provisions of Sections 4 and 5 of the Insurance (Motor Vehicle Third Party Risks) Act and pointed out that the liability of an insurance company cannot exceed the statutory limit of Kshs. 3,000,000/= imposed by Section 5(b)(iv) of the Act. Thus the appellant urged that the decision of the lower court be overturned on this ground as well. It relied on CIC General Insurance Group Ltd v Gerald Ochoki [2020] eKLR , Xplico Insurance Company Ltd v Maosa [2024] eKLR and Justus Mutiga & others v Law Society of Kenya & another, Civil Appeal No. 141 of 2016 and submitted that the lower court was duty bound to determine the extent of its liability in this instance.
[14] On the basis of the foregoing submissions, the appellant urged that its appeal be allowed with costs and the judgment of the lower court set aside in its entirety.
[15] The respondent relied on her written submissions dated 9 th October 2025. She reiterated the factual background of this appeal and underscored her assertion that the judgment in Homa Bay HCCC No. 2 of 2018 delivered on 6 th February 2020 did not affect or touch on her primary case, namely, Oyugis PMCC No. 24 of 2017 ; and therefore it was on that basis that she filed the declaratory suit. She submitted that, under Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, the insurer is under a mandatory duty to first pay the full judgment sum to the third party in satisfaction of any decree passed against its insured and thereafter recover the sums from the insured, if need be.
[16] The respondent submitted on the objective of the Act and relied on African Merchant Assurance Co. Limited v Jane Atieno [2014] eKLR for the proposition that the court’s priority ought to be to ensure the third party is protected. She accordingly urged the Court to find that the lower court properly evaluated the evidence adduced before arriving at its decision. She prayed for the dismissal of the appeal with costs.
[17] This being a first appeal, it is the duty of the Court to re-evaluate the evidence adduced before the lower court with a view of coming to its own findings and conclusions thereon; while giving due consideration for the fact that it did not have the advantage of seeing or hearing the witnesses. This is in line with Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 wherein it was held that:
"...this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect..."
[18] Before the lower court, evidence was called from the respondent who testified before the lower court and adopted her witness statement dated 20 th July 2018. She confirmed that the deceased, Oscar Kasema , was her son; and that he died as a result of injuries sustained in a road traffic accident on 1 st September 2016 involving Motor Vehicles Registration Numbers KCE 761E and KCB 686B. She further confirmed that she filed Oyugis PMCC No. 24 of 2017 which was resolved in her favour. She produced a copy of the judgment dated 21 st March 2018 among other documents to prove her claim. The respondent also made reference to the Homa Bay Suit No. 2 of 2018 between the appellant and its insured, Mohamed Ali Noorein . She produced the ruling and judgment passed in that case as exhibits before the lower court.
[19] The respondent also called the Court Administrator of the High Court at Homa Bay, Irene Okello as PW2. She produced the court file in respect of Homa Bay HCCC No. 2 of 2018 and pointed out that the case was pertinent to Oyugis PMCC Nos 9, 82, 83 of 2017 and 192, 193, 194, 195 of 2016 and not PMCC No. 24 of 2017.
[20] The appellant called its Branch Manager, Dan Kipkurui Kemboi as DW1. He adopted his witness statement dated 30 th March 2023 as his evidence in chief and produced a copy of the judgment delivered in Homa Bay HCCC No. 2 of 2018 and the appellant’s repudiation letter among other documents. DW1 conceded in cross-examination that Oyugis PMCC No. 24 of 2017 was not the subject of the Homa Bay HCCC No. 2 of 2018.
[21] From the foregoing summary of evidence, there is no dispute that a road traffic accident occurred on the 1 st September 2016 involving Motor Vehicles KCE 761L and KCB 686B. It is also not in dispute that the deceased was one of the passengers in motor vehicle registration number KCE 761L or that he died as a result of injuries sustained in the said accident. It is also common ground that Motor Vehicle Registration No. KCE 761L was insured by the appellant, Heritage Insurance Co. Ltd.
[22] As a result of the accident and the ensuing death occasioned thereby, the respondent filed Oyugis PMCC No. 24 of 2017 on behalf of the estate of the deceased, Oscar Kasamba Mmbo . In that suit the respondent claimed general damages for loss occasioned to the estate of the deceased. The lower court settled liability at 80:10:10 in favour of the deceased and awarded his estate Kshs. 5,420,610/= by way of general damages. Costs were thereafter assessed at Kshs. 176,430/=.
[23] Thereafter, the respondent filed Oyugis SPMCC No. 78 of 2018 seeking declaratory orders compelling the appellant to settle the sums due from its insured, in respect of whom liability was apportioned 80% of the decretal sum. As has been indicated above the lower court found merit in the respondent’s suit and granted the declaratory order sought in its judgment dated 9 th October 2023.
[24] Needless to say that where liability is shared, the insurer can only shoulder the burden apportioned to its insured, in this case Mohamed Ali Noorein. In Kenya Airways Limited v Mwaniki Gichohi , Hon. Ringera, J. (as he then was) held that:
“The concept of joint and several liability comprehends one judgment and decree against two or more persons who are liable collectively and individually to the full extent of such decree; however double compensation is not allowed and accordingly whatever portion of the decree is recovered against one of such defendant cannot be recovered from the other defendant(s).”
[25] It is equally true that the liability of an insurer in such circumstances is now circumscribed by law. In this regard Section 5 of the Insurance (Motor Vehicle Third Party Risks) Act provides that:
In order to comply with the requirements of section 4 , the policy of insurance must be a policy which—
(a)is issued by a company which is required under the Insurance Act ( Cap. 487 ) to carry on motor vehicle insurance business; and
(b)insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of, or bodily injury to, any person caused by or arising out of the use of the vehicle on a road:
Provided that a policy in terms of this section shall not be required to cover—
(i) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or
(ii) except in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from the vehicle at the time of the occurrence of the event out of which the claims arose; or
(iii) any contractual liability;
(iv) liability of any sum in excess of three million shillings, arising out of a claim by one person .
[26] This aspect appears not to have been given thought by the learned magistrate and therefore there appears to be no basis for finding that the learned magistrate erred in his judgment. I note though that he did state that the appellant’s liability would be limited to what was apportioned to its insured. At any rate, it would not be obliged to pay more than that which is capped by statute. In Law Society of Kenya v Attorney General & 3 others [2016] eKLR it was pointed out that:
“What the Principal Act has done is cap the amount of money that the insurer pays to the injured person. Nothing in the Principal Act stops a litigant or the injured person from pursuing a claim against the insured individual where an award in excess of the amount recoverable from the insurer is made...It only limits who pays how much by apportioning a maximum of Kshs. 3,000,000/= to be paid by the insurer and the additional if any by the insured.”
[27] That said, the single issue for determination in this appeal is whether the learned magistrate erred in by basing his entire judgment on the fact that Oyugis SPMCC No. 24 of 2017 was not expressly mentioned as forming part of a series of matters where the appellant was absolved from liability vide Homa Bay HCCC No. 2 of 2018.
[28] Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, is explicit that:
“If, after a policy of insurance has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of section 5 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.”
[29] Similarly, in Joseph Mwangi Gitundu v Gateway Insurance Co Ltd [2015] eKLR it was held:
“…under section 10(1) of Cap 405 Laws of Kenya, the insurer has a statutory obligation to pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
The obligation is statutory and a strict one; it cannot be shifted or abrogated by a term in the contract of insurance or in the manner proposed by the Defendant, lest the noble intention of the Act to guarantee compensation of third parties who suffer injuries arising from the use of the insured motor vehicle on the road should be lost. Similarly, if the statutory obligation placed by law on the insurer was to be shifted to the insured as proposed by the Defendant, the purpose for taking out an insurance policy and the compulsion by the Act for such insurance cover to be taken out on vehicles to be used on the roads to cover third party risks under Cap 405 Laws of Kenya will also be defeated.
The only legal way liability and obligation to pay third party claims may be avoided, is by strictly following the prescriptions provided for under section 10 of Cap 405.”
[30] Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act states that:
“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.”
[31] In this instance, the appellant not only issued a Notice of Repudiation, but also filed a declaratory suit, being Homa Bay HCCC No. 2 of 2018 seeking to be absolved from liability for the claims ensuing from the subject accident. In the said suit, the appellant pointed out that at the time of the accident, the subject motor vehicle was being used in contravention of the express terms of the insurance policy contract in that it was being used for hire and reward whereas the policy limited its use for private purposes. The High Court found as a fact that that was the case and ordered that:
“…the plaintiff is not under any obligation to indemnify the defendant against any claim by the direct or indirect victims of the material accidents and having complied with the requirements of section 10(4) of the Insurance (motor vehicles third party risks) Act, it is justly and fairly entitled to judgment against the defendant in terms of prayer (a) of the plaint only.”
[32] The prayer that was declined sought to shield the appellant from similar future claims arising from the accident, such as the impugned judgment. In the circumstances, I am persuaded that, a decision having been made by the High Court faulting the use of the subject motor vehicle for purposes other than those agreed to in their insurance contract, it was not open for the lower court to contradict that position; more so in the absence of an appeal or review thereof. It matters not that the primary suit, namely, Oyugis PMCC No. 24 of 2017 was not mentioned in the High Court suit. It suffices that the suit involved the same motor vehicle and the same accident and the claim was premised on the same insurance policy.
[33] It is a cardinal principle that parties are bound by the terms of their contracts. I therefore find instructive the expressions of Blackburn, J. in Harris vs. Great Western Railway Company [1876] 1 QBD 515 at page 530 that:
"...it is clear law that where there is a writing, into which the terms of any agreement are reduced, the terms are to be regulated by that writing...by assenting to the contract thus reduced to writing, [a party] represents to the other side that he has made himself acquainted with the contents of that writing and assents to them, and so induces the other side to act upon that representation by entering into the contract with him, and is consequently precluded from denying that he did make himself acquainted with those terms..."
[34] Likewise, in Kenyan Alliance Insurance Company Ltd v Naomi Wambui Ngira & Another [2020] KEHC 3540 (KLR) that:
“ In this case, the liability has been expressly excluded by virtue of the aforesaid Section 5(b)(l) of the Act. Should the insurer be obligated to settle any such judgment, this would not only have the effect of ascribing on parties that which they did not contract, but also to find against the provisions of law. The end result would be to confer an unnecessary benefit on an undeserving party while punishing the insurer for that which it did not contract and/or acquiesce to. This Court finds that the requirement that the insurer settles the decretal amount following entry of judgment is only applicable for such judgments involving liability which is required to be covered both under the Act and under the insurance policy.”
[35] There is a second reason why the lower court ought to have aligned itself with the decision of the High Court, namely, the doctrine of stare decisis. In Ernst & Young LLP v capital Markets Authority & another [2017] eKLR, Mativo, J. (as he then was) held:
“… The doctrine of stare decisis is long recognized as a principle of our law. Sir Frederick Pollock, in his first book of jurisprudence, 6 th ed. Page 321:
‘The decisions of an ordinary superior court are binding on all courts of inferior rank within the same jurisdiction, and though not absolutely binding on courts of co-ordinate authority nor on the court itself, will be followed in the absence of strong reason to the contrary’…”
[36] Similarly, in Republic v Ayako (Petition E002 of 2024) [2025] KESC 20 (KLR) (11 April 2025) (Judgment) the Supreme Court held:
This court has underscored the importance, fidelity and centrality of respecting and observing the doctrine of stare decisis . It serves as a reference point, and ensures that there is consistency, certainty and predictability in the administration of the law which in turn, enhances confidence in the justice system. Stare decisis sets the baseline of how people conduct their everyday affairs and how they transact with the State. See Asanyo & 3 Others v Attorney- General , (Petition 7 of 2019) [2020] KESC 62 ( KLR ).
[37] The upshot is that I find merit in the appeal. The same is hereby allowed and the judgment of the lower court dated 9 th October 2023 is hereby set aside and substituted with an order dismissing the declaratory suit.
[38] On costs, although Section 27 provides that costs ought to follow the event, the court retains the discretion to make a determination on costs as the justice of the case may require. The Supreme Court, in the case of Jasbir Singh Rai & 3 others v Tarlochan Singh Rai & 4 others [2014] eKLR, set out the guidelines that a court must consider when exercising its discretion to either award or deny costs. It held:
“[14] So the basic rule on attribution of costs is: costs follow the event. But it is well recognized that this principle is not to be used to penalize the losing party; rather, it is for compensating the successful party for the trouble taken in prosecuting or defending the suit. In Justice Kuloba’s words [Judicial Hints on Civil Procedure, at p.94]:
“[T]he object of ordering a party to pay costs is to reimburse the successful party for amounts expended on the case. It must not be made merely as a penal measure…Costs are a means by which a successful litigant is recouped for expenses to which he has been put in fighting an action.”
[39] Hence, while the law gives the court discretion over the costs associated with all suits, including the power to determine who should bear those costs and to what extent, the Court must evaluate whether the particular circumstances of this case justify awarding costs. The Supreme Court further observed as follows in Jasbir Singh Rai (supra):
“[18] It emerges that the award of costs would normally be guided by the principle that “costs follow the event”: the effect being that the party who calls forth the event by instituting suit, will bear the costs if the suit fails; but if this party shows legitimate occasion, by successful suit, then the defendant or respondent will bear the costs. However, the vital factor in setting the preference, is the judiciously-exercised discretion of the Court, accommodating the special circumstances of the case, while being guided by ends of justice. The claims of the public interest will be a relevant factor, in the exercise of such discretion, as will also be the motivations and conduct of the parties, prior-to, during, and subsequent-to the actual process of litigation…
[22] Although there is eminent good sense in the basic rule of costs – that costs follow the event – it is not an invariable rule and, indeed, the ultimate factor on award or non-award of costs is the judicial discretion. It follows, therefore, that costs do not, in law, constitute an unchanging consequence of legal proceedings – a position well illustrated by the considered opinions of this Court in other cases. The relevant question in this particular matter must be, whether or not the circumstances merit an award of costs to the applicant…”
[4
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[2] The respondent further averred before the lower court that the said motor vehicle was so negligently driven along the Kisumu-Kendu Bay Road that it collided with Motor Vehicle Registration No. KCB 686B, Toyota Matatu, thereby occasioning fatal injuries to the deceased. Consequently, the respondent filed a suit on behalf of the estate of the deceased in Oyugis Principal Magistrate’s Court vide Civil Case No. 24 of 2017 . She averred that she obtained judgment against the owners of Motor Vehicle KCE 761L and Motor Vehicle KCB 686B in the sum of Kshs. 5,420,610/= on the 21 st March 2018 together with costs amounting to Kshs. 176,430/=.
[3] The respondent further averred that, while the insurers of the owner of Motor Vehicle KCB 686B, namely Directline Assurance Co. Ltd obliged and paid its portion of the judgment, the appellant declined. It instead filed a declaratory suit in Homa Bay High Court Civil Case No. 2 of 2018 seeking to repudiate liability in respect of claims in Oyugis PMCC Nos. 192, 193, 194, 195 and 212 all of 2016 and Oyugis PMCC Nos. 9, 83, 81 and 82 all of 2017 between various plaintiffs and one Mohamed Ali Noorein . Therefore, it was the contention of the respondent that the primary suit pursuant to which the declaratory suit the subject of this appeal was filed, namely, Oyugis PMCC No. 24 of 2017, was not affected by the judgment passed in Homa Bay High Court Civil Case No. 2 of 2018.
[4] Accordingly, the respondent prayed before the lower court for a declaration that the appellant was legally bound to satisfy the decree and costs as apportioned against it by the trial court in Oyugis Principal Magistrate’s Civil Case No 24 of 2017 together with interest and costs.
[5] Upon hearing the parties, the learned magistrate delivered the impugned judgment on 9 th October 2023. He found that:
“Having considered that which was granted and that which was not granted by the Court at Homabay, I find that this suit No. 24 of 2017 do not make part and parcel of the matters which the defendant/plaintiff had sought. It follows therefore, that I am persuaded that the plaintiff in this matter has proved her case as required by law on a balance of probability that the defendant is bound to make good of the judgment in suit No. PMCC 24 of 2017. The principle of estoppel which the defendant is poising to rely on, appears to boomerang back as per the ruling made by the superior court when the plaintiff herein wanted to be enjoined as a party. I thus enter judgment against the defendant as hereunder :
a) A declaration that the Defendant is legally bound to fully satisfy the decretal sum as apportioned against him in the Oyugis Principal Magistrate’s Court Civil Case No. 24 of 2017.
b) Costs of the suit and interest thereof.
[6] Being aggrieved by the decision of the lower court, the appellant filed this appeal on the following grounds:
[a] The learned magistrate erred in law and in fact by failing to appreciate the full context of the judgment in Homa Bay HCCC No. 2 of 2018 and particularly by failing to acknowledge that the appellant was absolved by the said decision of the High Court from any claims arising out of the subject road traffic accident that led to the present suit.
[b] The learned magistrate erred both in fact and in law in limiting himself only to the finding of the High Court in Homa Bay HCCC No. 2 2018 that it was impossible to tell of future matters that may arise out of the subject road traffic accident as opposed to looking at the case wholesomely on its merits and making a sound decision.
[c] The learned magistrate erred in law and fact by basing his entire judgment on the fact that Oyugis SPMCC No. 24 of 2017 was not expressly mentioned as forming part of a series of matters where the appellant was absolved from liability vide Homa Bay HCCC No. 2 of 2018 when in fact the said primary suit arose from the same road traffic accident.
[d] The learned magistrate erred in law and fact in failing to note that the only reason Oyugis SPMCC No. 24 of 2017 was not listed as part of the series where liability of the appellants was successfully repudiated is because the said matter had not been brought to the attention of the appellant at the time Homa Bay HCCC No. 2 of 2018 commenced.
[e] The learned magistrate, in purporting to make an explicit decision relevant to the case, ended up misdirecting himself and contradicting the guiding judgment of the High Court over the same cause of action and ipso facto failed to heed precedent.
[f] The learned magistrate erred in law and fact by failing to appreciate that the judgment sum sought to be enforced totaled Kshs. 4,4337,672/= and therefore exceeds the statutory limit of Kshs. 3,000,000/= as expressly set out in Section 5(iv) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 of the Laws of Kenya and that the issue ought to have been up for determination as submitted by the appellant’s advocates.
[g] The learned magistrate totally disregarded the appellant’s written submissions and did not fully appreciate all the material evidence on record and hence delivered an unconsidered judgment.
[h] The learned magistrate erred in law and fact by failing to appreciate the injustice that would be occasioned on the appellant if the respondent was awarded the judgment sum in Oyugis PMCC No. 24 of 2017 when all matters arising from the same road traffic accident were repudiated through Homa Bay HCCC No. 2 of 2018 .
[i] The learned magistrate erred in law and fact in arriving at a decision that was wholly against the weight of the evidence and the law without any legal and/or evidential justification.
[7] In the premises, the appellant prayed that its appeal be allowed with costs, and that the entire judgment of the lower court be set aside and/or vacated.
[8] The appeal was urged by way of written submissions, pursuant to the directions given herein on 7 th July 2025. To that end, the appellant filed written submissions dated 30 th September 2025 and proposed one issue for determination, namely, whether the appeal is merited. It relied heavily on the decision of the High Court in Homa Bay HCCC No. 2 of 2018 in which its notice to repudiate the insurance contract between him and the judgment debtor in the primary suit was upheld and a declaratory order made in that regard.
[9] The appellant impugned the decision of the lower court for unduly restricting its analysis to the observation by the High Court that it was impossible to tell of future matters that could arise out of the subject road traffic accident. It posited that the learned magistrate abdicated his duty by failing to conduct a holistic and merit-based evaluation of its claim as presented, and thereby fettered his discretion in the matter before him. In the appellant’s view, the primary suit, namely, Oyugis PMCC No. 24 of 2017 was contemplated and falls within the ambit of the judgment of the High Court in Homa Bay HCCC No. 2 of 2018 .
[10] It was further submitted by the appellant that the learned magistrate ought to have gone beyond the question of whether or not Oyugis PMCC No. 24 of 2017 was among the series of matters mentioned in Homa Bay HCCC No. 2 of 2018 to interrogate the substance of the claim, including the question whether the statutory and policy preconditions for liability under Section 10(1) and (2) of the Insurance (Motor Vehicle Third Party Risks) Act, were met. The appellant argued that, in failing to do so, the learned magistrate misapprehended the scope and effect of the declaratory relief granted in Homa Bay HCCC NO. 2 of 2018.
[11] The appellant urged the Court to take into consideration that failure to mention the existence of Oyugis PMCC No. 24 of 2017 at the time of filing Homa Bay HCCC No. 2 of 2018 was not deliberate, but was due to the fact that it was unaware of the suit, having not been served with the requisite notice under Section 10(2) of the Insurance (Motor Vehicle Third Party Risks) Act. It relied on Mvuria Magwabi Chadago v Africa Merchant Assurance Company Limited [2017] eKLR and UAP Insurance Limited v Patrick Charo Chiro , Civil Appeal No. 88 of 2019 to buttress its arguments.
[12] Further to the foregoing, the appellant submitted that in disregarding the declaratory decision of the High Court the learned magistrate ran afoul of the doctrine of stare decisis by reopening an issue already determined by a court of higher jurisdiction. Reliance was placed on the cases of Mwai Kibaki v Daniel Toroitich Arap Moi [2008] 2 KLR (EP) 35 and John Kimathi Marete v Kenya Wildlife Services [2018] KEHC 5753 (KLR) in impugning the decision of the lower court for contradicting the decision of the High Court.
[13] Lastly, the appellant submitted on the provisions of Sections 4 and 5 of the Insurance (Motor Vehicle Third Party Risks) Act and pointed out that the liability of an insurance company cannot exceed the statutory limit of Kshs. 3,000,000/= imposed by Section 5(b)(iv) of the Act. Thus the appellant urged that the decision of the lower court be overturned on this ground as well. It relied on CIC General Insurance Group Ltd v Gerald Ochoki [2020] eKLR , Xplico Insurance Company Ltd v Maosa [2024] eKLR and Justus Mutiga & others v Law Society of Kenya & another, Civil Appeal No. 141 of 2016 and submitted that the lower court was duty bound to determine the extent of its liability in this instance.
[14] On the basis of the foregoing submissions, the appellant urged that its appeal be allowed with costs and the judgment of the lower court set aside in its entirety.
[15] The respondent relied on her written submissions dated 9 th October 2025. She reiterated the factual background of this appeal and underscored her assertion that the judgment in Homa Bay HCCC No. 2 of 2018 delivered on 6 th February 2020 did not affect or touch on her primary case, namely, Oyugis PMCC No. 24 of 2017 ; and therefore it was on that basis that she filed the declaratory suit. She submitted that, under Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, the insurer is under a mandatory duty to first pay the full judgment sum to the third party in satisfaction of any decree passed against its insured and thereafter recover the sums from the insured, if need be.
[16] The respondent submitted on the objective of the Act and relied on African Merchant Assurance Co. Limited v Jane Atieno [2014] eKLR for the proposition that the court’s priority ought to be to ensure the third party is protected. She accordingly urged the Court to find that the lower court properly evaluated the evidence adduced before arriving at its decision. She prayed for the dismissal of the appeal with costs.
[17] This being a first appeal, it is the duty of the Court to re-evaluate the evidence adduced before the lower court with a view of coming to its own findings and conclusions thereon; while giving due consideration for the fact that it did not have the advantage of seeing or hearing the witnesses. This is in line with Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 wherein it was held that:
"...this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect..."
[18] Before the lower court, evidence was called from the respondent who testified before the lower court and adopted her witness statement dated 20 th July 2018. She confirmed that the deceased, Oscar Kasema , was her son; and that he died as a result of injuries sustained in a road traffic accident on 1 st September 2016 involving Motor Vehicles Registration Numbers KCE 761E and KCB 686B. She further confirmed that she filed Oyugis PMCC No. 24 of 2017 which was resolved in her favour. She produced a copy of the judgment dated 21 st March 2018 among other documents to prove her claim. The respondent also made reference to the Homa Bay Suit No. 2 of 2018 between the appellant and its insured, Mohamed Ali Noorein . She produced the ruling and judgment passed in that case as exhibits before the lower court.
[19] The respondent also called the Court Administrator of the High Court at Homa Bay, Irene Okello as PW2. She produced the court file in respect of Homa Bay HCCC No. 2 of 2018 and pointed out that the case was pertinent to Oyugis PMCC Nos 9, 82, 83 of 2017 and 192, 193, 194, 195 of 2016 and not PMCC No. 24 of 2017.
[20] The appellant called its Branch Manager, Dan Kipkurui Kemboi as DW1. He adopted his witness statement dated 30 th March 2023 as his evidence in chief and produced a copy of the judgment delivered in Homa Bay HCCC No. 2 of 2018 and the appellant’s repudiation letter among other documents. DW1 conceded in cross-examination that Oyugis PMCC No. 24 of 2017 was not the subject of the Homa Bay HCCC No. 2 of 2018.
[21] From the foregoing summary of evidence, there is no dispute that a road traffic accident occurred on the 1 st September 2016 involving Motor Vehicles KCE 761L and KCB 686B. It is also not in dispute that the deceased was one of the passengers in motor vehicle registration number KCE 761L or that he died as a result of injuries sustained in the said accident. It is also common ground that Motor Vehicle Registration No. KCE 761L was insured by the appellant, Heritage Insurance Co. Ltd.
[22] As a result of the accident and the ensuing death occasioned thereby, the respondent filed Oyugis PMCC No. 24 of 2017 on behalf of the estate of the deceased, Oscar Kasamba Mmbo . In that suit the respondent claimed general damages for loss occasioned to the estate of the deceased. The lower court settled liability at 80:10:10 in favour of the deceased and awarded his estate Kshs. 5,420,610/= by way of general damages. Costs were thereafter assessed at Kshs. 176,430/=.
[23] Thereafter, the respondent filed Oyugis SPMCC No. 78 of 2018 seeking declaratory orders compelling the appellant to settle the sums due from its insured, in respect of whom liability was apportioned 80% of the decretal sum. As has been indicated above the lower court found merit in the respondent’s suit and granted the declaratory order sought in its judgment dated 9 th October 2023.
[24] Needless to say that where liability is shared, the insurer can only shoulder the burden apportioned to its insured, in this case Mohamed Ali Noorein. In Kenya Airways Limited v Mwaniki Gichohi , Hon. Ringera, J. (as he then was) held that:
“The concept of joint and several liability comprehends one judgment and decree against two or more persons who are liable collectively and individually to the full extent of such decree; however double compensation is not allowed and accordingly whatever portion of the decree is recovered against one of such defendant cannot be recovered from the other defendant(s).”
[25] It is equally true that the liability of an insurer in such circumstances is now circumscribed by law. In this regard Section 5 of the Insurance (Motor Vehicle Third Party Risks) Act provides that:
In order to comply with the requirements of section 4 , the policy of insurance must be a policy which—
(a)is issued by a company which is required under the Insurance Act ( Cap. 487 ) to carry on motor vehicle insurance business; and
(b)insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of, or bodily injury to, any person caused by or arising out of the use of the vehicle on a road:
Provided that a policy in terms of this section shall not be required to cover—
(i) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or
(ii) except in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from the vehicle at the time of the occurrence of the event out of which the claims arose; or
(iii) any contractual liability;
(iv) liability of any sum in excess of three million shillings, arising out of a claim by one person .
[26] This aspect appears not to have been given thought by the learned magistrate and therefore there appears to be no basis for finding that the learned magistrate erred in his judgment. I note though that he did state that the appellant’s liability would be limited to what was apportioned to its insured. At any rate, it would not be obliged to pay more than that which is capped by statute. In Law Society of Kenya v Attorney General & 3 others [2016] eKLR it was pointed out that:
“What the Principal Act has done is cap the amount of money that the insurer pays to the injured person. Nothing in the Principal Act stops a litigant or the injured person from pursuing a claim against the insured individual where an award in excess of the amount recoverable from the insurer is made...It only limits who pays how much by apportioning a maximum of Kshs. 3,000,000/= to be paid by the insurer and the additional if any by the insured.”
[27] That said, the single issue for determination in this appeal is whether the learned magistrate erred in by basing his entire judgment on the fact that Oyugis SPMCC No. 24 of 2017 was not expressly mentioned as forming part of a series of matters where the appellant was absolved from liability vide Homa Bay HCCC No. 2 of 2018.
[28] Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, is explicit that:
“If, after a policy of insurance has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of section 5 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.”
[29] Similarly, in Joseph Mwangi Gitundu v Gateway Insurance Co Ltd [2015] eKLR it was held:
“…under section 10(1) of Cap 405 Laws of Kenya, the insurer has a statutory obligation to pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
The obligation is statutory and a strict one; it cannot be shifted or abrogated by a term in the contract of insurance or in the manner proposed by the Defendant, lest the noble intention of the Act to guarantee compensation of third parties who suffer injuries arising from the use of the insured motor vehicle on the road should be lost. Similarly, if the statutory obligation placed by law on the insurer was to be shifted to the insured as proposed by the Defendant, the purpose for taking out an insurance policy and the compulsion by the Act for such insurance cover to be taken out on vehicles to be used on the roads to cover third party risks under Cap 405 Laws of Kenya will also be defeated.
The only legal way liability and obligation to pay third party claims may be avoided, is by strictly following the prescriptions provided for under section 10 of Cap 405.”
[30] Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act states that:
“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.”
[31] In this instance, the appellant not only issued a Notice of Repudiation, but also filed a declaratory suit, being Homa Bay HCCC No. 2 of 2018 seeking to be absolved from liability for the claims ensuing from the subject accident. In the said suit, the appellant pointed out that at the time of the accident, the subject motor vehicle was being used in contravention of the express terms of the insurance policy contract in that it was being used for hire and reward whereas the policy limited its use for private purposes. The High Court found as a fact that that was the case and ordered that:
“…the plaintiff is not under any obligation to indemnify the defendant against any claim by the direct or indirect victims of the material accidents and having complied with the requirements of section 10(4) of the Insurance (motor vehicles third party risks) Act, it is justly and fairly entitled to judgment against the defendant in terms of prayer (a) of the plaint only.”
[32] The prayer that was declined sought to shield the appellant from similar future claims arising from the accident, such as the impugned judgment. In the circumstances, I am persuaded that, a decision having been made by the High Court faulting the use of the subject motor vehicle for purposes other than those agreed to in their insurance contract, it was not open for the lower court to contradict that position; more so in the absence of an appeal or review thereof. It matters not that the primary suit, namely, Oyugis PMCC No. 24 of 2017 was not mentioned in the High Court suit. It suffices that the suit involved the same motor vehicle and the same accident and the claim was premised on the same insurance policy.
[33] It is a cardinal principle that parties are bound by the terms of their contracts. I therefore find instructive the expressions of Blackburn, J. in Harris vs. Great Western Railway Company [1876] 1 QBD 515 at page 530 that:
"...it is clear law that where there is a writing, into which the terms of any agreement are reduced, the terms are to be regulated by that writing...by assenting to the contract thus reduced to writing, [a party] represents to the other side that he has made himself acquainted with the contents of that writing and assents to them, and so induces the other side to act upon that representation by entering into the contract with him, and is consequently precluded from denying that he did make himself acquainted with those terms..."
[34] Likewise, in Kenyan Alliance Insurance Company Ltd v Naomi Wambui Ngira & Another [2020] KEHC 3540 (KLR) that:
“ In this case, the liability has been expressly excluded by virtue of the aforesaid Section 5(b)(l) of the Act. Should the insurer be obligated to settle any such judgment, this would not only have the effect of ascribing on parties that which they did not contract, but also to find against the provisions of law. The end result would be to confer an unnecessary benefit on an undeserving party while punishing the insurer for that which it did not contract and/or acquiesce to. This Court finds that the requirement that the insurer settles the decretal amount following entry of judgment is only applicable for such judgments involving liability which is required to be covered both under the Act and under the insurance policy.”
[35] There is a second reason why the lower court ought to have aligned itself with the decision of the High Court, namely, the doctrine of stare decisis. In Ernst & Young LLP v capital Markets Authority & another [2017] eKLR, Mativo, J. (as he then was) held:
“… The doctrine of stare decisis is long recognized as a principle of our law. Sir Frederick Pollock, in his first book of jurisprudence, 6 th ed. Page 321:
‘The decisions of an ordinary superior court are binding on all courts of inferior rank within the same jurisdiction, and though not absolutely binding on courts of co-ordinate authority nor on the court itself, will be followed in the absence of strong reason to the contrary’…”
[36] Similarly, in Republic v Ayako (Petition E002 of 2024) [2025] KESC 20 (KLR) (11 April 2025) (Judgment) the Supreme Court held:
This court has underscored the importance, fidelity and centrality of respecting and observing the doctrine of stare decisis . It serves as a reference point, and ensures that there is consistency, certainty and predictability in the administration of the law which in turn, enhances confidence in the justice system. Stare decisis sets the baseline of how people conduct their everyday affairs and how they transact with the State. See Asanyo & 3 Others v Attorney- General , (Petition 7 of 2019) [2020] KESC 62 ( KLR ).
[37] The upshot is that I find merit in the appeal. The same is hereby allowed and the judgment of the lower court dated 9 th October 2023 is hereby set aside and substituted with an order dismissing the declaratory suit.
[38] On costs, although Section 27 provides that costs ought to follow the event, the court retains the discretion to make a determination on costs as the justice of the case may require. The Supreme Court, in the case of Jasbir Singh Rai & 3 others v Tarlochan Singh Rai & 4 others [2014] eKLR, set out the guidelines that a court must consider when exercising its discretion to either award or deny costs. It held:
“[14] So the basic rule on attribution of costs is: costs follow the event. But it is well recognized that this principle is not to be used to penalize the losing party; rather, it is for compensating the successful party for the trouble taken in prosecuting or defending the suit. In Justice Kuloba’s words [Judicial Hints on Civil Procedure, at p.94]:
“[T]he object of ordering a party to pay costs is to reimburse the successful party for amounts expended on the case. It must not be made merely as a penal measure…Costs are a means by which a successful litigant is recouped for expenses to which he has been put in fighting an action.”
[39] Hence, while the law gives the court discretion over the costs associated with all suits, including the power to determine who should bear those costs and to what extent, the Court must evaluate whether the particular circumstances of this case justify awarding costs. The Supreme Court further observed as follows in Jasbir Singh Rai (supra):
“[18] It emerges that the award of costs would normally be guided by the principle that “costs follow the event”: the effect being that the party who calls forth the event by instituting suit, will bear the costs if the suit fails; but if this party shows legitimate occasion, by successful suit, then the defendant or respondent will bear the costs. However, the vital factor in setting the preference, is the judiciously-exercised discretion of the Court, accommodating the special circumstances of the case, while being guided by ends of justice. The claims of the public interest will be a relevant factor, in the exercise of such discretion, as will also be the motivations and conduct of the parties, prior-to, during, and subsequent-to the actual process of litigation…
[22] Although there is eminent good sense in the basic rule of costs – that costs follow the event – it is not an invariable rule and, indeed, the ultimate factor on award or non-award of costs is the judicial discretion. It follows, therefore, that costs do not, in law, constitute an unchanging consequence of legal proceedings – a position well illustrated by the considered opinions of this Court in other cases. The relevant question in this particular matter must be, whether or not the circumstances merit an award of costs to the applicant…”
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