(Being an Appeal from the Ruling of the Magistrates Court at Milimani Commercial Courts by Hon. Rawlings Liluma Musiega delivered on 26th May, 2023 in Milimani Magistrates Courts CMCC No. E830 of 2022)
- The appellant filed this appeal through the memorandum of appeal amended on 4/4/2024 praying for orders that the ruling delivered on 26/5/2023 in Milimani Magistrates Civil Suit No. E830 of 2022 be set aside and the appeal be allowed with costs.
- The impugned ruling allowed an application dated 14/12/2022 by the respondent herein seeking to strike out the appellant’s defence to the respondent’s suit. The respondent had filed suit through a plaint dated 11/2/2022 seeking a declaration that the appellant was the insurer of the owner of motor vehicle registration number KBX 308M and was liable to pay KShs 2,207,244/= to satisfy a judgment obtained by the respondent against the appellant’s insured in Gatundu Magistrates Civil Case No. 16 of 2018. The primary suit was for a claim for compensation for fatal injuries sustained by the deceased Roselyn Khatenje Wakhu when she was involved in an accident with the appellant insured’s motor vehicle registration number KBX 308M.
- In the said ruling the trial court found that the appellant’s defence to the suit raised no triable issues and consequently allowed the application and struck out the defence by the appellant.
- The appellant was dissatisfied with that decision and has filed the present appeal based on three grounds, that the learned trial magistrate erred in law and in fact by:
- striking out the appellant’s defence;
- failing to find that the appellant’s defence had raised triable issues; and
- failing to follow precedent and thereby arriving at an erroneous conclusion in allowing the respondent’s application.
- The appeal was canvassed by way of written submissions. Learned counsels for both parties filed their respective submissions urging their respective clients’ cases.
- This being a first appeal, the duty of the court is to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. In the case of Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 it was held that:
“An appeal to this Court from a trial by the High 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. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally (Abdul Hameed Saif v Ali Mohamed Sholan (1955), 22 E.A.C.A. 270)”.
- I have considered the trial court record, the grounds of appeal as set out in the memorandum, the submissions for and against this appeal and cited cases. The issue for determination is whether the learned trial Magistrate erred in allowing the respondent’s application and striking out the appellant’s defence.
- The power of the court to strike out a pleading is provided for under Order 2 rule 15 of the Civil Procedure Code (CPC) which provides as follows: -
“15(1) At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—
and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”
- The respondent’s application was premised on Rule 15(1)(b), (c) and (d) of the CPC that is, that the defence is scandalous, frivolous or vexatious; or it may prejudice, embarrass or delay the fair trial of the action, or it is otherwise an abuse of the process of the court.
- In the case of DT Dobie & Co. (Kenya) Limited v Muchina & Another [1982] KLR 1 stated regarding the principles of striking out pleadings that:
'No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action, and is so weak as to be beyond redemption and incurable by amendment. If a suit shows a mere semblance of a cause of action, provided it can be injected with real life by amendments, it ought to be allowed to go forward for a Court of justice ought not to act in darkness without the full facts of a case before it'.
- The Court of Appeal in the same case stated further that a triable issue is not necessarily one that the defendant would ultimately succeed on and need only be bonafide.
- The learned trial magistrate, after setting out the provisions of section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act (cap. 405) Laws of Kenya and upon considering the defence filed by the appellant stated that in order for the same to be sustainable, the defendant (appellant herein) had to demonstrate that there was a stay of execution of the judgment in the primary suit, that a statutory notice was not served and there is a decree entitling the defendant to avoid liability under the policy. He went further to find that the defendant/respondent (or appellant herein) had merely stated in its replying affidavit that it was under no obligation to satisfy the judgment in Gatundu RMCC No. 16 of 2018 and that the respondent did not question the service of the statutory notice by the plaintiff/applicant (or respondent herein). He concluded by observing that he had carefully considered the averments in the defence and was persuaded that it did not raise triable issues.
- I have considered the statement of defence dated 6/6/2022 filed by the appellant to the respondent’s suit and I note that the appellant raised two issues. First it denied that it had insured the motor vehicle registration number KBX 308M and so there was no contract of indemnity between it and the alleged insured George Muthini Muthauvyu. Second, that it had not been served with a statutory notice. It therefore averred that it was not liable to satisfy the judgment in the primary suit.
- Other than stating that he had carefully considered the averments in the defence and was persuaded that it did not raise triable issues, the learned trial magistrate does not lift out these two issues from the statement of defence, consider them and analyse them in relation to the suit filed by the respondent and therefore dismiss the defence as being scandalous, frivolous or vexatious; or that it may prejudice, embarrass or delay the fair trial of the action, or that it is otherwise an abuse of the process of the court as provided for under Order 2 Rule 15(1)(b), (c), and (d).
- It was imperative for the respondent to have given notice pursuant to S.10 of Cap 405. The appellant denied service. However, it is not difficult to dismiss the plea of not being served with a statutory notice because the respondent annexed a copy of the same dated 19/5/2017 to its supporting affidavit bearing the rubber stamp of the appellant dated 24/5/2017. It would be difficult for the appellant to extricate itself from such evidence and so a defence based on the same would be frivolous, vexatious and only meant to delay the trial of the action. So, although the learned trial magistrate did not analyse that bit of the defence and arrive at his finding, it was available to him and so it would lead to the finding that on the issue of lack of service of the statutory notice the defence had no merit.
- The other defence raised by the appellant in the declaratory suit in which its defence was struck out was, with regard to insurance policy for the subject motor vehicle. Section 10(4) of the Act provides as that:
“10 (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.”
- From the provisions of this section, it follows that, that defence of being entitled to avoid satisfying the claim in the declaratory suit would only be available to the appellant if it was raised in good time by way of an objection to the claim. There is no indication that any objection was raised by the appellant herein after it received the statutory notice. In considering the import of this provision of the law, the High Court in the case of Real Insurance Co. Limited v Wanyeki (Civil Appeal 424 of 2019) [2023] KEHC 1339 (KLR) (Civ) (24 February 2023) (Judgment) observed that “this may be one of the purposes contemplated under section 10 of the Act, precisely, to inform the victim (by way of objection) immediately, or at the very latest, within three months, that it would be objecting to the claim.” I agree with that holding so that where the objection is not raised in time, then the defence is not available to the insurer. In APA Insurance Limited v Theodora Atieno Okal [2012] eKLR the High Court on appeal in a matter similar to the present one held thus regarding the defence of avoidance to satisfy the decree:
“I further see no reasonable ground to interfere with the magistrate’s other finding, that the Appellant, having been served with a Notice under Section 10(4) of Cap 405, but having failed to file a relevant objection as prescribed therein, was thereafter, statutorily barred from raising the same objection whether under the Act or thereafter, in court in this suit. Indeed, it is my further view and finding, that where the Insurance Company has failed to file an objection within three months after being served with notice to satisfy such a decree it cannot have the benefit of the invisaged declaration to avoid the liability. It cannot later also have a viable defence even if it obtained the declaration to avoid, under Section 10(4) of the said Act unless it had served the plaintiff with a Notice of disclaimer with reasons for the disclaimer within 14 days of service of the summons to enter appearance to a declaratory suit filed by the insured to recover on a decree already obtained in an original suit as aforestated.
… Not only had the Appellant, APA Insurance Ltd, failed to file the Notice of Objection to avoid satisfying the decree notified on it by the Respondent, but it had also failed to obtain the declaration to avoid to pay under Section 10(4) of Cap 405…”
- I am persuaded that the reasoning in the above case is the correct evaluation of the law on the defence available to an insurance company that wishes to avoid satisfying a declaratory judgment obtained against it. I accordingly follow it and find that the defence of avoidance is equally not available to the appellant. I find that the defence raised by the appellant to the suit was without merit and its continued sustenance on record may prejudice, embarrass or delay the fair trial of the suit by the respondent.
- Having considered this appeal, I am satisfied that the learned trial Magistrate was correct in his findings that there was no triable issue raised in the defence even though he did not indicate his analysis of the evidence in arriving at the decision.
- Consequently, I find that this appeal is without merit and the same is dismissed with costs to the respondent.
Orders accordingly.
Written, dated and signed at Milimani this 24th day of July, 2024.
Delivered on the Virtual platform, Teams this 23rd day of July, 2024.
In the presence of:
Nyakera holding brief for Kemunto for the appellant.
Kamau for the Respondent.
Etropia: Court assistant