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(Being an Appeal from the judgment and decree of the Magistrates Court at Milimani Commercial Courts by Hon. A. Nyoike (SPM) delivered on 24th February 2025 in Milimani Magistrates Courts COMMSU No. E273 of 2024)
1. The appellant filed this appeal through the memorandum dated 12th March 2025 praying for orders that the judgment delivered on 24th February 2025 dismissing the appellant’s suit and the subsequent decree in Milimani Magistrates Court Commercial Suit No. E273 of 2024 be set aside and judgment be entered for the appellant as prayed in the plaint.
2. The impugned judgment dismissed the appellant’s suit against the respondent seeking a declaration that the respondent was bound to satisfy the decretal sum of KShs 8,275,237.20 made up of the judgment sum of KShs 3,427,000/=, costs of KShs 349,011.70, and accrued interest of KShs 4,499,225.50 obtained in a judgment in Nakuru HCCC No. 198 of 2006 by the appellant against the respondent’s insured Serbena Supply & Contractors aka Berjan Suppliers Limited and its driver Francis Kimani Muni.
3. It was the appellant’s case, through his plaint dated 20th March 2024 and witness statement dated 20th March 2024 that he was a mechanic employed by the respondent’s said insured. The appellant stated in his evidence by way of witness statement dated 20th March 2024 that he was employed as a mechanic to repair and travel with the insured’s motor vehicle in case of breakdown. That while travelling in the insured’s motor vehicle registration number KAN 160C M/Benz trailer on 25th January 2005 along Naivasha-Mai Mahiu road the same was involved in an accident and he sustained serious injuries, loss and damage.
4. The respondent in its statement of defence dated 26th April 2024 and witness statement of Mercy M. Maweu, its legal officer conceded that it was the insurer of motor vehicle registration number KAN 160C M/Benz trailer owned by Berjan Suppliers Ltd, the insured and which was being driven by its authorized driver Francis Kimani Muni. It’s contention however was that the appellant being an employee of the respondent’s insured and was in the ordinary course of his employment when the accident occurred, the respondent was not liable to take up the claim as section 5(b)(i) of the Insurance (Motor Vehicle Third Party Risks) Act provides that the policy under the section does not cover death or injury suffered by an employee.
5. The case proceeded by way of the trial court considering the witness statements and documents filed by the parties and submissions without parties testifying.
6. The trial court dismissed the suit finding that at the time of the accident, the appellant, being an employee of the insured, was not a third party covered under the provisions of Cap. 405 Laws of Kenya and thus was not entitled to compensation by the respondent herein. In other words, the trial court found that the respondent was not bound to indemnify the insured against the injury sustained by the appellant. The trial court went further to advise that in its view, the right cause of action would be under the work injury claim and not Insurance Third Party Risks claims.
7. The appellant was dissatisfied with the decision of the trial court and now appeals to this court.
8. The grounds of appeal are that:
a. The learned trial magistrate erred in law and in fact in evaluation of the evidence before her and in reaching a wrong conclusion contrary to law.
b. The learned trial magistrate erred in law and in fact in dismissing the appellant’s suit.
c. The learned trial magistrate erred in law and in fact by failing to consider and evaluate the appellant’s agreed issues and submissions and misapprehended the provisions of section 5(b)(ii) of Cap. 405 Laws of Kenya by failing to differentiate the different categories of employees under the said section as set out by the Court of Appeal in the case of Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) and not appreciating that the appellant was a third party pursuant to the said provisions of the law as he was in a category that ought to be covered pursuant to that section of the law.
9. This being a first appeal, the duty of the court is to consider re-evaluate and re-analyze 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)”.
10. The appeal was disposed of by way of written submissions filed by learned counsels for both parties.
11. The appellant filed submissions dated 19th May 2025 and further submissions dated 11th September 2025. The appellant raised one issue for determination which it split into several issues but whose gist is that the learned trial magistrate misapprehended the import of section 5(b)(ii) of the Insurance (Motor Vehicle) Third Party Risks Act (Cap. 405) Laws of Kenya. Further that the learned trial magistrate failed to apply her mind to the decision of the Court of Appeal in Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) but instead relied on decisions of the High Court. Further that following the above decision the appellant is in the category of employees who are covered under section 5(b)(ii) of the said Act. The submissions repeat the same issue over and over again.
12. The case of Francis Munyua Wanyoike v General Accident Insurance Co. Ltd [2007] KEHC 2967 (KLR) cited by learned counsel for the appellant is not useful in this case because the circumstances are different. In that case the High Court found that the appellant was an independent contractor, a mechanic, who, by his own admission, worked in a juakali garage. He never pleaded that he was traveling in the insured motor vehicle pursuant to an employment contract, and his own evidence was clear that he took a “lift” to go pick up his money. The High Court held that:
“By no stretch of imagination can that relationship be construed as an “employer – employee” or a “contract of employment” relationship. In my view he was not covered by the Respondent’s policy, and there was no obligation on the Respondent to so cover him.”
13. Similarly, the case of Corporate Insurance Company Limited v Julius Mwangi Irungu [2020] KEHC 266 (KLR) also cited by learned counsel for the appellant is not of much help as the facts in that case are distinguishable from the present case. The High Court found that the insurance company as plaintiff in that case seeking a declaration that as the insurer of the defendant’s motor vehicle it was not bound to honour the insurance policy as the policy cover did not cover Third party risks involving passengers aboard the subject motor vehicle under the policy, as the vehicle was to be used as a private vehicle, for carrying the insured’s own goods in connection with his businesses without reward or hire. But that the plaintiff having failed to establish by credible cogent and sufficient evidence that the two deceased passengers were not in the vehicle pursuant to a contract of employment with the defendant it was not entitled to repudiate the policy.
14. The respondent on its part submits that the issue for determination is whether the appellant who was an employee of the respondent’s insured can legally claim for damages from the respondent insurer under the Act.
15. The respondent submits that it is not liable to take up the claim under section 5(b)(i) of the Act as the section does not cover death or injuries suffered by an employee in the course of his employment. Yet, the respondent also submits that the question of whether the appellant was in the ordinary course of his employment is not relevant in determining the respondent’s liability under section 5(b)(i) and (ii) of the Act. The respondent submits that section 5(b)(i) excludes certain employees despite them being in the course of employment.
16. 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 finding that the respondent was not liable to satisfy the claim in the primary suit.
17. The application of section 5(b)(i) and (ii) of the Insurance (Motor Vehicle) Third Party Risks Act (Cap. 405) Laws of Kenya is sometimes problematic. The said section provides as follows:
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.
18. Section 4 referred to in the above section requires that motor vehicles be insured by the user against third party risks.
19. The Court of Appeal pointed out the problematic application of section 5(b)(i) and (ii) of the Act above in the case of Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) when it advised that it was perhaps time that Parliament re-looked at the language of section 5 of the Act to rid it of any ambiguity and of unhappy wording. The Court of Appeal gave what I understand to be the definitive explanation of this section of the law thus:
“The learned trial judge took the position, correctly in our view, that sections 5(b)(i) and 5(b)(ii) of the Act recognized two categories of employees. The first category of employees being those under sections 5(b)(i) of the Act who are not required to be covered and the second category, of employees under sections 5(b)(ii) of the Act who are required to be covered. The first category of employees under section 5(b)(i) of the Act “would be employees’ nature of whose work is not connected to the motor vehicle causing the accident” while the second category under Section5(b)(ii) “includes the driver and/or turn boy, whose terms of employment relate to the motor vehicle.”
We think the learned trial judge was right in arriving at the decision that the appellant was covered under sections 5(b)(ii) of the Act. The appellant in our view, is a third party by virtue of the fact that he was being carried in the subject motor vehicle by virtue of his contract of employment. According to McGillivray on Insurance Law at paragraph 2069;
“a person is carried “pursuance of” a contract of employment if it is a term that he shall be carried and; A person is carried “by reason of” a contract of employment if, for instance, he is directed by his employee to travel in a vehicle, and the employer is able to give that order because of the relationship of employer and employee.”
In construing provisions similar to our own the court in Tan Ken Hong & another Vs. New India Assurance [1937] 3 ALL ER 79, held;
“The words “by reason of...a contract of employment” in the exception had to be read in conjunction with the words “in pursuance of” and so were to be construed as meaning that the passenger was being carried because his contract of employment expressly or impliedly required him, or gave him the right, to travel as a passenger in the motor vehicle concerned. Whether a passenger was being carried by reason or in pursuance of a contract of employment within the exception depended solely on the terms of his employment.”
This Court with reference to section 5 of the Act in the case of M’Mairanyi and others vs. Blue Shield Insurance Co Ltd stated:
“It is a section that is perhaps unhappily worded and which has over time generated differing judicial interpretation. On our part, we think the meaning conveyed is fairly plain. The latter part of proviso (ii) of the section makes it clear that compulsory insurance is not required in respect of risks to passengers. The first part however, which could well have been a separate provision, exempts “passengers carried for hire or reward or by reason of or in pursuance of a contract of employment.” That is to say, for that category of passengers it is compulsory.”
20. The facts of the case leading to this appeal are not disputed. The appellant was employed as a mechanic by the respondent’s insured Berjan Suppliers Ltd. On 25th January 2005, the appellant was travelling in his employer’s motor vehicle registration number KAN 160C Mercedes Benz trailer driven by Berjan’s authorized driver Francis Kimani Muni when an accident occurred causing the appellant to suffer serious injuries. The appellant sued Berjan and the driver in Nakuru High Court Civil Case No. 198 of 2006 and obtained judgment against them. He thereafter filed suit against the respondent herein in the Magistrate’s Court at Milimani Commercial Court Civil Suit No. E273 of 2024 for a declaration that the respondent was liable to settle the decretal sum arising out of the primary suit.
21. In arriving at the decision the trial court relied on the following cases:
a. Kenya Orient Insurance Limited v Okuku [2023] KEHC 27235 (KLR). In this case trial court entered judgement for the respondent Josephat Otieno Okuku for a declaration that the appellant, Kenya Orient Insurance Ltd was bound to indemnify the respondent in the sum of Kshs. 1,649,697 as per the Judgement in PMCC No. 1148 of 2017. The High Court on appeal found that it was not in dispute that the respondent who was at the time of the accident in the course of duty with his employer and travelling in the appellant’s insured’s motor vehicle registration number KAL 732X canter and employed as a loader tasked to load and offload goods from the motor vehicle and therefore was not such a person who could benefit from the cover entered into between the owner of the accident motor vehicle and the appellant.
b. Ngugi v Gathu [2024] KEHC 9442 (KLR) where the High Court on appeal found that under the provisions of section 5(b)(i) and (ii) above, the respondent, having been a driver and/or employee of the appellant, is not a third party within the meaning of the Insurance (Motor Vehicle Third Party Risks) Act and cannot recover from the insurers of the Appellant.
22. I note that in the first case of Okuku, the case of Mugo v. Kenya Alliance Insurance Company was not brought to the attention of the High Court. In the second case of Ngugi v Gathu, the case of Maria Ciabaitaru M’mairanyi & Others v. Blue Shield Insurance Company Limited Civil Appeal No. 101 of 2000 [2005] 1 EA 280 was cited by the High Court but, it is my view that, like in the Okuku case, the court did not consider the subtle issue that was stated by the Court of Appeal in the Mugo case, that is:
“… that sections 5(b)(i) and 5(b)(ii) of the Act recognized two categories of employees. The first category of employees being those under sections 5(b)(i) of the Act who are not required to be covered and the second category, of employees under sections 5(b)(ii) of the Act who are required to be covered. The first category of employees under section 5(b)(i) of the Act “would be employees’ nature of whose work is not connected to the motor vehicle causing the accident” while the second category under Section 5(b)(ii) “includes the driver and/or turn boy, whose terms of employment relate to the motor vehicle.”
23. The subtle issue for me here is under what category of employee is the claimant travelling in the vehicle as a passenger, that is, is the employee’s nature of work connected to the accident motor vehicle, for instance the driver, turnboy, loader or mechanic, like in the present case, in which case he would be covered by the insurance or an employee who the employer has directed to board the vehicle only by virtue of being an employee.
24. The respondent submits that the test of whether an employee falls in either sections 5(b)(i) or (ii) was set out by the High Court in the case of James Muriithi Mugo v Kenyan Alliance Insurance Company Limited [2010] KEHC 1637 (KLR).
25. According to learned counsel, it is clear from that case that the test is whether the employee’s terms of employment specifically relate to the subject vehicle, at the time of the accident, he was performing his employer’s duties in the vehicle. I agree with learned counsel that this is the way I understand the cited decision. However, I do not agree with him in his next line of submission and subsequent ones that the appellant has not tabled any evidence to prove that he had met that test that he was assigned to perform his employee duties aboard the vehicle on the date of the accident. In fact the appellant stated quite clearly in his witness statement that he was employed as a mechanic to repair and travel with the insured’s motor vehicle in case of breakdown. That while travelling in the insured’s motor vehicle registration number KAN 160C M/Benz trailer on 25th January 2005 along Naivasha-Mai Mahiu road the same was involved in an accident and he sustained serious injuries, loss and damage. That evidence was not challenged at all by the respondent’s evidence. Instead, the respondent has through the submissions purported to explain how its insured was operating its business of transport fleet management and even gone ahead to speculate that it is very much likely that since he knew the drivers and turnboys of the vehicles, on the day of the accident he requested for a lift from the driver and he was not in any way performing his duties. Submissions cannot take the place of evidence. The respondent argues that the appellant failed to prove that he was injured in the course of his duties as he did not produce any evidence showing that he was assigned to the vehicle to do repairs or maintenance on that particular date. That is stretching the matter too far. I find that the appellant’s evidence on this issue was not challenged.
26. The respondent does not seem to be sure on which of the subsections 5(b)(i) or 5(b)(ii) its wishes to hinge its case as its submissions oscillate between the subsections.
27. I find that from the evidence on record, the appellant, as a mechanic for the said vehicle, falls under section 5(b)(ii) and therefore, as held by the Court of Appeal in the Mugo case, he was covered under the insurance and the respondent herein was liable to satisfy the claim in the primary suit. I do not accept the respondent’s contention that the appellant falls under section 5(b)(i) of the Act.
28. On the issue of the application of section 5(b)(iv) of the Act to the facts of the present case, I am inclined to agree with learned counsel for the appellant that the same cannot be considered in this appeal because it was not an issue before the trial court.
29. Having considered this appeal, I find that the learned trial magistrate erred in dismissing the suit by the appellant upon her finding that the appellant was not liable to satisfy the decretal sum in the primary suit. The judgment is set aside and substituted with an order allowing the appellant’s claim before the trial court in its entirety.
30. Consequently, I find that this appeal has merit and the same is allowed with costs to the appellant.
Orders accordingly.
Written, dated and signed this 1st day of December, 2025.
ANDAYI W. F.
JUDGE
Delivered on the Virtual platform, Teams this 1st day of December, 2025.
In the presence of:
Obaga (Ms) for the Appellant.
Tambo (Ms) for the Respondent.
Ummu h/b for Amina: Court assistant
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(Being an Appeal from the judgment and decree of the Magistrates Court at Milimani Commercial Courts by Hon. A. Nyoike (SPM) delivered on 24th February 2025 in Milimani Magistrates Courts COMMSU No. E273 of 2024)
1. The appellant filed this appeal through the memorandum dated 12th March 2025 praying for orders that the judgment delivered on 24th February 2025 dismissing the appellant’s suit and the subsequent decree in Milimani Magistrates Court Commercial Suit No. E273 of 2024 be set aside and judgment be entered for the appellant as prayed in the plaint.
2. The impugned judgment dismissed the appellant’s suit against the respondent seeking a declaration that the respondent was bound to satisfy the decretal sum of KShs 8,275,237.20 made up of the judgment sum of KShs 3,427,000/=, costs of KShs 349,011.70, and accrued interest of KShs 4,499,225.50 obtained in a judgment in Nakuru HCCC No. 198 of 2006 by the appellant against the respondent’s insured Serbena Supply & Contractors aka Berjan Suppliers Limited and its driver Francis Kimani Muni.
3. It was the appellant’s case, through his plaint dated 20th March 2024 and witness statement dated 20th March 2024 that he was a mechanic employed by the respondent’s said insured. The appellant stated in his evidence by way of witness statement dated 20th March 2024 that he was employed as a mechanic to repair and travel with the insured’s motor vehicle in case of breakdown. That while travelling in the insured’s motor vehicle registration number KAN 160C M/Benz trailer on 25th January 2005 along Naivasha-Mai Mahiu road the same was involved in an accident and he sustained serious injuries, loss and damage.
4. The respondent in its statement of defence dated 26th April 2024 and witness statement of Mercy M. Maweu, its legal officer conceded that it was the insurer of motor vehicle registration number KAN 160C M/Benz trailer owned by Berjan Suppliers Ltd, the insured and which was being driven by its authorized driver Francis Kimani Muni. It’s contention however was that the appellant being an employee of the respondent’s insured and was in the ordinary course of his employment when the accident occurred, the respondent was not liable to take up the claim as section 5(b)(i) of the Insurance (Motor Vehicle Third Party Risks) Act provides that the policy under the section does not cover death or injury suffered by an employee.
5. The case proceeded by way of the trial court considering the witness statements and documents filed by the parties and submissions without parties testifying.
6. The trial court dismissed the suit finding that at the time of the accident, the appellant, being an employee of the insured, was not a third party covered under the provisions of Cap. 405 Laws of Kenya and thus was not entitled to compensation by the respondent herein. In other words, the trial court found that the respondent was not bound to indemnify the insured against the injury sustained by the appellant. The trial court went further to advise that in its view, the right cause of action would be under the work injury claim and not Insurance Third Party Risks claims.
7. The appellant was dissatisfied with the decision of the trial court and now appeals to this court.
8. The grounds of appeal are that:
a. The learned trial magistrate erred in law and in fact in evaluation of the evidence before her and in reaching a wrong conclusion contrary to law.
b. The learned trial magistrate erred in law and in fact in dismissing the appellant’s suit.
c. The learned trial magistrate erred in law and in fact by failing to consider and evaluate the appellant’s agreed issues and submissions and misapprehended the provisions of section 5(b)(ii) of Cap. 405 Laws of Kenya by failing to differentiate the different categories of employees under the said section as set out by the Court of Appeal in the case of Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) and not appreciating that the appellant was a third party pursuant to the said provisions of the law as he was in a category that ought to be covered pursuant to that section of the law.
9. This being a first appeal, the duty of the court is to consider re-evaluate and re-analyze 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)”.
10. The appeal was disposed of by way of written submissions filed by learned counsels for both parties.
11. The appellant filed submissions dated 19th May 2025 and further submissions dated 11th September 2025. The appellant raised one issue for determination which it split into several issues but whose gist is that the learned trial magistrate misapprehended the import of section 5(b)(ii) of the Insurance (Motor Vehicle) Third Party Risks Act (Cap. 405) Laws of Kenya. Further that the learned trial magistrate failed to apply her mind to the decision of the Court of Appeal in Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) but instead relied on decisions of the High Court. Further that following the above decision the appellant is in the category of employees who are covered under section 5(b)(ii) of the said Act. The submissions repeat the same issue over and over again.
12. The case of Francis Munyua Wanyoike v General Accident Insurance Co. Ltd [2007] KEHC 2967 (KLR) cited by learned counsel for the appellant is not useful in this case because the circumstances are different. In that case the High Court found that the appellant was an independent contractor, a mechanic, who, by his own admission, worked in a juakali garage. He never pleaded that he was traveling in the insured motor vehicle pursuant to an employment contract, and his own evidence was clear that he took a “lift” to go pick up his money. The High Court held that:
“By no stretch of imagination can that relationship be construed as an “employer – employee” or a “contract of employment” relationship. In my view he was not covered by the Respondent’s policy, and there was no obligation on the Respondent to so cover him.”
13. Similarly, the case of Corporate Insurance Company Limited v Julius Mwangi Irungu [2020] KEHC 266 (KLR) also cited by learned counsel for the appellant is not of much help as the facts in that case are distinguishable from the present case. The High Court found that the insurance company as plaintiff in that case seeking a declaration that as the insurer of the defendant’s motor vehicle it was not bound to honour the insurance policy as the policy cover did not cover Third party risks involving passengers aboard the subject motor vehicle under the policy, as the vehicle was to be used as a private vehicle, for carrying the insured’s own goods in connection with his businesses without reward or hire. But that the plaintiff having failed to establish by credible cogent and sufficient evidence that the two deceased passengers were not in the vehicle pursuant to a contract of employment with the defendant it was not entitled to repudiate the policy.
14. The respondent on its part submits that the issue for determination is whether the appellant who was an employee of the respondent’s insured can legally claim for damages from the respondent insurer under the Act.
15. The respondent submits that it is not liable to take up the claim under section 5(b)(i) of the Act as the section does not cover death or injuries suffered by an employee in the course of his employment. Yet, the respondent also submits that the question of whether the appellant was in the ordinary course of his employment is not relevant in determining the respondent’s liability under section 5(b)(i) and (ii) of the Act. The respondent submits that section 5(b)(i) excludes certain employees despite them being in the course of employment.
16. 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 finding that the respondent was not liable to satisfy the claim in the primary suit.
17. The application of section 5(b)(i) and (ii) of the Insurance (Motor Vehicle) Third Party Risks Act (Cap. 405) Laws of Kenya is sometimes problematic. The said section provides as follows:
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.
18. Section 4 referred to in the above section requires that motor vehicles be insured by the user against third party risks.
19. The Court of Appeal pointed out the problematic application of section 5(b)(i) and (ii) of the Act above in the case of Mugo v Kenya Alliance Insurance Co. Ltd [2013] KECA 548 (KLR) when it advised that it was perhaps time that Parliament re-looked at the language of section 5 of the Act to rid it of any ambiguity and of unhappy wording. The Court of Appeal gave what I understand to be the definitive explanation of this section of the law thus:
“The learned trial judge took the position, correctly in our view, that sections 5(b)(i) and 5(b)(ii) of the Act recognized two categories of employees. The first category of employees being those under sections 5(b)(i) of the Act who are not required to be covered and the second category, of employees under sections 5(b)(ii) of the Act who are required to be covered. The first category of employees under section 5(b)(i) of the Act “would be employees’ nature of whose work is not connected to the motor vehicle causing the accident” while the second category under Section5(b)(ii) “includes the driver and/or turn boy, whose terms of employment relate to the motor vehicle.”
We think the learned trial judge was right in arriving at the decision that the appellant was covered under sections 5(b)(ii) of the Act. The appellant in our view, is a third party by virtue of the fact that he was being carried in the subject motor vehicle by virtue of his contract of employment. According to McGillivray on Insurance Law at paragraph 2069;
“a person is carried “pursuance of” a contract of employment if it is a term that he shall be carried and; A person is carried “by reason of” a contract of employment if, for instance, he is directed by his employee to travel in a vehicle, and the employer is able to give that order because of the relationship of employer and employee.”
In construing provisions similar to our own the court in Tan Ken Hong & another Vs. New India Assurance [1937] 3 ALL ER 79, held;
“The words “by reason of...a contract of employment” in the exception had to be read in conjunction with the words “in pursuance of” and so were to be construed as meaning that the passenger was being carried because his contract of employment expressly or impliedly required him, or gave him the right, to travel as a passenger in the motor vehicle concerned. Whether a passenger was being carried by reason or in pursuance of a contract of employment within the exception depended solely on the terms of his employment.”
This Court with reference to section 5 of the Act in the case of M’Mairanyi and others vs. Blue Shield Insurance Co Ltd stated:
“It is a section that is perhaps unhappily worded and which has over time generated differing judicial interpretation. On our part, we think the meaning conveyed is fairly plain. The latter part of proviso (ii) of the section makes it clear that compulsory insurance is not required in respect of risks to passengers. The first part however, which could well have been a separate provision, exempts “passengers carried for hire or reward or by reason of or in pursuance of a contract of employment.” That is to say, for that category of passengers it is compulsory.”
20. The facts of the case leading to this appeal are not disputed. The appellant was employed as a mechanic by the respondent’s insured Berjan Suppliers Ltd. On 25th January 2005, the appellant was travelling in his employer’s motor vehicle registration number KAN 160C Mercedes Benz trailer driven by Berjan’s authorized driver Francis Kimani Muni when an accident occurred causing the appellant to suffer serious injuries. The appellant sued Berjan and the driver in Nakuru High Court Civil Case No. 198 of 2006 and obtained judgment against them. He thereafter filed suit against the respondent herein in the Magistrate’s Court at Milimani Commercial Court Civil Suit No. E273 of 2024 for a declaration that the respondent was liable to settle the decretal sum arising out of the primary suit.
21. In arriving at the decision the trial court relied on the following cases:
a. Kenya Orient Insurance Limited v Okuku [2023] KEHC 27235 (KLR). In this case trial court entered judgement for the respondent Josephat Otieno Okuku for a declaration that the appellant, Kenya Orient Insurance Ltd was bound to indemnify the respondent in the sum of Kshs. 1,649,697 as per the Judgement in PMCC No. 1148 of 2017. The High Court on appeal found that it was not in dispute that the respondent who was at the time of the accident in the course of duty with his employer and travelling in the appellant’s insured’s motor vehicle registration number KAL 732X canter and employed as a loader tasked to load and offload goods from the motor vehicle and therefore was not such a person who could benefit from the cover entered into between the owner of the accident motor vehicle and the appellant.
b. Ngugi v Gathu [2024] KEHC 9442 (KLR) where the High Court on appeal found that under the provisions of section 5(b)(i) and (ii) above, the respondent, having been a driver and/or employee of the appellant, is not a third party within the meaning of the Insurance (Motor Vehicle Third Party Risks) Act and cannot recover from the insurers of the Appellant.
22. I note that in the first case of Okuku, the case of Mugo v. Kenya Alliance Insurance Company was not brought to the attention of the High Court. In the second case of Ngugi v Gathu, the case of Maria Ciabaitaru M’mairanyi & Others v. Blue Shield Insurance Company Limited Civil Appeal No. 101 of 2000 [2005] 1 EA 280 was cited by the High Court but, it is my view that, like in the Okuku case, the court did not consider the subtle issue that was stated by the Court of Appeal in the Mugo case, that is:
“… that sections 5(b)(i) and 5(b)(ii) of the Act recognized two categories of employees. The first category of employees being those under sections 5(b)(i) of the Act who are not required to be covered and the second category, of employees under sections 5(b)(ii) of the Act who are required to be covered. The first category of employees under section 5(b)(i) of the Act “would be employees’ nature of whose work is not connected to the motor vehicle causing the accident” while the second category under Section 5(b)(ii) “includes the driver and/or turn boy, whose terms of employment relate to the motor vehicle.”
23. The subtle issue for me here is under what category of employee is the claimant travelling in the vehicle as a passenger, that is, is the employee’s nature of work connected to the accident motor vehicle, for instance the driver, turnboy, loader or mechanic, like in the present case, in which case he would be covered by the insurance or an employee who the employer has directed to board the vehicle only by virtue of being an employee.
24. The respondent submits that the test of whether an employee falls in either sections 5(b)(i) or (ii) was set out by the High Court in the case of James Muriithi Mugo v Kenyan Alliance Insurance Company Limited [2010] KEHC 1637 (KLR).
25. According to learned counsel, it is clear from that case that the test is whether the employee’s terms of employment specifically relate to the subject vehicle, at the time of the accident, he was performing his employer’s duties in the vehicle. I agree with learned counsel that this is the way I understand the cited decision. However, I do not agree with him in his next line of submission and subsequent ones that the appellant has not tabled any evidence to prove that he had met that test that he was assigned to perform his employee duties aboard the vehicle on the date of the accident. In fact the appellant stated quite clearly in his witness statement that he was employed as a mechanic to repair and travel with the insured’s motor vehicle in case of breakdown. That while travelling in the insured’s motor vehicle registration number KAN 160C M/Benz trailer on 25th January 2005 along Naivasha-Mai Mahiu road the same was involved in an accident and he sustained serious injuries, loss and damage. That evidence was not challenged at all by the respondent’s evidence. Instead, the respondent has through the submissions purported to explain how its insured was operating its business of transport fleet management and even gone ahead to speculate that it is very much likely that since he knew the drivers and turnboys of the vehicles, on the day of the accident he requested for a lift from the driver and he was not in any way performing his duties. Submissions cannot take the place of evidence. The respondent argues that the appellant failed to prove that he was injured in the course of his duties as he did not produce any evidence showing that he was assigned to the vehicle to do repairs or maintenance on that particular date. That is stretching the matter too far. I find that the appellant’s evidence on this issue was not challenged.
26. The respondent does not seem to be sure on which of the subsections 5(b)(i) or 5(b)(ii) its wishes to hinge its case as its submissions oscillate between the subsections.
27. I find that from the evidence on record, the appellant, as a mechanic for the said vehicle, falls under section 5(b)(ii) and therefore, as held by the Court of Appeal in the Mugo case, he was covered under the insurance and the respondent herein was liable to satisfy the claim in the primary suit. I do not accept the respondent’s contention that the appellant falls under section 5(b)(i) of the Act.
28. On the issue of the application of section 5(b)(iv) of the Act to the facts of the present case, I am inclined to agree with learned counsel for the appellant that the same cannot be considered in this appeal because it was not an issue before the trial court.
29. Having considered this appeal, I find that the learned trial magistrate erred in dismissing the suit by the appellant upon her finding that the appellant was not liable to satisfy the decretal sum in the primary suit. The judgment is set aside and substituted with an order allowing the appellant’s claim before the trial court in its entirety.
30. Consequently, I find that this appeal has merit and the same is allowed with costs to the appellant.
Orders accordingly.
Written, dated and signed this 1st day of December, 2025.
ANDAYI W. F.
JUDGE
Delivered on the Virtual platform, Teams this 1st day of December, 2025.
In the presence of:
Obaga (Ms) for the Appellant.
Tambo (Ms) for the Respondent.
Ummu h/b for Amina: Court assistant
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