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Court of AppealAllowedCivil Appeal 216 of 1996· [1997] KECA 70 (KLR)

PROVINCIAL INSURANCE COMPANY OF EAST AFRICA LIMITED now known as UAP PROVINCIAL INSURANCE COMPANY LIMITED v LENNY M. KIVUTI [1997] KECA 70 (KLR)

Court of Appeal of Kenya
11 July 1997
RKR. O. KwachPhilip Kiptoo TunoiP. K. TunoiASA. B. Shah
1,162 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that if a defendant raises even one genuine triable issue, they cannot be denied the right to a full trial.

What this practically means

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Executive summary

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The insurer appealed against a summary judgment of the High Court (Pall, J.) ordering it to pay the insured Shs. 1,800,000 plus interest and costs under policy No. 9103069-1 for a Mitsubishi Pajero allegedly robbed from the insured in May 1993. The insurer had repudiated liability after discovering discrepancies in the import documents: the customs entry No. 492 variously referred to a Toyota Carina from Japan/Singapore and a Mitsubishi Station Wagon from Dubai, and the bill of lading indicated importation from Chiba, Japan. It pleaded that its insurable interest was doubtful and that the contract was unenforceable as tainted with illegality, and counterclaimed for a declaration that it was entitled to avoid the policy. The High Court entered summary judgment, accepting that the insured was a bona fide purchaser without notice, and struck out the counterclaim. The Court of Appeal, applying Kundanlal Restaurant v Devshi & Company and Hasmani v Banque du Congo Belge, held that even one bona fide triable issue entitles a defendant to unconditional leave to defend; the importation and illegality issues were weighty matters for trial, and the judge erred in resolving them on affidavits and in striking out the counterclaim unasked. The appeal was allowed, the judgment and decree set aside, the defence and counterclaim restored, and unconditional leave to defend granted, with costs of the appeal to the insurer and the costs of the application in the superior court made costs in the cause.

Key legal issues

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01

Whether triable issues existed on the insurer's defences of import irregularity and illegality

Holding

The defences raised weighty issues that could not be tried summarily on affidavits; the insurer was entitled to unconditional leave to defend.

Reasoning

The insurer's defences - that the vehicle may have been improperly imported, that Import Entry No. 492 referred to a different vehicle, and that the contract was tainted with illegality - were weighty issues requiring evidence at trial. The learned judge erred in resolving them by simply finding the insured a bona fide purchaser without notice, which was itself a matter for the trial court. The defence and counterclaim were not sham.

p. 2
02

Whether the striking out of the insurer's counterclaim was proper

Holding

The order striking out the counterclaim was wrong and was set aside; the counterclaim is a distinct claim.

Reasoning

The learned judge struck out the counterclaim although he was not asked to do so. The counterclaim, seeking a declaration that the insurer was entitled to avoid the contract of insurance, was a distinct claim interwoven with but separate from the defence, and did not merit striking out. It was restored with the defence.

p. 2
03

Whether the insured's status as a bona fide purchaser without notice exonerated him at the summary judgment stage

Holding

That was a matter for the trial court, as was the effect of section 203(1) of the Customs & Excise Act on a purchaser of an unlawfully imported item.

Reasoning

The learned judge fell into error by dismissing the insurer's issues by reference simply to the insured being a bona fide purchaser without notice of the importation discrepancies. Whether a purchaser who buys an item that may have been unlawfully or improperly imported is bound by section 203(1) of the Customs & Excise Act (Cap 472) would be a matter for trial.

p. 2

Legal principles established

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  • On a summary judgment application, even one bona fide triable issue entitles a defendant to unconditional leave to defend.
  • A judge hearing a summary judgment or striking-out application must give unconditional leave to defend where specific bona fide triable issues are raised.
  • A counterclaim is a distinct claim and should not be struck out merely because it is interwoven with the defence.

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment and decree of the superior court set aside
  3. 3.Defence and counterclaim restored
  4. 4.Appellant granted unconditional leave to defend the suit and prosecute its counterclaim
  5. 5.Appellant to have costs of the appeal
  6. 6.Costs of the application in the superior court to be costs in the cause in the superior court

Authorities

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Legislation

  • Civil Procedure RulesOrder 35 rule 1
  • Civil Procedure RulesOrder 6 rule 13(b) to (d)
  • Customs & Excise Act (Cap 472, Laws of Kenya)Section 203(1)

Cases cited (2)

  • Kundanlal Restaurant v. Devshi & Company
    [1952] 19 E.A.C.A. 77
  • Hasmani v. Banque du Congo Belge
    [1938] 5 E.A.C.A. 89
On appeal from
High Court of Kenya at Nairobi
Civil Case No. 3919 of 1994
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court (Civil Appeal 216 of 1996)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "PROVINCIAL INSURANCE COMPANY OF EAST AFRICA LIMITED now known as UAP PROVINCIAL INSURANCE COMPANY LIMITED v LENNY M. KIVUTI [1997] KECA 70 (KLR)", Case Analysis (1997). Civil Appeal 216 of 1996. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1997/70/eng@1997-07-11

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.