First Assurance Company Limited v Seascapes Limited [2008] KECA 50 (KLR)

Agreed issues exist to identify the matters in controversy and guide the calling of evidence. If, at the close of the hearing, the judge is satisfied some issues are unnecessary, he is not precluded from saying so. Order XIV rule 1(5) places the burden on the court to ascertain the material propositions of fact or law in variance, rule 3 empowers framing issues from pleadings or documents, and rule 5(2) permits striking out wrongly framed issues before decree. The complaint therefore lacked merit.

The arrangement was verbal, no proposal form was completed, and although the insurer's agent's account was debited, no remittance followed; the agent itself demanded premium from the respondent. The respondent made a cheque only after the fire, eleven months into a twelve-month cover, which the insurer was entitled to reject. Absent any step accepting the cover, or an agreement to pay by instalments, no concluded contract arose, so the insurer had no liability for the fire loss.

An estoppel requires a representation acted upon to detriment and can only be a defence. The respondent made no payment despite demand by the agent, which is prima facie evidence the representation was not acted upon. Waiver requires evidence that the respondent had expressly agreed to pay, which is absent, so section 77 of the Insurance Act could not be invoked to override section 156. The trial Judge erred in holding an estoppel had been raised against the appellant.

Mulwa J. had delivered judgment without interest, then on 9th May 2002 recalled it as an accidental slip under section 99 of the Civil Procedure Act and awarded interest at 15% and 18%. The appellant argued costs and interest are discretionary matters to be exercised at judgment, after which the court becomes functus officio. The Court of Appeal did not decide this question on its merits; it held that because Civil Appeal No. 263 of 2002 succeeded, Civil Appeal No. 246 of 2002 succeeds as well.