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Court of AppealPartially AllowedCivil Appeal 262 of 2003· [2009] KECA 221 (KLR)

BLUE SHIELD INSURANCE COMPANY LTD v JOSEPH MBOYA OGUTTU [2009] KECA 221 (KLR)

Court of Appeal of Kenya
17 July 2009
EOE. O. O'KubasuPWP. N. WakiJOJ. W. Onyango Otieno
3,879 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled insurers can't be shut out of a hearing over minor paperwork errors if their defence raises even one genuine issue worth trying.

What this practically means

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Executive summary

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This was a first appeal from a High Court ruling (Wambilyangah J, 18 July 2003) striking out Blue Shield Insurance's defence in a declaratory suit brought by Joseph Mboya Oguttu to enforce, against the insurer, a decree of Kshs.1,098,354 obtained against Juma Construction Company Limited following a road accident. The High Court had entered judgment for the full decree in terms of the plaint. The Court of Appeal, comprising O'Kubasu, Waki and Onyango Otieno JJA in a single judgment of the court, applied the settled principles in D.T. Dobie & Company (Kenya) Ltd v Muchina that the power to strike out a pleading should be exercised sparingly and without embarking on the merits. The Court identified multiple genuine triable issues: material discrepancies in the insurance policy number across the plaint, statutory notice, certificate of insurance and affidavits; whether the statutory notice under section 10(2)(a) of Cap 405 was valid and properly served; a third name ('John Waluke') appearing in the certificate of insurance; and whether part of the award (special damages for loss of the vehicle) fell outside the cover mandated by section 5(b) of Cap 405, which extends to death or bodily injury only. The Court allowed the appeal, set aside the ruling of 18 July 2003, directed that Kisii Civil Case No. 15 of 2003 proceed to full hearing, and awarded the appellant the costs of the appeal and of the Chamber Summons. The decision binds subordinate courts and the High Court on the sparing exercise of the striking-out jurisdiction.

Key legal issues

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01

Striking out pleadings and triable issues

Holding

A defence raising inconsistencies in the policy number, the validity of statutory notice, the identity of the insured and the scope of cover under section 5(b) of Cap 405 was not scandalous, frivolous or vexatious and warranted a full trial

Reasoning

The Court, as a first appellate court, re-examined the pleadings and found multiple discrepancies in the policy numbers cited in the plaint, statutory notice, certificate of insurance and affidavits. It held these inconsistencies, together with the questions of notice and scope of statutory cover, required ventilation by evidence and cross-examination and could not be resolved on a striking-out application.

p. 5
02

Scope of statutory cover under section 5(b) of Cap 405

Holding

Whether the award included special damages for loss of the motor vehicle, which falls outside the statutory cover for death or bodily injury, was a genuine defence requiring investigation

Reasoning

The appellant pleaded that part of the decree - special damages of Kshs.248,354 for loss of the vehicle and medical expenses - was not a liability required to be covered under section 5(b), which covers death of or bodily injury to persons. The Court held this defence was neither scandalous nor frivolous, and if successful would considerably reduce the claim.

p. 6

Legal principles established

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  • The power to strike out a pleading must be exercised sparingly and only where the pleading is clearly untenable, without embarking on the merits
  • A single genuine defence - not necessarily a successful one - suffices to entitle a party to a full hearing

Court orders

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  1. 1.Appeal allowed
  2. 2.Ruling of the superior court delivered on 18th July 2003 set aside
  3. 3.Civil Case No. 15 of 2003 to proceed to full hearing
  4. 4.Appellant awarded costs of the appeal and of the Chamber Summons dated 24th February 2003

Authorities

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Legislation

  • Insurance (Motor Vehicles Third Party Risks) Act (Cap 405, Laws of Kenya)section 5
  • Insurance (Motor Vehicles Third Party Risks) Act (Cap 405, Laws of Kenya)section 5(b)
  • Insurance (Motor Vehicles Third Party Risks) Act (Cap 405, Laws of Kenya)section 10
  • Insurance (Motor Vehicles Third Party Risks) Act (Cap 405, Laws of Kenya)section 10(2)
  • Insurance (Motor Vehicles Third Party Risks) Act (Cap 405, Laws of Kenya)section 10(2)(a)
  • Civil Procedure Actsections 3, 3A and 63(a)
  • Civil Procedure RulesOrder VI rule 13(1)(b), (c) and (d)
  • Civil Procedure RulesOrder 20 rule 4

Cases cited (3)

  • D.T. Dobie and Company (Kenya) Ltd vs Muchina
    (1982) KLR 1
  • Cail Zeiss Stiftung vs Ranjuer & Keeler Ltd and others (No.3)
    (1970) ChpD 506
  • Selle vs Associated Motor Boat Co. Ltd and others
    (1968) EA 123
On appeal from
High Court of Kenya at Nairobi (sitting on Kisii HCCC No. 15 of 2003)
Kisii HCCC No. 15 of 2003
Jurisdiction invoked
First appeal to the Court of Appeal under the applicable appellate framework; the judgment does not expressly cite the constitutional or statutory provision invoking jurisdiction

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, "BLUE SHIELD INSURANCE COMPANY LTD v JOSEPH MBOYA OGUTTU [2009] KECA 221 (KLR)", Case Analysis (2009). Civil Appeal 262 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/221/eng@2009-07-17

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