UAP Insurance Company Ltd v Maina & another (t/a Sawa Sawa Paints and Allied Products) (Civil Appeal E078 of 2021) [2024] KECA 392 (KLR)
The bottom line
#The Court of Appeal ruled that once an insurer repairs a vehicle, it doesn't owe the full insured sum, and loss-of-user claims need solid proof.
What this practically means
#Executive summary
#Key legal issues
#Whether the financier CFC Stanbic Bank Limited had a legal and insurable interest in the insured motor vehicle
Yes. The Bank was a registered joint owner by virtue of financing the purchase and the policy's hire purchase endorsement recognised its interest in monies payable.
Insurable interest arises from the assured's relationship with the subject matter, including legal or equitable rights or liability. The Certificate of Registration named the Bank as owner, and clause M15 of the policy (the Hire Purchase Endorsement) expressly declared that monies payable for loss or damage not made good by repair, reinstatement or replacement would be paid to the owners. The Bank therefore had an insurable interest and could repossess on default under hire-purchase law.
Whether the High Court had a legal basis to award the Respondents the full insured sum of Kshs 2,250,000/-
No. The insurer had opted to repair the vehicle; after repair the joint-owner Bank lawfully repossessed it, exercising the reinstatement option, so the payment option was unavailable and the Respondents' remedies lie under the hire-purchase agreement.
A comprehensive motor policy is a contract of indemnity: the assured is entitled only to compensation for actual loss and cannot be overcompensated. Since the insurer repaired the vehicle and the repaired vehicle was then lawfully repossessed by the co-owner financier on default, the Respondents suffered no loss of the insured sum under the policy. Any claim lies against the co-owner under the hire-purchase agreement, and residual damage after repair must be proved.
Whether the loss of user award of Kshs 25,000/- per month was supportable in law
No. Though pleaded with sufficient particularity and correctly characterised as special damage, the award was unsupported by any proof, and the High Court erred in making it.
Loss of user was not an expected damage under the policy and so was special damage requiring specific averment and strict proof. Hypothetical loss may be estimated without the balance-of-probabilities test, but the claimant must still deploy the best evidence reasonably available. The High Court itself acknowledged there was no specific evidence, only an estimate, so the award had no legal foundation.
Legal principles established
#- A second appeal to the Court of Appeal lies only on matters of law
- A financier registered as a joint owner of an insured motor vehicle has an insurable interest in it
- Under hire-purchase law, an owner in default may terminate the hiring and take immediate possession of the goods from the hirer or any person detaining them
- Where an insurer opts to repair the insured vehicle, the option of payment of the insured sum is no longer available, and the insured may only claim the residual damage persisting after repair
- Loss of user under a contract of insurance that does not provide for it is a special damage which must be specifically pleaded and strictly proved, though flexibility is allowed in the manner of proof; where quantification involves a hypothetical exercise, the court makes the best attempt it can but the claimant must still deploy the best evidence reasonably available
Court orders
#- 1.The judgment of the High Court of Kenya at Nakuru (T. Matheka J.) delivered on 23rd April 2020 in Nakuru High Court Civil Appeal No. 155 of 2017 is set aside in its entirety
- 2.The original judgment of the Chief Magistrate's Court in Nakuru (Hon. L. Gicheha SPM) in Nakuru Chief Magistrate's Civil Case No. 589 of 2013 is upheld
- 3.Each party shall bear their own costs of the appeal
- On appeal from
- High Court of Kenya at Nakuru
- Nakuru H.C. Civil Appeal No. 155 of 2017
- Jurisdiction invoked
- Section 72(1) of the Civil Procedure Act, Chapter 21, Laws of Kenya (second appeal on matters of law)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Doric Industries Limited v Aksharap Real Estate Limited (Environment and Land Case 686 of 2017) [2026] KEELC 1427 (KLR)[2026] KEELC 1427 (KLR)12 Mar 2026
- Sanlam Insurance Company Limited v Julius Kiambati N'Mbura[2025] KEHC 340 (KLR)23 Jan 2025
Cite this brief
#Cite this brief
Caselaw, "UAP Insurance Company Ltd v Maina & another (t/a Sawa Sawa Paints and Allied Products) (Civil Appeal E078 of 2021) [2024] KECA 392 (KLR)", Case Analysis (2024). Nakuru Civil Appeal (Court of Appeal) - Memorandum of Appeal dated 27th September 2021, arising from Nakuru H.C. Civil Appeal No. 155 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/392/eng@2024-04-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.