REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL & ADMIRALTY DIVISION HCCC NO. 230 OF 2012 GEORGE MORARA NYANGAU ...........................................................1 ST PLAINTIFF FELISTA WAMAITHA MORARA ........................................................2 ND PLAINTIFF HEZBRON OTACHI NYANGAU trading as KENYA ECO CARE INNOVATIONS & DEVELOPMENT AGENCY (KECIDA) ................................................3 rd PLAINTIFF VERSUS HERITAGE INSURANCE CO. LTD .......................................................DEFENDANT JUDGMENT 1. The success or failure of the Plaintiffs’ claim depends, partly, on the nature of relationship between it and Mavic Insurance Agency. 2. George Morara Nyangau, Felista Wamaitha Morara and Hezborn Otachi Nyangau trade as Kenya Eco Care Innovations & Development Agency (KECIDA). At all material times, KECIDA were the owners of Motor Vehicle Registration No. KAS 024B on which it took out a comprehensive insurance cover with Heritage Insurance Company Ltd (Heritage or the Insurer or the Defendant) for the period 31 st January 2011 to 30th January 2012. The policy contract was No. JP11HP0004 (See P. Exhibit). 3. The said motor vehicle was involved in an accident on 31 st October 2011 at Shangilia along Nairobi-Mombasa Highway. The accident was during the pendency of the policy. The vehicle suffered damage and was taken for repairs first at Peter Motor Works Mombasa and later to Corner Garage. These garages are designated garages of Heritage. 4. Clause MO22B for the policy provided as follows:EXCESS – OWN DAMAGE It is hereby understood and agreed that notwithstanding anything contained within the policy or to the contrary in respect of each and every event giving rise to a claim thereafter. The insured shall be responsible for the first 10% of the insured’s estimate of value stated in the schedule minimum Kshs.50,000.00 in respect of each and every claim under Section(s) 1 of the policy. If the Company elects to repair or reinstate or replace the motor vehicle or any part thereof or its accessories or spare parts in accordance with paragraph 2 of Section 1 of the within policy then the insured shall forthwith pay to the company any amount payable in terms of this endorsement. For the purpose of this Endorsement an event shall mean an event or series of events arising out of one cause in connection with any one Motor Vehicle in respect of or in connection with which indemnity is granted under this policy. 5. Under the terms of that clause, the insured was required to pay Kshs.154,000.00 as excess. Mr. Hezborn Otachi Nyangau who testified on behalf of the Plaintiffs stated that he paid this amount to Mavic Insurance Agency. On its part Mavic, through Jackson Musumba, told Court that it remitted the sum alongside Kshs.40,000.00 towards premium payments for another policy being JP10M00012 and was issued with receipt number 11873. 6. It was however the evidence of Gibson M. Kamau of Heritage that upon cross-checking for the payment of the said sum, there was no evidence that it was ever banked by the Agent and/or insured. Heritage therefore regarded the receipt as a forgery and that on several occasions informed the insured and/or his agent to pay the excess so that the vehicle could be released.
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7. The Agent and insured insisted that the excess had been paid. There was a standoff and the vehicle is still held by the garage. Hence this suit in which the Plaintiff seeks the following prayers:1. A declaration that the Defendant’s actions are illegal, unlawful and amount to a breach of contract. 2. An order directing the Defendant to forthwith issue the Plaintiffs with a release letter in respect of their Motor Vehicle Registration Number KAS 024B. 3. Damages of breach of contract. 4. Compensation for loss of earnings. 5. Interest on 3 above. 6. Costs of the suit. 8. In their submissions the parties each had different proposals on issues. Some overlap. The Court has considered these issues in the light of the pleadings and what emerged at the hearing. The Court sees the following as issues for determination; i Whose agent is Mavic Insurance Agency? ii Depending on the answer to (i), is the Defendant entitled to avoid the claim on the basis of an infraction by Mavic. iii Has the Defendant proved that receipt No. 11873 is a forgery? iv Is the Plaintiff entitled to the claim? v What are the appropriate orders? 9. In regard to the first issue, I have to think that it is less controversial than would have first appeared. Both PW1 and PW2 insisted that Mavic Insurance Agency was at the material times an agent of Heritage. Heritage itself conceded this through its witness, who having said as follows changed his mind; “At the material time, I am not sure that Mavic was our agent”. Later, in respect to an email dated 8th March 2012 by Jackson Musumba he testified; “Jackson Musumba was proprietor of Mavic. At the date of this letter Mavic was an agent of Heritage”. 10. On this issue the witness continued to blow hot and cold, when he again stated that Mavic represented the insured in the matter. 11. On a balance of probabilities, I find that Mavic was an agent of Heritage. The Plaintiffs’ witnesses were firm on this issue while that of the Defendant was lukewarm. 12. If Mavic was the agent to Heritage then payment of the excess to Mavic must be treated as payment to the principal (Heritage). It would not matter that Mavic never passed on the money to Heritage and Heritage would be liable to meet the claim. 13. Further still, Heritage has, in my view failed to prove that receipt No. 11873 was a forgery. An allegation of forgery is an allegation of commission of a crime and must not only be specifically pleaded but also sufficiently proved. Sufficient prove is proof on a threshold higher than a balance of probabilities although not as high as beyond reasonable doubt. 14. On this, Heritage’s only witness simply stated that the receipt was a forgery. There was no expert evidence in this regard. Then there was this telling evidence. “I do not know who forged the receipt. Although we had accused Mavic of forgery in other policies, we have not done so in respect to this”. 15. While it is true that Mavic had not produced the original banking slip, Heritage which made the allegation of forgery needed to provide cogent prove of the forgery before Mavic could be called upon to disprove it. I find that the allegation of forgery was unproved. 16. Whichever way one looks at it, Heritage is liable. 17. What remedy does the Plaintiff deserve? Although it claims damages for breach of contract and compensation for loss of earnings, there was a complete dearth of evidence to support these claims. They are unproven.
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18. In the end the Court is inclined to enter judgment for the Plaintiff against the Defendant for prayers (1) and (2) of the Plaint as follows:i. The Defendant’s actions are illegal, unlawful and amount to a breach of contract. ii. The Defendant is hereby ordered to forthwith issue the Plaintiffs with a release letter in respect of their Motor Vehicle Registration Number KAS 024B. 19. If any storage charges have been incurred because of the long stay of the vehicle at the garage, then Heritage would have to pay as it was to blame for the state of affairs. 20. Costs as well to the Plaintiff. Dated, Signed and Delivered in Court at Nairobi this 6th Day of December, 2019 F. TUIYOTT JUDGE PRESENT; Onyango holding brief Akolo for Plaintiff Lubulellah holding brief Waweru for Defendant Court Assistant: Nixon
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