Crown Bus Services Limited v Directline Assurance Company Limited

f. That the Honourable Court be pleased to make such further or other orders as it may deem just and expedient in the circumstances of this case. g. That costs of this Application be provided for. 2. The application is supported by the grounds thereto and an affidavit of even date sworn by the Applicant. He avers that the Defendant/Respondent herein, despite being liable under the comprehensive insurance policy to settle the decretal sum awarded in Kilungu PMCC No. 157 of 2020.has failed to meet its contractual obligations, thus exposing the Plaintiff to financial loss and auction. 3. The Applicant will suffer irreparable harm that cannot be compensated by damages if the said motor vehicles are auctioned, as they are essential to the Plaintiffs daily business operations. 4. The Respondent's failure to honour the terms of the insurance contract and to settle the decretal amount is a direct breach of the terms of the insurance policy entered into between the parties, further justifying the need for urgent intervention by this Honourable Court. 5. The Respondent and the Intended Interested Party will not suffer any prejudice if the orders sought are granted, as the Defendant is contractually bound to settle the decretal amount. 6. It is in the interest of justice that the interim orders be granted to prevent the Applicant from suffering unwarranted losses caused by the Respondent's negligence. 7. However, the application was opposed by the Interested Party vide a replying affidavit dated October 18, 2024, in which he prayed that the application be dismissed for reasons that: a. the application is untenable, ill advised, malafides and purely made to defeat execution. b. judgement was delivered against the Applicant in Kilungu PMCC No.157 of 2020 which judgement remains unsatisfied. c. execution as against the applicant is therefore regular and in line with the law. d. the interested party is not privy to the insurance contract between the plaintiff and the defendant therefore should not be denied the fruits of his judgment. e. the plaintiff should first satisfy the decree in Kilungu PMCC No.157 of 2020 and thereafter pursue its indemnity against the defendant. f. no sufficient material has been placed before the court to demonstrate that the plaintiff had a valid contract of insurance with the defendant which was valid at the material time. g. no justification has been shown why the interested party should be precluded from realizing the fruits of its judgement. h. the plaintiff has not met the threshold for grant of the orders sought. i. the Interested Party would be greatly prejudiced if the Application is allowed as the applicant is tactfully evading execution of this court's decree with result that the decretal sum remains unpaid entirely. 8. The Defendant/Respondent did not respond to the application. 9. The application was disposed of by filing of written submissions. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 2

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Applicant’s Submissions 10. The Applicant in his submissions dated December 11, 2024, argued on two issues. First, whether the Applicant has satisfied the principles for granting a temporary injunction pending hearing and determination of the main suit and second, whether the execution of warrants in Kilungu PMCC No.157 of 2020 should be stayed pending the hearing and determination of the main suit. Whether the Applicant has satisffed the principles for granting a temporary injunction pending hearing and determination of the main suit 11. The Applicant cited the famous case of Giella v Cassman Brown (1973) EA 358 which guides the principles for grant of temporary injunctions that:a. The Applicant must first establish a prima facie case with a probability of success; b. The Applicant must then demonstrate that he /she or it stands to suffer irreparable loss that cannot be adequately compensated through damages; c. Where there is doubt on the above, then the balance of convenience should tilt i favour of the Applicant 12. Similarly, the Applicant cited the case of Nguraman Limited v Jan Bonde Nielsen & 2 Others (2024) where the Court of Appeal determined the triple requirements an applicant has to satisfy for an interlocutory injunction to be granted. 13. On the first issue of prima facie case, the Applicant being guided by the case of Mrao Ltd v First American Bank of Kenya and 2 Others (2003) KLR 125 which was cited with approval in Moses C. Muhia Njoroge & 2 Others v Jane W. Lesaloi & 5 Others (2014) eKLR where the Court of Appeal defined a prima facie case as one which on the material presented to the court, a tribunal properly directing itself will conclude there exists a right which has apparently been infringed by the opposite party as to call foe an explanation or rebuttal from the later. 14. In the present case, the Applicant has demonstrated a prima facie case by providing evidence of a subsisting insurance policy under which the Respondent is obligated to indemnify it against claims by third parties such as the Interested Party herein. 15. The Respondent’s failure to fulfill this obligation has exposed the Applicant to unjust execution and it is only fair that the order sought herein be granted pending the hearing and determination of the main suit. 16. On the second question of suffering irreparable loss that cannot be adequately compensated through damages, the Applicant cited the case of Nguraman Limited (supra) where the Court of Appeal further held that;“ On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima facie, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 3

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which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation of whatever amount will never be adequate remedy” 17. In this case, the Applicant’s motor vehicles had already been detained by Auctioneers acting on Interested Party’s instructions for a period of two (2) months until the same were released on 26th November 2024. The two motor vehicles are crucial to the Applicant’s daily operations and their detention caused significant disruption of the Applicant’s operations and loss of income and business opportunities which cannot be compensated in damages. 18. On the third question on balance of convenience, the Applicant cited the case of Chebii Kipkoech v Barnabas Tuitoek Bargoria & Anor (2019) eKLR where the court stated that:“ Although it is called balance of convenience, it is really the balance of inconvenience and it is for the plaintiffs to show that the inconvenience caused to them would be greater that that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the Plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater that which is likely to arise from granting it” 19. The Applicant submitted that, there is no doubt the balance of convenience herein tilts in its favour as granting the injunction preserves the status quo and prevents irreversible harm while the main suit is determined. 20. The Applicant further submitted that the Interested party’s interests are safeguarded since they are enjoined in this suit, which is for their own benefit as they stand to be paid the decretal sum by the Respondent, who is contractually bound under the terms of the Insurance policy with the Applicant to satisfy the decree entered in the Interested Party’s favour. 21. Guided by the above, the Applicant submitted that it has satisfied the principles for granting a temporary injunction pending the hearing and determination of the main suit. Whether the execution of warrants in Kilungu PMCC No.157 of 2020 should be stayed pending the hearing and determination of the main suit. 22. The Applicant submitted that the Defendant/Respondent herein as its Insurer under a comprehensive insurance policy, is legally obligated to indemnify it against the judgment in Kilungu PMCC No.157 of 2020. 23. The provisions of Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act Cap 405, place a statutory obligation on insurers to satisfy third party claims. 24. The Defendant breached its contractual obligation by failing to settle the decretal amount, resulting in the Interested Party initiating execution proceedings against the Applicant/Plaintiff. 25. The Applicant submitted that it acted promptly to seek redress upon receiving the warrants of attachment, demonstrating good faith and diligence. It cited the case of Butt v Rent Restriction Tribunal (1982) KLR 417, where the Court of Appeal held that a stay is meant to prevent hardship or injustice. 26. The Applicant submitted that in the circumstances it is only fair and just that execution of warrants in Kilungu PMCC No.157 of 2020 should be stayed pending the hearing and determination of the main suit so that it is not rendered nugatory. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 4

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Interested Party’s Submissions 27. On his part, the Interested Party vide submissions dated January 13, 2025, submitted on two issues, whether the instant application is merited and what prayers should this Court grant. Whether the instant application is merited 28. It is the Interested Party's submissions that the instant application is bereft of merits and the same should be dismissed with costs. 29. That the Applicant herein has approached this court for stay of execution and release of the attached motor vehicles, the same were done in execution of a lawful order and the same curtails the rights of the Interested Party to enjoy the fruits of his judgment. 30. It is the Interested Party's submissions that since the said application does not seek for another prayer after stay has been granted, the same curtails the rights to execute a lawful decree and should be dismissed by this Honourable Court. The Applicant/Plaintiff has not demonstrated for how longthe said orders will be in force and the same should be discharged. The Interested Party thus urge this Honourable Court to find that the orders being sought cannot be granted. 31. It is the Interested Party's submissions are that the said application is filed with the sole purpose of trying to pay what is due and owing and thus an abuse of precious judicial time. He invited this court to adopt the position taken by the Court of Appeal in the case of Kivanga Estates Limited v National Bank of Kenya Limited [2017] eKLR where it held as follows: “ There is no greater duty for the court than to ensure that it maintains the integrity of the system of administration of justice and ensure that justice is not only done but is seen to be done by, amongst other measures, stopping litigations brought for ulterior and extraneous considerations." The Court went ahead and held as follows: “ There cannot be any doubt that the foregoing sentiments represent what the appellant has been engaged in. It is our duty as it was the learned Judge's to remind the appellant that the sooner it sorts out this dispute by settling the debt the better for it and that, the stage at which it has reached, it does not matter how long it takes, it will still settle it." 32. It is the Interested Party's submissions that it is not privy to the contract between the Plaintiff and the Defendant. It is thus his position that the wrangles between the Plaintiff and the Defendant should not be visited upon an innocent party. 33 It is the Interested Party's submission that this Honourable Court does proceed and dismiss the instant application with costs to the Interested Party. What prayers should this Honourable Court grant 34. The Interested Party urge this Honourable Court to proceed and dismiss the instant application with costs. Analysis and Determination 35. I have considered the materials before the court on the instant application. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 5

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36. The Applicant sought for orders that, pending the hearing and determination of the main suit herein, this court be pleased to issue an order of temporary injunction restraining the Intended Interested Party, its Advocates, agents, servants, and or Auctioneers from selling, auctioning, or otherwise disposing of the Plaintiffs motor vehicles registration numbers KCW 329Z and KCP 016Z and further that this court does issue an order staying the execution of warrants of attachment and proclamation in Kilungu PMCC No. 157 of 2020. 37. I find that the following single issue has arisen for determination; whether the threshold for grant of orders sought has been met. 38. The law regarding grant of interlocutory injunctions is found in Order 40 Rule 1 and 2 of the Civil Procedure Rules which provide as follows: “ Where in any suit it is proved by affidavit or otherwise: (a) That any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit or wrongfully sold in execution of a decree; (b) That the Defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the Plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the Defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further order.” 39. The conditions for the grant of interim injunctions is well settled in the case of Giella v Cassman Brown & Co. Ltd (1973) E.A 358 where it was held that: -“The conditions for the grant of an interlocutory injunction are well settled in East Africa. First, an Applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the Applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience.” 40. The Applicant submits that it has established a prima facie case by providing evidence of a subsisting insurance policy under which the Defendant/ Respondent is obligated to indemnify it against claims by third parties such as the Interested Party herein. 41. The Respondent’s failure to fulfill this obligation has exposed the Applicant to unjust execution and it is only fare that the order sought herein be granted pending the hearing and determination of the main suit. 42. The Applicant submitted that it will suffer irreparable loss as the subject two motor vehicles which had been attached are crucial to the Applicant’s daily operations and their detention caused significant disruption of the Applicant’s operations and loss of income and business opportunities which cannot be compensated in damages and that the balance of convenience should tilt in its favour. 43. On the other hand, the Interested Party's submissions are that the said application is filed with the sole purpose of trying to pay what is due and owing and thus an abuse of precious judicial time. He invited this court to adopt the position taken by the Court of Appeal in the case of Kivanga Estates Limited v National Bank of Kenya Limited [2017]. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 6

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44. The Interested Party further submitted that it is not privy to the contract between the Plaintiff/ Applicant and the Defendant/Respondent. It is thus his position that the wrangles between the Plaintiff/Applicant and the Defendant/Respondent should not be visited upon an innocent party. 45. There is need to preserve the Applicant’s property including the stated two motor vehicles that are subject to court proceedings so as to protect the court from giving orders in vain upon hearing and determining a suit. Order 40, of Civil Procedure Act gives the court discretion to issue orders which are in the nature of an injunction restraining dealings on property pending further orders by the court. 46. The court at this stage is not required to determine the merits and demerits of the Applicant’s suit. The court is only required to determine whether the Applicant has established a prima facie case. 47. In the case of Silvester Momanyi Marube –Vs- Guizar Ahmed Motari & Another (2012) eKLR, Odunga J. held that: “ In determining this application, I am well aware that at this stage the court is not required to make any conclusive or definitive findings of fact or law, most certainly not on the basis of contradictory affidavit evidence or disputed propositions of law and that in an application for injunction although the court cannot find conclusively who is to be believed or not, the court is not excluded from expressing a prima facie view of the matter and the court is entitled to consider what else the deponent to the supporting affidavit has stated on oath which is not true.” 48. The Applicant herein avers that at the time of occurrence of the accident herein there subsisted an insurance policy under which the Defendant/ Respondent is obligated to indemnify it against claims by third parties such as the Interested Party herein. 49. Ther Defendant/Respondent has not responded to the application making it difficult for the court to have a consideration on it in determining the application. 50. The Interested Party avers that if the orders sought are granted then his right to enjoyment of the fruits of his successful judgment will be curtailed. 51. It is therefore, safe to say that indeed the issue as to whether the Applicant had at the time of occurrence of the accident an insurance policy with the Respondent has to be determined in the main suit herein and consider whether the Defendant/Respondent is obligated to pay the decretal amount. 52. The question to be answered at this point is, what happens to the Interested Party who has a valid decree in the primary suit and is not privy to the contract between the Plaintiff/Applicant and the Defendant/Respondent? 53. Although the Applicant submitted that the Interested Party’s interests are safeguarded since they are enjoined in this suit, which is for their own benefit as they stand to be paid the decretal sum by the Respondent, who is contractually bound under the terms of the Insurance policy with the Applicant to satisfy the decree entered in the Interested Party’s favour. 54. In my opinion, dragging the Interested Party in this suit was ill conceived. He is not privy to the contract between the Applicant and the Respondent, who has conveniently failed to file any response. The matter is between the Applicant and its insurer. The Interested Party is entitled to enjoy the fruits of his successful judgement or part thereof pending the hearing and determination of the main suit herein. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 7

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55. I am guided by the decision in Daniel Mutua Musyoki vs Amaco Insurance Company Ltd & Another (2023) eKLR, where the court found that :“ The primary duty of settling the decree falls squarely on the Applicant. In the event the 1st Respondent as his insurer fails to satisfy the decree, the Applicant will still be called upon to satisfy the same. Nothing prevents the Applicant from settling the decretal sum and then suing the Respondent for compensation or reimbursement.....” 56. On whether this court should issue an order staying the execution of warrants of attachment and proclamation in Kilungu PMCC No. 157 of 2020, I note that the Applicant failed to make submissions on this particular prayer, I will therefore decline to grant an order of stay of execution as sought. 57. To grant orders of injunction sought, is based on the discretion of the court, to be exercised in the interest of justice. 58. In this case, to balance between right of the Applicant to allow the Applicant’s suit to be heard and the Interested Party’s right to enforce the fruits of judgment, I order that, there shall be order of temporary injunction restraining the Intended Interested Party, its Advocates, agents, servants, and or auctioneers from selling, auctioning, or otherwise disposing of the Plaintiffs motor vehicles registration numbers KCW 329Z and KCP 016Z or any other property pending the hearing and determination of the suit herein on condition that: - 59. a. The Applicant pays the Interested Party’s Advocates 30% of the decretal sum (as stated in the decree) within Forty-Five (45) days of the date of this order which amount will be refunded to the Applicant by the Respondent should judgment be entered in favour of the Applicant. b. The balance thereof, costs and interest shall be in the min suit. c. The suit herein be set down for hearing and concluded within six (6) months of the date of this order. d. Failure to comply with orders (a) and (b) above execution to proceed without further recourse to court. It is so ordered RULING WRITTEN, DATED & SIGNED AT MACHAKOS THIS 8TH MAY 2025 NOEL I. ADAGI JUDGE DELIVERED VIRTUALLY ON TEAMS AT MACHAKOS THIS 8TH MAY 2025 In the presence of : ................................................... for Appellant .................................................. ..for Respondent ....................................................... Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14314/eng@2025-05-08 8

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