Bernard Kones Kipyagut & 1 other v African Merchant Assuarance Co. Ltd

Chapter 405 Laws of Kenya as the fatal injury sustained by the deceased was a liability covered under the insurance policy. 5. The Plaintiffs aver that despite demand and notice to sue in default of compliance having been duly issued, the Defendant has failed, refused and or neglected to make good of the Plaintiffs claim. 6. The above background informed the filing of this suit vide a plaint dated 5th June 2023. The plaintiffs are craving for the following orders :i. A declaration that the Defendant is bound to satisfy the total decretal amount in Bungoma CMCC No. 188 of 2014 (or the alternative judgment entered as prayed in paragraph 9 of the Plaint). ii. Costs of the current suit. iii. Interest from 28th August 2020 until payment in full. iv. Any other relief the Honourable Court deems fit. 7. In response to the Plaint, the Defendant herein filed it’s Statement of Defence dated 6th September 2023, wherein it denied every allegation as contained in the Plaint, save for paragraphs 1, 2, and 3 of the Plaint only in so far as they are merely descriptive of the parties and their respective addresses. 8. The Defendant admitted to issuing the 2nd Plaintiff's motor vehicle registration number KBP 284S with a motor vehicle insurance policy, identified as Policy Number AMC/070/01099/2013. Further, it avers that it was not aware that an accident occurred on the 11th of February 2013, and it put the Plaintiffs to strict proof. 9. The Defendant denied knowledge of any judgment entered against its insured in Bungoma CMCC No. 188 of 2014 and in the alternative, it maintained that even if judgment in Bungoma CMCC NO. 188 of 2014 existed then it had no obligation under any contract or Laws of Kenya to settle the same on grounds that the Plaintiffs failed to comply with policy conditions. The defendant averred that it had no contractual obligation to indemnify the plaintiffs and that if such a contract existed, then the same was unenforceable due to the Plaintiffs' breach of contract. The Defendant pleaded the following particulars of breach of contract by the Plaintiffs: i. Non-Payment of Premiums. ii. Non-Payment of the requisite policy excess. iii. Non-Documentation of the claim. iv. Using the motor vehicle in contravention of the policy conditions. 10. The Defendant denied receipt of statutory notice and/or demand and it craved that this suit be dismissed with costs. 11. The Plaintiffs filed their reply to defence dated 6th October 2023, wherein they denied the contents therein including the particulars of breach of contract. Further, the 1st Plaintiff averred that he did not contribute to the occurrence of the subject accident as allegeor at all. Plaintiffs’ case 12. PW1, Bernard Kones Kipyagut, the 1st plaintiff testified that he is a driver by profession and an employee of the County Government of Bungoma. That on 11th February 2013, while driving a motor vehicle registration number KBP 284S he knocked down a child who was crossing the road at Kibabi https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 2

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area. He told the Court that the child sustained injuries but died upon arrival at the hospital. He was later issued with a Police Abstract which he availed in Court as PEXH1. It was his evidence that the subject motor vehicle was at all material times insured with the Defendant herein via a policy number AMC/070/01099/2013. 13. PW1 told the Court that subsequent to the said accident he duly lodged a report at the Defendant’s Bungoma office and that when he received summons in BUNGOMA CMCC No. 188 of 2014, he duly handed the same to the Defendant. He told the Court that judgement was eventually entered against him for a sum of Kshs. 749,500/=. He produced the Plaint and decree in BUNGOMA CMCC No. 188 of 2014 as PEXH2 and PEXH3 respectively. 14. PW1 testified that due to his inability to pay the decretal amount, attachment was commenced against him by the firm of Dominion Auctioneers & Maco Auctioneers. That he then visited the Defendant’s office in Bungoma where he was issued with a letter dated 23rd February 2023 which disclosed that the defendant had paid Kshs. 200,000/= in part settlement of the judgment sum and that it had undertaken to pay the whole decretal sum of Kshs. 1, 103, 463/= by way of monthly instalments to the claimant’s/ interested party’s advocates. He produced the letter dated 23rd February 2023, as PEXH4. 15. He told the Court that he then proceeded to the chambers of the Interested Party’s Advocate wherein he learnt that the Defendant had not paid any part of the judgement sum as alleged. Subsequently the firm of Maco Auctioneers attached all his household goods. He thus craves that that the Defendant do indemnify him of the entire judgment sum plus costs. 16. The 1st Plaintiff denied that the premiums were not paid as required. 17. On cross-examination, the 1st plaintiff told the court that he had duly filed a claim form at the Defendant’s Bungoma office in the year 2013, but he does not have a copy of the same and that the Defendant catered for the repairs his motor vehicle registration number KBP 284S. He maintained that he had served a copy of the Court summons to the Defendant at their Bungoma office and that he had paid the premium at once and the insurance cover was comprehensive, but he could not recall the excess amount he paid. He told the Court that the premium was around Kshs. 50,000/= or thereabout and that the 2nd Plaintiff is the insured of the motor vehicle registration number KBP 284S. He maintained that the whole premium had been paid and that was why the defendant issued the insurance sticker that was affixed on the windscreen. Further that the Defendant had even retained an advocate to represent him in the lower Court. 18. On re-examination, he reiterated that he had filled in a claim form at the Defendant’s Bungoma office and that it was the Defendant who repaired the motor vehicle registration number KBP 284S. 19. At that juncture, the Plaintiffs closed their case. The Defendant did not call any witness. Parties were directed to file and exchange their respective written submissions. Both parties complied Plaintiffs Submissions 20. 21. Vide submissions dated 4th July 2025, the Plaintiffs herein submitted on two key issues : i) Whether there was a valid insurance contract between the Plaintiff and the Defendant, ii) Whether the Defendant should be compelled by way of a declaration to honour the contract of insurance. On the 1st issue, the Plaintiffs argue that there existed a valid contract between them and the Defendant. The Plaintiffs maintain the existence of the contract is confirmed by the evidence the policy number as https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 3

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provided in the Police Abstract. They also rely on Section 10 (1) & (2) and Section 9 of the Insurance (Motor Vehicles Third Party Risks) Act Cap 405 Laws of Kenya. Counsel also placed reliance on the case of Kenya Alliance Insurance Co. Ltd vs Thomas Ochieng Apopa (suing as Administrator of the Estate of Pamela Agola Apopa (deceased) (2020) eKLR. 22. On the 2nd issue, the Plaintiffs argues that the duty of an insurance company to satisfy or settle decrees against their insured is a statutory duty under Sections 10(1) and (2) of the Insurance Act (Motor Vehicles Third Party Risks) Act Cap 405 Laws of Kenya Cap 405 Laws of Kenya. Section 10(1) provides that after a policy has taken effect, judgment concerning liability covered by the policy must be satisfied, even if there are grounds for cancellation between the insurer and insured. The Plaintiffs note that the Defendant did not adduce any rebuttal evidence, despite denying the existence of the policy in it’s defense. The Plaintiffs relied on judicial precedent to argue that this failure renders the defense of "little probative value". They cited the case of Owour & Another (Suing as the Legal Representative and Administrators in the Estate of Benard Onyango Ogunyo (Deceased) -VS- Aftab Petroleum (K) LTD (CIVIL APPEAL NO. E074 OF 2023) KEHC 4484 (KLR), which states that failure to challenge evidence gives the Plaintiff's story greater weight. They also cited Board of Trustees Meru diocese Kirimara Parish -vs- Dores Wanja Bore eKLR, emphasizing that evidence not controverted is considered weighty, and failure to adduce evidence impacts the outcome negatively. This failure renders the defense of little probative value. The Plaintiffs posit that the Defendant was well aware of the primary suit and the judgment entered against t’s insured. 23. The Plaintiffs concluded that they have demonstrated they are deserving of the orders sought in the plaint. 24. On the issue of costs, the Plaintiffs rely on Section 27 (1) of the Civil Procedure Act, Cap. 21, and cited the case of Reids Heweet & Company - versus - Joseph AIR 1918 cal. 7171 & Myers-versus-Deferies (1880) 5 Ex. D. 1880), arguing that costs should follow the event. Therefore, the issue of costs in this suit ought to be met by the Defendant in the event the suit is upheld. Defendant’s submissions 25. In opposing the Plaintiffs submissions, the Defendant submits on two key issues: whether the Plaintiffs have met the evidential threshold as required by law and whether the Plaintiffs are entitled to the prayers sought. 26. On the 1st issue, the defendant’s counsel submits that the Plaintiffs relied on a Police Abstract to prove that the Defendant had insured the vehicle. However, the Defendant argued that a Police Abstract is not conclusive evidence of insurance coverage as the only viable document is the Certificate of Insurance to prove the alleged motor vehicle was insured by the Defendant. Counsel submits that the Plaintiffs evidence did not meet the threshold as set under Sections 107 and 108 of the Evidence Act. Counsel placed reliance on the cases of Waithera Ngige v Africa Merchant Assurance Company Limited [2021] eKLR where it was held that a Police Abstract is not sufficient proof of insurance and the case of APA Insurance Co. Ltd v George Masele [2014] eKLR where the Court held that a Certificate of Insurance is the ideal document to prove insurance coverage. Counsel submits that the Plaintiffs failed to produce a Certificate of Insurance or call the insured (2nd Plaintiff) to testify and this weakened their case. 27. Counsel argues that the Plaintiffs did not provide evidence of serving a statutory notice as required under Section 10(2)(a) of the Insurance (Motor Vehicle Third Party Risks) Act as it was requisite for a stamped copy of the notice was not presented to the Court. Counsel relied on the case of UAP https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 4

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Insurance Co. Ltd vs Patrick Charo Chiro (2021) eKLR. Further, Counsel submits that without proof of statutory notice, the Defendant cannot be held liable for the decretal amount. 28. Counsel argues that the Plaintiffs did not provide evidence that the insurance premiums were paid and were up to date, which is a critical requirement for an insurance contract to be valid. Counsel argues that the absence of evidence of a claim form, acknowledgment of the claim, or proof of paid premiums further undermined the Plaintiffs’ case. Counsel relied on the case Kasereka vs Gateway Insurance Co. Ltd [2003] arguing that Police Abstracts only indicate that an accident occurred and was reported, but do not prove insurance coverage. 29. Counsel submits that the Plaintiffs did not meet the legal requirements to hold the Defendant liable for the decretal amount and that the Plaintiffs failed to prove their case on a balance of probabilities. The defendant craves for the dismissal of this suit with costs. Determination 30. I have considered all the pleadings as filed herein, the plaintiffs’ evidence as well as the rival submissions of parties as filed herein and the issues that emerge for determination are as follows:i. Whether there existed a valid insurance policy at the time of accident. ii. Whether the Defendant is liable to indemnify the Plaintiffs of the judgment sum and incidental costs. 31. On the issue whether there existed a valid policy of insurance between the 2nd Plaintiff and the defendant, I note that the plaintiffs did not produce a certificate of insurance but instead produced a police abstract that disclosed the subject motor vehicle was at the time of the accident insured by the defendant vide policy no number AMC/070/1/010991/2013 which policy the plaintiffs maintain, covered such persons or class of persons as specified in the policy in respect of injury or damages caused or arising out of the use of the said motor vehicle and that the said accident is a liability covered by the said policy within the meaning of Section 5(b) of the Insurance ( Motor Vehicles Third Party Risks) Act Chapter 405 of the Laws of Kenya. 32. Whereas the defendant has contended that it is unsafe to place reliance on the police abstract for purposes of establishing proof of existence of a valid policy of insurance between it and the 2nd plaintiff, the defendant retained an advocate to represent the plaintiffs in the lower court and when notice of judgment was brought to it’s attention it issued a letter dated 23rd February 2023 addressed to the firm of Situma & Company Advocates proposing to liquidate the judgment sum by way of monthly instalments of Ksh 100,000 and stating that it had already paid a sum of Ksh 200,000 in that regard. 33. It is noteworthy that the defendant catered for the repairs of the subject motor vehicle. The defendant’s own conduct is consistent to the fact of existence of a valid insurance policy. The defendant is thus estopped from pleading otherwise. In any event the evidence tendered by the plaintiffs stands uncontroverted. I therefore find that a valid and binding policy of insurance existed between the defendant and the 2nd Plaintiff at all material times while the 1st plaintiff was the driver of the subject motor vehicle. 34. On the issue whether the defendant is duty bound to satisfy the decretal sum or indemnify the plaintiffs of the said judgment sum plus costs and interest, I find guidance in the case of Morgan Mwita Vs CIC Insurance (1998) eKLR where Justice (Rtd) Waki was then persuaded by my position that an insurer https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 5

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is a stranger to a suit who has interest to protect given that a judgment made against it’s insured is injurious to it. The Judge had rendered himself as follows “ The insurer is obliged under S.10 (1) of the Insurance ( Motor Vehicle Third Party Risks) Act to satisfy the judgement notwithstanding that the insurer may be entitled to cancel or avoid the policy vis-à-vis the insured. There is no question that the Insurer is liable.” 35. The defendant is thus duty bound under the provision of section 10 (1) of the Act and the doctrine of subrogation, to satisfy the decretal sum of Kshs 749,500/= entered against the Plaintiffs in the lower court which sum now stands at Kshs. 1, 028,743/= and /or indemnify the plaintiffs of the same. 36. Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act provides for the duty of an insurer to settle a decretal amount as follows: “ Duty of insurer to satisfy judgments against persons insured (1) If, after a policy of insurance has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of Section 5 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. Provided that the sum payable under a judgment for a liability pursuant to this section shall not exceed the maximum percentage of the sum specified in Section 5 (b) prescribed in respect thereof in the Schedule.” 37. In the case of Kenindia Assurance Co. Ltd v James Otiende [1987]2KAR 162 the Court held as follows: “ We have listened to both advocates and the authorities produced. The main body of S10 (1) of the Insurance (Motor Vehicle Third Party Risks) Act Cap 405 is in our opinion clear. It says: If, after a policy of insurance has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of section 5 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable there under in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.” 38. On the balance I am satisfied that the Plaintiffs have proved their case on a preponderance of evidence. Consequently, judgment is entered in favour of the Plaintiffs and against the Defendant and I thus make the following orders; i. An order of declaration is hereby made pursuant to the provisions of Section 10 (1) of the Insurance (Motor Vehicles Third Party Risks) Act, that the defendant is liable to indemnify https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 6

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for and/or pay the Plaintiffs a sum of Kshs. 1, 028,743/= plus Costs pursuant to a judgment entered against them in Bungoma CMCC No 188 of 2014. ii. The judgment sum shall attract interest at Court rates from the date herein until full payment. iii) The Plaintiffs are awarded costs of this suit. DATED AND DELIVERED AT BUNGOMA THIS 27THDAY OF NOVEMBER 2025. MWANAISHA S. SHARIFF JUDGE In the presence of : Ms Wangui for the Plaintiffs Mr Munyoki holding brief for Wamaitha for the Defendant N/A by Situma for the interested Party Peter Machoni – Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18351/eng@2025-11-27 7

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