Margaret Warigia Wachira & 1 other v Pwani Oil Products Limited

4. Being dissatisfied with the judgment, the Appellants filed this appeal through the Memorandum of Appeal dated 15th September 2022 on grounds that the learned Magistrate erred in law and in fact in; a. finding the Appellants liable, b. analyzing the evidence on the doctrine of subrogation, c. failing to hold that there was no privity of contract between the parties, d. failing to properly analyse the evidence and shifting the burden of proof to the Appellants, e. finding the Appellants liable despite evidence on the contrary, f. relying on the demeanor of witnesses than documentary evidence produced by the respective parties, g. relying on hearsay evidence on record to make its determination. 5. The Appellants prayed that the appeal be allowed with costs and that the Respondent’s suit in the lower court be dismissed with costs. 6. The appeal was canvassed by way of written submissions. The Appellants in their submissions dated 27th March 2025 in analyzing evidence on the doctrine of subrogation, cited the decision of the Court of Appeal in Africa Merchant Assurance Company v Kenya Power & Lighting Company Limited [2018] KECA 112 (KLR). 7. The Appellant submitted that it is trite law that parties are bound by their pleadings and that the Respondent failed to prove that they had a claim against the Appellants under subrogation rights. The Appellants argued that PW2 in her testimony noted that they had contracted M/s Papera Logistics to transport the Respondent’s goods on 19th August 2010 and that M/s Papera Logistics had acknowledged receipt of the goods for transportation. 8. That on cross examination, she confirmed that she did not have the contract between the Appellants and the Respondent and had handed the same to the insurance. That PW1, a representative from the insurance company on cross examination indicated he had not seen the alleged contract and had not asked for the same from the Respondent. 9. That DW1 in her testimony denied having any business dealings with the Respondent to carry any goods for them on 20th August 2010, which assertion remained uncontroverted at the hearing of the suit. That the trial court therefore erred in observing that the evidence of PW1 and PW2 was unshaken even in cross examination. The Appellants cited the case of Savings & Loan (K) Limited v Kanyenje Karangaita Gakombe & another (2015) eKLR and Kenya National Capital Corporation Ltd v Albert Mario Cordeiro & another (2014) eKLR which held that a contract cannot confer rights or impose obligations on any person other than the parties to the contract. 10. The Appellants submitted that from the evidence tendered before the trial court, the Respondent failed to prove privity of contract with the Appellants and that the court erred in shifting the burden of proof to the Appellants. That the correct party to sue was Papera Logistics Ltd as per the police abstract and loss of adjuster’s report. That it is evident the Respondent failed to prove that it had contractual relationship with the Appellants to carry the goods. 11. The Appellants submitted that the trial court erred in holding them liable for the reason of ownership of motor vehicle KBJ 081E. That PW1 produced police abstract that indicated that the policy holder of the motor vehicle KBJ 081E was Papera Logistics. That based on the evidence adduced by PW1, https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19599/eng@2025-12-05 2

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Papera Logistics Ltd.’s role to the Respondent was to transport their products to M/s Biashara Trading situated in Mwingi. That Papera Logistics therefore stood in in the capacity of a bailee and ought to have been sued by the Respondent. 12. The Appellants further stated that the trial court in its judgment erred in placing greater reliance on the demeanor of the witnesses than documentary evidence produced by the parties. The Appellants cited that case of Arthi Highway Developers Limited v West End Butchery Limited & 6 others [2015] KECA 861 (KLR) on the demeanor of a witness and submitted that the trial court in its judgment dismissed the evidence of DW1 on the basis of fidgeting and speaking hesitantly and indicated that the evidence of PW1 and PW2 was unshaken. The Appellants further relied on the holding in Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] KECA 782 (KLR) which cited with approval the case of Mwangi v Wambugu [1984] KLR 453 and urged the court to interfere with findings of the trial court. 13. TH court was also faulted for finding that the Respondent had hired the 1st Appellant to transport its goods in the absence of documentary evidence. The Appellants therefore prayed that judgment of the trial court be set aside. 14. The Respondent in their submissions dated 10th April 2025 argued on whether the learned trial magistrate erred in law in relying on the demeanor of the 1st Appellant in analyzing the evidence, that, according to Anyona v Wells Oil Limited & 2 others [2023] KEHC 26833 (KLR), demeanor of a witness in legal context refers to the judge’s assessment of a witness’ overall appearance, behavior and mannerisms while testifying which can be used to help determine their credibility. That demeanor also includes a witness’ body language, tone of voice, eye contact and overall composure, as well as how they react to questions and the unfolding events at the trial. 15. That the Anyona case (supra) cited with approval the case of Peter Kanithi Kimunyav Aden Guyo Haro (2014) eKLR where it was held that a case is not just proved by documentary evidence but that it depends on the circumstances of each case. The Respondent submitted that the trial court then did not fall into error by applying demeanor evidence to establish liability of the Appellant. 16. On whether the trial court properly applied the insurance doctrine of subrogation in the circumstances of the case, the Respondent submitted that the doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon anyone who is not a party thereto. That the insurance policy was a contract between the Respondent and her insurer and the Appellants herein being neither party nor privy thereto are estopped from interrogating its validity or otherwise, or seek to enforce its terms for that matter. 17. The Respondent argued that they duly discharged their burden of proof by proving that there was valid contract of insurance between the Respondent and the insurer, M/s APA Insurance, at all material times of the suit, that pursuant to the contract of carriage of insurance, the insurer fully indemnified the Respondent for the loss incurred as a result of the breach of transportation contract between the Respondent and the Appellant, and that the Respondent was under an obligation to bring action in her own name so that the insurer can recover their outlay pursuant to indemnifying the Respondent for the loss, and thus the instant suit. 18. The Respondent stated that they discharged their burden of proof on a balance of probabilities with the onus shifting to the Appellant but they failed to rebut. That therefore, the judgment in favour of the Respondent was sound in law and fact and the same ought not be disturbed in the circumstances. That in the Anyona case (supra), it was reemphasized that the initial burden of proof lies with the Plaintiff but the same may shift to the Defendant depending on the circumstances of the case. The court in the case cited with approval the holding in Willian Kabogo Gitau v George Thuo & 2 others https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19599/eng@2025-12-05 3

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(2010) 1 KLE 526 to support the position. That therefore, the appeal herein is without merit, it is tantamount to an abuse of the court process and ought to be dismissed accordingly with an attendant order as to costs. Analysis 19. The role of the first appellate court to re-examine and to reevaluate evidence to come up with its own findings was set out in Selle v Associated Motor Boat Co. (1968) E.A 123 as follows: “ … Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect …” 20. 21. I have considered the Record of Appeal dated 13th October 2023 and submissions by the parties. The issues for determination are: a. Whether it was proper for the trial court to analyse evidence on the doctrine of subrogation b. Whether the trial court’s determination on the basis of demeanor of witnesses was proper c. Whether the trial court erred in finding that the Appellants were liable d. What orders on costs should issue The Court of Appeal in Africa Merchant Assurance Company v Kenya Power & Lighting Company Limited (2018) eKLR held as follows with regards to the doctrine of subrogation: “ The essence of the doctrine of subrogation is not in contention. It allows an insurer after compensating an insured for any loss under the insurance contract to step into the shoes of the insured. In that, the insurer is entitled to all the rights and remedies the insured might have against a third party in respect of the loss compensated. As it stands, the law in that respect is settled, that is, that an insurer cannot under the doctrine of subrogation institute a suit in its own name against a third party.” 22. For the doctrine of subrogation to be invoked, the following conditions must be met as held in the case of Egypt Air Corporation v Suffish International Food Processors (U) Ltd and Another [1999] 1 EA 69 where the Court held as follows: “ The whole basis of subrogation doctrine is founded on a binding and operative contract of indemnity and it derives its life from the original contract of indemnity and gains its operative force from payment under that contract; the essence of the matter is that subrogation springs not from payment only but from actual payment conjointly with the fact that it is made pursuant to the basic and original contract of indemnity. If there is no contract of indemnity, then there is no juristic scope for the operation of the principle of subrogation.” 23. From the above, the following conditions must be met; a. There must be existence of an insurance contract b. The risk must have crystalized c. Actual payments were made in order to indemnify the insured https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19599/eng@2025-12-05 4

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24. I have perused through the lower court proceedings. The Respondent availed witnesses from the insurance company where the Claims Officer, PW1, testified that the Respondent was fully insured by APA Insurance. After carrying out investigations and confirmed that a self-involving accident had occurred and Respondents goods which were on transit looted by members of public, the Insurance company compensated the Respondent by paying Kshs. 1,428,942/=. I find that there was an existence of insurance between the Respondent and the insurer and the insured was indemnified. 25. On whether the risk had crystalized, there is evidence that the vehicle involved in the accident belonged to the Appellants, a fact admitted by the 1st Appellant. The accident was self-involving and the driver did not testify. The court correctly found that he driver was liable for the accident. 26. On whether the Appellants were liable to compensate the Respondent, the 1st Appellant denied that the vehicle was carrying the Respondents goods. In her evidence in chief, she stated that he vehicle was ferrying NCPB cereals. On cross examination, she denied that NCPB goods were being ferried. She also denied knowing Papera Logistics as indicated in the Police Abstract. 27. The court on observing the demeanor of the 1st Appellant while testifying and the fact that she gave contradicting evidence, found her evidence untruthful, and found in favour of the Respondent that the goods were being ferried by the Appellants vehicle. 28. I agree with the submissions by the Respondent that a court can rely on the demeanor of a witness as it was in this case. I find that the court correctly found that the Appellants were liable for the accidence, hence the risk had crystalized. I find that the Respondent discharged the legal burden under Section 107(1) of the Evidence Act which provides as hereunder; “ Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.” 29. From the above, I find the that the appeal has got no merits and is hereby dismissed. 30. On costs, the same follows the event. The Respondent having succeeded in the appeal is awarded costs. Determination 31. Following the foregone discourse, the upshot is that the following orders do hereby issue; a. That the appeal lacks merits and is hereby dismissed. b. Costs awarded to the Respondent It is so ordered. DATED, SIGNED AND DELIVERED AT MOMBASA THIS 05TH DAY OF DECEMBER, 2025 ……………………….. HON. F. WANGARI JUDGE In the presence of; Ms. Njeri Advocate h/b for Mr. Ondari Advocate for the Appellant Mr. Busieka Advocate h/b for Mr. Oloo Advocate for the Respondent https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19599/eng@2025-12-05 5

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Ms. Salwa, Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19599/eng@2025-12-05 6

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