Lubisia v Trident Insurance Company Ltd (Civil Case E161 of 2025) [2026] KEMC 698 (KLR)

5. It was also averred by the insurer that the insured herein did not serve upon them a Statutory Notice and the notice of intention to sue per the Insurance (Motor vehicle Third Party Risks) Act (‘the Act’). 6. The insurer also averred that the insured was not a person covered under any policy issued by them, hence the insured was not entitled to any compensation within the meaning of cap. 405. 7. Further, the insurer denied owing the insured Kshs. 1,805,205/= plus costs and interest sought herein. 8. Given the divergent positions taken by the parties herein over this matter, this matter proceeded to full hearing, where the parties herein led the evidence summarized below. PLAINTIFF’S CASE 9. PW1 Gabriel Mutoro Lubisia adopted his witness statement dated 09th April 2024 as his evidence in chief. That statement was largely a rendition of the summary of his averments in his Plaint set out above. He also produced all the documents listed in his list of documents dated 09th April 2025 as exhibits. The documents included a copy of insurance, a copy of police abstract, warrants of execution issued against the insured in the primary suit, and several receipts evidencing payment of money to the decree holder in the primary suit. 10. In cross-examination, he stated that he notified the insurer about the occurrence of the accident which gave rise to this suit. He conceded that the receipts he had filed in support of his case proved payment of Kshs. 1,720,205/= to the decree holder in the primary suit. He added that he delivered the documents in the primary suit to the insurer’s office in Eldoret. 11. He concluded his testimony by stating that upon notifying the insurer about the primary suit, the insurer reported instructed Mr. Erick Ndabwa to represent him. DEFENDANT’S CASE 12. DW1 James Ojoro; the insurer’s Legal Officer, adopted his witness statement dated 07th October 2025 as his evidence in chief. His testimony was, by and large, a summary of the insurer’s Statement of Defence above, which this court need not reproduce here.

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13. He also testified that a policy document is the genesis of any insurance contract; therefore, one cannot have a certificate of insurance without a policy. He added that an insured has a duty of reporting the occurrence of an accident within thirty (30) days of the occurrence of an accident for settlement. 14. In cross-examination, he admitted that he had perused the primary suit’s file. He stated that he could not tell the insured’s counsel in the primary suit. He added that the insured did not hold a valid policy issued by the insurer at the time of the occurrence of the accident in the primary suit. 15. He conceded that the insurer had not filed any report disowning the copy of the Certificate of Insurance placed before this court by the insured. He could not confirm if the insurer issued the said copy of Certificate of Insurance. PLAINTIFF’S WRITTEN SUBMISSIONS 16. The insured submitted that DW1, having confirmed that a Certificate of Insurance could only be issued after compliance by the insured, the insurer was, by dint of section 10 of the Act, obligated to settle the decree in the primary suit. 17. He added that the insurer could only decline to settle the decretal sum in the primary suit if they had commenced an action under section 10 of the Act within the prescribed time and obtained a declaration to the effect that they were entitled to avoid its liability under the insurance policy. He placed reliance on Blue Shield Insurance Company Limited vs- Raymond M’riembera (CA No. 107 of 1997) to buttress this position. 18. In the circumstances, the Plaintiff urged this court to find that he had proved his case to the required standards and that the orders sought in his Plaint were merited. DEFENDANT’S WRITTEN SUBMISSIONS 19. It was the insurer’s submission that section 10 of the Act was predicated on the existence of a policy of insurance; thus, in the absence of a policy of insurance, they could not be called upon to indemnify the insured the decretal sum reportedly paid by the Plaintiff in the primary suit. 20. Further, they submitted that the testimony by DW1 that a Certificate of Insurance can only be issued after compliance was not an admission that there existed a valid insurance policy between the insurer and the insured.

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21. They concluded their written submissions by urging this court to dismiss this suit with costs since the insured had not discharged the burden of proof placed on them. ANALYSIS AND DETERMINATION 22. This court has given due regard to the evidence led by the parties herein, their respective written submissions, as well as the authorities relied upon. 23. From the onset, it should be borne in mind that the questions of whether the accident giving rise to this suit occurred, as well as the ownership and involvement of the subject motor vehicle in the accident giving rise to this primary suit, were determined in the primary suit. Therefore, the averments by the insurer in their Statement of Defence questioning the occurrence of the said accident, the ownership of the subject motor vehicle, and its involvement in the said accident lack any limbs to stand on in fact and law. 24. Flowing from the above, this court takes the view that the issues that merit determination are: a) Whether there existed a valid insurance contract between the insured and insurer at the time of the occurrence of the accident in the primary suit b) Whether the insurer had a statutory duty to settle the decretal sum in the primary suit c) What is the amount of money the insurer should indemnify the insured, if any Whether there existed a valid insurance contract between the insured and insurer at the time of the occurrence of the accident in the primary suit 25. The insured placed before this court a copy of a Certificate of Insurance showing that at the time of the accident herein, the suit motor vehicle had been insured by the insurer vide insurance policy number P/NO.030/070/1/253783. 26. The insured, on the other hand, argued that in the absence of an insurance policy, there was no valid insurance contract between the parties herein.

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27. The law in this jurisdiction is that a Certificate of Insurance is a prima-facie evidence of a contract of insurance. This position finds support in Rono v Monarch Insurance Co. Ltd; Livia (Interested Party) (Civil Suit E011 of 2023) [2025] KEHC 1987 (KLR), where Wananda J rendered himself thus: ‘Under Section 107 and 108 of the Evidence Act, Cap. 80, the burden of proof lies squarely on the Plaintiff. As aforesaid, to prove the insurance, the Plaintiff relied on a police abstract but a police abstract is not, by itself or on its own, conclusive proof of evidence of an insurance contract. The Plaintiff ought to have produced at least a copy of the policy or the duplicate certificate of insurance bearing her name, or receipts for payment for the premium…’ (Emphasis added) 28. Similarly, in Standard Assurance Co. Ltd v Kenya Bus Services Ltd [2014], the court held the certificate is the main proof of coverage for third-party risks under Cap 405 and that its public display indicates an existing contract. 29. The insured having placed before this court a Certificate of Insurance, the evidential burden shifted to the insurer to prove the non-existence of that Certificate of Insurance (see Jubilee Insurance Co Ltd v Walter Tondo Soita [2021] and Bernard Mutisya Wambua v Kenya Orient Insurance Company Limited [2020]) 30. The insurer simply waved away the Certificate of Insurance produced by the insured. The insurer did not lead any credible and cogent evidence to dislodge the insured’s primafacie case of the existence of a valid insurance contract between the parties herein at the time of the accident herein. 31. It is against this backdrop that this court finds and holds that there existed a valid insurance contract between the insured and insurer at the time of the occurrence of the accident that gave rise to this suit. Whether the insurer had a statutory duty to settle the decretal sum in the primary suit

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32. The duty of the Insurance Company (insurers) to satisfy or settle decrees against their insured is a statutory duty which stems from Sections 10(1) and (2) of the Act. 10. Duty of insurer to satisfy judgments against persons insured 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 33. In The Great Insurance Company of India Ltd –vs- Lilian Everlyn Cross and Another [1966] E.A 90, 97, Newbold V.P sitting at the Court of Appeal held as follows concerning the applicability of Section 10 of the Act: “It is submitted on behalf of the insurer that this section only applies where the liability is covered by the terms of the policy and that in this case no liability arose under the policy for any injury caused by a disqualified driver. I accept that this section only applies where both the liability is required under Section 5(b) to be covered by a policy and the liability is in fact covered by the terms of the policy.” (Emphasis added) 34. The authorities above show that where there exists a valid insurance contract under the Act, the insurer must be called upon to settle the decree under the Act unless the liability giving rise to the decree was not covered by the insurer. 35. The insurer did not place before this court any evidence to suggest that the liability giving rise to the decree in the primary suit was one not covered under the insurance contract herein.

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36. Having determined that the insured held a valid insurance policy issued by the insurer at the time of the accident herein, and the liability in the primary suit being a liability covered under the insurance policy between the parties herein, it follows that as a general rule, the insurer had a legal obligation to satisfy the decree in the primary suit per the provisions of the Act. 37. Be that as it may, it is a well-settled principle of law that for every general rule, there are exceptions or an exception. This begs the question of whether the Act provides such exceptions and whether the insurer placed itself within the ambit of any of those exceptions. 38. Section 10(4) of the Act provides as follows regarding this issue: “4.No sum shall be payable by an insurer under the foregoing provisions of this section if in an action commenced before, or within three months after, the commencement of the proceedings in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it: Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such action is so given shall be entitled, if he thinks fit, to be made a party thereto.” 39. The provisions of the law reproduced above show that an insurer is exempted from liability under section 10(2) only where there is stay of execution; where the policy has

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been cancelled and the certificate of insurance surrendered; where no notice of institution of the suit giving rise to the judgment sought to be enforced was served either before institution of the suit or within 14 days after institution of the suit; or where the insurer has obtained a decree entitling it to avoid liability under the policy. These exceptions were well explained in Blueshield Insurance Co. Ltd v Raymond Buuri M’rimberia (1998) eKLR, cited by the insured in his submissions. 40. Another exception is found in section 67C of the Act, where a decree an insured or a decree holder seeks to be satisfied was issued when the insurer is enjoying a moratorium after being placed under statutory management. This was aptly captured in Karari (suing as Legal Representative of the Estate of Stanley Mwangi Muthiru Njambi) & 2 others v Statutory Manager KEHC 2325 (KLR), where the Court stated as follows: “The plain and obvious meaning of section 67C (11) aforesaid is that the policy holder or insured of a company under statutory management is placed in the same position as the company in so far as the moratorium is concerned. In this case, the insureds are judgment debtors and are entitled to indemnity from the company, but the company cannot settle their claims as a result of the declared moratorium. As a result of legislative fiat, the insured as judgment debtor is now protected by the same moratorium.” 41. The foregoing begs the question of whether the insurer placed itself within the exceptions set out above. 42. In a bid to place themselves within the exceptions above, it was the insured’s evidence that they were not served with the statutory notice and the notice of institution of suit in the primary. They further added that the insured did not notify them about the occurrence of the accident giving rise to the primary suit. 43. It is given that the insured did not place before this court any statutory notice and a notice of institution of suit served upon the insurer in the primary suit. It is also common ground that the insured did not place before this court any document to show that he notified the insurer about the occurrence of the accident.

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44. The question at this stage is whether the omissions above were fatal to the insurer’s case. 45. The duty to serve upon the insurer the notice of institution of suit and the statutory notice is not upon the insured. That is a duty placed upon the Plaintiff in the primary suit. If at all, the Plaintiff in the primary suit did not serve upon the insurer the notice of institution of suit and the statutory notice, nothing prevented the insurer from moving the court for a declaration that they were not bound to settle the decree in the primary suit. 46. In any event, given that the insurer pleaded non-service of the statutory notice and the notice of institution of suit in their pleadings, they had a duty of proving those allegations on a balance of probabilities as stated in Kenya Akiba Micro Financing Limited v Ezekiel Chebii & 14 others [2012] eKLR, where the court stated as follows: “Section 112 of the Evidence Act Chapter 80 of the laws of Kenya provides: ‘In civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proofing of disproving that fact is upon him.’ 47. The alleged non-service of the relevant notices could have been proved by the insurer by calling this Court’s Administrator to produce the primary suit’s court file as an exhibit for perusal by this court. 48. Further, DW1 admitted having perused the primary suit’s court file. This means that evidence of the alleged non-service of the said notices, if any, existed in the primary suit’s court file, and the same was within his knowledge, but he chose not to produce the same. 49. Where a party has knowledge or custody or is in control of evidence that that party fails or refuses to tender or produce, the court is entitled to make an adverse inference that if such evidence were produced, it would be adverse to such a party. In Kimotho v KCB [2003] 1 EA 108, the court held that an adverse inference should be drawn upon a party who fails to call evidence in his possession.

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50. Simply put, the insurer failed to prove on a balance of probabilities that they were not served with the relevant statutory notices in the primary suit. 51. Turning to the failure by the insured to place before this court evidence of notifying the insurer about the occurrence of the accident in question, the insured appeared to suggest that the said failure meant that they were not obligated to settle the decretal sum in the primary suit. 52. The argument above by the insurer could only hold water if the insurer had placed before this court the insurance policy between the parties herein for this court to satisfy itself if the said insurance contract or policy provided for notification of the occurrence of the accident by the insured as a condition precedent to settlement of decretal sums or damages by the insurer or repudiation of liability by the insurer. The insurer did not place before this court such evidence. 53. In any event, authorities abound on the position that the mere breach of a condition like the failure by an insured to notify the insurer about the occurrence of an accident does not on the face of it repudiate the insurer’s liability. For instance, in National Consumers Dispute Redressal Commission New Delhi Revision Petition No. 1503 of 2004 the court held: “The mere fact that there was violation of the terms and conditions subject to which the insurance policy had been issued cannot have the effect of exonerating the insurer from statutory liability case upon to pay the amount to third party.” 54. Further, the insurer operates an insurance business under the Insurance Act of Kenya Cap 487 of the Laws of Kenya. The Act requires the Insurance Regulatory Authority to develop guidelines and regulations for the conduct of insurance business in Kenya. 55. Under Section 3A (a), (b) and (e) of the Insurance Act the authority has issued guidelines in the following terms: “(a) The insurer shall not decline a claim on the ground of breach of warranty or condition where the circumstances of the loss are unconnected with the breach.

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(b) Secondly no claim should be declined on grounds of late reporting without establishing and considering the reasons of late notification.”(Emphasis added) 56. The guideline above is abundantly clear that the insurer can only decline a claim where the breached condition is connected with the breach. There is no evidence to suggest that the failure by the insurer to notify the insured about the occurrence of the accident was connected to the loss giving rise to this suit. 57. If the insurer wanted to repudiate its liability in the primary suit, it was incumbent upon them to follow the laid-down procedures of repudiating liability set out under the Act. 58. In Kenyan Alliance Insurance Company Limited v Naomi Wambui Ngira & another (Suing as the Legal Representatives and Administrators of the Estate of Nelson Machari Maina (Deceased) [2021] eKLR, the procedure for an insurer to repudiate their liability under the Act was outlined as follows:“ In essence, repudiation of liability is two-fold, first, by way of giving notice to the Plaintiff in the primary suit, and secondly, by way of filing a declaratory suit. However, the said repudiation is not a blanket one, requiring to be done whenever an insurer has been served with a notice. This Court finds that the requirement for an insurer to file a declaratory suit is intended for only those liabilities for which the insurer is entitled to repudiate and/or avoid for reasons beyond the express provisions of the policy, specifically being that there was nondisclosure of material facts or a misrepresentation of a material fact.” 59. Nothing on record suggests that the insurer repudiated liability in the manner set out above. 60. The long and short of it all is that the insurer failed to prove on a balance of probabilities that this suit fell within the exceptions known in law permitting them to avoid discharging their statutory duty under section 10 of the Act. 61. In the circumstances, the Defendant must be compelled to honour its statutory duty under section 10(1) and (2) of theAct. What is the amount of money the insurer should indemnify the insured, if any

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62. This court has already made a finding above that the insurer had a statutory duty to settle the decretal sum in the primary suit. This means that under the insurance principle of indemnity, the insurer must put the insured back to the position he was in before payment of the decretal sum and other incidental expenses/costs the he paid to the Plaintiff in the primary suit. 63. The Plaintiff pleaded in paragraph 12 of his Plaint that the insurer ought to refund him Kshs. 1,805,205/=. 64. It is given that the said sum sought by the Plaintiff is a liquidated sum in the nature of a Special Damage. It is trite that Special Damages must not only be pleaded but must also be proved before the same are awarded. 65. To this end, this court places reliance on Ryce Motors Limited & Another –v- Elias Muroki [1996] KECA 30 (KLR), where the Court of Appeal stated as follows on this subject: There are umpteen authorities of this court to say that special damages must not only be specifically pleaded but must be strictly proved. Such authorities are now legion. The plaintiff simply gave evidence to the effect that his matatu was bringing him income of Shs. 4500/= per day. He did not support such claim by any acceptable evidence. There was absolutely no basis on which the learned judge could have awarded the sum of Kshs. 2,830,500/= for special damages and we set aside the award in its entirety. 66. The insured placed before this court a receipt dated 19 th September 2024 for Kshs. 830/=, a receipt dated 04th December 2024 for Kshs. 200,000/=, a receipt dated 16 th December 2024 for Kshs. 161,425/=, and another receipt dated 17 th December 2024 for Kshs. 1,357,950/= evidencing payment of Kshs. 1,720,025/= in settlement of the decretal sum and incidental costs in the primary suit. 67. The evidence on record fell short of proving on a balance of probabilities the claimed sum of Kshs. 1,805,2025/=. In the absence of credible evidence by the Plaintiff to support his claim for a refund of Kshs. 1,805,205/= , the Plaintiff must be reminded of the words by Lord Goddard C.J. in Bonham Carter vs. Hyde Park Hotel Limited [1948] 64 TLR 177, where the learned judge rendered himself thus:

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“Plaintiffs must understand that if they bring actions for damages, it is for them to prove damages, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, 'this is what I have lost, I ask you to give me these damages.' They have to prove it", 68. The upshot of the above is that the Plaintiff proved on a balance of probabilities that the Defendant ought to indemnify him a sum of Kshs. 1,720,025/=. DETERMINATION 9. The upshot of the foregoing is that judgment is entered against the Defendant in the following terms:a) The Defendant to refund the Plaintiff the sum of Kshs. 1,720,205/= b) The amount in (a) above, being a liquidated sum, shall attract interest at court rates from the date of filing this suit until payment in full. c) The Plaintiff will have the costs of this suit 10. Judgment accordingly. Read, signed, and delivered in open court at Bungoma this 16th day of January 2026 T.O. OMONO SENIOR RESIDENT MAGISTRATE In the presence of: Wakhanu for the Plaintiff C/A: Mr. Rioba

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