Kariuki v Xplico Insurance Compay Limited (Civil Appeal E407 of 2021) [2024] KEHC 9653 (KLR) (30 July 2024) (Judgment)

Key Facts

Transaction Type

Issues

• The Appellant argued that the Trial Magistrate erred in finding they failed to prove their case on a balance of probabilities. The Appellant contended that the police abstract, which indicated the Respondent's insurance policy, was sufficient evidence, and the burden of disproving it shifted to the Respondent. The court reviewed precedents, including cases where police abstracts were deemed adequate in absence of rebuttal evidence, and concluded the Trial Magistrate misdirected herself by requiring production of the certificate of insurance rather than relying on unchallenged police records.
• The Appellant requested that the Respondent bear the costs of the appeal, citing their failure to challenge the police abstract or produce a certificate of insurance. The court ruled in favor of the Appellant, finding no valid reason for the Respondent to avoid liability, and awarded costs of the appeal to the Appellant as the Respondent did not satisfactorily justify their non-compliance with the statutory obligations under the Insurance Act.
• The Appellant challenged the Trial Magistrate's conclusion that the plaintiff failed to prove the existence of a valid insurance policy. The appellate court found the Trial Magistrate erred by requiring direct evidence of the certificate of insurance, when unchallenged police abstracts, under established case law, suffice. The court emphasized that insurers, having custody of policy documents, bear the burden to refute such evidence, which the Respondent did not do. This misdirection invalidated the Trial Magistrate's findings.

Holdings

• The court emphasized that police abstracts, when unchallenged, constitute sufficient evidence of insurance policy details, as per established case law. The respondent's failure to produce rebuttal evidence or file a repudiatory suit under Section 10(4) of the Act resulted in their liability being affirmed.
• The respondent was ordered to bear the costs of the appeal and the lower court case, as the appeal was found to have merit and the respondent had no valid reason for not satisfying the judgment in the primary suit.
• The appeal court re-evaluated the evidence and concluded that the trial court misdirected itself by requiring the certificate of insurance instead of accepting the unchallenged police abstract as sufficient proof of the respondent's liability. The appeal was allowed, and the respondent is statutorily bound to satisfy the judgment under Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act. The respondent failed to utilize available defenses under Section 10(4), leading to their liability for the decretal sum of Kshs. 1,173,162 and costs of the appeal and lower court proceedings.

Remedies

• The Appellant is awarded the costs of the appeal and the costs of the suit in the lower court. The court determined the respondent had no valid reason for not satisfying the primary judgment and thus the burden of costs falls on them.
• The court found the appeal has merit and allowed it as prayed. The Appellant is entitled to the decretal sum of Kshs. 1,173,162/- from the respondent under the insurance policy, and the costs of both the appeal and the lower court are awarded to the Appellant.
• The court ruled the respondent is statutorily bound to satisfy the judgment in the primary suit (Milimani CMCC No. 11105 of 2018) for Kshs. 1,173,162/-, as there was no evidence the respondent utilized defenses under Section 10(4) of the Insurance Act to avoid liability.

Contract Value

Monetary Damages

Legal Principles

• The court determined that the standard of proof on a balance of probabilities was satisfied by the police abstract's unchallenged evidence. The trial court's requirement for a certificate of insurance was deemed an incorrect application of the standard, as the police abstract sufficed under established legal precedent.
• The court applied the principle that when a plaintiff presents a police abstract indicating insurance coverage and the insurer does not contest it, the burden of proof shifts to the insurer to disprove the abstract's contents. This aligns with case law emphasizing insurers must produce rebuttal evidence if they deny the validity of a police abstract.

Precedent Name

• David Kahuruka Gitau & Another v Nancy Ann Wathithi Gatu & Another
• Joel Muna Opija -Vs- East African Sea Food Ltd
• Esther Muthoni Munyiri v Amaco Insurance Company Limited
• APA Insurance Company Limited v George Masele
• Bernard Mutisya Wambua v Kenya Orient Insurance Company Limited
• Esther Muthoni Munyiri -Vs- Amaco Insurance Company Limited
• Isaac Katambani Iminya vs firestone east Africa (1969) Limited
• Selle And Another V Associated Motor Boat Company Ltd and Others

Cited Statute

• Insurance (Motor Vehicle Third Party Risks) Act
• Civil Procedure Rules 2010
• Evidence Act

Judge Name

Passage Text

• The certificate of insurance is usually issued to the insured and not the road accident victim. It is a document in the special knowledge and possession of both the insured and the insurer. The road traffic accident victim cannot access it. The details in the police abstract as to the details of insurance are in the ordinary cause of events obtained by the police from the certificate of insurance affixed to the motor vehicle or are supplied by the insured.
• The net effect is that I find the appeal has merit and I do allow it as prayed.

Damages / Relief Type

• Costs of the appeal and lower court awarded to the Appellant.
• Declaratory Relief: The respondent is ordered to pay the decretal sum of Kshs. 1,173,162/- from the primary case (Milimani CMCC No. 11105 of 2018).