Automated Summary
Transaction Type
Theft Insurance Policy dispute between Cycle Importers Limited and Tausi Assurance Company Limited
Key Facts
Cycle Importers Limited claimed Shs. 21,236,269 in losses after their premises in Monrovia Street, Nairobi, were vandalized on 28th February 2009. The incident was reported to police and a claim submitted under their theft insurance policy (No. POL/1138/102/2003) with Tausi Assurance Company Limited. The defendant denied coverage, arguing the goods were removed during a lawful distress for rent by the landlord's auctioneers, not a burglary. The court ruled that the plaintiff's application for summary judgment failed due to triable issues, including whether the event constituted theft under the policy and potential breaches of policy conditions (e.g., delayed claim submission). The case was dismissed, requiring a full trial to resolve disputes.
Issues
- The court considered if the removal of goods by Auckland Agencies during a distress for rent on 28th February 2009 constituted 'theft' as defined in the insurance policy, which requires 'forcible and violent entry' by thieves. The Defendant argued the incident was a lawful distress, not theft.
- The Defendant alleged the Plaintiff failed to lodge a valid claim form within 7 days of the 28th February 2009 incident, as required by the Theft Policy. The claim was submitted on 26th May 2009, three months later.
- The Plaintiff claimed property valued at over Shs. 20,500,000/- was stolen, while the Defendant contended the First Loss Amount of Shs. 5,400,000/- should limit the claim. The court noted this required determination at trial.
Holdings
The court dismissed the Plaintiff's Notice of Motion dated 18th November 2010 with costs to the Defendant, determining that there were several triable issues requiring a full trial, including whether the incident fell under the theft policy, the application of First Loss principles, and alleged breaches of policy conditions.
Contract Value
26800000.00
Remedies
The court dismissed the Plaintiff's application for summary judgment, determining that the Defendant's Defence raised triable issues requiring a full trial. The ruling included an award of costs to the Defendant.
Legal Principles
The court dismissed the plaintiff's summary judgment application, emphasizing that summary procedures are drastic and should only be used in clear cases where there are no triable issues. The judge cited principles from multiple cases (e.g., Proline Supaquick Ltd v Kenya Oil Co. Ltd, Awuondo v Surgipharm Ltd) and legal texts, noting that a defendant must be given leave to defend if the defence raises even one bona fide triable issue. The ruling highlighted that unresolved issues, such as whether the incident fell under the theft policy and breach of claim lodgment timelines, necessitate a full trial.
Key Disputed Contract Clauses
- The Defendant alleged the Plaintiff breached the policy's condition requiring a claim form to be submitted within 7 days of the incident. The claim was lodged 3 months post-incident, leading to disputes over procedural compliance and policy validity.
- The Defendant asserted the Plaintiff breached the Books Clause and Safe and Books Clause of the policy, though the document does not specify the exact terms of these clauses. This formed part of the triable issues requiring a full trial.
- The dispute centered on the application of the First Loss Amount of Shs. 5,400,000/-, with the Defendant arguing this should limit the claim. The Plaintiff disputed this, asserting the loss exceeded the First Loss threshold and the policy's full sum insured should apply.
- The court analyzed clauses (a) and (b) of the theft insurance policy, which require theft to follow an 'actual forcible and violent entry' to premises. The Plaintiff argued the 28th February 2009 incident met this definition, while the Defendant contended it was a lawful distress, not theft.
Precedent Name
- Achkay Holdings Ltd v N.M Shah T/A Braidwood College
- D.T Dobie (K) Ltd v Muchina
- Wenlock v Maloney & Others
- Moi University v Vaishra Builders Ltd
- Lacoste Ltd v Henry Oulo Ndede
- Shah v Padamshi
- Proline Supaquick Ltd v Kenya Oil Co. Ltd
Cited Statute
- Civil Procedure Rules
- Penal Code
- Civil Procedure Rules, 2010
Judge Name
J. B. Havelock
Damages / Relief Type
Compensatory Damages for property loss exceeding Shs. 21,236,269/-
Passage Text
- The summary procedure under Order 6 Rule 13 can only be adopted when it can be clearly seen that a cause of action or defence on the face of it obviously unsustainable and should be applied only in plain and obvious case.
- Except in the clearest of cases, which this one is not, it is inadvisable for the court to prefer one affidavit to another in order to enter summary judgement. Summary judgement is a drastic remedy to grant, for inherent in it is a denial to the respondent of his right to defend the claim made against him. A trial must be ordered if a triable issue is found to exist, even if the court strongly feels that the defendant is unlikely to succeed at the trial.
- The result of the foregoing is that I consider that there is not one but several issues that need to be tried as regards this suit including whether the incident giving rise to the Plaintiff's claim can fall under the theft Policy taking into account the definition of 'Theft'.