Directline Assurance Company Limited v Juma Ali Sikiro [2021] eKLR

Key Facts

Issues

• The appeal challenged the Trial Magistrate's interpretation of Section 10, which mandates insurers to pay judgments against the insured, questioning if the section applies when the claimant is an employee.
• The court considered if the insurance policy (Cap 405) covers the respondent's injuries as he was an employee (conductor) of the insured, which would typically exclude coverage under the Act.
• The case addressed if the respondent, as an employee, should have filed a claim under the Work Injury Benefits Act (Act No. 13 of 2007) rather than the insurance policy under Cap 405.
• The court examined the validity of the judgment in Mombasa CMCC No. 2892 of 2009, where the insured was not a party, and whether the judgment was procured through misrepresentation of the respondent's status as a passenger.

Holdings

• The appeal was allowed, and the lower court's ruling was set aside. The case was remitted for trial on merit before a different magistrate, with each party to bear its own costs. The court emphasized the need to evaluate whether the respondent's conductor status invalidated the insurance liability under the Act.
• The court determined that the lower court's decision to strike out the appellant's statement of defence was improper, as the defence raised triable issues regarding the respondent's employment status as a conductor (employee) of the insured vehicle, which excludes coverage under the Insurance (Motor Vehicles Third Party Risks) Act. The ruling highlighted that the defence warranted a trial to assess whether the respondent's injuries fell within the policy's exclusion for employee-related claims.

Remedies

• Each party shall bear its own costs.
• The appeal is allowed.
• The case shall be heard on merit by a different Magistrate, other than Hon. Kasam, whose ruling is the subject of this appeal.
• The ruling of the Trial Magistrate delivered on 22nd March, 2019 in Mombasa CMCC No. 1542 of 2016 is hereby set aside.

Monetary Damages

Legal Principles

• The court held that the Trial Magistrate erred in law by striking out the appellant's defence without proper consideration of triable issues. It emphasized that appellate courts must not interfere with discretionary decisions unless there is a clear misdirection, misapprehension of facts, or an erroneous application of principles governing pleadings. The ruling reinforced the importance of allowing defences raising bonafide issues to proceed to trial.
• The judgment relied on Section 5(b) of the Insurance (Motor Vehicles Third Party Risks) Act, which excludes coverage for bodily injuries sustained by employees of the insured in the course of employment. The court determined that the respondent's status as a conductor (employee) of the insured vehicle excluded the appellant's liability under the policy, necessitating evidence to resolve this factual issue.

Precedent Name

• Postal Corporation of Kenya vs Inamdar & 2 others
• Equatorial Commercial Bank Ltd v Jodam Engineering Works Limited & 2 others
• Wangechi & 2 others vs United Insurance Co. Ltd
• United Insurance Co. Ltd vs Lawrence Ruthi Mwangi
• Blue Sky EPZ Limited vs Natalia Polyakova & another
• Diamond Trust Bank Kenya vs Peter Mailanyi & 2 others
• Carl Ronning vs Societe Naval Chargeurs Delmas Viejeux (The Francais Bieljeux)
• Nation Media Group vs Communication Concept
• DT Dobie & Company (Kenya) Ltd vs Muchina
• Gateway Insurance Company Limited vs Ng'ang'a Njuguna

Cited Statute

Judge Name

• Njoki Mwangi
• Hon. J. Kasam

Passage Text

• The upshot is that the appeal succeeds. The ruling of the learned Trial Magistrate delivered on 22nd March, 2019 in Mombasa CMCC No. 1542 of 2016 is hereby set aside.
• The provisions of Order 2 Rule 15 of the Civil Procedure Rules, 2010 exist in order to bar a party from instituting a claim and/or filing a statement of defence that discloses no reasonable cause of action.
• The power of the Court to strike out a pleading under Order 6 rule 13(1) (b) (c) and (d) is discretionary and an appellate Court will not interfere with the exercise of the power unless it is clear that there was either an error on principle or that the trial Judge was plainly wrong.