Musyoki v GA Insurance Company Limited (Civil Appeal E042 of 2025) [2026] KEHC 2781 (KLR) (5 March 2026) (Judgment)

Key Facts

Issues

• Whether the respondent met the legal conditions for cancellation under Section 10(2)(c), which require surrendering the certificate or notifying statutory authorities. The court held these procedural requirements are substantive obligations to protect third-party victims, and the respondent failed to prove compliance.
• Whether the burden of proof shifted to the respondent to demonstrate the cancellation was legally effective, given the appellant's prima facie evidence of coverage via the police abstract. The court ruled the respondent failed to discharge this burden by not proving compliance with statutory cancellation procedures.
• Whether the respondent insurance company's policy for motor vehicle KBW 001J was valid at the time of the accident on 3/5/2023, despite its claim of cancellation in 2022 under Section 10(2)(c) of the Insurance (Motor Vehicle Third Party Risks) Act. The court found the cancellation lacked proper statutory compliance, including failure to notify authorities and surrender the certificate.

Holdings

• The trial court erred in law by misapprehending the statutory requirements for policy cancellation and failing to recognize the respondent's obligation under Section 10(1) to satisfy the judgment despite policy cancellation, unless strict statutory conditions were met.
• The court held that the respondent failed to legally cancel the motor vehicle insurance policy by not notifying the Registrar of Motor Vehicles and Commissioner of Police, as required by Section 10(2)(c) of the Insurance (Motor Vehicles Third Party Risks) Act, rendering the policy valid at the time of the 3/5/2023 accident.
• The burden of proof shifted to the respondent to demonstrate legal cancellation of the policy, which they failed to discharge due to incomplete evidence (discrepancies in policy numbers, lack of statutory notifications).
• The High Court allowed the appeal, set aside the trial court's dismissal of the appellant's suit, and ordered the respondent to satisfy the decree obtained in Voi CMCC No. E0134 of 2023 (Kshs. 879,849/= with interest and costs).

Remedies

• The appellant shall also have the costs of this appeal and the costs of the suit in the lower court.
• The respondent is required to satisfy the decree obtained in Voi CMCC No. E0134 of 2023, which includes the sum of Kshs. 879,849/= together with interest thereon and costs as awarded in that primary suit.

Monetary Damages

Legal Principles

• The court applied a purposive interpretation of Section 10(2)(c) of the Insurance Act, emphasizing the legislative intent to protect third-party victims by requiring insurers to strictly comply with cancellation formalities, even if policies are canceled.
• The court held that the respondent insurer bore the burden to prove the policy cancellation was legally effective, as the appellant established a prima facie case of valid insurance. The respondent failed to discharge this burden due to insufficient statutory compliance evidence.

Precedent Name

• Blueshield Insurance Co. Ltd vs. Raymond Buuri M'Rimberia
• Selle v Associated Motor Boat Co. Ltd

Cited Statute

• Insurance (Motor Vehicle Third Party Risks) Act
• Evidence Act

Judge Name

Passage Text

• The appellant further relies on the Court of Appeal decision in Blueshield Insurance Co. Ltd vs. Raymond Buuri M'Rimberia which held that once statutory liability under section 5(b) is covered by the terms of the policy, the insurer is obliged under section 10(1) of the Act to satisfy the judgment obtained against the insured and pay to the person entitled to the benefit of that judgment all sums payable thereunder with costs and interest, notwithstanding that the insurer may be entitled to avoid or cancel the policy vis a vis the insured or may have avoided or cancelled it.
• The abstract, being a public document, carries evidential weight. The burden then shifted to the respondent, who was pleading a cancellation, to prove that the cancellation was not only factually carried out but was also legally effective in compliance with the stringent provisions of Section 10(2)(c) of the Act.
• The learned trial magistrate, with respect, misapprehended the correct legal principles applicable to the cancellation of a motor vehicle insurance policy and the statutory obligations of an insurer towards accident victims.