APA INSURANCE LIMITED v THEODORA ATIENO OKAL [2012] eKLR

Key Facts

Transaction Type

Issues

• Whether APA Insurance Limited was formed through the merger of Apollo Insurance Company Limited and Pan Africa Insurance Company Limited and the effective date of the merger as per Legal Notice No. 8126.
• Whether the trial magistrate erred in striking out the Appellant's defence and entering judgment in favour of the Respondent, particularly regarding failure to file a statutory objection under Section 10(4) of Cap 405 within the prescribed period.
• Whether APA Insurance Limited inherited the insurance liabilities of the merged Apollo and Pan Africa Insurance Companies, specifically regarding motor vehicle accident claims under Civil Suit No. 6539 of 2006.
• Whether the Respondent was entitled to damages under the 30% liability apportioned against Kenya Bus Services in the original suit and if the Ksh.318,842/60 award was correct.

Holdings

• The court found APA Insurance Limited was properly served with the statutory Notice under Section 10(2) of Cap 405 but failed to file a declaration to avoid liability within the required three-month period. This failure statutorily barred them from raising the defense in the subsequent suit.
• APA Insurance Limited inherited the insurance liabilities of the merged companies, including the 30% liability from the motor vehicle accident claim in Civil Case No. 6539 of 2006. The liability was fully covered under the transferred assets and obligations.
• The appeal was dismissed for lacking merit. The Appellant provided no evidence of having filed a declaration to avoid liability or served the required notice to the Plaintiff. Costs were awarded to the Respondent.
• The court ruled that APA Insurance Limited was created through the merger of Apollo Insurance Company Ltd and Pan Africa Insurance Company Ltd, effective 1st January 2003, as per Legal Notice No. 8126. The merger transferred all liabilities, including motor vehicle accident claims, to APA Insurance Limited.
• The trial court correctly struck out the Appellant's defense as it raised no triable issues. The defense was deemed a sham intended to delay the fair trial, and the Appellant had no lawful basis to avoid liability under the provisions of the Insurance Act.

Remedies

• The Respondent was awarded costs in the case against the Appellant.
• The court made orders in accordance with the dismissal of the appeal, upholding the trial court's judgment.
• The appeal was dismissed for lack of merit as it had no legal basis to challenge the trial court's decision.

Contract Value

Monetary Damages

Legal Principles

Cited Statute

Judge Name

Passage Text

• "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 material fact or by a representation of fact which was false in some material particular, or, if he has avoided the policy on the ground, that he was entitled so to do apart from any provision contained in it."
• through the Government Gazette Notice No. 8126, a transfer of property, undertakings, assets and liabilities of the respective general insurance businesses of Apollo Insurance Company Ltd and Pan Africa Insurance Company Limited to a new limited liability Company (APA Insurance Ltd) with effect from 1st January 2003 (The appellant herein).
• APA Insurance Ltd failed to commence proceedings for or obtain a declaration that it was entitled to avoid the liability under the policy of Insurance issued to Kenya Bus Service by Pan Africa Insurance Company Ltd, under Section 10(4) of Cap 405 and accordingly the Defendant/Appellant was under obligation to satisfy the Plaintiff's claim.

Damages / Relief Type