1.MUA Insurance (Kenya) Ltd, (hereafter the Plaintiff) have sued Pewin Cabs Limited (hereafter the Defendant) seeking the following reliefs, inter alia. First, a declaration that the Plaintiff is and has at all material times been entitled to avoid the Policy No. 383/20/08/DT on grounds that the said policy of insurance was obtained by, non-disclosure of a material fact or facts, and representation of facts, which were false in material particulars.
2.Second, a declaration that at the time of accident, there was no insurable interest in respect of the suit motor vehicle registration number KCA 658C and hence the Plaintiff is not liable to pay any claim arising out of the accident on 28/03/2012.
3.Third, a declaration that the Plaintiff is not liable or bound to make payments or to indemnify the Defendant under the insurance Policy No. 383/20/08/DT concerning any claim, in respect of bodily injury or death to any person or passenger in motor vehicle registration number KCA 658C, that may arise from the road traffic accident which occurred on 28.03.2021 along Yangu Kwa Kuloba , involving the said motor vehicle (hereafter the suit motor vehicle) and motorcycle registration number KMCF 950Y (hereafter third party motor cycle).
4.It was averred that by a contract of insurance stipulating the terms and conditions binding the parties, the Plaintiff issued a cover to the Defendant upon payment of due premium and subject to the terms of insurance Policy No. 383/20/08/DT (hereafter the policy); that on 23.03.2021, the suit motor vehicle for which the Defendant had taken a cover under policy was involved in a road traffic accident with the third party motor cycle. The Plaintiff further averred that upon receipt of the claim and upon investigations, it was discovered that the claim had been lodged in respect of one Augustine Mwaka Kanyanya who had no insurable interest under the policy. That arising from the material non-disclosure or misrepresentation on the part of the Defendant, the Plaintiff is not bound to indemnify the Defendant for any loss or injuries to any party whatsoever on account of the policy issued to the Defendant.
5.The Defendant despite being served with summons failed and or neglected to enter appearance or file defence.
6.The suit proceeded for formal proof hearing during which Christine Ndanu Mutisya testified on behalf of the Plaintiff as PW1 and was the sole witness. She identified herself as a Claims Supervisor at the Plaintiff company and adopted her witness statement dated 27.05.2021 as her evidence in chief. She also produced the bundle of documents attached to the Plaintiff’s list of documents dated 02.06.2021 as PExh.1 – PExh.8. The gist of her evidence was that the Plaintiff is not bound to satisfy any claim arising or made in respect of motor vehicle KCA 648C, which had been sold to a third party at the time of the accident. That as an insurable interest in not transferable, the claim lodged in that regard was by a stranger.
7.Upon the close of its case, the Plaintiff’s counsel filed submissions in respect of the matter. He began by rehashing the evidence before the court and condensing his submissions into two (2) cogent issues for determination. Addressing the court on the first issue, he called to aid the Indian decision in United India Insurance Co. Ltd v M.K.J Corporation  6 SCC India 428 to assert that contracts of insurance are contracts of utmost good faith and every relevant material is required to be disclosed. That the Defendant by misrepresenting and giving false and untrue information on material facts while proposing and applying for the subject insurance policy cover with the Plaintiff, breached the contract of insurance and the principle of good faith.
8.Submitting on the second issue counsel invoked the provisions of Section 10(4) of Insurance (Motor Vehicle Third Party) Act and cited the decision in Blueshield Insurance Co. Ltd v Samuel Nyaga Ngurukiri  eKLR to contend that the Plaintiff has met the statutory threshold for repudiation of the Defendant’s claim. That after discovery of the misrepresentation and falsehood by the Defendant, a repudiatory letter was sent to the Defendant setting out the non-disclosure and false representation necessitating avoidance of the policy. In conclusion, counsel relied on the provisions of Section 27 of the Civil Procedure Act and the decision in Party of Independent Candidate of Kenya & Another v Mutula Kilonzo & 2 Others  eKLR to argue that the Plaintiff has proved its case against the Defendant and therefore costs ought to follow the event.
9.The court has considered the pleadings, evidence, and submissions of the Plaintiff. The sole issue for determination is whether the Plaintiff has established on a balance of probabilities that the Defendant was in breach of the policy of insurance and whether the Plaintiff is entitled to repudiate any claim in respect of the suit motor vehicle.
10.In Wareham t/a A.F. Wareham & 2 Others Kenya Post Office Savings Bank  2 KLR 91, the Court of Appeal stated in this regard that: -
11.The key averments in respect of the Plaintiff’s pleadings have earlier in this judgment, been captured in part and thus do not require reproduction. At the hearing, PW1 adopted her witness statement whose key assertions are that:
12.The applicable law as to the burden of proof is found in Section 107, 108 and 109 of the Evidence Act which provides that;
13.In Karugi & Another v Kabiya & 3 Others  KLR 347 the Court of Appeal stated that:
14.The Plaintiff’s case rests on the Defendant’s alleged material non-disclosure. A contract of insurance or policy agreement prescribes the rights and obligation of the respective parties. The Court of Appeal in Co-Operative Insurance Company Ltd v David Wachira Wambugu  eKLR while addressing itself to the nature of insurance contracts held that:
15.The essence of PW1’s evidence was that a stranger to the contract of insurance Augustine Mwaka Kanyanya sought to utilize the cover under the policy whereas based on the information that had been provided to the Plaintiff prior to the payment of premium, the Defendant represented to the Plaintiff that it owned the suit motor vehicle. To buttress the same, she produced copies of the Policy of Insurance as (PEXh.1), Policy Schedule as (PExh.2), Claim Form as (PExh.3) and the Police Abstract as (PExh.4). That said, a perusal of the claim supporting documents, being the Policy of Insurance & Schedule and Certificate of Insurance (PExh.6) the Defendant is indicated to be the insured in respect of the suit motor vehicle.
16.However, in the Claim Form, Police Abstract and Logbook (PExh.5), one Augustine Mwaka Kanyanya is stated to be the owner of the suit motor vehicle. The Plaintiff’s contention is that there was no insurable interest in respect of Augustine Mwaka Kanyanya as an insurable interest cannot be transferred. The repudiatory letter (PExh.7) stated in part that… “we confirm having received the claim supporting documents as well as carried out assessment. We note that at the time of accident, the motor vehicle had already been sold and ownership transferred to the buyer. Therefore, you do not have insurable interest on it. Further, kindly note insurance contract are not transferable to other parties.”
17.Mwilu JA (as she then was) in Kenya Alliance Insurance Company Ltd v Parklands Shade Hotel Limited & Another  eKLR while addressing herself on repudiation in insurance contracts stated that;-
18.It is undisputed that there existed a policy of insurance executed between the parties herein in respect of the suit motor vehicle under policy number Policy No. 383/20/08/DT that was to subsist from 03.02.2021 to 02.02.2022. Although the proposal form was not tendered as evidence from the documents before the court, it is apparent that the insured in respect of the suit motor vehicle, at the time of the accident was the Defendant. However, it appears that one Augustine Mwaka Kanyanya lodged a claim in respect of the policy of insurance regarding the accident involving the suit motor vehicle. A preliminary assessment of the claim revealed that the suit motor vehicle had been sold to Augustine Mwaka Kanyanya. The question therefore is whether there existed an insurable interest in respect of Augustine Mwaka Kanyanya as pertains the suit motor vehicle.
19.The Court of Appeal in Kinyanjui v Kenya Orient Insurance Company & another (Civil Appeal 372 of 2017)  KECA 1333 (KLR) had this to say in respect of an insurable interest;-
20.The accident that is the subject of the lodged claim in respect of the suit motor vehicle occurred on 28.03.2021 as per the Police Abstract adduced into evidence. The claim form lodged as at 08.04.2021 by Augustine Mwaka Kanyanya indicates that he was the owner of the suit motor vehicle. Applying the dicta above to the instant proceedings, the contract of insurance was between the parties to this suit and not Augustine Mwaka Kanyanya, a third party. In effect Augustine Mwaka Kanyanya had not contracted the Plaintiff to secure his insurable interest in respect to which he could lodge a claim, whereas the Defendant ceased to have an insurable interest therein upon the transfer of the suit motor vehicle to the third party. Hence none of them could benefit from the policy of insurance.
21.In conclusion, the Plaintiff’s evidence stands uncontroverted and the court is persuaded the Plaintiff has established its case on a balance of probabilities. Accordingly, judgment is hereby entered for the Plaintiff as prayed in the plaint.