Dora Mbula t/a Tamarillo Junior Academy v Africa Merchant Assurance Company Limited; Hillary Nyabali Ndusu (Interested Party) [2020] eKLR Case Summary

Court
High Court of Kenya at Eldoret
Category
Civil
Judge(s)
Olga Sewe
Judgment Date
October 07, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the case summary of Dora Mbula t/a Tamarillo Junior Academy v Africa Merchant Assurance Company Limited; Hillary Nyabali Ndusu [2020] eKLR. Gain insights into legal arguments and implications from this important judgment.

Case Brief: Dora Mbula t/a Tamarillo Junior Academy v Africa Merchant Assurance Company Limited; Hillary Nyabali Ndusu (Interested Party) [2020] eKLR

1. Case Information:
- Name of the Case: Dora Mbula T/A Tamarillo Junior Academy vs. Africa Merchant Assurance Company Limited
- Case Number: Civil Case No. 48 of 2019
- Court: High Court of Kenya at Eldoret
- Date Delivered: 7th October 2020
- Category of Law: Civil
- Judge(s): Olga Sewe
- Country: Kenya

2. Questions Presented:
The central legal issues for resolution in this case are:
- Whether there exists a valid insurance contract between the plaintiff and the defendant.
- Whether the defendant breached the insurance contract.
- Whether the plaintiff is entitled to a stay of execution of the judgment and decree from a lower court pending the determination of the current suit.

3. Facts of the Case:
The plaintiff, Dora Mbula, operates Tamarillo Junior Academy and is the registered owner of Motor Vehicle Registration No. KAP 496Q, which was insured by the defendant, Africa Merchant Assurance Company Limited, under a third-party insurance policy. The vehicle was involved in a road traffic accident on 24 May 2018, resulting in injuries to the interested party, Hillary Nyabali Ndusu. Following the accident, Ndusu sued the plaintiff in Eldoret CMCC No. 888 of 2018, where the court awarded him Kshs. 528,900 plus interest and costs. The defendant failed to satisfy this decree, prompting the plaintiff to seek a stay of execution through the current application.

4. Procedural History:
The plaintiff filed a Notice of Motion on 11 December 2019, seeking a stay of execution of the judgment from the lower court. The application was served on the defendant, who did not respond, while the interested party filed a replying affidavit asserting that the plaintiff was attempting to circumvent a consent order regarding the payment of the awarded sum. The application was argued through written submissions, with the plaintiff asserting her right to insurance coverage and the interested party contesting the request for a stay due to the existence of a consent order.

5. Analysis:
- Rules: The court considered Articles 40, 48, 50(1), and 159 of the Constitution of Kenya, Sections 1A, 1B, 3A, and 63(e) of the Civil Procedure Act, and relevant provisions from the Civil Procedure Rules. The court also referenced Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act, which emphasizes the purpose of insurance contracts in protecting third-party rights.

- Case Law: The court cited *Anctol vs. Manufacture Life Insurance Co.* [1989] AC 604, which establishes the need for an identifiable insurable interest in insurance contracts. Additionally, previous cases such as *Charles Mackenzie Wambua vs. Africa Merchant Assurance Co. Ltd & Another* [2014] eKLR and *New Great Insurance Co. of India Ltd vs. Lilian Everlyne Cross & Another* [1966] EA 90 were referenced to support the plaintiff's argument regarding the obligation of insurers to compensate third-party claimants.

- Application: The court found that the plaintiff had a prima facie case against the defendant regarding the existence of an insurance contract and the defendant's obligation to satisfy the decree in the lower court. The court reasoned that the plaintiff’s application for a stay of execution was justified, as there was no evidence of an imminent execution of the decree and the interested party had not sufficiently proved the existence of a consent order that would preclude the stay.

6. Conclusion:
The court granted the plaintiff's application for a stay of execution of the judgment and decree from the lower court pending the hearing and determination of the current suit. The ruling emphasized the necessity for the plaintiff to pursue her claim against the defendant without being compelled to pay the decree amount prematurely.

7. Dissent:
There was no dissenting opinion in this case as the ruling was delivered by a single judge.

8. Summary:
The High Court of Kenya ruled in favor of the plaintiff, granting a stay of execution of the lower court’s judgment pending further proceedings. This decision underscores the importance of ensuring that an insured party can pursue their legal rights without immediate financial repercussions from a decree that may ultimately be the responsibility of their insurer. The case highlights the complexities surrounding insurance contracts and the obligations of insurers in compensating third parties.

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