Appeal Court rejects bid to halt Sh4.4 million fatal crash payout

Judges said liability rests primarily with insured parties, not insurer.

The Court of Appeal in Nairobi has declined to stop the execution of a Sh4,4 million compensation award arising from a fatal road accident, ruling that the applicants failed to demonstrate an arguable appeal and had abused court process by pursuing parallel remedies.

Luxury Shuttle Tours & Travel Ltd and its driver, Charles Mwiti Kinyua, had moved to the appellate court seeking “stay of execution and stay of further proceedings” pending an intended appeal against a High Court decision that lifted an earlier stay.

The dispute traces back to a 2020 accident in which Benson Kinuthia Wanja died.

His estate administrators sued in the Senior Principal Magistrate’s Court at Wang’uru in Nyeri and, on February 28, 2024, obtained judgment for Sh4,440,627 compensation plus costs and interest.

The applicants did not challenge the award. Instead, they filed a declaratory suit against their insurer, Invesco Assurance Co. Ltd, seeking to compel the insurer to pay the amount.

Pending that suit, they asked the trial court to stay execution of the decree.

The magistrate’s court granted a conditional stay on May 14, 2024, holding that section 5 of the Motor Vehicle (Third Party Risks) Act capped the insurer’s liability at Sh3 million.

It ruled the applicants were responsible for the balance and ordered them to deposit half of Sh1,440,627.

The respondents (administrtors of the deceased man) appealed before the High Court, argueing that it was “erroneous” to stay execution when no appeal had been lodged against the decree and that the Motor Vehicle (Third Party Risks) Act did not provide for such a stay.

The High Court agreed, finding there was “no appeal from the decree” and that the declaratory suit did not extinguish the applicants’ liability.

The court set aside the stay order but the applicants challenged the outcome and told the Court of Appeal their intended appeal was arguable.

They said the issues included “whether a judgment debtor who holds a valid insurance cover is liable to settle the decree when the insurer is under statutory management”, whether the statutory cap of Sh3,000,000 had been ignored, and whether their constitutional rights had been infringed.

They further argued that paying the full amount would “cripple their operations” and defeat the policy objective of the statute.

The respondents countered that the application was an “abuse of the process of the court”, noting that after filing in the appellate court, the applicants returned to the trial court and obtained fresh interim stay orders.

They maintained the intended appeal was not arguable because the decree itself had never been appealed and stressed that “in law it was the obligation of the respondents to settle the decree”.

They also argued the appeal would not be rendered nugatory because the decree was monetary and recoverable if the appeal succeeded.

On preliminary objections, the Court of Appeal rejected claims that the notice of appeal was invalid and that failure to attach a draft memorandum was fatal, reiterating that those defects were not determinative at this stage.

On the merits, however, the bench of Justices K M’Inoti, Aggrey Muchelule and George Odunga held the applicants had not met the twin tests for relief.

“Although the applicants’ intended appeal is against the decision of the High Court that set aside the earlier order of stay… the appellants have neither challenged nor appealed against the decree,” the court stated, adding, “in law the liability is primarily that of the applicants as the insured parties”.

Even if arguability had been shown, the judges said the appeal would not be rendered nugatory because the applicants retained a remedy against their insurer.

The court also criticised the applicants’ conduct, describing “glaring evidence of abuse of the process of the court” after they sought another stay from the subordinate court following the High Court’s ruling.

Citing Supreme Court authority, the judges said abuse involves attempts “to manoeuvre the Court’s jurisdiction in a manner incompatible with the goals of justice”.

Concluding there was “absolutely no merit”, the court dismissed the application and awarded the costs to the dead man's estate.