Intra Africa Assurance Company Limited v Simon N. Njoroge Avertano Da Costa & 1 other

The court applied the plain meaning of section 10(4), which provides that no sum shall be payable by an insurer if he had commenced an action before or within three months after the commencement of the proceedings in which the judgment was given and had obtained a declaration of entitlement to avoid the policy for non-disclosure or misrepresentation. The trial Judge had read the sub-section as a condition precedent requiring the declaration to be obtained within that window. The Court of Appeal held that the sub-section cannot bear that meaning; the timing requirement attaches to the commencement of the action, not to the obtaining of the declaration.

Having granted the declaration as prayed in the plaint and found for the appellant on the issues before him, the trial Judge went further to opine that the declaration only entitled the insurer to claim indemnity from the insured but did not protect it against third parties satisfying section 10. The Court of Appeal held there was no such issue before the trial court, so the opinion was purely gratuitous and had to be set aside. The declaration itself, granted in terms of the plaint, was undisturbed.

The Court of Appeal found that the trial Judge had distinguished the appellant's proceedings for the declaration ('the suit') from the injured party's proceedings for damages ('the action'), and had said the declaration must be obtained before or within three months after 'the action'. Since the appellant's complaint mischaracterised the Judge's reasoning, the second ground of appeal had no merit and was rejected.