Invesco Assurance Co. Ltd v Granata Ernesto (suing as Attorney of Denise Granata) [2018] KECA 19 (KLR)
The bottom line
#A Kenyan insurer that wants to refuse a fire claim must prove the customer's non-disclosure actually influenced its decision to issue the policy — suspicion alone isn't enough.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether there was material mis-description and/or non-disclosure by the respondent regarding the land and the building and the effect thereof
- 2.Whether the learned Judge failed to consider evidence and/or submissions placed before her
Key legal issues
#Whether the alleged mis-description and non-disclosure regarding the parcel of land rendered the insurance contract avoidable
No material discrepancy was shown between the parcel described under the policy and the parcel where the fire occurred; the allegation was rightly dismissed by the trial court.
The lease, the provisional cover note and schedule, and both loss adjusters' reports all described the same premises (Plot No. 798, Original No. 794/4 Angels Bay Mambrui). The court found the identity of the insured land was consistent across the documents, so the insurer's allegation of a different parcel on the ground failed.
Whether the mis-description of the roofing materials and the number of storeys amounted to material non-disclosure entitling the insurer to avoid the contract
The makuti roofing disclosure was accurate and the insurer was aware of it; as to the storeys, the insurer failed to prove inducement, so the contract could not be avoided.
The provisional cover note itself recorded 'makuti roofing and concrete ceiling', showing the insurer knew of the roofing. On the number of storeys, the court applied Steel Rolling Mills: the insurer had to prove not only materiality but inducement to contract to its detriment. No such evidence was tendered, so the appellant remained liable under the policy.
Whether the trial Judge failed to consider the appellant's submissions and the loss assessment reports
The contention was without merit; the Judge properly framed two broad issues germane to the pleadings and evidence and referred to both assessors' reports.
The record showed the appellant's submissions were filed on 23rd October 2014, and the trial judgment demonstrated that the Judge analyzed the non-disclosure law, applied it to the facts, and cited both loss assessors' reports describing a double storeyed house. The appellate court found no failure to consider the material placed before her.
Legal principles established
#- For an insurer to avoid liability on account of misrepresentation and/or non-disclosure by the insured, the insurer must prove both that the misrepresentation or non-disclosure was material and that it induced the insurer to contract on the terms agreed; the burden of proving both aspects lies with the insurer.
- Even a fraudulent misrepresentation cannot by itself be ground for rescission of an insurance contract; it must be shown to have influenced the insurer to contract to its detriment.
- On a first appeal, the Court reanalyzes and reevaluates the evidence afresh but will not substitute its own factual finding for that of a trial court unless there is no evidence to support the finding or the judge is plainly wrong.
- A High Court decision is not binding on the Court of Appeal.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Malindi
- H.C.C.C. No. 145 of 2012
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Constitution of Kenya, 2010 and the Appellate Jurisdiction Act (first appellate jurisdiction over the High Court judgment)
Relief refused
#Appellant's request to set aside the High Court judgment and decree and to repudiate the insurance contract for material misrepresentation and/or non-disclosure
The appellant failed to prove that the alleged misrepresentation or non-disclosure induced it to enter into the contract to its detriment
Costs
Appeal dismissed with costs to the respondent
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The insurer must not only prove the misrepresentation and/or non-disclosure was material, but that the same induced him to contract on the terms agreed. The burden of proving both aspects lies with the insurer.
So strict is this burden therefore, that even a fraudulent misrepresentation cannot by itself be ground for rescission of the contract. The same must be proven to have influenced the insurer to contract to his detriment.
This being a first appeal, the responsibility of this Court is to reanalyze and reevaluate the evidence on record afresh and reach its own conclusions bearing in mind however, that it neither saw nor heard the witnesses testify
We think we have said enough to demonstrate this appeal lacks merit. We hereby order it dismissed with costs to the respondent.
Issues in the judgment
#The coram lists 'VISRAM' while the signature block reads 'ALNASHIR VISRAM'; the same judge is rendered with slightly different spellings in the judgment.
The coram states the court sat at Malindi, but the judgment is dated and delivered at Mombasa.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Invesco Assurance Co. Ltd v Granata Ernesto (suing as Attorney of Denise Granata) [2018] KECA 19 (KLR)", Case Analysis (2018). Civil Appeal No. 74 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/19/eng@2018-01-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.