THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
COMMERCIAL COURT DIVISION
(ARISING FROM HCT-00-OS-CS-081-2008)
THE JUBILEE INSURANCE COMPANY LIMITED..….. APPLICANT
FIFI TRANSPORTERS LIMITED ……………………RESPONDENT
BEFORE HON. MR. JUSTICE LAMECK N. MUKASA
2. Costs be provided for.
The brief background is that the Respondent, Fifi Transporters (U) Ltd , file HCT-00-CC-Cs-0081 against the applicant. The Respondents claims therein is that it gave insurance cover to the Applicant for loss or damager caused to its motor vehicle for the period running from 2nd December, 2005 to 1st December 2006. the premium payable by the Applicant under policy was Ugshs51,544,400/=. The Applicant issued 2 cheques of Uganda Shs26,272,000/= each in the name of the Respondent, in payment of the premium. The cheques were dishonored on presentation. Thus the suit to recover the sum of Shs52,544,400/= plus costs.
The grounds for the application are that:-
(b) The Respondent waived its right to sue for performance of the insurance contract or recovery of express when it purported to cover the Applicant which had not paid the premiums contrary to the Insurance Act, Cap 213.
(c) The Respondent did not provide insurance cover to the Applicant and declined to consider and / or honour the applicant’s claim when one of the Applicants trucks was involved in an accident.
(d) The Respondent is not entitled to Ushs52, 544,400/= as claimed by the Respondent or at all having declined to consider the Applicants claim.
(e) There is a triable issue which cannot be dismissed of under summary procedure.
(f) It is in the interest of Justice that the Applicant be given an opportunity to appear and defend the suit on its merits.
In an application for leave to defend a suit under summary procedure the law is that the Applicant must show that there is a bonafide triable issue of fact or law. Any defence raised should be stated with sufficient particulars as to appear genuine and not generally vague statements denying liability. See Muluku Interglobal Trade Agencies Vs Bank of Uganda (1985) HCB 65, Tororo District Administration Vs Andalalap Industries Ltd (1077) IV KALR 126
This application is supported by an affidavit deponed to by Esther Semakula, the Legal Officer of the Aya Group of Companies to which the Applicant belong. She states that contrary to section 34(i) of the Insurance Act, which does not allow an insurer to give credit of more that 30 days for payment of premiums, the Respondent purported to continue to cover the Applicant even thought the Applicant had not pay the premiums due under the policy. That as a result of the non payment of the premiums, the policy was avoided and the Respondent was only entitled to recover the expenses incurred. Further that the Respondent did not provide insurance cover to the Applicant as the party because void after the first 30 days when the premiums had not been paid.
The respondent filed an affidavit in reply deponed to its General Manager, Depark Pandey. He therein avers that the Respondent provided insurance cover to the Applicant. That the said policy emanated from the broker, known as Five Star Insurance Services Ltd. Annexed A to the Plaint is the Insurance Policy. In the schedule thereto the Broker is named as Five Star Insurance Services Ltd.
Section 34 of the Insurance Act provides:-
(ii) Where the insured fails to pay the premium within the period provided under subsection (I), the policy shall be avoidable and the insurer shall be entitled to recover the expenses incurred.”
The burden is upon the applicant to put up genuine defence to the Respondent’s claim based on the provision of Section 34 of the Act. The general rule is that the burden of proof lies on the party, who asserts the affirmative if the issue or question is issue. When that party adduces evidence sufficient to raise a prescribed to be true, unless his opponent adduces evidence to rebut the presumption. The Applicant has not adduced any evidence on oath to she that the broker names in policy was not lincenced under the Act. I am aware that at this stage the Applicant is not bound to show a good defence on the merits but he must put up a plausible defence.
However, in paragraph 7 and 8 of the affidavit in support the Applicant argues that the Respondent did not provide insurance cover to the Applicant and declined to consider and or honour the applicant’s claim when one of the trucks was involved in an accident. The Applicant contends that having declined to consider the Applicants claim the respondent is not entitled to the UShs52,544,200/= claimed.
It is so pleaded in paragraphs 4 (d) and (e) of the proposed Written Statement of Defence annexed to the affidavit.
This point was not addressed by the Respondent in its affidavit in reply. Yet is raises a triable issue whether in the circumstances the Respondent is entitled to the premium sum of Shs52,544,200/= claimed in the plaint. In the circumstances I find that the Applicant has shown a bonafide triable issue.
Therefore the applicant is allowed. Applicant to file a Written Statement of Defence within 7 days . Cost shall be in the course of the main suit.
I so order.
Hon Mr. Justice Lameck N. Mukasa
13th October 2008