SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
REPORTABLE
Case No: 11554/2017
In the matter between:
N[…] F[...] Plaintiff
vs
SANTAM LIMITED Defendant
Heard on: 15 November 2023
Delivered on: 26 January 2024
JUDGMENT
MANTAME J
Introduction
[1] This application for condonation pertains to the late filing of the plaintiff’s
replication to the defendant’s plea in the main action. The plaintiff in the main action
claims damages on behalf of her minor child, E […] F[…] (“E[...]”) who allegedly
suffered an injury at birth resulting in brain damage, severe asphyxia and cerebral
palsy.
[2] The defendant opposed this application on the basis that the replication has
been introduced woefully late and it is not “to be taken” that the issues raised in the
replication are triable in the sense required in order to permit the amendment of the
pleadings by the introduction of the proposed replication.
2
Facts
[3] The facts summarised briefly are that E[...] was born on 3 January 2011 at St
Mary’s Mission Hospital in Pinetown. E[...] is currently thirteen (13) years old. At the
time of E[...] ’s birth, the minor child allegedly sustained an injury which resulted in
damage, severe asphyxia and cerebral palsy. The defendant, Santam Limited at the
time was the insurer of St Mary’s Mission Hospital.
[4] St Mary’s Hospital at all times was owned and operated by The St Mary’s
Catholic Mission Hospital Trust (“ the Trust ”). The plaintiff instituted action against
the Trust in April 2013 and against the defendant in June 2017. The Trust later
became insolvent and was placed on final liquidation on 13 May 2016.
[5] The action instituted against the defendant by the plaintiff is that the injury
suffered by E[...] at birth was as a result of negligence of the medical officers at St
Mary’s Mission Hospital, and such negligence was not solely limited to negligence
arising from “midwifery duties” as the defendant has repeatedly said. Upon the Trust
fulfilling its obligations, the defendant was bound to insure the Trust in accordance
with Exclusion, Conditions and Limitations contained in the contract annexed as
“Annexure A” to the Plea and entitled: Professional Indemnity, Medical Malpractice
And Public Liability Insurance For Hospital And Clinics.
[6] On 28 January 2015, the plaintiff was invited by Norton Rose Fulbright to
discuss the Trust’s financial situation which appeared precarious at the time with Mr
Andre Liebenberg (“ Mr Liebenberg”). At the time, it was alleged that both the Trust
3
and the defendant were aware that the plaintiff disputed that the claim arose solely
out of “midwifery duties.”
[7] On 4 November 2015, Mr Liebenberg addressed a letter to the Trustees of the
Trust and set out various claims against the Trust, including R10 500 000.00 in
respect of the plaintiff’s claim. Mr Liebenberg stated that St Mary’s Mission Hospital
does not have insurance for any of these amounts. The only claim in which funds
are held is in respect of plaintiff’s claim where it was recorded that the defendant had
paid R500 000.00.
[8] In turn, on 16 November 2017, Garlicke & Bousfield addressed a letter which
confirmed that the Trust received an amount of R5 560 175.01 in settlement of its
insurance obligations and not in settlement of the plaintiff’s claim. According to the
plaintiff, this appears to be in contrast to the wording of the Agreement of Loss
concluded by the Trust and the defendant which specifically referenced the amount
of R5 560 175.01 in full and final settlement of the insured’s claim for an indemnity
under its insurance policy in respect of the action.
[9] The plaintiff alleges that despite the acknowledgment that the monies paid
over to Garlicke & Bowesfield were in respect of the plaintiff’s claim, however
Garlicke & Bousfield paid over to the Estate account an amount of R4 928 587.71.
The plaintiff observed that this amount was not ring- fenced, nor used to settle the
plaintiff’s claim against the Trust. It appears to have been dispersed for general
expenses of the liquidated hospital.
4
Replication
[10] In its replication, first, the plaintiff asserts that the nature of the negligence and
specifically whether it would fall within the ambit of the limitation pertaining to
“midwifery duties” on the general malpractice clause has at all times been integral to
the plaintiff’s claim against the defendant, and the plaintiff has at no point accepted
that the negligence a rose solely from “mi dwifery duties.” For instance, if the plaintiff
is only able to establish negligence arising from “ midwifery duties”, the limitation of
R5 000 000.00 (R5 million) would be applicable. However, if the plaintiff establishes
negligence from any medical officer or institutional negligence, the plaintiff’s claim
against the defendant would be for the medical malpractice with a R25 000 000.00
(R25 million) limit.
[11] It is the plaintiff’s stance that the negligence was not limited solely to
“midwifery duties” but medical practitioners. For instance, the plaintiff alleged that
the obstetric medical officer on duty on the night of 2 January 2011 and 3 Januar y
2011 mismanaged his or her on duty responsibilities. Essentially, the institutional
failure on behalf of the hospital led to the unfortunate events and which ultimately
caused E[...]’s injury. The defendant cannot elect to pigeonhole the plaintiff’s claim
into the specific limitation for midwifery, as opposed to general damages.
[12] The second issue raised in the replication pertains to the amount paid by the
insurance not being ring- fenced. The amount paid to Garlicke and Bousfield was in
respect of the plaintiff’s claim and should not have fallen into the Trust’s estate
whether liquidated or not. Despite Mr Liebenberg’s acknowledgment that the funds
5
were held “in respect of F[…] ” and advised that F[…] ’s claim was reduced from
R10 500 000.00 to R5 500 000.00, there was no provision made by the defendant for
the ring-fencing of the funds concerned.
[13] The third issue raised in the replication pertains to the agreement being
concluded to thwart the provision of section 156 of the Insolvency Act 24 of 1936
(“Insolvency Act”). At the time when the Agreement of L oss was entered into, the
defendant and the Trust were aware that the Trust was carrying on business in
insolvent circumstances and that liquidation in the near future was inevitable, without
the assistance from the Department of Health. In the circumstances, upon the
liquidation of the Trust, the plaintiff’s claim would be against the insurance company
directly in terms of Section 156 of the Insolvency Act.
[14] The opposition raised by the defendant appears to be that the proposed
replication is ultimately excipiable and permitting it to be delivered at this stage would
accordingly serve no purpose; and that no case for condonation has been made out
in circumstances where this application is brought more than five (5) years after the
close of pleadings.
[15] According to the defendant, the plaintiff’s claim dealing with an injury to a
foetus sustained in the course of labour, for purposes of t he contract of insurance, is
a claim arising out of “midwifery duties” provided for in the insurance policy. There
appears to be no ambiguity on the insured cover as the claims arising out of
“midwifery duties” as it was expressly agreed between the parties to a contract of
6
insurance that the claims are subject to the aggregate limit of R5 million. The
agreement of parties with regard to the A greement of Loss has no relevance to this
application. The defendant was entitled to pay the amount of maximum indemnity to
the Trust in terms of the policy. And, on making that payment, the defendant would
be under no further liability to the insured in connection with the claim. Further, there
is no provision in law allowing for the amount of the indemnity to be “ring-fenced as a
payment for the plaintiff’s claim ” so as to fall outside an ensuing insolvency. In any
event, Section 156 of the Insolvency Act does not allow an action directly by a
claimant against an indemnity insurer, but only to the extent that the obligation to
indemnify remains and would otherwise be enforceable by the insured.
Submissions
[16] The plaintiff submitted that the explanation for degree of lateness has been
proffered. However, he conceded that it is not a day -to-day type of an explanation
and in such circumstances , it was said that it is not an ideal one. However, it was
pointed out that initially, it might have been that it was not deemed necessary to file a
replication to the defendant’s plea which was filed in 2017 hence a considerable
amount of lateness. Regardless of that standpoint by old Counsel, after new
Counsel came on brief, it was considered necessary to file a replication. In fact, the
plaintiff and especially E[...], cannot be prejudiced by the fact that old Counsel did
not deem it appropriate to replicate to the plea. New Counsel considered the matter
and highlighted the need to replicate in August 2022. As a result, the process in
preparation thereof ensued and the defendant was adamant that a formal application
7
should be brought hence this application. Good cause, and the interest of justice
requires that this application should succeed.
[17] In Madinda, 1 the plaintiff had this to say the Supreme Court of Appeal held
that:
“Good cause looks at all those factors which bear on the fairness of
granting the relief as between the parties and as affecting the proper
administration of justice. In any factual complex it may be that only
some of many such possible factors become relevant. These may
include prospects of success in the proposed action, the reasons for
the delay, the sufficiency of the explanation offered, the bona fides of
the applicant and any contribution by other persons or parties, to the
delay and the Applicant’s responsibility therefor.”
[18] It was suggested by the plaintiff that the defendant’s answering affidavit does
not demonstrate that any of the issues pleaded in the replication are excipiable.
Quite the contrary, it was stated that the issues raised in the replication are triable,
and that will be determined by the trial court on the merits of the replication if this
application is granted.
1 Madinda v Minister of Safety and Security, Republic of South Africa (153/07) [2008] ZASCA 34 (28
March 2008) para [10]
8
[19] The defendant on the other hand submitted that new propositions were
introduced in the replication and therefore the requirements for the amendment of a
pleading should be complied with, in the sense that the plaintiff must show the
reasons for lateness and that it has something deserving of consideration, a triable
issue. The plaintiff cannot place on record an issue for which it has no supporting
evidence – See – Ciba–Geigy.
2
[20] This assertion was disputed by the plaintiff on the basis that the issues raised
in the replication are issues that are required to be raised in the pleadings and could
not have been raised in the particulars of claim because the plaintiff had not, at that
stage, had sight of the insurance documentation, upon which reliance is placed by
the defendant. The defendant also is to blame as it did not furnish the plaintiff with
these documents timeously.
[21] In addition, the defendant and the Trust might have been ad idem on the
contents of the contract, however, the plaintiff interpreted the contract differently and
that caused severe prejudice on the minor child that was severely injured.
[22] According to the plaintiff, the factors that weigh heavily in favour of granting
condonation in the interest of justice include the following: (i) the importance of the
case to the plaintiff (minor child), (ii) the sound prospects of success at trial, (iii) the
fact that the condonation has not been brought mala fide; (iv) that it would be
2 Ciba-Geigy (Pty) Ltd v Lushof Farms (Pty) Ltd en ‘n Ander 2002 (2) SA 447 (SCA)
9
desirable to have all triable issues in the matter properly and fully ventilated before
the Court; (v) that if condonation is granted, the defendant would suffer no prejudice;
(vi) that if the condonation were to be refused, the plaintiff and the minor child would
be severely prejudiced in that the plaintiff would have no option but to reinstate the
action afresh – which would in itself serve to considerably delay finalization of the
minor’s claim and thereby causing substantial inconvenience to both parties and the
Court’s administration of justice; (vii) an adequate explanation for the delay has
been provided; (viii) that neither the plaintiff nor the minor child are personally
responsible for the delay; (ix) and that the plaintiff’s claim on behalf of the minor child
has not prescribed. In such circumstances, the Court should grant the condonation
for the late filing of the replication.
Discussion
[23] Rule 27(3) of the Uniform Rules states that:
“The Court may, on good cause shown, condone any non- compliance with
these rules.”
[24] Rule 25(1) of the Uniform Rules states that:
10
“Within fifteen days after the service upon him of a plea and subject to subrule
(2) hereof, the plaintiff shall where necessary deliver a replication to the pl ea
and a plea to any claim in reconvention, which plea shall comply with Rule
22.”
[25] The defendant’s complaint is that the plaintiff has not complied with Rule
25(1) and a delay of (5) five years has not been explained. Indeed, the plaintiff’s
explanation for the delay in filing its replication might be considerably late and not be
a blow-by blow type of an explanation. In my analysis , the explanation proffered by
the plaintiff is cogent and reasonable. The plaintiff explained that the old Counsel
might not have deemed it appropriate in that five (5) years to file the replication.
However, upon the new Counsel accepting the brief and considering the matter, he
made resolve to file the replication. E[...] cannot be prejudiced by an error that was
committed by the legal representative.
[26] Courts have consistently refrained from attempting an exhaustive definition of
what constitutes good or sufficient cause for the exercise of its discretion. 3 Good
cause or sufficient cause for the exercise of discretion in my view suggest that each
case must be judged on its own merits. The plaintiff has ably set out the factors that
count heavily in favour of condonation in paragraph 22 above. The defendant has
not gainsaid such factors.
3 Mynhardt v Mynhardt 1986 (1) SA 456 (T) at 463 E - F
11
[27] If regard is had to the merits, the defendant does not dispute the plaintiff’s
assertion that the plaintiff’s claim had been formulated in such a way as to go
beyond “midwifery duties” as they elected to interpret that provision in the insurance
policy. As such, it was not for the Trust and the defendant’s call to prescribe and
reach an agreement suitable to them without taking into account the pending
litigation in the matter. The plaintiff as the initiator of legal proceedings cannot be
told by any party in the proceedings how it should proceed in prosecuting its claim.
In my view, upon the plaintiff realising that its case has not been presented properly
before Court, it was bound to ask for Court’s indulgence and present it properly. As
the defendant did not consent to the plaintiff’s filing its replication out of time, it is
therefore incumbent upon this Court to exercise its discretion judicially in assessing
whether there has been sufficient or convincing reasons and / or good cause shown
for the granting of the condonation in this regard.
[28] The plaintiff filed a damages claim after assessing the manner in which the
minor child was injured and this was before the Trust was sequestrated. The
manner in which the Agreement of L oss was concluded leaves much to be desired.
To the extent that the Trust and the defendant always had an upper hand, the facts
that have been put before this Court require some attention. On 28 January 2015,
after the plaintiff did not avail themselves to an invitation by Norton Rose Fulbright ’s
attorneys to discuss the Trust’s precarious position with Mr Liebenberg, Mr
Liebenberg who at the time was the chairman of St Mary’s Mission Hospital later
went ahead and concluded an Agreement of Loss with the defendant (Santam) that
was represented by Stalker Hutchison Admiral (Pty) Ltd. Mr Liebenberg is a director
12
of Garlicke and Bousfield, a firm of attorneys that act for the defendant ( Santam).
The defendant ( Santam) is a client of both Norton Rose Fulbright and Garlicke &
Bousfield. Clearly, there is a conflict of interest situation and / or a perception of bias
in this regard, most notably to those at arm’s length. As it was brought before the
defendant that Mr Liebenberg appears to have put Santam’s and his firm’s interest
above those of St Mary’s Mission Hospital and / or the minor child in concluding the
Agreement of Loss. I n my view, the defendant should not have demonstrated an
aloof attitude, but should have explained his ethical and legitimate involvement in
this agreement.
[29] The defendant might appear to dispute the conflict of interest and / or
perceived bias on the part of Mr Liebenberg. However, as the defendant put it, the
defendant was inundated with a series of claims under the policy. Having had this
background, the insurer and insured (having been legally represented by one
person) had to devise means to curtail their loss. On 20 May 2015, the insurer and
the insured agreed that the limit of the indemnity under the contract of insurance in
respect of the claim advanced by the plaintiff was R5 000 000.00 and that the
defendant would pay to the Trust R5 560 175.01 being the maximum indemnity of
the insurer and the insured in respect of the claims advanced by the plaintiff. Surely,
in such circumstances, the interests of the plaintiff as a litigant were not taken into
account.
13
[30] In Chueu4 at paragraph 4 the Supreme Court of Appeal stated:
“Legal practitioners are obliged to conduct themselves with the utmost
integrity and scrupulous honesty. Public confidence in the legal profession is
enhanced by maintaining the highest ethical standards. A lack of trust in the
legal profession goes hand in hand with the erosion of the rule of law. The
Legal Practice Act 28 of 2014 (the LPA) replaced the Attorneys Act 53 of 1979
and came into operation on 1 November 2018. Like its predecessor, the
objects of the LPA are, inter alia, to promote and protect the public interest
and to enhance and maintain appropriate standards of professional and
ethical conduct of all legal practitioners. As such the Limpopo LPC is not an
ordinary litigant, but generally acts for the public good. Legal proceedings
brought by the Limpopo LPC in this regard are sui generis and the disciplinary
powers of the High Court over the legal practitioners are founded in its
inherent jurisdiction as the ultimate custos morum of the legal profession.”
[31] Recently, the Constitutional Court restated the ethical standard which
practitioners should uphold. In: Ex Parte Minister of Home Affairs and Others
5, it
was stated:
“[103] Legal practitioners are an integral part of our justice system. They
must uphold the rule of law, act diligently and professionally. They owe a high
4Limpopo Provincial Council of the South African Legal Practice Council v Chueu Incorporated
Attorneys and others (459/22) [2023] ZASCA 112 (26 July 2023)
5In re Lawyers for Human Rights v Minister of Home Affairs and Others (CCT 38/16) [2023] ZACC 34;
2024 (1) BCLR 70 (CC) (30 October 2023)
14
ethical and moral duty to the public in general, but in particular to their clients
and to the courts. In Jiba, this Court stated:
“Legal practitioners are a vital part of our system of justice . . . . As a
result, the law demands from every practitioner absolute personal
integrity and scrupulous honesty.”6
[104] In Kekana, the Supreme Court of Appeal held:
“Legal practitioners occupy a unique position. On the one hand they
serve the interests of their clients, which require a case to be presented
fearlessly and vigorously. On the other hand, as officers of the court,
they serve the interests of justice itself by acting as a bulwark against
the admission of fabricated evidence. Both professions have strict
ethical rules aimed at preventing their members from becoming parties
to the deception of the court. Unfortunately, the observance of the
rules is not assured because what happens between legal
representatives and their clients or witnesses is not a matter for public
scrutiny. The preservation of a high standard of professional ethics
having thus been left almost entirely in the hands of individual
practitioners, it stands to reason, firstly, that absolute personal integrity
and scrupulous honesty are demanded of each of them and, secondly,
that a practitioner who lacks these qualities cannot be expected to play
his part.”7
[32] This is the standard that the higher courts expect from legal practitioners .
Obviously, it is unpalatable and undesirable that Mr Liebenberg represented the
insurer and the insured in concluding an Agreement of Loss. More so, i t is somehow
6 General Council of the Bar of South Africa v Jiba [2019] ZACC 23; 2019 (8) BCLR 919 (CC) at para
1.
7 Kekana v Society of Advocates of SA [1998] ZASCA 54; 1998 (4) SA 649 (SCA). See also: Chueu
above at footnote 4.
15
incomprehensible for the defendant to assert that the plaintiff is not a beneficiary of
anything and they were not compelled to ring- fence this amount. When the
Agreement of Loss was concluded, t he defendant knew that this amount was claim
specific and not to defray the insolvent estate’s costs. These are triable issues in my
analysis.
[33] Seemingly, the purpose of the parties in this agreement was meant to protect
both the Trust and the defendant and for them to be released from liability regardless
of the outcome of the litigation. This intention is bolstered by the fact that the
defendant in opposing this application stated that: “ It is, with respect not open to a
stranger to the insurance contract to assert that a term of the contract has a meaning
which is different to that as understood by the parties to the contract. The parties
were ad idem as to the meaning of the policy and its effect and the Agreement of
Loss reflect their common understanding and intention. There is no room for the
plaintiff to allege that they were labouring under some “common mistake” and that
the agreement concluded is void.”
[34] This response to the plaintiff’s interpretation of the contract demonstrates that
the defendant had a deem view of the seriousness of the plaintiff ’s claim. In other
words, the plaintiff should have accepted whatever was shoved to her and keep
quiet.
16
[35] Although this Court is tempted to interpret what exactly the parties meant in
their agreement by limiting the claim to “midwifery duties,” it would shy away from
such interpretation due to the fact that this might be a contentious triable issue in the
main action. It is this Courts view that the A greement of Loss was meant to collapse
the plaintiff’s litigation, and unfortunately this did not happen. In fact, I disagree with
the defendant’s stance that the plaintiff is not a beneficiary of the policy, and that the
replication should it be granted, it would be uneventful. If that is indeed so, it then
begs a question why the defendant incurred costs and opposed this application, and
why the plaintiff’s claim was reduced by the parties when they enter ed into an
Agreement of loss. It might be so that the plaintiff was not a beneficiary to this
policy. The fact that it was taken specifically to insure the events such as that of the
plaintiff makes her an indirect beneficiary of the policy more so if she is so aggrieved.
The plaintiff is entitled to interpret the contract in such a way that her interests are
protected. Essentially, t he plaintiff is directly affected by the outcome of the insurer
and insured’s contract, and she is entitled to interpret the contract employing the
often quoted principles in Endumeni.
8
[36] It is common cause that this matter has not made its way to trial, and in such
circumstances, the plaintiff was at liberty to file an application for condonation for the
late filing of its replication. The defendant did not take issue with the delay in
finalising the main action, but confined its opposition to the late filing of the
replication.
8 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA)
17
[37] The Court had an opportunity to assess the conduct and motive of the
plaintiff. In doing such an exercise, this Court is convinced that the plaintiff would not
have pursued this matter this vigorously if there were no prospects of success. This
matter indeed has dragged for years. Despite that being the case, cogent
explanation was made. In my consideration there appears to be no prejudice or
potential prejudice to be suffered by the defendant if this condonation is granted.
This Court in all fairness has a duty to protect the interest of the minor child if there is
an element of them bei ng trampled at. I n the interest of justice and fairness, this
duty is entrenched in the Constitution
9. The manner in which the Constitution is to
be interpreted and applied is of paramount importance.
“Section 28 Children – states that:
…
(2) A child’s best interest are of paramount importance in every matter
concerning the child”.
[38] This therefore suggest s that this Court, as the upper guardian of all minors
should be slow in getting carried away by legal technicalities and rigid application of
court rules that are raised before it. Prejudice, in matters of this nature reign
supreme. And, in this instance, it is the minor child that would be prejudiced should
the application not be granted.
9 The Constitution of the Republic of South Africa, Act 108 of 1996
18
[39] In addition, I disagree with the assertion that the defendant should be
absolved from taking respons ibility in this regard as the Agreement of Loss of Loss
was reached. And further, the Agreement of Loss has no relevance and / or bearing
in this application. The defendant overlooks the fact that the late replication was filed
as a result of the consequences of the Agreement of Loss.
[40] Section 156 of the Insolvency Act notably reads as follows:
“Insurer obliged to pay third party’s claim against insolvent
Whenever any person (hereinafter called the insurer) is obliged to indemnify
another person (hereinafter called the insurer) in respect of any liability
incurred by the insured towards a third party, the latter shall, on the
sequestration of the estate of the insured, be entitled to recover from the
insurer the amount of the insured’s liability towards the third party but not
exceeding the maximum amount for which the insurer has bound himself to
indemnify the insured.”
[41] The plaintiff posed a valid point that what motivated the A greement of Loss
was the fact that both parties knew that the Trust was operating at a loss. Notably,
Mr Liebenberg when he concluded an Agreement of Loss , he knew that the Trust
was in a precarious financial position before its liquidation. Surely, the Trust was
aware of its insolvent state and intended to minimise its loss. In the circumstances
19
there is no way that this Court would dismiss the allegations by the plaintiff that the
agreement was concluded to thwart the provisions of section 156 of the Insolvency
Act. The plaintiff is adamant that it is not precluded from proceeding directly against
the defendant in terms of section 156 of the Insolvency Act. This Court is convinced
that the plaintiff has raised triable issues in its replication.
[42] In conclusion, a proper case has been made up by the plaintiff for granting of
condonation for the late filing of its replication.
[43] In the result, the following order is granted:
43.1 The application for condonation for the late filing of the replication is
granted with costs including costs of two Counsel.
MANTAME J
WESTERN CAPE HIGH COURT
In the High Court of South Africa
(Western Cape Division, Cape Town)
Case No: 11554/2017
In the matter between:
N[…] F[…] Plaintiff
vs
20
SANTAM LIMITED Defendant
Coram: B P MANTAME, J
Judgment by: B P MANTAME, J
FOR APPLICANT: ADV BRANFORD
021 426 1098
adbranford@capebar.co.za
Instructed by: Justice Reichlin Ramsamy Attorneys Inc
031 305 3844
mohamed@jrr.co.za
FOR RESPONDENT: ADV S MULLINS SC
031 304 9991
smullins@law.co.za
Instructed by: Norton Rose Fulbright SA Inc
021 405 1200
Deniro.Pillay@nortonrosefulbright.com
Date (s) of Hearing: 15 November 2023
Judgment Delivered on: 26 January 2024