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[2021] ZAGPPHC 897
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Alexander Forbes Insurance Insurance Company Limited v Cingo (40210/20) [2021] ZAGPPHC 897 (14 June 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO.:40210/20
REPORTABLE:
YES/NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED:
YES\no
14
June 2021
In
the matter between:
ALEXANDER
FORBES INSURANCE
COMPANY
LIMITED
Applicant/Defendant
And
LUVO
CINGO
Respondent/Plaintiff
JUDGMENT
MKANSI
AJ
1.
Introduction
.
Insurance
claim.
Plaintiff took a short-term insurance policy with Applicant in terms
of which Applicant undertook
,
for
consideration of premiums, to indemnify Respondent in the event of
loss or damage. Respondent paid premiums and the
insurance
took effect.
During the course of the cover Respondent was involved in a single
vehicle accident from which the vehicle was damaged.
2.
Summary
2.1.
The defendant
was served with summons via sheriff on 17 September 2020. The summons
was served at defendant's legal department on
the head of legal,
named Fiona Rollason. Fiona sends the summons to the email address of
a claims handler, MAE HLALELE, for appointment
of an attorney to
defend the claim. The serv
i
ce
of the summons took place after completion of
the
acquisition of
defendant by Momentum Insurance.
As
a result of
the acquisition the email addresses of employees, including the email
address of claims handler, who was meant to handler
the summons and
instruct
an
attorney
to
defend the
summons, had changed
.
The email
address of the claims handler to which the head of
legal
transmitted
the summons had been changed and a new email address had been
allocated to
the
claims
handler. Fiona was not aware that the claims handler
'
s
address had changed. As a result, the summons
did
not reach
the
claims
handler.
Defendant
stated
that
a
judgment was subsequently granted by my sister
TLHAPI
J on 26
January 2021. The default
judgment
was served on
the defendant
on 29 January
2021. The application for
rescission
in
terms of
rule 31
(2)(b)
was
issued
and served
upon plaintiff on 16 February 2021. The defendant states that it was
not
in
wilful
default in that the head of legal was under an impression
that
the summons
received the necessary attention. Defendant further indicated it did
not renounce its defence, and had a serious intention
of proceeding
with the case and would have done so had it not been for the mistake
in
the
chain of command
.
2.2.
Defendant
further indicates that
it
has a bona
fide defence against plaintiffs claim in that
Plaintiff
breached
the
terms of the insurance agreement entered into
between
plaintiff and
defendant as follows:
2.2.1.
Plaintiff
failed
to
give
complete and truthful information;
2.2.2.
plaintiff
failed to take reasonable care to prevent loss, damage and accident;
2.3.
Defendant
allege that plaintiff breached the above in that (a) he was unwilling
to provide true and correct information relating
to the collision
that occurred; and (b) he drove at an excessive speed whilst being
under the influence of alcohol.
2.4.
The defendant
did not attach a copy of the insurance document upon which the terms
of the insurance could be referred, to assess
a bona fide
defence.
2.5.
The plaintiff
disputes: (a) that he was under the influence of alcohol; (b) that he
drove at an excessive speed; and (c) that he
did not furnish the
defendant with a complete and truthful information.
2.6.
Plaintiff also
opposes the application on basis that:
(a)
It is
misguided as it ought to have been brought in terms of rule 42 of the
uniform rules; and
(b)
That it was
not granted on 26 January 2021 as indicated
in
the Notice of
Motion.
2.7.
Defendant
requested leave of the court to amend the application from one
brought under rule 31(2)(b) to one under the auspices of
rule
42(1)(a) and tendered costs for the amendment.
2.8.
Counsel for
the Plaintiff on the other hand opposed the application to amend and
stated that the application before court was irregular
and cannot be
cured by an amendment.
He stated
that the only
step available to the defendant was to remove the application and
instituted one
de
novo.
2.9.
After hearing
the parties on the aspect of amendment, I granted the leave to amend
and the application was accordingly amended.
The application for
rescission shall, in the premisses, be considered under rule 42
.
If
the
application is not successful under this ru
l
e
,
it shall be
evaluated under the common law auspices
.
2.10.
Before
I
commence with
the application itself, I will deal with the Plaintiffs point
relating to the error of Defendant to accurately describe
the default
judgment to be rescinded by the court. The plaintiff pointed out that
the
default
judgment was not granted on 26 January 2021, but
was
granted on 21
January
2021.
He
further
indicated
that
the date appearing on
the
court stamp is
the date on which the registrar appended its stamp.
The
order indeed
indicates that the matter appeared before TLHAPI J on 21 January 2021
as reflected on the order. I find that the order
to be rescinded has
been sufficiently described for me to identify it as the subject of
the rescission application.
2.11.
The court has
jurisdiction to hear application for rescissions brought to it under
rule 31(2)(b), rule 42(1) and even to rescind
judgment under common
law. In considering an application for rescission, the court has to
have regard
to
the provisions of the respective rules or common law considerations
pertinent to the application. It is noteworthy to indicate
that the
court does
not
have
jurisdiction
to
consider
rescission of judgment under rule 31(2)(b) for a default judgment
granted by a court.
2.12.
The
application for rescission is thus dealt with under Rule 42(1). It is
upon the defendant to prove existence of the grounds listed
in Rule
42(1) to succeed with the application under this rule. Rule 42(1)
provides as follows:
"(1)
The
court may, in addition to
any
other
powers it may have, mero motu or upon
application
of any
party affected, rescind or vary:
(a)
An
order or judgment
erroneously
sought
or
erroneously
granted in the absence of
any
party
affected thereby;
(b)
An
order
or
judgment in which there is an ambiguity,
or
patent
error
or
omission
,
but
only to the extent of such ambiguity, error or omission;
(c)
An
order or judgment granted as the result of a mistake common to the
parties
.
"
2.13.
I
find
that
none of these grounds exist in the applicant application. Rescission
cannot, therefore, be granted under rule 42
[1]
2.14.
As
I
have
already indicated, the court is not confined to rule 31(2)(b) and
rule 42(1) of the uniform rules of court, but the court has
inherent
power to
rescind
default
judgments
[2]
.
2.15.
I
will first take a look at the following elements in considering
whether sufficient cause exist for me to rescind the judgment
under
common law.
(1)
The party
seeking relief must present a reasonable and acceptable explanation
for default, and
(2)
That on the
merits that party has a
bona
fide
defence
which, prima facie, carries some prospect or probability of success.
2.16.
In determining
the first element I will look into circumstances
that led to
the granting of the default judgment. The applicant indicates that it
received the summons but the summons was not defended
because of the
logistical engagements that it was involved in following its
acquisition by momentum Insurance.
2.17.
I
find
that the period within which the application for rescission was
brought is not lengthy and was acted upon promptly as soon
as the
default judgment was brought to the attention of the defendant.
2.18.
I, however
find that if the defendant had an intention to defend the action it
had a good opportunity to do so, and could have done
so on the
following basis
.
2.18.1.
Defendant, as
a company which has regard to its
insured
members on
daily basis, could have put systems in place to ensure that there
is
continuity in
service to its members, even under circumstances of a merger of
acquisition.
2.18.2.
Defendant is
an insurance company whose duty is, primarily to honour insurance
obligations upon occurrence of an insured event,
(pacta
sunt servanda).
2.18.3.
In
the
event of repudiation of a claim, it shall have valid grounds to do
so.
2.18.4.
In the event
that it is served with summons and
intend
to defend, it
shall respect the court processes by promptly acting upon such
summons.
2.18.5.
The summons
was received by a head of legal who appreciates the exigency of a
summons. Her task being to oversee a proper functioning
of the legal
department, including compliance by claims handlers
in
instructing
attorneys where repudiated claims are to be defended
,
should have
seen to it that the summons has successfully
departed
from her control to receive further attention. She failed to follow
up with the claims handler within
.
the
period of entry of intention to defend and any subsequent time until
default judgment was granted.
2.18.6.
The defendant,
being aware of the consequences
of failure to
abide by the court rules, did not give due regard to the court rules
and was accordingly, grossly negligent in handling
the summons.
2.18.7.
The defendant
does not have any person to blame but itself.
2.18.8.
I accordingly
find that the defendant does not present a
reasonable
and acceptable explanation for default
as
set out in paragraph 2.18 hereinabove.
2.19.
In respect of
the second element of the evaluation, being
"that
on the merits that party has
a
bona fide
defence which, prima facie, carries some prospect or probability of
success".
Counsel
for the plaintiff argued that defendant does not have any basis for
its allegation that plaintiff drove the vehicle under
the influence
of alcohol; does not have basis that plaintiff drove at an excessive
speed; he further indicated that the quantum
of the claim was
properly evaluated by the court and a report was submitted in the
evaluation of quantum; that the claim amount
was accordingly reduced
to reflect a fair and reasonable amount of defendant's liability.
2.20.
I find that
the defence alleged by the defendant does not, on the face it,
carry
any prosect or probability of success [my emphasis].
2.21.
I,
accordingly, hereby dismiss the application with costs.
MKANSI
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION OF THE HIGH COURT, PRETORIA
Heard
on:
07
JUNE 2021
Decided
on: 14
JUNE
2021
Delivered:
This
judgement was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to
the
parties/their legal representatives by email and by uploading it to
the electronic file of this matter on CaseLines
.
The
date for hand-down is deemed to be
14
June2021
.
Appearances:
For
the Applicant: Adv RM VENTER
(Instructed.by
Klagsburn Edelstein
Bosman
du Plessis
INC
.)
For
the
Respondent: Adv.
L MGVETYANA
(Instructed
by
Cingo
Attorneys.)
[1]
De
Wet v Wester bank Ltd
1979 (2) SA 1031(A)
at 1038-1039.
[2]
Msane
v Bertie Williams (pty)ltd
1962 (1) SA 910
(D) at 912C