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[2021] ZAMPMBHC 12
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Qhibi v MiWay Insurance Ltd (634/2017) [2021] ZAMPMBHC 12 (12 May 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(MPUMALANGA
DIVISION, MBOMBELA)
(1)
REPORTABLE:NO
(2)
OF INTEREST TO OTHER JUDGES
:
NO
(3)
REVISED: YES
11/05/2021
CASE
NO: 634/2017
In the matter
between:
HENDRICK
QHIBI
Plaintiff
and
MIWAY
INSURANCE LTD
Defendant
J
U D G M E N T
MASHILE J:
INTRODUCTION
[1]
This is an insurance claim emanating from an insurance contract (“the
contract”)
concluded on 19 July 2013 by the parties herein. The
subject of the contract against which the Defendant agreed to
indemnify the
Plaintiff for loss and/or damage ensuing was a 2015
Toyota Fortuner 2.5D
-4D
RB A/T motor vehicle)” the insured vehicle”). A
reciprocal undertaking by the Plaintiff was that he would make
payment of monthly premiums and observe all other terms and
conditions contained in the contract
[2]
The insured vehicle subsequently became involved in a collision in
consequence of
which the Plaintiff lodged a claim with the
Defendant for payment of damages occasioned by the accident. The
Defendant investigated
the circumstances of the happening of the
insured event and resolved to repudiate the claim. Disgruntled by
this response by the
Defendant, the Plaintiff instituted these
current proceedings against the Defendant persisting on compensation
of his loss
arising from the collision.
[3]
When the matter served before this Court, the Defendant had raised
two preliminary
points. However, prior to commencement of the
proceedings, it abandoned the one and retained the other concerning
a time-bar
clause. Fundamentally, the Defendant’s assertion is
that in terms of the provisions of the time bar clause, the
Plaintiff
ought to have instituted this action within 270 days from
the date on which it rejected the Plaintiff’s claim. The
Plaintiff’s
claim cannot be entertained in view of it having
been brought well after the expiration of the period. For better
appreciation
of this matter a terse background of the facts is
necessary.
FACTUAL MATRIX
[4]
The
facts that gave rise to the claim are largely common cause. The
contract is said to consist of two documents. These are the
Coversheet and The Policy Wording. The Defendant captured the
contact particulars of the Plaintiff on communication issues stemming
from the contract as:
P
o Box 3816, Acornhoek, 1360
;
and
maverynice@webmail.co.za
.
Following
the conclusion of the contract, it was sent to the Plaintiff per
contact particulars furnished by him. The Plaintiff
received the
updated Coversheet and Policy Wording by e-mail at the
abovementioned e-mail address on 16 June 2016.
[5]
The claim lodged by the Plaintiff against the Defendant followed on
one early evening
on 24 August 2016 when the insured vehicle left
the R37 road at a look-out point approximately 13km from Sabie and
5km from Hendriksdal
where it plummeted and rolled down a steep
embankment. The insured vehicle was damage beyond economical repair.
On the very day
of the accident, 24 August 2016, the Plaintiff lodged
a claim relying on the terms of the contract for indemnification for
the
loss suffered.
[6]
The Defendant engaged the services of one Morne van Rooyen to conduct
investigations
regarding the circumstances surrounding the accident.
Following receipt and perusal of Morne Van Rooyen’s
conclusions set
out in his report, the Defendant felt that it would
be justified to decline indemnification occasioned by the loss. In
rejecting
the claim, the Defendant maintained that the Plaintiff had
supplied it with false information warranting it to lawfully reject
the claim.
[7]
On 2 September 2016, the Plaintiff was notified of the repudiation of
his claim, which
was accompanied by reasons therefore in writing.
The Plaintiff has accepted that he received the letter informing him
of the
rejection of his claim on 2 September 2016. On 9 September
2016, the Plaintiff placed a call to Morne van Rooyen enquiring
about
the status of his claim. Morne Van Rooyen telephonically
advised him that his claim had been rejected whereupon the Plaintiff
requested that the rejection letter be sent to an alternative e-mail
address cited on the Coversheet. Morne Van Rooyen duly obliged.
[8]
The Defendant asserts that the Plaintiff’s failure to comply
with the contract
entitled it to refuse the claim and to lawfully
cancel it on the ground of his breach of it. The Plaintiff’s
attorney (“the
attorney”) as well enquired on the outcome
of the claim. On 22 November 2016, the attorney was told that the
outcome had
been communicated to the Plaintiff. On 22 December 2016,
at the request of the attorney, the letter of 2 September 2016
rejecting
the Plaintiff’s claim was again sent to the
attorney.
[9]
On 22 December 2016, the attorney telephonically disputed the
election to reject the
Plaintiff’s claim. The Plaintiff now
disputed the election to reject his claim and submitted
“complaint”.
According to the Defendant, this complaint
was not in line with the agreed procedure in the contract, which
provides as follows:
“
If
I am not satisfied with the outcome of my claim, I must first raise
my objection in writing to MiWay together with reasons within
90
days for the day that I received written notification of the outcome
of
my claim.
The
objection must be addressed to Disputes and emailed to
disputes@miway.co.za or faxed to 011 990 0001 or posted to MiWay
Insurance,
PostNet Suite #382, Private Bag X121, Halfway House,
1685.”
[10]
The Defendant alleges that the objection described above was raised
outside the agreed 90 days,
it was not in writing and the reasons
therefore are unknown. The Defendant responded to him in writing on
10 January 2017 and
again informed him that the rejection of his
claim would not be reversed. The Defendant again provided reasons
for the repudiation.
[11]
On 6 November 2017 and assured that the Defendant was adamant not to
reverse its decision to
repudiate the claim, the Plaintiff served
the summons on the Defendant seeking the relief as per this action.
At the hearing of
this matter, the Defendant advised this Court that
it needed to raise a preliminary point that, if upheld, might be
dispositive
of the entire claim of the Plaintiff. On that ground,
the parties made an application that the preliminary point be
treated discretely
and that the case would proceed if the preliminary
point fails. The court considered the matter and persuaded that it
would be
convenient and cost effective to separate the issues,
granted the application.
[12]
Following the entertainment of the separation of issues, the parties
agreed that the preliminary
point be adjudicated on the agreed facts
described below:
12.1
the existence of the agreement of insurance, the terms and conditions
of which are
encapsulated in annexure “P1” and annexure “P2”
to the defendant’s plea;
12.2
The occurrence of the accident and the submission of the claim by the
Plaintiff
personally to the Defendant on 24
August 2016;
12.3
the repudiation of the claim on 2 September 2016 by the Defendant;
and
12.4
The institution of legal action by service of the summons upon the
Defendant on 6
November 2017.
ISSUES
[13]
It would appear that the only conspicuous issue for adjudication is
whether or not the Plaintiff
instituted these proceedings outside of
the prescribed period mentioned in the time-bar clause. The issue
is as such, simple.
If the institution of the action was outside of
the prescribed period stipulated in the time-bar clause, the claim
cannot succeed
and that will mark the collapse of the Plaintiff’s
claim. Conversely, if the opposite holds, the Court must
continue to hear the case. Against
that backdrop, it is advisable to turn to the guiding legal
principles on the subject.
LEGAL POSITION
[14]
The parties are agreed that the Plaintiff issued and served the
summons commencing this action
outside of the period stipulated in
the time-bar clause. This understanding between the parties
necessarily implies that there
is also agreement that proceedings are
generally initiated by issuing of summons and that a letter of
demand false outside of
that process. In this regard, it could be
instructive to refer to
Commercial
Association Co v Rainer
NO
(1896) 3 Off Rep
88
. Both parties
refer to the Constitutional Court case of
Barkhuizen
v Napier
NO
[2007] ZACC 5
;
2007 (5) SA 323
(CC),
which dealt with time-bar clauses in somewhat similar circumstances.
[15]
The Constitutional Court in Barkhuizen
supra
acknowledged that
circumstances could exist where it could be defensible to reject
enforcement of a time-bar clause especially
where it would render
the contract unfair and unreasonable. Accordingly, Barkhuizen serves
as authority that a blanket approach
in these matters is not
possible because concepts such as fairness and unreasonableness are
nebulous. That fact inexorably requires
examination of each given
set of facts to arrive at a solution.
[16]
pacta sunt servanda
finds application in this matter insofar as it is the argument of the
parties that it was concluded freely and voluntarily. The
point of
divergence of these parties, however, is the fairness and injustice
that might arise having regard to the circumstances
under which the
contract was entered into. In Barkhuizen, it was held that the
circumstances
were not
well-explained to decide fairness and unreasonableness. In
consequence, the court held that
pacta
sunt servanda
found
application. The insurance claim process is now governed by the
Policy Protection Rules published in
GN
R1128
in
Government
Gazette 26853 of September 2004
,
as amended by
GN
R1212
in
Government
Gazette 33882 of 17 December 2010
under Section
55(5)
of the
Short-term Insurance
Act
53 of 1998
.
[17]
Pertinent to this matter is Rule 7.4 of the Policy Protection Rules,
which provides:
“
7.4
(a) An insurer must accept,
reject or dispute a claim or the
quantum of a claim for
a
benefit under a policy within a reasonable period after receipt
of a
claim.
(b)
An insurer must within 10 days of taking any decision referred to in
paragraph
(a), in writing, notify the policyholder of its decision.
(c)
If the insurer rejects or disputes a claim or the quantum of a claim,
the notice
referred to in paragraph (b) must inform the policyholder:-
(I)
of the reasons, for the decision;
(ii)
that the policyholder may within a period of not less than days after
the date of
receipt of the notice make representations to the relevant insurer in
respect of
the
decision;
(iii)
of the right to lodge a complaint under the Financial Services Ombud
Schemes
Act.
2004 (Act No 37 of 2004) and the relevant provisions of the Act
relating to
the lodging of such a complaint in plain understandable language;
(iv)
in the event that the relevant policy contains a time limitation
provision for the
institution of legal action, of that provision and the implications
of that provision
for the policyholder in an easily understood manner; and
(v)
in the event that the relevant policy does not contain a time
limitation provision
for the Institution of legal action, of the prescription period that
will apply in
terms of the Prescription Act. 1969 (Act No. 88 of 1969) and the
implications
of that provision for the policyholder in an easily understood
manner.
(d)
If a claim is rejected or disputed, or a quantum is disputed as
contemplated in paragraph
(a) on behalf of an insurer by a
person other than the insurer, such other person must provide the
notice contemplated in paragraph
(b) and include in that notice, in
addition to the information referred to in paragraph (c), the name
and contact details of
the insurer and a statement that any recourse
or enquiries must be directed directly to that insurer.
(e)
If the policyholder makes representations to the relevant insurer in
accordance with
paragraph (c)(ii) the insurer must within 45 days of
receipt of the representation, in writing, notify the policyholder
of its
decision to accept, reject or dispute the claim or the
quantum of a claim for a benefit under a policy.
(f)
If the insurer, despite the representations of the policyholder,
confirms the
decision to reject or dispute the claim or the quantum
of a claim, the notice referred to in paragraph (e) must:-
(I)
inform the policyholder of the
reasons for the decision;
(ii)
include the facts that informed the decision; and
(iii)
include the information referred to in paragraph (c)(iii) to (v).
(g)
Any time limitation provision for the institution of legal action
that may be provided
for in a policy entered into before 1 January
2011 may not include the period referred to in (c)(ii) in the
calculation of the
time limitation period;
(h)
Any time limitation provision for the institution of legal action
that may be provided
for in a policy entered into on or after 1
January 2011:-
(I)
may not include the period referred
to in (c)(ii) in the calculation of the time limitation period; and
(ii)
must provide for a period of not less than 6 months after the expiry
of the
period referred to in paragraph
(c)(ii) for the institution of legal action…”
EVALUATION
[18]
The Plaintiff has admitted that he instituted his claim against the
Defendant outside of the
prescribed period stated in the contract.
He challenges the validity of the time-bar clause on
the ground that its observance in
these circumstances would be unfair and unreasonable to the
Plaintiff. It is trite that he who
alleges must prove. The Plaintiff
therefore has the onus of alleging and demonstrating that
enforcement of the time bar clause
would produce unfairness and
injustice to the Plaintiff. The only intimation of an alleged
unfairness or unreasonableness is
that the Plaintiff has been paying
his premiums and was up to date when the accident occurred and that
the dismissal of special
plea would not mark the collapse of the
Defendant’s case.
[19]
These are hardly factors that this Court would consider when
determining unfairness and unreasonableness.
The Plaintiff concluded
this contract over the telephone and the policy documents comprising
the contract were send to him subsequently.
I would assume that he
perused the terms and conditions,
which he found acceptable. The postulation aforesaid must be correct
because following the conclusion
of the contract, he knew that he had
to make monthly premiums for continued indemnification of his loss
by the Defendant. The
Plaintiff’s papers are stridently silent
on how enforcement will be unfair and unreasonable.
[20]
The contract is categorical on how the claim process ought to unfold
upon the occurrence of
an insured event. The Plaintiff lodged his
claim punctually, which the Defendant rejected on 2 September 2016
and furnished reasons
therefor. The letter repudiating the
Plaintiff’s claim complies with Rule 7.4 of the Policy
Protection Rules, which I have
described above. Among other reasons
cited for the repudiation is that the Plaintiff supplied the
Defendant with dishonest information.
[21]
In consequence of the dishonesty, the Defendant advised that it would
not honour the Plaintiff’s
claim and that it was cancelling
the policy reckoned from the date of the accident as it was entitled
to do as per the contract.
Having rejected his claim, the Defendant
went on to inform the Plaintiff that he had a period of 90 days from
2 September 2016
within which to raise objection with the Defendant.
The letter continues to state that regardless of whether or not the
Plaintiff
raises an objection within the 90-day period, he would
still have another 180 days within which to serve summons on the
Defendant
failing which his right to challenge the decision of the
Defendant would be forfeited.
[22]
The Plaintiff went completely silent and it was only on 22 December
2017 that his attorney challenge
the validity of the repudiation.
Although the lodging of a formal objection was not necessarily
prejudicial to the Plaintiff,
it is notable that this was already
outside of the prescribed 90-day period. Notwithstanding that the
Defendant had advised the
Plaintiff of its reasons for refusing to
pay, it nonetheless set out a full exposition of the dishonesty to
his attorney in a
letter dated 10 January 2017. As such, at every
turn the Plaintiff was furnished with reasons for the rejection, his
rights fully
explained despite that there was no allegation of
illiteracy and that he was legally represented as early as 22
December 2017
to date.
[23]
I am at loss why the Plaintiff would claim that enforcement of the
terms and conditions of the
contract would be unfair and
unreasonable to him. The fact that he was up to date with his
premiums and that a dismissal of the
special plea would not mean the
end of this case for the Defendant are hardly, without more, factors
for consideration. The Plaintiff’s
reference to Barkhuizen
supra
,
Representative
of
Lloyds
&
others
v
Classic
Sailing
Adventures
(Pty)
Ltd
[2010]
JOL 25605
(SCA
)
and
Links
v Member of the
Executive Council, Department of
Health,
Northern
Cape
Province
2016
(5)
BCLR
656
(CC)
is completely misguided.
[24]
The statement in Barkhuizen
supra
on which the Plaintiff seem
to rely was made obiter. Even so, the Constitutional Court made it
clear that each case would have
to be decided on its own merits
suggesting that such facts would have to be alleged and proved. In
Representative of Lloyds and
Others, the Supreme Court of Appeal
dealt with conflict of laws. I cannot do more than citing Paragraph
23 of the judgment below:
“
Rather
than
asking
whether
statutory
provisions
are
prohibitory
or
dispositive,
a
better
approach
to determining whether parties may
exclude the operation of statutory provisions by choice of another
system of law might be to
question whether they can waive the
application of the provisions. This question was addressed in SA
Co-Op Citrus Exchange v
Director-General,
Trade & Industry
7
where
Harms JA,
dealing
with procedural
statutory provisions, held that
they may be renounced by a party (in that case the State) for whose
benefit they are enacted.
But where public policy and interest would
be prejudiced by a waiver, such provisions cannot be escaped. Waiver
is not possible,
said this Court, if it affects public policy or
interest or a right.
8
This principle was affirmed
in De Jager & andere v ABSA Bank Bpk
,9
where this Court held that
the application of the provisions of the
Prescription Act 68 of 1969
may be waived by a debtor under a contract after the prescriptive
period had run because renunciation did not substantially or
materially impact on the public interest.”
[25]
Put differently, the general rule is that parties in an agreement are
free to elect a country
whose laws would apply to a contract but
where doing so offends public policy, the South African law would
carry the day. In
this case the SCA declined to apply the English law
in line with what the parties had chosen for had it done so,
Representative
of Lloyds would have escaped liability. In the
circumstances, this case is totally distinguishable from the current.
More baffling
is the Plaintiff’s reference to the case of
Links, which dealt with the
Prescription
Act, 68 of 1969
.
This case too is different from the case
in casu
.
CONCLUSION
[26]
Parties who have freely and voluntarily entered into contracts ought
to be bound by the terms
and conditions arising therefrom. The
exception is, of course, where enforcement of such terms and
conditions would cause unfairness
and unreasonableness to the other
party to the contract, it would be justifiable to decline to
hold that other party liable.
The Plaintiff has failed to give a
factual background that would persuade this Court to find that
despite his conclusion of the
contract with the Defendant, it would
be unfair and unjust to enforce the
terms
and conditions on him.
[27]
In view of the above, I am bound to uphold the special plea and I
make the following order:
1.
The Plaintiff’s
claim is dismissed; and
2.
The Plaintiff is to pay
the costs of the Defendant.
B A MASHILE
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA
This judgment was
handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date
and time for
hand-down is deemed to be 12 May 2021 at 10:00.
APPEARANCES:
Counsel for the
Plaintiff:
Adv K Shai
Instructed
by:
A.K Khoza Attorneys
Counsel
for the Defendant:
Mr E.H. Wiese
Instructed
by:
H.J Badenhorst & Association
Date of
Hearing:
19 April 2021
Date of
Judgment:
12 May 2021