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[2016] ZAFSHC 204
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Mutual & Federal Insurance Company (Pty) Ltd v Hentiq 1353 (Pty) Ltd (2359/2015) [2016] ZAFSHC 204 (15 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2359/2015
Reportable:
No
Of
interest to other judges: No
Revised.
In
the matter between:
MUTUAL
& FEDERAL INSURANCE
COMPANY
(PTY)
LTD
Applicant
and
HENTIQ 1353 (PTY)
LTD
Respondent
HEARD ON:
24 NOVEMBER
2016
JUDGMENT BY:
BOKWA,
AJ
DELIVERED ON:
15
DECEMBER 2016
A
INTRODUCTION AND BACKGROUND FACTS:
[1]
These are interlocutory proceedings. The factual matrix that
gave rise to the present application are briefly as follows:
[2]
The applicant (Defendant in the main action), seek leave to amend its
plea in terms of the Provisions of Rule 28(1) of the Uniform
Rule of
Court. The plea sought to be amended is dated 24
th
August 2015, in accordance with its notice of intention to amend
dated 29 June 2016.
[3]
Upon delivery of the relevant Notice in terms of the Uniform Rule of
Court 28(1), the Respondent (Plaintiff in the main action),
served a
Notice of Objection to the proposed amendment in term of the Uniform
Court Rule 28(3), contending that firstly the proposed
amendment is
at a late stage of litigation and is without a substantive
explanation giving grounds for the delay. Furthermore,
that no
sufficient reasons have been advanced by the Applicant of the
withdrawal of the admissions it made in its plea at this
late stage.
[4]
During 2015 the Applicant and Respondent concluded a written Short
Term Insurance contract in terms whereof, several items being
32
mechanical horses/trucks and trailers were insured.
[5]
The description of the insured items, their registration numbers, the
sums insured, the excesses to be paid and the premiums,
were
stipulated on an annexure to the insurance schedule.
[6]
On 24
th
January 2015 an accident occurred on N1 national
road near Winburg, Free State Province, in which a mechanical horse
with registration
number DGN 898 FS, engine/VIN number
93SRUAPT47R446623, the first trailer with registration number DVM 907
FS and the second trailer
with registration number DVM 905 FS were
damaged.
[7]
The Respondent issued summons for the damages to the items totalling
R572 310.56, in terms of its insurance contract with the
Applicant on
20 May 2015. The Applicant repudiated the claim in its plea
filed on 24
th
August 2015 and where in, it admitted that
the trailers were insured.
[8]
Subsequent thereto, a consultation took place between the Applicants
and its legal advisors at Bedfordview, Germiston, Gauteng
on 21
st
June 2016. At this consultation, it was discovered by the
Applicant that as a matter of fact, the two trailers were not insured
by the Applicant at the time of the accident, in as far as they did
not appear on the list of the insured items to the schedule.
[9]
After making this discovery, the Applicant filed a Rule 28 Notice of
its intention to withdraw the admission it made in its
plea. On 5
th
July 2016, the Respondent filed a Rule 28(3) Notice of Objection to
the amendments. The Applicant proceeded to file an Application
for
Leave to Amend.
C.
ISSUES FOR DETERMINATION
[10]
In the first instance, the crisp question that calls for
consideration is whether the Applicant may withdraw an admission in
its plea, by amending the plea. To determine if a litigant is
allowed to amend a pleading, the first question is whether
a
satisfactory explanation has been proffered to the Court, why a wrong
admission in a pleading was made. If the question
is answered
in the affirmative, it follows therefore that the amendment ought to
be allowed by the Court. In the second instance,
the issue to
consider is the question of prejudice to the other party. If
the result of allowing the admission to be withdrawn
will, inevitably
cause prejudice or injustice to the other party, which cannot be
offset by a special order of cost, then the Application
to Amend
ought to be refused.
D.
APPLICABLE LEGAL PRINCIPLES
[11]
In deciding whether to grant or refuse an application for amendment,
the court exercises a discretion and, in doing so, leans
in favour of
granting it in order to ensure that justice is done between the
parties by deciding the real issues between them.
[1]
[12]
An amendment will usually be allowed unless the amendment is made
mala fide or would cause prejudice to the other party which
cannot be
compensated by a costs order or some other suitable order such as a
postponement.
[2]
[13]
An amendment must raise a triable issue – ie, it must be of
sufficient importance to justify any procedural disadvantages
caused
by the amendment proceedings in the sense that the issue is viable
and relevant or will probably be covered by the available
evidence.
[3]
[14]
There will not be prejudice if the parties can be put back for the
purpose of justice in the same position as they were when
the
pleading, which is sought to be amended, was originally filed.
[4]
The onus rests upon the applicant seeking the amendment to show that
the other party will not be prejudice by the amendment.
[5]
[15]
An amendment will be granted (even at a late stage) if it leads to a
proper ventilation of the dispute and if it does not occasion
an
injustice to the opposing party which cannot be remedied by an
appropriate costs order.
[6]
[16]
An amendment which has the effect of withdrawing an admission of fact
is permissible, but not readily granted
[7]
.
The applicant must under oath, provide a reasonable explanation both
of the circumstances under which the admission was
made and the
reasons why it is sought to withdraw it.
[8]
D.
SUBMISSIONS ON BEHALF OF THE APPLICANT
[17]
The affidavit deposed by the legal representative on behalf of the
applicant, Mr Angelo Raynard, sets out the circumstances
under which
the admission was made as well as the reasons why it should be
withdrawn. Those circumstances are recorded as
follows in his
affidavit at paragraph 5.3 – 5.7:
“
5.3 The fact came
to the notice of the Applicant’s legal team during a
consultation at Bedfordview, GERMISTON on
21
June 2016.
It was not
previously known to me, nor the Applicant’s current advocate.
I was simply under the impression that the
trailers were insured.
During the aforesaid consultation I saw that they were not insured as
they do not appear on the list
of insured items to the Schedule.
5.4 As can be seen from
the current Plea it was drafted and settled by the Late Advocate FWA
Danzfuss SC. I cannot talk on
his behalf but apparently he must
have assumed that the two trailers were indeed also insured.
But that was wrong.
Why he was under that assumption, I cannot
explain.
5.5 But the fact is that
if those two trailers were insured, they would have been described as
insured on the list of the schedule
to the insurance contract
MER0001775. They are not. The aforesaid International
mechanical horse appears on the schedule.
I attach that list of
insured items (under MER0001775) as Annexure “
M1”
hereto.
5.6 In any event, the
Respondent (as Plaintiff) and its insurance broker (Piet Bester
Makelaars of WESSELSBRON) should all the time
have known that the
trailers were indeed actually not insured with the Applicant. I
attach as Annexure “
M2”
an email by this broker
dated
6 May 2015
which proves that they knew before summons
already that these trailers do not appear on the list to the
Schedule.
5.7 Under the
circumstances, leave is sought to effect the aforesaid amendment.”
D.
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
[18]
Counsel for the Respondent Mr Van Aswegen, argued that the submission
that applicant seeks to withdraw, is a submission of
fact which is
fundamental to the applicants claim against the respondent. He
contended that by simply stating that both former
counsel of the
applicant, the late Adv Danzfuss and the attorneys Mr Raynard, made
incorrect assumption, could not in itself be
a sufficient
explanation, without applicant providing a factual bedrock thereto.
[19]
He submitted further that, beyond the explanation of the legal
representatives, the applicant ought to have also proffered
a further
explanation on its part. For these reasons, he submitted that
the application be refused.
F.
ANALYSIS
[20]
Turning to the contentious issues in the present application, one
needs to examine closely if the applicant proffered a satisfactory
explanation on the circumstances in which the admission was made as
well as the reasons for seeking the withdrawal.
[21]
In submission, Adv Benade posed a rhetorical question:
“
Why don’t
they want to hear the truth …. Why are they afraid to allow
the amendment…”
[22]
There is merit in the question he posed because the court can grant
an amendment of a pleading, even at a late stage, if it
leads to a
proper ventilation of a dispute and if it does not occasion an
injustice to the opposing party which cannot be remedied
by an
appropriate cost order.
[23]
I am of the opinion that the applicant has indeed provided a
satisfactory explanation of why the admission was made in the
first
place and why it needs to be withdrawn. There is nothing
sinister about the explanation given by the legal representative
on
behalf of the applicant. In my view, it is bona fide to justify
the discretion by this court to allow the amendment of
applicant’s
plea.
G.
RELIEF
[24]
In light of the afore going considerations, I come to the conclusion
that there exist no real impediment why an amendment should
not be
permitted in these circumstances.
24.1
The applicant’s
(defendant in the main action) are hereby
granted leave to amend
the plea dated 24
th
August 2015, in the notice in terms of
Rule 28(1) of the Uniform Rules of Court.
24.2
The applicants are ordered to
deliver and file their amended
pages within 10 (TEN)
days from the granting of this order.
24.3
The cost of application are
costs in the cause.
________________
I.
R.O. BOKWA, AJ
On
behalf of applicant:
Adv.
Benade
Instructed
by:
Advocates Chambers
Bloemfontein
On
behalf of respondent: Adv. Van Aswegan
Instructed
by:
Advocates Chambers
Bloemfontein
[1]
Trans-Drakensberg
Bank Ltd (under judicial management) v Combined Engineering (Pty) Ltd
1967 (3) SA 632
(N), Kasper v André Kemp Boerdery CC
2012 (3)
SA 20
(WCC), Commercial Union Assurance Co Ltd v Waymark NO 1995 (2)
SA 73 (TkGD)
[2]
Imperial Bank
Limited v Hendrick Barnard NO (349/12)
(2013 ZASCA 42
(28 March
2013) at (8)
[3]
Caxton Ltd v
Reeva Forman (Pty) Ltd supra; Ciba-Geigy (Pty) Ltd v Lushof Farms
(Pty) Ltd (2002) 2 All SA 525 (A) 537,
[4]
Moolman v Estate
Moolman
1927 CPD 27
; Euroshipping Corp of Monrovia v Minister of
Agriculture supra
[5]
Union Bank of SA
Ltd v Woolf
1939 WLD 222
[6]
Kasper v André
Kemp Boerdery CC 2012 (
3)
SA 20 (WCC)
[7]
Cordier v Cordier
1984 (4) SA 524
(C ); Mabaso v Minister of Police 1980 (4) SA 319
(W)
[8]
Western Bank Ltd
v Wood
1969 (4) SA 131
(D); Dladla v President Insurance Co Ltd
1982
(3) SA 198
(W)