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2009
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[2009] ZAGPJHC 46
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Ntlhabyane v Black Panther Trucking (Pty) Ltd and Another (A3083/08) [2009] ZAGPJHC 46 (1 September 2009)
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE
NUMBER A 3083/08
In
the matter between
VC
NTLHABYANE APPELLANT
and
BLACK
PANTHER TRUCKING (PTY) LTD FIRST RESPONDENT
NEW
LEAF CARRIERS (PTY) LTD SECOND RESPONDENT
______________________________________________________________
J U D G M E N T
VAN
OOSTEN J:
[1] This is an appeal against an
order of absolution from the instance with costs granted by the court
a quo
at the end of the appellant’s case in the trial of an action
instituted by the appellant against the respondents for damages
caused to her motor vehicle in a collision. At the commencement of
the trial the appellant’s
locus
standi,
the issue of
negligence and the
quantum
of the appellant’s damages were in dispute. The appellant
testified and called two witnesses to testify on her behalf. It
is
only necessary to refer to that part of the appellant’s
evidence which is relevant to deciding this appeal.
[2] The appellant testified that she
was the registered owner of the motor vehicle which she had purchased
in terms of a written
instalment sale agreement. Insurance of the
motor vehicle was provided for in the agreement and was duly effected
by the appellant
with Thebe Hoskins. She further testified that her
claim for indemnity in the sum of R90 000 was fully paid by the
insurer after
the collision. Her claim for damages in the action was
for R70 000. At the close of the appellant’s case the
defendants’
attorney applied for absolution from the instance
on the grounds firstly, that the appellant was not ‘out of
pocket’
concerning damages as she had been indemnified by the
insurer in an amount in excess of the amount claimed in the action
and secondly,
that she had failed to ‘prove subrogation’
in failing to produce in her evidence the original or a copy of the
insurance
policy in respect of which the motor vehicle was insured.
These arguments found favour with the Magistrate who based thereon,
granted
absolution from the instance with costs.
[3] The application for absolution
from the instance was based on a clear misunderstanding of the
principles of the doctrine of
subrogation and therefore was
ill-conceived. The same misconceptions advanced to the court in
argument on the doctrine of subrogation
in the law of insurance
regrettably perpetuated themselves in the judgment and reasons of the
magistrate. In his reasons the magistrate
held against the appellant
that she had failed to present evidence ‘that excludes
cession’. Cession of the appellant’s
claim to the insurer
was neither mentioned by the appellant in her evidence nor put to her
at any stage. It simply never arose.
On her evidence the insurer
clearly acted under subrogation in instituting the action in her
name. The legal principles on the
doctrine of subrogation are
well-settled and hardly need clarification. The basic rules thereof
are dealt with in LAWSA Joubert
(Ed) Vol 12 (first re-issue para 373)
as follows:
In
its literal sense the word “subrogation” means the
substitution of one party for another as creditor. In the context
of
insurance, however, the word is used in a metaphorical sense.
Subrogation as a doctrine of insurance law embraces a set of rules
providing for the reimbursement of an insurer which has indemnified
its insured under a contract of indemnity insurance. The gist
of the
doctrine is the insurer’s personal right of recourse against
its insured, in terms of which it is entitled to reimburse
itself out
of the proceeds of any claims that the insured may have against third
parties in respect of the loss.
The doctrine as part of insurance law
was imported into South African law through
Ackerman
v Loubser
1918 OPD 31
(see
also D M Davis
Gordon &
Getz on The South African Law of Insurance
4
ed (1993)). A useful summary of the history and principles of
subrogation is given by Harms ADP in the recent judgment of the
Supreme Court of Appeal in
Rand
Mutual Assurance Co Ltd v Road Accident Fund
[2008] ZASCA 114
;
2008
(6) SA 511
(SCA). The judgment in essence dealt with the right of the
insurer to sue in its own name under the doctrine of subrogation, in
respect of which the learned judge concluded (para [24])
It
is safe to assume if regard is had to the prevailing practice that
insurance companies have been acting on the basis that they
have to
litigate in the name of the insured. Although this is in my view a
less than desirable practice it would be wrong to abolish
it by
judicial
fiat
.
This court is reluctant to interfere with settled legal principles,
even when they have their origin in an incorrect interpretation
of
the law because members of the public may have arranged their affairs
on the assumption that they were settled.31
Communis
error facit ius.
C
onsequently,
this judgment does not hold that the insurer must litigate in its own
name and may not litigate in the name of the
insured. What it does
hold is that the English rule in its stark form cannot be justified
and that, unless the wrongdoer will be
prejudiced in a procedural
sense, courts may permit the insurer to proceed in its own name. It
might be necessary to adapt other
procedural rules in such an event
as requiring, by analogy with Uniform rule 35(5)(b), discovery by the
insured.
The insurer on the facts of this
matter was clearly entitled by subrogation to institute action
against the alleged wrongdoers in
the name of the insured (see
Rand
Mutual Assurance
para [24];
Schoonwinkel v Galatides
1974 (4) SA 388
(T)).
[4] Subrogation did not in any way
affect the
locus standi
of the appellant to institute action: it merely provides the insurer
with a personal right of recourse against its insured,
in
casu
the appellant, to be
reimbursed out of the proceeds of her claim, if successful. There can
be no question of the appellant not
being ‘out of pocket’:
a similar argument was rejected as long ago as in 1918 in
Ackerman
v Laubser
supra, and the
doctrine of subrogation has ever since formed part of our law of
insurance. There was neither a duty on the appellant
to prove
subrogation, nor to produce the policy of insurance. That being so
the appeal must be upheld.
[5] In the result the following order
is made:
The appeal is upheld with costs, such
costs to include the costs reserved by this court on 4 March 2009.
The order of the court
a
quo
granting absolution
from the instance with costs, is set aside and substituted with the
following:
The application for absolution from
the instance is dismissed with costs such costs to include counsel’s
fees for one day.
The matter is referred back to the
court
a quo
for the continuation of the trial.
_______________________
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
I agree.
__________________________
MP TSOKA
JUDGE OF THE HIGH COURT
COUNSEL FOR THE APPELLANT ADV
AC VAN DER NEST
APPELLANT’S ATTORNEYS
BOTHA & SUTHERLAND
COUNSEL FOR FIRST
RESPONDENT ADV G LAZARUS
FIRST RESPONDENT’S
ATTORNEYS HAUPT & EARLE
DATE OF HEARING
1 SEPTEMBER 2009
DATE OF JUDGMENT 1 SEPTEMBER
2009