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1989
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[1989] ZASCA 109
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Abbass v Allianz Insurance Ltd. (222/88) [1989] ZASCA 109 (21 September 1989)
Case no 222/88
/MC
IN THE SUPREME COURT OF SOUTH AFRICA APPELLATE DIVISION
Between:
MOGAMAT ABBASS
Appellant
- and -
ALLIANZ INSURANCE LIMITED
Respondent
CORAM:
JOUBERT, BOTHA, VIVIER, EKSTEEN JJA
et
NICHOLAS AJA.
HEARD:
7 SEPTEMBER 1989.
DELIVERED:
21 SEPTEMBER 1989.
JUDGMENT
VIVIER JA.
2/...
2.
VIVIER JA:
The appellant applied in the Cape Provincial Division
for an order in terms of sec 24(2)(a)(ii) of the Compulsory Motor Vehicle
Insurance
Act 56 of 1972 ("the Act") granting him leave to serve process upon
the respondent despite the fact that his claim had become prescribed
under sec
24(1) of the Act. The application was dismissed by MARAIS J and the appellant
now appeals with the leave of this Court.
The relevant facts are not in
dispute and may be summarised as follows. On 15 June 1981 the appellant
sustained serious bodily injuries
in a collision between a motor vehicle driven
by himself and another motor vehicle driven by one Booysen. As a third party
within
the meaning of those words in sec 21 of the
3/...
3.
Act, the appellant instructed a firm of attorneys to act on his behalf in
claiming ccmpensation from the respondent as the authorised
insurer under the
Act of Booysen's vehicle. In compliance with the provisions of sec 25(1) of the
Act, the appellant's claim for
compensation in an amount of R25 760-00, set out
on the prescribed form MVA 13 and accompanied by the prescribed medical report,
was duly lodged with respondent at some unspecified time after 17 December 1981.
Apparently nothing happened thereafter until 15
April 1983 when respondent
offered, without prejudice, to settle the appellant's claim for the sum of R2
858-16 and to make a contribution
of R150-00 towards his costs. A few days
later, on 29 April 1983, the respondent further agreed that the appellant should
be examined,
at its cost, by an orthopaedic surgeon in order to
4/...
4.
obtain an updated medico-legal report on his condition.
The appellant
thereafter terminated the services of the attorneys who had up to that stage
been acting for him, and on 11 May 1983
instructed the firm of Frank and Frank
to act on his behalf. Mr Jack Stanley Frank ("Frank") of this firm handled the
appellant's
claim thereafter.
Allowing for the ninety day period of
suspension of prescription referred to in sub-sections 24(1)(a) and 25(2) of the
Act, the two
year period of prescription laid down by the former of these
sub-sections was due to expire on or about 15 September 1983 (the exact
date is
not relevant for present purposes). On 17 August 1983 Frank addressed a letter
to the respondent confirming that arrangements
had been made for the appellant
to be medically examined at the beginning of September 1983, and requesting
confirmation from
5/...
5.
the respondent that it had taken the necessary steps
"to extend
prescription of the claim". The respondent
replied by letter dated 29 August
1983 stating that
it had arranged for "an extension of our right to
plead
prescription up to and including 29 February 1984".
The updated
medico-legal report was duly sent to respondent
under cover of a letter dated
14 February 1984. The
letter stated that the appellant was not prepared
to
accept the respondent's offer of settlement contained
in its aforesaid
letter of 15 April 1983, and that,
since prescription of the claim was now
imminent, steps
were being taken to issue and serve the summons. On
20 Pebruary 1983 the appellant's combined summons was
issued out of the Cape Provincial Division and Frank
wrote on the front of
his file: "20/2/84 issued summons
and filed power of attorney". On the same
day Frank
6/...
6.
received a telephone call from respondent's representative, a Mr George, and
he the n informed the latter that summons was being issued
that day and that it
would be served on the respondent shortly. It was agreed that, pending
settlement negotiations, it would not
be necessary for respondent to defend the
action and that, if the matter could not be settled, defendant would then be
given a reasonable
opportunity to defend. George also advised Frank of an
increased offer of settlement which respondent was prepared to make in respect
of the claim. Later the same day George again telephoned Frank and said that
respondent did not want the summons to be served on
it and that its increased
offer of settlement was being made specifically on condition that the summons
was not served on it. George
said that he would take the necessary steps "to
extend
7/...
7.
prescription of the claim for about six months". Frank accordingly agreed to
withhold service of the summons and the summons was not
served. In a letter
dated 21 February 1984 addressed to Frank the respondent confirmed the above
telephonic conversations in the
following words:
"Kindly note that the MVA Pund has agreed
that we do not plead prescription up to and
including 31 August 1984.
Furthermore, we wish to advise that we have
reconsidered this matter on a without prejudice
basis and tender settlement of this claim
in the sum of R4 000-00.
The above offer is on condition that you
withhold your summons and should your client
accept this offer, we will settle your bill
of costs on a taxed or agreed basis."
It was stated that the new offer was open for
acceptance for a period of
30 days. Frank did nothing about
the offer, so that, in the event, the matter
was not settled,
8/...
8.
nor was the summons served by the date stipulated by
respondent viz 31
August 1984. In an affidavit filed
in support of the application Frank said
that his failure
to have the summons served was initially due to the
fact
that he was under considerable pressure of work.
Thereafter he was away from
his office on leave for
about a month towards the end of May 1984. His
firm
was moving offices at the end of August 1984 and much
time was spent
preparing for the move. These circumstances
so preoccupied his mind and time
that he was unable
to attend to the appellant's claim and to investigate
the quantum of the claim in order to attempt to settle
the matter. He received a letter dated 12 July 1984
from the appellant's previous attorneys concerning
payment of their fees and he replied thereto in a letter
dated 7 August 1984. He had the appellant's file before
9/...
9.
him when he dictated the reply, and saw his note on
the file that summons
had been issued. This misled
him into the mistaken belief that the summons
had in
fact been served since he had by then forgotten or
overlooked the
arrangement to withhold service of the
summons. It was only on 20 October
1984 that, upon
going through the file again, he discovered that
the
summons had indeed not been served and that the extended period
during
which respondent had undertaken not to plead
prescription had expired. He
thereafter unsuccessfully
attempted to persuade the respondent to waive
prescription .
Respondent did, however, waive compliance with
the
provisions of sec 24(2)(b)(i) which require an application
to be
brought within a period of ninety days after
the date on which the claim
became prescribed.
10/...
10.
Sec 24(2)(a)
of the Act deals with two types
of
situations: subsec (i) provides for the case where the claim for compensation
has become prescribed before compliance by the third
party with the provisions
of sec 25(1); and subsec (ii) deals with the situation where, after compliance
with the said provisions,
the claim has become prescribed because any process
could not be served on the authorised insurer in time to interrupt prescription.
The relevant portion of sec 24(2) provides as follows :
"24(2)(a) If a third party's claim for compensation has become prescribed under
subsection (1) of this section and a court having
jurisdiction in respect of
such claim is satisfied, upon application by the third party concerned
-
(i)
11/...
11.
(ii) where the claim became prescribed after compliance by him with the said
provisions, that by reason of special circumstances he
or, if he instructed any
other person to act on his behalf in this connection, such person could not
reasonably have been expected
to serve any process, by which the running of
prescription could have been interrupted, on the authorized insurer before that
date;
and (iii) that the authorized insurer is not prepared to waive its right
to invoke the prescription,
the court may grant leave to the third party
to comply with the said
provisions and serve
process in any action for enforcement of
the claim on
the authorized insurer in accordance
with the provisions of section 25(2)
before
a date determined by the court, or, as the
case may be, to serve
such process on the
authorized insurer before a date so determined.
12/...
12.
(b) The court shall not grant an application
referred to in paragraph (a)
unless -
(i) the application is made
within
a period of ninety days after the date on which the claim became prescribed;
and
(ii) the third party has given security to the satisfaction of the court for
the costs of the authorized insurer in connection with
the application.
(c) A plea of prescription in terms
of subsection (1) shall not be upheld
in
any action in which the relevant process
was served on an authorised insurer by virtue of leave granted under this
subsection."
It will be seen that there are five
requisites for relief under sec 24(2)(a)(ii). Firstly the applicant for relief
must show that
his claim for
13/...
13
compensation "has become prescribed under subsection
(1) of this section". The reference is to the statutory
period of
prescription laid down in sec 24(1) viz the
two year period from the date on
which the claim arose,
taking into account the ninety day period of
suspension
referred to in subsections 24(1)(a) and 25(2).
The words have
no reference to any extended period
of prescription to which the parties may
have agreed.
The second requirement for relief is that, by reason
of
special circumstances, the applicant for relief
or his attorney could not
reasonably have been expected
to serve process interrupting prescription on
the authorised
insurer "before that date". The date referred to
is the same as "the date on which the claim became
prescribed" in subsec 24(2)(a)(i) and is clearly the
date when the statutory period of prescription laid
14/...
14
down in subsec 24(1) expired. Thirdly the applicant must show that the
authorized insurer is not prepared to waive its right to invoke
"the
prescription" (subsec 24(2)(a)(iii)). Again the reference is clearly to the
prescriptive period prescribed in subsec 24(1).
The fourth reguisite . is laid
down in subsec 24(2)(b)(i) viz that the application for relief must be made
within a period of ninety
days "after the date on which the claim became
prescribed". There is no indication that the date referred to in this subsection
is
any other than the date earlier referred to in subsec 24(2) i e the date on
which the statutory period of prescription expired. The
fifth reguisite for
relief is that the third party must furnish the security prescribed in subsec
24(2)(b)(ii). It seems clear from
the first four reguisites
15/...
15
that subsec 24(2) is concerned only with one period of prescription i e the
statutory period provided for by subsec 24(1), and that
it does not provide for
any relief in respect of any privately agreed prescriptive period which differs
from the statutory period.
It follows that the dicta in
Modise v Incorporated
General Insurances Ltd
1985(4) SA 650 (B GD) at 654I-655C to the effect that
the parties may substitute a period of prescription of their own choosing for
the statutory period prescribed in sec 24(1) without affecting the applicability
of sec 24(2), cannot be supported.
Counsel for the appellant accepted in his main argument before this Court
that sec 24(2) only applied to the statutory period of prescription.
He
submitted, however, that upon a proper construction of the negotiations
16/...
16
between the parties, no more was agreed upon than that the respondent would
until 29 February 1984, and thereafter until 31 August
1984 waive its right to
invoke the statutory prescriptive period, and that there was no question of any
prescriptive period other
than the statutory period having been agreed upon
between the parties. Consequently, so the argument proceeded, all that the
appellant
needed to show to entitle him to relief in terms of sec 24(2)(a)(ii)
was that it could not reasonably have been expected that process
should be
served within the statutory prescriptive period. It was submitted that by reason
of the waiver agreement reached between
the parties in terms whereof it was no
longer necessary to serve the appellant's summons by 15 September 1983,
appellant's attorneys
could not reasonably have been expected to serve any
process
17/...
17
by which the running of prescription could have been interrupted, within the
statutory period. It is irrelevant that process could
reasonably have been
served during the extended period.
It will be recalled that in the letters of
17 and 19 August 1983 the parties agreed that respondent's right to plead
prescription
would be extended to 29 February 1984, and that, after the
statutory prescriptive period had expired on 15 September 1983, the respondent
.
on 21 February 1984 further allowed the appellant until 31 August 1984 to serve
the summons. I shall assume in appellant's favour
that no more was agreed upon
in granting the extensions than that respondent would waive its right to invoke
the statutory prescription.
While it is no doubt true that the appellant's
attorneys could not reasonably have been expected to
18/...
18
serve the summons within the statutory prescriptive period, this was not
sufficient in itself to ground a case for relief under sec
24(2)(a)(ii) of the
Act. It was necessary in addition to satisfy the court in terms of sub-para
(2)(a)(iii) that the respondent was
not prepared to waive its right to invoke
"the prescription". It is true that that paragraph appeárs to contemplate
a waiver
given after the date on which the claim becomes prescribed. But it does
not, in terms, exclude a waiver given in anticipation of
imminent prescription.
And there is no reason why it should be construed as doing so. Indeed it is, and
was, well known that a claimant
and an insurance company would often agree in
advance to an extension of the "right to plead prescription". That is something
to
be encouraged as being calculated to facilitate the settlement of
19/...
19
claims. In any event the waiver of 21 February 1984 was given
after the date on which the claim became prescribed.
If, therefore, the
appellant had applied, within a period of ninety days after the date on which
the claim became prescribed (as required
by subsec :. (2)(b)(i)),the application
for relief under subsec
(2)(a)(ii) could not have been granted, because the appellant would not have
been able to satisfy the Court that the respondent was
not prepared to waive its
right to invoke "the prescription" i e the statutory prescriptive period which
expired on 15 September
1983. The passage of time has not improved the
appellant's position. It is quite clear that the respondent's refusal to waive
prescription
related to the extended periods and not to the statutory period of
prescription
20/...
20
which expired on 15 September 1983.
If, therefore, the appellant is to
have any remedy at all, it can only be on the basis that his attorneys could not
reasonably have
been expected to serve the summons during the extended periods
agreed upon. In view of the conclusion which I have reached that sec
24(2)
applies only to the statutory period of prescription, that line of argument is
not open to the appellant. It is accordingly
not necessary to consider whether
special circumstances, within the meaning of those words in sec 24(2)(a),
existed during the extended
periods.
The application was accordingly
correctly refused by the Court
a quo
. In order to reach this conclusion
it has not been found necessary to deal with the cases in the Provincial
Divisions to which
21/...
21
this Court was referred during argument viz
Kriel v President
Versekeringsmaatskappy Bpk en 'n Ander
1981(1) SA 103(T);
Grey v Southern
Insurance Association Ltd
1982(3) SA 688 (ECD) and
Vilikazi v National
Employers' General Insurance Co Ltd
1985(4) SA 251(C).
The appeal is dismissed with costs.
W. VIVIER JA.
JOUBERT JA)
BOTHA JA) Concur.
EKSTEEN JA)
NICHOLAS AJA)