CIV/APN/489/2001

IN THE
HIGH COURT OF LESOTHO

In the
matter between:

WOOL
WAGON (Pty) Ltd. t/a

M.K.
CLOTHING PRODUCT 1ST APPLICANT

WOOL
WAGON (Pty) Ltd 2nd APPLICANT

MRS
'MAMOTŠELISI KHIBA t/a

HAIR AND
BEAUTY SALON 3 rd APPLICANT

and

LESOTHO
NATIONAL GENERAL

INSURANCE
COMPANY LIMITED RESPONDENT

JUDGMENT

Delivered
by the Honourable Mrs Acting Justice A.M. Hlajoane on 25th Day of
April, 2002

I will
start first by giving a brief synopsis of the relationship between
the Applicants and the Respondent. The papers filed of record reveal
that both parties had entered into written agreements of insurance in
terms of which the Respondent undertook to insure first Applicant's
machines and equipment, second Applicant's electronic equipment and
third Applicant's stock in trade and all the contents against the
risk mentioned in the Insurance contract; being amongst others fire,
and malicious damage to property.

Applicants
allege that on or about 16th May, 2001, a fire at their premises
destroyed their property and that formulated claims were lodged
between August and September respectively. Letters seeking the
position of Respondent regarding the claims were thereafter written
to the Respondent, showing that Respondent has unreasonably delayed
in making a decision regarding Applicants' claim. Applicants feel
that a decision by the Court on that issue will assist in the
formulation and determination of three other claims arising from the
fire.

It is
further the Applicants case that after the burning of the premises
and business Respondent conducted its own private investigations into
the circumstances relating to the incidence, together with the
question of liability. That the Respondent has known about the cause
of the fire as early as June and July, 2001. It is further the
Applicants feeling that they have complied with their obligations
under and in terms of their policies but that Respondent has failed
and/or refuses to either accept or deny liability in respect of the
claims. As a result of Respondent's failure to decide on Applicants'
claims, Applicants are unable to establish new businesses as they
have been deprived of their main source of income and have had their
lease agreement with the National University of Lesotho cancelled.

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Applicants
further contend that this Application relates to three separate
Insurance policies with Respondent who cannot therefore rely on
non-formulation of the stock claim in respect of Wool Wagon (Pty) Ltd
as a ground for Respondent's failure to make a decision regarding
Applicants claims. It is Applicants further contention that the
policy documents in respect of which the present Applicants claim
contain no clause that gives Respondent the right to combine any
claim under them with any other claim under another policy.

The main
prayer for this Application being;

1. Directing
   the Respondent to make a decision regarding acceptance or denial of
   liability of Applicants' claims within fourteen (14) days of
   granting of the order.

   
   

2. Directing
   Respondent to furnish the Applicants with the ground of denial of
   liability within fourteen 14 days of granting the order.

   
   

In
opposing the Application Respondent shows that Applicants are in
effect seeking for a mandatory interdict since the relief sought
requires a final determination of the rights of the parties.
Respondent is being asked to either accept or deny liability.

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The
policy wording of the relevant paragraph in the policy contract
reads:

"In consideration of the payment of the premium by or on behalf
of the insured, the company specified in the schedule agrees to
indemnify or compensate the insured by payment or at the option of
the company by replacement, reinstatement or repair in respect of the
defined events occurring during the period of insurance and as
otherwise provided under the within sections up to the sums insured,
limits of liability, compensation and other amounts specified/'

The
leading case on the subject of interdicts, Setlogelo v Setlogelo 1914
AD 221 clearly spells out the requisites for an interdict:

- a clear
right,

- injury
actually committed or reasonably apprehended

- absence
of similar protection by any other remedy.

The
Respondent submits therefore that on the authority of the above case
Applicants have not proved that they have a clear right to the relief
sought, neither does such a right exist in the policy conditions.
Respondent points out that, the Applicants are only relying upon the
policy wording shown earlier, which has to be given its ordinary and
popular meaning, Fedgen Insurance Ltd v Leyds 1995(3) S.A 33 at 38.

What the
Policy wording provides is contractual right on the part of the

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Applicants
to insist upon payment from the Respondent in the event of the other
conditions and terms of the policy being met. The question that has
to be answered is whether or not the Applicants have a clear right to
the relief being claimed.

On the
facts of this case it has been clear that there is a contractual
relationship between the parties, Applicants submitting a claim after
the happening of an event and Respondent effecting payments on
certain conditions being met by Applicants. There is a right to
submit the claim under the contract by the Applicants and the right
to be given a reply of whether to accept or deny liability by
Respondent. To be said to be a clear right is a matter of evidence,
Welkom Bottling Co. (Pty) Ltd. v Belfast Mineral Waters (OFS) (Pry)
Ltd. 1967(3) S.A. 45 at 56. In order to establish that clear right
the Applicant has to prove on a balance of probability the right
which he seeks to protect. This is a task which is normally tackled
by way of action since a final order will not be granted on motion
where there is a dispute of fact. Applicant has only alleged that
instituting an action will be premature and unsuitable without
explaining further as to what he meant by that.

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Injury
Committed or Apprehended .

Applicants
allege that the injury that has arisen is that they are unable to
establish new business as their future is held to ransom by the
Respondents and that their lease has been cancelled due to the
conduct by the Respondent of not accepting or denying liability. But
can it be said that the response is unreasonably withheld by the
Respondent? Respondent is not just keeping quiet but making further
private investigations to establish the possible cause of the fire so
as to dispel any lingering doubts, ( page 91 of the record) which is
a letter to professional investigator. Respondent says he needed to
investigate circumstances surrounding the fire damage. Applicants are
saying that their prayers relate only to liability not quantum, and
that proofs and information referred to by the Respondent would be an
issue when the question of quantum is being addressed but not in this
case. Applicants here have shown that according to them they have
complied with their obligations in terms of the policy but that the
Respondent has taken an unreasonable time before showing whether he
accepts or denies liability. The Respondent on the other hand has
shown that Applicants have not complied with their obligations in
terms of the policy as they have not furnished proof required which
they are obliged to furnish in terms of the said policy. Even here

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there is
clearly a dispute of fact which cannot be resolved on papers.
Applicants are saying they have complied but the Respondent on the
other hand claims that they have not complied. There is therefore a
dispute of fact on whether or not enough information has been
provided.

In
support of their proposition that they are entitled to be appraised
of a decision by the Respondent within a reasonable time of
formulation of their claims, the Applicants on the authorities of Reg
v Liver pool Ex parte Liverpool Taxi Fleet Operators Association
[1972)2 All ER 589 at 594 quoted Lord Denning where he showed that, a
person or public body entrusted with powers for public purposes
cannot divest themselves of those powers e.g. by contract. He pointed
out that;

" That principle does not mean that a public corporation can
give an undertaking and break it as they please. So long as the
performance of the undertaking is compatible with their public duty,
they must honour it."

Applicants
went further and stated that the abovementioned case was quoted with
approval in the case of Attorney-General and Others v Makesi & 85

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Others
1999-2000 LLR & LB 302 where the Court of Appeal issued a
mandamus.

As can be
seen from the facts of this case, it is distinguishable from the
Makesi case as in Makesi there were no conditions precedent before
effecting changes, the revised salaries for Court Presidents. The
Government there had made an undertaking. You only have to be a Court
President to qualify for such upgrading, no other requirements like
qualifications, service or age. Unlike in Life Policies, which are
valued policies. In Life Policy you only report death and you get
paid. But in our present case liability is not automatic on the
happening of the events, but there are other conditions that have to
be satisfied first before accepting or denying liability. Applicant
have first to furnish proof. That means loss has still to be proved
in this case.

Claims

Section 6 (a)(iii) ........after the event submit to the company
full details in writing of any claim.

(iv) Give the company such proofs, information and sworn declaration
as the company may require

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No Other
Remedy

The Court
will not generally grant final interdict where Applicant can obtain
adequate redress in some other form of ordinary relief as a final
interdict is a drastic remedy and in the Court's discretion. But in
circumstances where the Court feels that despite existence of other
remedies the interdict may in fact be less drastic than some other
remedy available to the Applicant, the Court may grand a final
interdict. See Peri-Urban Area Health Board vs Sandhust Gardens (Pry)
Ltd 1965 (1) S.A. 683 at 684.

In this
case the Respondent says that the Applicants still have other
suitable remedy like instituting an action, but the Applicants on the
other hand show that that move would be unsuitable and premature in
the absence of any knowledge of grounds of repudiation. Applicants
put their reliance on Section 6(c) of the policy which reads;

"In the event of a claim being rejected and legal action not
being commenced within 6 months after such rejection all benefit
afforded under this policy in respect of any such claim shall be
forfeited"

Applicants
are reading the section to mean that there can be no action
instituted in the absence of anything from the insurer by way of
accepting or repudiating liability, at the same time are saying that
Respondent has taken an

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unreasonable
delay in showing their position. According to them the behaviour of
the Respondent is tantamount to rejection of liability on its part.
The best way therefore would be to institute an action against the
company.

An
example being where a letter of demand has been given and the
response to it being that you first have to do certain things before
you get an answer. If you allege that what is needed from you has
been complied with already you cannot insist on demanding but the
best route would be to institute an action. In Reserve Bank of
Rhodesia vs Rhodesia Railways 1966(3) S.A. 656, where it was held
that the granting of an interdict was neither necessary nor competent
as they had another remedy open to them. The Court went on to say
that if in an Application for an interdict it appears that there is
an existing remedy with the same result, the interdict should be
refused. Commander LDF and Another vs Matela 1999 - 2000 LLR & LB
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On
Urgency

Respondent
contents that the matter is not urgent as no grounds for urgency have
been shown. Applicants on the other hand allege that the matter in
fact is urgent as may have been deprived of their main source of
income and are unable to settle outstanding debts. Again Applicants
show that in fact the matter had not

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been
treated as one of urgency as Respondent was allowed to file opposing
papers and no temporary interdict was sought against Respondent.
Respondent suffered no prejudice as the Application was on notice,
Attorney General vs Makesi Supra .

Admissibility
of Answering Affidavit

Mr Martin
Wright, Chief Executive of the Respondent deposed to an affidavit
deriving an authority so to act from a resolution that was made at a
Board meeting of the Respondent and copy of such resolution attached.

Applicants
are arguing that the answering affidavit of Mr Wright is not
admissible as he has not alleged that he deposes to facts that are
within his personal knowledge or that have been gleaned from records
of Respondents. In Central Bank of Lesotho vs Phoofolo LAC (1985 -
1989) 259, where the Governor had deposed to the answering affidavit
on behalf of the Bank, and did not say that the fact to which he had
deposed were within his personal knowledge. As rightly conceded by
the Applicants the affidavit, dealt with legal issues and not factual
issues. The Court held that since the material facts to which the
Governor deposed to were clearly within his knowledge and were indeed
common cause, the objection had to be dismissed. In that case my
brother Molai J was taken to

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have
correctly dismissed that objection as the Court went further to state
that, "There is no invariable rule which requires a juristic
person to file a formal resolution, manifesting the authority of a
particular person to represent it in any legal proceedings, if the
existence of such authority appears from other facts." Mr Wright
is the Chief Executive of Respondent and is duly authorized. For the
reasons given Mr Wrights affidavit is considered to be admissible.

It has
already been shown that this Application is for a mandatory interdict
and as such the requisites for an interdict have to be established.
As rightly pointed out by the Respondent there is no provision in the
policies contract entitling the Applicants to be told whether
liability is being accepted or denied, the relationship is purely of
a contractual nature. In the contracts, the Respondent has agreed to
compensate or indemnify the Applicant by payment or replacement,
reinstatement or repair in respect of the defined events occurring
during the period of Insurance, in consideration of the payment of
the premiums but on certain conditions.

There can
therefore be no injury committed or reasonably apprehended as
Applicants have not been able to establish or show a clear right
under the contracts. Applicants still have a remedy open to them by
instituting an action for

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their
claims under the contract.

I
therefore dismiss the Application with costs,

A.M.
HLAJOANE

ACTING
JUDGE

For
Applicant: Mr Malebanye

For
Respondent: Mr Molyneaux

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