C OF A
(CIV) NO. 10/2003
COURT OF APPEAL OF LESOTHO
CO. LTD. APPELLANT
13 and 20
policy - clause 14 providing for a 12-month time bar to institute
action - clause 12 requiring insured to commence action
months after the insurer has disclaimed liability' - clause 14
provides in clear and unambiguous terms that "in no
whatever " shall the insurer be liable after the expiration of
the 12-month period - no express or implied term providing
interruption or suspension of the running of the 12-month period once
the insurer has disclaimed liability.
appeal was postponed sine die on 2 October 2003 pending the
resolution of the following applications:-
application to set aside as an irregular proceeding the notice of
set down which led to a judgment by default being granted
application for the rescission of the judgment by default referred
to in 1 above.
application to stay execution on the said judgment.
Court ordered on 2 October 2003 that the appeal could not be
reinstated until an affidavit by the appellant's attorney
filed stating that the above applications had been resolved in the
High Court. Such an affidavit has now been filed in which
further mentioned that judgment was handed down on 26 August 2004 in
the High Court in terms whereof the notice of set down
was set aside,
the judgment by default rescinded and execution stayed.
Court further ordered on 2 October 2003:-
no order be made on the notice of motion of the respondent dated 21
August 2003 in which the respondent applied to have the
appeal struck off the roll;
the costs of the respondent's said application and the costs of the
hearing on 2 October 2003 be dealt with by this Court
appeal is finally heard.
respondent claimed Ml05 600,00 from the appellant as insurer in the
High Court in terms of a motor vehicle insurance policy.
was for the respondent's insured vehicle which had been stolen. The
appellant filed a special plea of prescription together
with its plea
on the merits. The parties thereafter agreed upon a written statement
of facts in terms of rule 32 (1) of the High
Court Rules for the
adjudication of the special plea. By agreement between the parties
only the special plea was argued before
the Court a quo while the
merits of the claim stood over for later adjudication. The Court a
quo dismissed the special plea with
costs on 1 April 2003. The
appellant appeals against this order.
respondent had previously brought an application in this Court to
strike the appellant's appeal from the roll on the grounds
order of the Court a quo dismissing the special appeal was an
interlocutory order which required leave to appeal. The
did not proceed with this application before us and it will
accordingly be dismissed with costs.
following relevant Facts were admitted by the parties in their
written statement for purposes of the special plea:
respondent's insured motor vehicle was stolen on 12 March 2000.
in respect of the respondent's claim was repudiated on 23 January
was instituted by the respondent on 30 May 2001, more than 14 months
after the happening of the event, i.e. the theft of
respondent's claim was neither the subject of pending action or
arbitration on 11 March 2001, nor is it a claim under section
the policy. .
appellant in its special plea denied liability under the policy in
view of the provisions of clause 14 of the general conditions
policy which reads as follows:-
"In no case whatever shall the Company be liable under this
Policy after the expiration of twelve months from the happening
the event unless the claim is the subject of pending action or
arbitration or is a claim under Section 11. "
respondent on the other hand submitted that a proper interpretation
of clause 12 of the general conditions shows that he
had 6 months
after the appellant's disclaimer to institute his action,
irrespective of whether the 12 month period of clause 14
had by then
elapsed or not. Clause 12 provides as follows:-
"In the event of the Company disclaiming liability in respect of
any claim and an action or suit be not commenced within six
after such disclaimer all benefit under this policy in respect of
such claim shall be forfeited. "
a quo agreed with the respondent's interpretation.
the respondent's construction the insured who has lodged his claim
within the 12-month period will always have an additional
after the insurer's disclaimer to institute his action, even if the
insurer disclaims liability on the last day of the
Such an interpretation in my view disregards the clear wording of
clause 14 which is introduced by the words "in
no case whatever
...". Clause 14 should also be read together with clause 12.
was held in Union National South British Insurance Co Ltd v
Padayachee and Another 1985 (1) SA 551 (A) at 559 H-I that a
similar to the present clause 14:
no need of a special interpretative approach or an implied term to
give it meaning or efficacy. It is clear and unambiguous;
the insurer to refuse to pay any claim after the expiration of the
12-month period if no action is then pending. If
as the end of the
12-month period approaches, the insured finds it impossible within
such period to furnish all the required information
...due to the
insurer's own untoward delay in requesting such information, there
would to my mind be nothing to bar the insured
from issuing summons
within the 12 month period. "
similar approach was adopted in Kgaka v Statsure Insurance Co Ltd and
Another 2001 (4) SA 245 (T) at 247 H-248A where the
remarked as follows in relation to clauses in insurance policies
barring action after expiry of a period of 12 months:
"They provide an independent defence to a claim under the
policy. All that is necessary to make such a defence available to
insurer is the failure of the insured to institute action within 12
months of the happening ... These provisions provide a
defence to the insured's claim. They have nothing to do with
prescription and they are therefore not affected by the
the Prescription Act 68 of 1969. The only question is therefore
whether or not the claim was the subject of a pending
within 12 months of the happening. "
the respondent's interpretation the provisions of clause 12 serve to
interrupt or suspend the running of the 12 month period
in clause 14.
There is however no clause in the insurance contract of the parties
which expressly provides for any such interruption
or suspension, and
there is certainly no need to imply a tacit term to provide for such
interruption or suspension. See the Padayachee
case, supra, at
559C-5601, where the court rejected the insured's argument that a
similar term should be implied in the contract
respondent relied heavily on the case of SZ Tooling Services CC v SA
Eagle Insurance Co Ltd 1993 (1) SA 274 (A). The policy
in that case
contained a 24-month time bar for legal action similar to our
14. That condition did not however play any role in the case. A
further condition, similar to our clause 13, provided that
event of a claim being rejected and legal action not being commenced
within 3 months after such rejection all benefit under
shall be forfeited. The question in that case was whether motion
proceedings for declaratory relief instituted within
period constituted the required commencement of "legal action".
The court held that it did. In my view the
SZ Tooling case does not
provide any support for the respondent's contentions.
my judgment clauses 12 and 14 should be read together. Reliance
cannot be placed on clause 12 to the exclusion of clause
14 which in
clear and unambiguous terms entitles the insurer to refuse to pay any
claim after expiration of the 12-month period
if no action is then
pending. I am accordingly of the view that the special plea should
have been upheld and that the appeal should
be allowed with costs.
following order is made:
appeal is upheld with costs, such costs to include the costs of the
hearing on 2 October 2003.
order of the court a quo dismissing the special plea is set aside
and the following order is substituted therefor:
special plea is upheld with costs".
respondent's application to strike the appeal from the roll is
dismissed with costs.
Appellant : Mr P.J. Loubser
Respondent: Mr M. Ntlhoki
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