REPUBLIC OF SOUTH AFRICA
       
	IN THE HIGH COURT OF SOUTH AFRICA 
	(MPUMALANGA DIVISION, MBOMBELA) 

(1)	REPORTABLE:NO
(2)	OF INTEREST TO OTHER JUDGES:NO
(3)	REVISED:  YES

				11/05/2021
……………………………….		………………………..
SIGNATURE			DATE

											CASE NO: 634/2017

In the matter between:

HENDRICK QHIBI							                                               Plaintiff

and 

MIWAY INSURANCE LTD									          Defendant

J U D G M E N T

MASHILE J:

INTRODUCTION

[1]	This is an insurance claim emanating from an insurance contract (“the contract”) concluded 	on 19 July 2013 by the parties herein. The subject of the contract against which the 	Defendant agreed to indemnify the Plaintiff for loss and/or damage ensuing was a 2015 	Toyota Fortuner 2.5D-4D RB A/T motor vehicle)” the insured vehicle”). A reciprocal 	undertaking by the Plaintiff was that he would make payment of monthly premiums and 	observe all other terms and conditions contained in the contract  

[2]	The insured vehicle subsequently became involved in a collision in consequence of which 	the Plaintiff lodged a claim with the Defendant for payment of damages occasioned by the 	accident. The Defendant investigated the circumstances of the happening of the insured 	event and resolved to repudiate the claim. Disgruntled by this response by the Defendant, 	the Plaintiff instituted these current proceedings against the Defendant persisting on 	compensation of his loss arising from the collision.   

[3]	When the matter served before this Court, the Defendant had raised two preliminary points. 	However, prior to commencement of the proceedings, it abandoned the one and retained the 	other concerning a time-bar clause. Fundamentally, the Defendant’s assertion is that in terms 	of the provisions of the time bar clause, the Plaintiff ought to have instituted this action within 	270 days from the date on which it rejected the Plaintiff’s claim. The Plaintiff’s claim cannot 	be entertained in view of it having been brought well after the expiration of the period. For 	better appreciation of this matter a terse background of the facts is necessary.

FACTUAL MATRIX

[4]	The facts that gave rise to the claim are largely common cause. The contract is said to consist 	of two documents. These are the Coversheet and The Policy Wording. The Defendant 	captured the contact particulars of the Plaintiff on communication issues stemming from the 	contract as: P o Box 3816, Acornhoek, 1360; and maverynice@webmail.co.za. Following 	the conclusion of the contract, it was sent to the Plaintiff per contact particulars furnished by 	him. The Plaintiff received the updated Coversheet and Policy Wording by e-mail at the 	abovementioned e-mail address on 16 June 2016.

[5]	The claim lodged by the Plaintiff against the Defendant followed on one early evening on 24 	August 2016 when the insured vehicle left the R37 road at a look-out point approximately 	13km from Sabie and 5km from Hendriksdal where it plummeted and rolled down a steep 	embankment. The insured vehicle was damage beyond economical repair. On the very day 

	of the accident, 24 August 2016, the Plaintiff lodged a claim relying on the terms of the 	contract for indemnification for the loss suffered.

[6]	The Defendant engaged the services of one Morne van Rooyen to conduct investigations 	regarding the circumstances surrounding the accident. Following receipt and perusal of 	Morne Van Rooyen’s conclusions set out in his report, the Defendant felt that it would be 	justified to decline indemnification occasioned by the loss. In rejecting the claim, the 	Defendant maintained that the Plaintiff had supplied it with false information warranting it to 	lawfully reject the claim.

[7]	On 2 September 2016, the Plaintiff was notified of the repudiation of his claim, which was 	accompanied by reasons therefore in writing. The Plaintiff has accepted that he received the 	letter informing him of the rejection of his claim on 2 September 2016. On 9 September 2016, 	the Plaintiff placed a call to Morne van Rooyen enquiring about the status of his claim.  Morne 	Van Rooyen telephonically advised him that his claim had been rejected whereupon the 	Plaintiff requested that the rejection letter be sent to an alternative e-mail address cited on 	the Coversheet. Morne Van Rooyen duly obliged.

[8]	The Defendant asserts that the Plaintiff’s failure to comply with the contract entitled it to 	refuse the claim and to lawfully cancel it on the ground of his breach of it. The Plaintiff’s 	attorney (“the attorney”) as well enquired on the outcome of the claim. On 22 November 	2016, the attorney was told that the outcome had been communicated to the Plaintiff. On 22 	December 2016, at the request of the attorney, the letter of 2 September 2016 rejecting the 	Plaintiff’s claim was again sent to the attorney.

[9]	On 22 December 2016, the attorney telephonically disputed the election to reject the 	Plaintiff’s claim. The Plaintiff now disputed the election to reject his claim and submitted a                                 	“complaint”. According to the Defendant, this complaint was not in line with the agreed 	procedure in the contract, which provides as follows:

	“If I am not satisfied with the outcome of my claim, I must first raise my objection in writing to MiWay 	together with reasons within 90 days for the day that I received written notification of the outcome of 
	my claim. The objection must be addressed to Disputes and emailed to disputes@miway.co.za or 	faxed to 011 990 0001 or posted to MiWay Insurance, PostNet Suite #382, Private Bag X121, Halfway 	House, 1685.”

[10]	The Defendant alleges that the objection described above was raised outside the agreed 90 	days, it was not in writing and the reasons therefore are unknown. The Defendant responded 	to him in writing on 10 January 2017 and again informed him that the rejection of his claim 	would not be reversed. The Defendant again provided reasons for the repudiation.

[11]	On 6 November 2017 and assured that the Defendant was adamant not to reverse its 	decision to repudiate the claim, the Plaintiff served the summons on the Defendant seeking 	the relief as per this action. At the hearing of this matter, the Defendant advised this Court 	that it needed to raise a preliminary point that, if upheld, might be dispositive of the entire 	claim of the Plaintiff. On that ground, the parties made an application that the preliminary 	point be treated discretely and that the case would proceed if the preliminary point fails. The 	court considered the matter and persuaded that it would be convenient and cost effective to 	separate the issues, granted the application. 

[12]	Following the entertainment of the separation of issues, the parties agreed that the 	preliminary point be adjudicated on the agreed facts described below:

	12.1	the existence of the agreement of insurance, the terms and conditions of which are 		encapsulated in annexure “P1” and annexure “P2” to the defendant’s plea;

12.2	The occurrence of the accident and the submission of the claim by the Plaintiff        	           personally to the Defendant on 24 August 2016;

12.3	the repudiation of the claim on 2 September 2016 by the Defendant; and 

12.4	The institution of legal action by service of the summons upon the Defendant on 6 		November 2017. 

ISSUES

[13]	It would appear that the only conspicuous issue for adjudication is whether or not the Plaintiff 	instituted these proceedings outside of the prescribed period mentioned in the time-bar                  	clause. The issue is as such, simple. If the institution of the action was outside of the 	prescribed period stipulated in the time-bar clause, the claim cannot succeed and that will 	mark the collapse of the Plaintiff’s claim. Conversely, if the opposite holds, the Court must 

	continue to hear the case. Against that backdrop, it is advisable to turn to the guiding legal 	principles on the subject.

LEGAL POSITION

[14]	The parties are agreed that the Plaintiff issued and served the summons commencing this 	action outside of the period stipulated in the time-bar clause. This understanding between 	the parties necessarily implies that there is also agreement that proceedings are generally 	initiated by issuing of summons and that a letter of demand false outside of that process. In 	this regard, it could be instructive to refer to Commercial Association Co v Rainer NO 	(1896) 3 Off Rep 88. Both parties refer to the Constitutional Court case of Barkhuizen v 	Napier NO 2007 (5) SA 323 (CC), which dealt with time-bar clauses in somewhat similar 	circumstances.

[15]	The Constitutional Court in Barkhuizen supra acknowledged that circumstances could exist 	where it could be defensible to reject enforcement of a time-bar clause especially where it 	would render the contract unfair and unreasonable. Accordingly, Barkhuizen serves as 	authority that a blanket approach in these matters is not possible because concepts such as 	fairness and unreasonableness are nebulous. That fact inexorably requires examination of 	each given set of facts to arrive at a solution. 

[16]	pacta sunt servanda finds application in this matter insofar as it is the argument of the parties 	that it was concluded freely and voluntarily. The point of divergence of these parties, 	however, is the fairness and injustice that might arise having regard to the circumstances 	under which 	the contract was entered into. In Barkhuizen, it was held that the circumstances 
	were not well-explained to decide fairness and unreasonableness. In consequence, the court 	held that pacta sunt servanda found application. The insurance claim 	process is now 	governed by the Policy Protection Rules published in GN R1128 in Government Gazette 	26853 of September 2004, as amended by GN R1212 in Government Gazette 33882 of 	17 December 2010 under Section 55(5) of the Short-term Insurance Act 53 of 1998.

[17]	Pertinent to this matter is Rule 7.4 of the Policy Protection Rules, which provides:

	“7.4	 (a)	 An insurer must accept, reject or dispute a claim or the quantum of a claim for 				a benefit under a policy within a reasonable period after receipt of a claim.

		(b)	An insurer must within 10 days of taking any decision referred to in paragraph 				(a), in writing, notify the policyholder of its decision.

		(c)	 If the insurer rejects or disputes a claim or the quantum of a claim, the notice 				referred to in paragraph (b) must inform the policyholder:-

(I)	of the reasons, for the decision;

(ii) 	that the policyholder may within a period of not less than days after the date of 	receipt of the notice make representations to the relevant insurer in respect of 	the decision;

(iii)	 of the right to lodge a complaint under the Financial Services Ombud Schemes 	Act. 2004 (Act No 37 of 2004) and the relevant provisions of the Act relating to 	the lodging of such a complaint in plain understandable language;

(iv)	 in the event that the relevant policy contains a time limitation provision for the 	institution of legal action, of that provision and the implications of that provision 	for the policyholder in an easily understood manner; and

(v)	 in the event that the relevant policy does not contain a time limitation provision 	for the Institution of legal action, of the prescription period that will apply in 	terms of the Prescription Act. 1969 (Act No. 88 of 1969) and the implications 	of that provision for the policyholder in an easily understood manner.

		(d) 	If a claim is rejected or disputed, or a quantum is disputed as contemplated in        			paragraph (a) on behalf of an insurer by a person other than the insurer, such        			other person must provide the notice contemplated in paragraph (b) and                            			include in that notice, in addition to the information referred to in paragraph (c), the 			name and contact details of the insurer and a statement that any recourse or enquiries 			must be directed directly to that insurer.

		(e)	If the policyholder makes representations to the relevant insurer in accordance with 			paragraph (c)(ii) the insurer must within 45 days of receipt of the representation, in 			writing, notify the policyholder of its decision to accept, reject or dispute the claim or 			the quantum of a claim for a benefit under a policy.

		(f)	 If the insurer, despite the representations of the policyholder, confirms the decision to 			reject or dispute the claim or the quantum of a claim, the notice referred to in paragraph 			(e) must:-

(I)	inform the policyholder of the reasons for the decision;

(ii)	 include the facts that informed the decision; and

(iii)	 include the information referred to in paragraph (c)(iii) to (v).

		(g)	 Any time limitation provision for the institution of legal action that may be 	provided 			for in a policy entered into before 1 January 2011 may not include the period referred 			to in (c)(ii) in the calculation of the time limitation period;

		(h)	 Any time limitation provision for the institution of legal action that may be provided 			for in a policy entered into on or after 1 January 2011:-

(I)	may not include the period referred to in (c)(ii) in the calculation of the time limitation period; and

(ii)		 must provide for a period of not less than 6 months after the expiry of the 	period referred to in paragraph (c)(ii) for the institution of legal action…”

EVALUATION

[18]	The Plaintiff has admitted that he instituted his claim against the Defendant outside of the 	prescribed period stated in the contract. He challenges the validity of the time-bar clause on 
	the ground that its observance in these circumstances would be unfair and unreasonable to 	the Plaintiff. It is trite that he who alleges must prove. The Plaintiff therefore has the onus of 	alleging and demonstrating that enforcement of the time bar clause would produce unfairness 	and injustice to the Plaintiff. The only intimation of an alleged unfairness or unreasonableness 	is that the Plaintiff has been paying his premiums and was up to date when the accident 	occurred and that the dismissal of special plea would not mark the collapse of the 	Defendant’s case.

[19]	These are hardly factors that this Court would consider when determining unfairness and 	unreasonableness. The Plaintiff concluded this contract over the telephone and the policy 	documents comprising the contract were send to him subsequently. I would assume that he 
	
	perused the terms and conditions, which he found acceptable. The postulation aforesaid                      	must be correct because following the conclusion of the contract, he knew that he had to 	make monthly premiums for continued indemnification of his loss by the Defendant. The 	Plaintiff’s papers are stridently silent on how enforcement will be unfair and unreasonable.

[20]	The contract is categorical on how the claim process ought to unfold upon the occurrence of 	an insured event. The Plaintiff lodged his claim punctually, which the Defendant rejected on 	2 September 2016 and furnished reasons therefor. The letter repudiating the Plaintiff’s claim 	complies with Rule 7.4 of the Policy Protection Rules, which I have described above. Among 	other reasons cited for the repudiation is that the Plaintiff supplied the Defendant with 	dishonest information.

[21]	In consequence of the dishonesty, the Defendant advised that it would not honour the 	Plaintiff’s claim and that it was cancelling the policy reckoned from the date of the accident 	as it was entitled to do as per the contract. Having rejected his claim, the Defendant went on 	to inform the Plaintiff that he had a period of 90 days from 2 September 2016 within which to 	raise objection with the Defendant. The letter continues to state that regardless of whether 	or not the Plaintiff raises an objection within the 90-day period, he would still have another 	180 days within which to serve summons on the Defendant failing which his right to challenge 	the decision of the Defendant would be forfeited.  

[22]	The Plaintiff went completely silent and it was only on 22 December 2017 that his attorney 	challenge the validity of the repudiation. Although the lodging of a formal objection was not 	necessarily prejudicial to the Plaintiff, it is notable that this was already outside of the                    	prescribed 90-day period. Notwithstanding that the Defendant had advised the Plaintiff of its 	reasons for refusing to pay, it nonetheless set out a full exposition of the dishonesty to his 	attorney in a letter dated 10 January 2017. As such, at every turn the Plaintiff was furnished 	with reasons for the rejection, his rights fully explained despite that there was no allegation 	of illiteracy and that he was legally represented as early as 22 December 2017 to date.

[23]	I am at loss why the Plaintiff would claim that enforcement of the terms and conditions of the 	contract would be unfair and unreasonable to him. The fact that he was up to date with his 	premiums and that a dismissal of the special plea would not mean the end of this case for 	the Defendant are hardly, without more, factors for consideration. The Plaintiff’s reference to 	Barkhuizen supra, Representative of Lloyds & others v Classic Sailing Adventures (Pty) Ltd 	[2010] JOL 25605 (SCA) and Links v Member of the Executive Council, Department of 	

	Health, Northern Cape Province 2016 (5) BCLR 656 (CC) is completely misguided. 

[24]	The statement in Barkhuizen supra on which the Plaintiff seem to rely was made obiter. Even 	so, the Constitutional Court made it clear that each case would have to be decided on its 	own merits suggesting that such facts would have to be alleged and proved. In 	Representative of Lloyds and Others, the Supreme Court of Appeal dealt with conflict of laws. 	I cannot do more than citing Paragraph 23 of the judgment below:

	“Rather than asking whether statutory provisions are prohibitory or dispositive, a 	better approach to determining whether parties may exclude the operation of statutory 	provisions by choice of another system of law might be to question whether they can waive the 	application of the provisions. This question was addressed in SA Co-Op Citrus Exchange v 	Director-General, Trade & Industry7 where Harms JA, dealing with procedural statutory 	provisions, held that they may be renounced by a party (in that case the State) for whose benefit 	they are enacted. But where public policy and interest would be prejudiced by a waiver, such 	provisions cannot be escaped. Waiver is not possible, said this Court, if it affects public policy or 	interest or a right.8 This principle was affirmed in De Jager & andere v ABSA Bank Bpk,9 where 	this Court held that the application of the provisions of the Prescription Act 68 of 1969 may be 	waived by a debtor under a contract after the prescriptive period had run because renunciation 	did not substantially or materially impact on the public interest.”

[25]	Put differently, the general rule is that parties in an agreement are free to elect a country 	whose laws would apply to a contract but where doing so offends public policy, the South 	African law would carry the day. In this case the SCA declined to apply the English law in line 	with what the parties had chosen for had it done so, Representative of Lloyds would have 	escaped liability. In the circumstances, this case is totally distinguishable from the current. 	More baffling is the Plaintiff’s reference to the case of Links, which dealt with the Prescription 	Act, 68 of 1969. This case too is different from the case in casu.

CONCLUSION

[26]	Parties who have freely and voluntarily entered into contracts ought to be bound by the terms 	and conditions arising therefrom. The exception is, of course, where enforcement of 	such terms and conditions would cause unfairness and unreasonableness to the other party 	to the contract, it would be justifiable to decline to hold that other party liable. The Plaintiff 	has failed to give a factual background that would persuade this Court to find that despite his 	conclusion of the contract with the Defendant, it would be unfair and unjust to enforce the 	
	terms 	and conditions on him.

[27]	In view of the above, I am bound to uphold the special plea and I make the following order:

1.	The Plaintiff’s claim is dismissed; and 

2.	The Plaintiff is to pay the costs of the Defendant.

	______________________________
B A MASHILE
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION, MBOMBELA

This judgment was handed down electronically by circulation to the parties and/or parties’ representatives by email. The date and time for hand-down is deemed to be 12 May 2021 at 10:00.

APPEARANCES:
						
Counsel for the Plaintiff:				Adv K Shai			
Instructed by:					A.K Khoza Attorneys	

Counsel for the Defendant:			 Mr E.H. Wiese		 		
Instructed by:					 H.J Badenhorst & Association
		
Date of Hearing:					 19 April 2021			
Date of Judgment:					  12 May 2021