IN THE HIGH COURT OF LESOTHO
In the Matter Between:
SALEMANE PHAFANE Plaintiff
LESOTHO NATIONAL GENERAL INSURANCE CO. LTD Defendant
RULING ON SPECIAL PLEA
Delivered by the Honourable Mrs Justice A. M. Hlajoane on the 1st April, 2003.
This is an action for compensation arising out of an Insurance Policy by the Defendant for the Plaintiffs vehicle which was stolen. After the pleadings were closed, the Defendant raised a special plea of Prescription.
Both parties have, in terms of Rule 32 (1) of the High Court Rules, submitted a written statement for adjudication. The statement is duly signed by both parties. Rule 32 (1) reads:
"The parties to any civil action may, after institution of Proceedings agree upon a written statement of facts in the terms of a special case for the adjudication of the Court. "
Parties made it clear that the undermentioned facts are admitted only for purposes of adjudication of the special plea. It was specifically reiterated that the facts are merely admitted for purposes of the adjudication of the special plea only as Defendant is adamant that these aspects remain in dispute in respect of the merits of the defence.
The admitted facts stand as follows:
An Insurance Policy was issued by Defendant to Plaintiff, a copy of which is annexed to Plaintiffs further particulars.
On 12 March, 2000, Plaintiffs insured vehicle was stolen.
The alleged theft of the vehicle is "the happening of an event" as set out in Clause 14 of the General Conditions of the Insurance Policy.
Clause 14 is part and parcel of the Insurance Policy.
Liability in respect of the claim was repudiated on the 23rd January, 2001.
Action was instituted by Plaintiff on 30th May, 2001, more than 14 months after the happening of the event (theft of the vehicle).
The Plaintiffs claim was neither the subject of pending action (or arbitration) on the 1lth March, 2001, nor is it a claim under Section (11) of the Policy.
In denying liability to Plaintiff's claim, the defendant relies on Clause 14 of the General Conditions in the Policy Contract which reads:
"In no case whatever shall the Company be liable under this Policy after the expiration of twelve months from the happening of the event unless the claim is the subject of pending action or arbitration or is a claim under Section 11. "
Plaintiff contents that Clause 14 of the general conditions on which defendant
bases his special plea of prescription is irrelevant and inapplicable to the present case, as it covers situations where a claimant does not lodge with the Insurance Company a claim for indemnity within 12 months from the date of the happening of the event (theft of car).
According to the Plaintiff, the relevant and applicable Clause in the Policy Contract is Clause 12 which reads:
"In the event of the company disclaiming liability in respect of any claim and an action or suit be not commenced within six months after such disclaimer all benefits under this policy in respect of such claim shall be forfeited. "
The Defendant submitted that if Clause 14 could be found to be ambiguous, then it had to be interpreted in a manner that would be most favourable to the Plaintiff. However, he conceded that the Clause, Clause 14, was without doubt unambiguous and clear, and not capable of more than one interpretation.
That being the case, on looking at the two clauses of the Insurance Contract, Clause 12 and Clause 14, it becomes obvious that they cover two distinct situations. Clause 14 would have been applicable if, and only if the Defendant did not break the silence by his letter of repudiation, Mahindi v Commercial Union Insurance Co SA LTD 1997 (1) S. A. 326 made a clear distinction between similar provisions to our two clauses, and the adoption of the ordinary and grammatical meaning of the words led to no absurdity, inconsistency or inequity whatsoever.
The history of this case show that the Defendant insured Plaintiffs vehicle in the given amount and the commencement date of the policy was the 18th May, 1999.
On the 11th March, 2000 Plaintiff's vehicle was stolen in Bloemfontein. The Plaintiff lodged his claim for indemnity with the Defendant on the 14th March, 2000. The Defendant demanded settlement on the 10th November, 2000. The Defendant repudiated liability on the 20th January 2001, and the summons were filed on the 30th May, 2001.
The Defendant in this case brought himself under the provisions of Clause 12 by repudiating liability, and under that clause benefits under the Policy would only be forfeited after six months of disclaiming liability by the Company. Repudiation was a pre-condition to instituting Proceedings, under Clause 12. It is obvious that the six months from 20th January, 2001 to 30th May, 2001 had not yet expired. Clause 14 of the Policy Contract makes no mention of repudiation or disclaiming of liability, instead Clause 14 covers a situation where a claim is lodged after 12 months of the happening of the event. This clause fixes a prescription period at 12 months after the happening of the event, subject of cause to where there is pending action or arbitration.
In fact the points which are common cause in these proceedings have said it all. The terminology used in the Policy contract is very clear and not capable of more than one meaning. They would give other meanings if interpreted out of context. For instance, the words action, claim or suit in the policy contract must be given their meaning as selectively and purposefully used to give them their distinct meaning. The period when, under Clause 12 the Plaintiff is to lodge his claim is distinct from the period under Clause 14 when prescription is supposed to start running. See a similar provision in Joka v Commercial Union Insurance Co of S. A. Ltd 1994(3)
S. A. at 392.
The Policy contract was annexed to the proceedings in this case thus forming part of the record. To get the message conveyed by the Policy, the clauses have to be read sequentially and not in piece meal. The Defendant in this case cannot be allowed to hide behind clause 14 when the clause applicable is Clause 12 by reason of the Defendant having repudiated liability. The Court finds therefore that the Plaintiff was still within time when he so lodged his claim. Because the Defendant had raised a special plea on a point of law there was no need for any replication.
The special plea therefore fails and is dismissed with costs.
A. M. HLAJQANE
For Plaintiff: Mr Ntlhoki
For Defendant: Mr J. P. Daffue