IGI Insurance Co Ltd v Madasa

• Jurisdiction: South Africa
• Judge: Beck CJ, Goldin JA and Dumbutshena JA
• Judgment Date: 11 November 1993
• Docket Number: 665/91
• Court: Transkei Appellate Division
• Hearing Date: 11 November 1993
• Citation: 1995 (1) SA 144 (TkA)

Goldin JA:

This is an appeal against a decision that respondent is entitled to claim for compensation against appellant in terms of a J contract of insurance entered into between them.

Goldin JA

A At a conference held in terms of Rule 37 of the Rules of Court the following facts were agreed upon as common cause. Respondent's vehicle was damaged on 1 October 1990. On 4 October 1990 respondent completed the prescribed forms of the insurance policy and submitted them to the appellant. In a form headed 'Motor accident claim form' respondent was required to 'estimate for repairs or attach quotation'. In reply B respondent stated 'as per quotes'. Respondent attached two quotations. Appellant disclaimed liability for compensation on 12 November 1990. On 15 January 1991 the respondent applied for and was granted an order to sue the appellant by edictal citation in South Africa. On 6 May summons was issued and was served on appellant on 18 June 1991. C

Clause 7 of the general conditions of the insurance agreement entered between the parties provides:

'7. Repudiation of claims

In the event of the company disclaiming liability in respect of any claim, and an action or suit be not commenced within 90 days after the date of such disclaimer, all benefit under this policy in respect of such claim D shall be forfeited.'

It has been held that non-compliance with a term of a policy of insurance has the effect of extinguishing the insurer's obligation to pay (see Adriatic Insurance Company v O'Mant 1964 (3) SA 292 (SR) at 294E and Cave t/a The Entertainers and the Record Box v Santam Insurance Co Ltd 1984 (3) SA 735 (W) at 746C. E

The crucial issue is whether respondent commenced 'an action or suit' within 90 days after the appellant disclaimed liability for compensation. Appellant disclaimed liability on 12 November 1990 and respondent was consequently required to commence an action or suit by 12 February. The answer depends on whether the application for and granting of an order to F sue the defendant by edictal citation on 15 January 1991 constitutes the commencement of 'an action or suit'.

Rule 5 of the Supreme Court Act 5 of 1983 provides that, save by leave of the Court, no process or document whereby proceedings are instituted shall be served outside the Republic of Transkei. The application for edictal citation enabled respondent to serve a summons outside Transkei. I G emphasise that such a summons is a process whereby proceedings are instituted and cannot be served without leave to do so...