President Insurance Company Ltd. v Retsos (116/87) [1987] ZASCA 113; [1988] 1 All SA 344 (A) (29 September 1987)

116/87

PRESIDENT INSURANCE COMPANY LIMITEDAppellant

ENHELEN RETSOSRespondent

IN THE SUPREME COURT OF SOUTH AFRICA .

(APPELLATE DIVISION)

In the matter between:

PRESIDENT INSURANCE COMPANY LIMITED Appellant

and

HELEN RETSOS Respondent

Coram: RABIE, A C J , CORBETT, BOTHA, NESTADT, JJ A

et BOSHOFF, A J A

Heard: 18 August 1987

Delivered: 29 September 1987

JUDGMENT

BOSHOFF, A J A :

On 16 June 1983 Helen Retsos, the

respondent /2

-2-

respondent, was struck down in Voortrekker Road, Alberton,

by a motorcar which was insured by the President Insurance

Co , the appellant under the provisíons of the Compul-

sory Motor Vehicle Insurance Act No 56 of 1972, here-

after referred to as the Act. She suffered serious

bodily injury. During that same month she, as a third

party within the meaning of the phrase in section 21 of

the Act, instructed Dimosthenis Christides, a qualified

attorney, who was then a professional assistant with the

legal firm Huftel and Klawansky in Germiston, to

prepare and lodge a MVA claim on her behalf with the

appellant

On /3

-3-

On 6 June 1985 the MVA 13 claim form and medical report

with annexures thereto were duly lodged by the firm on

respondent's behalf with the appellant. The files re-

lating to MVA claims were left under the control of the

legal secretary Mrs Joyce Constance Irene Nadin. During

June 1985 Christides was admitted as a partner in the firm

Farbers in Johannesburg and he moved to Johannesburg.

Mrs Nadin from then on worked under the supervision of

Barry Farber in Gerraiston. He was a partner in the Ger-

miston firm as well as the Johannesburg firm. On 8 October

1985 Christides assisted the firm in Germiston in the motion

court and visited the office which he had previously

occupied. In the office he came across certain files

which had been left on a desk.

Out /4

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Out of curiosity he perused the files and found the

file relating to the respondent's claim amongst them

He was shocked to learn that the file had not been

attended to. He immediately telephoned the appellant's

offices and spoke to a Mr Swart. Mr Swart looked into

the matter and telephoned back to tell him that the

claim had become prescribed. He then wrote to the

appellant asking it to waive prescription. By letter

dated 22 October 1985 it refused to do so.

The /5

-5- The respondent thereupon applied to the Wit-

watersrand Local Division for an order granting her

leave, by virtue of the provxsions of section 24(2)

a)(ii) of the Act, to serve her combined summons for

the enforcement of her third party claim against the

appellant within 60 days from the date of the order.

The court granted the order and ordered the respondent

to pay the costs of the application, excluding the costs

of opposition which were to be paid by the appellant

The court refused the appellant leave to appeal with costs but such leave was subsequently granted by this court.

At /6

-6-

At the hearing of the appeal application was

made for condonation of the late filing of the notice

of the appeal. There was no opposition and the appli-

cation was granted.

The position basically is that the right to

claira compensation under the Act becomes prescribed

upon the expiration of a period of two years from the

date upon which the claim arose, provided that during

the period of 90 days following timeous delivery of a claim

in terms of section 25(1) of the Act, the running of

prescription is suspended by virtue of section 24(1) read with sec 25{2)

The powers of the court to relieve a claimant third

party of the consequences of prescription are defined

by /7

-7-

by section 24(2)(a) which reads as follows

"(2) (a) If a third party's claim for compen-sation has become prescribed under subsection (1) of this section and a court having juris-diction in respect of such claim is satis-fied, upon application by the third party concerned -

(i) where the claim became prescribed

before compliance by the third party with the provisions of section 25(1), that by reason of special circum-stances he or, if he instructed any other person to comply with those provisions on his behalf, such per-son could not reasonably have been expected to comply with the said provisions before the date on which the claim became prescribed; or (ii) where 'the claim became prescribed after compliance by him with the said provisions, that by reason of special circumstances he or, if he instructed any other person to act on

his /8

his behalf in this connection, such person could not reasonably have been expected to serve any process, by which the running of prescription could have been interrupted, on the authorized insurer before that date; and

(iii) that the authorized insurer is not prepared to waive its right to in-voke the prescription,

the court may grant leave to the third party to comply with the said provisions and serve process in any action for enforcement of the claim on the authorized insurer in accordance with the provisions of section 25(2) before a date determined by the court, or, as the case may be, to serve such pro-cess on the authorized insurer before a date so determined."

Inasmuch as the respondent's claim became pre-

scribed after she had complied with the provisions of

-8-section 25(1) i e due delivery of a claim in the prescribed

form /9-9-form MVA 13, subsections (ii) and (iii) are the portions

of section 24{2}(a) relevant to the present case. The

appellant was not prepared to waive its right to invoke

prescription and the sole issue which the cour't a quo

had to decide was whether the respondent had established

the existence of special circumstances within the meaning

of the expression in subsection (ii).

It is to be noted thát the circumstances

had to be the reason why it could not have been reason-

ably expected that the process be served timeously and,

also, that the circumstances had to be special. Whether

or not any particular set of circumstances complies

with /10

-10-

with these requirements must obviously

depend on the facts peculiar to eacfr case. It would

consequently be impracticable, indeed impossible, to

attempt to formulate an accurate and comprehensive

definition of the phrase "special circumstances" as

used in this context. In the case of Webster and Another

v Santam Insurance Co Ltd 1977(2) SA 874(A) at p 882

E-G this court accepted and acted on the basis that

special circumstances are circumstances which are

unusual and unexpected; see also Commercial Union

Assurance Co of S A Ltd v Johannesburg City Council 1983(1)

SA /11

-11-

SA 226 (A) at p 232 G-H and Coetzee v Santam Versekerings-

maatskappy Bpk 1985(1) SA 389 (A) at p 394 B-C. The ex-

pression "special circumstances" is an elastic concept capable

of such a wide meaning that the legislature thought fit

to place some limitation on it. Section 1(1) of the

Act provides that unless inconsistent with the context

it does not include any neglect, omission or ignorance.

This court has held that in the context of section 24(2) (a)

the legislature intended the words neglect, omission or

ignorance to refer to neglect, omission or ignorance

due to negligence, see Oelofse v Santam Versekerings-

maatskappy Bpk 1982(3) SA 882(AÏ at p 891 D-H; Mamela

v Constantia Insurance Co Ltd 1983(1) SA 218(A) at p

225 /12

-12-

225 C-E; Commercial Union Assurance Co of SA Ltd v

Johannesburg City Council (supra) at p 232 E-G; Coetzee

v Santam Versekeringsmaatskappy Bpk (supra) at p 394 D-F

Mr Potqieter on behalf of the respondent

challenged the correctness of the order of the court

a quo substantially on the ground that the circumstances

found and relied upon by the court were not "special

circumstances" of the kind contemplated in and required

by section 24(2)(a).

The important dates to bear in mind are the

following. The respondent's claim arose on 16 June 1983

The /13

-13-

The respondent had instructed Christides to act on her

behalf in June 1983. He was employed by the firm

Huftel and Klawansky in Germiston as a professional

assistant from January 1982 to December 1984. Barry

Farber was evidently then introduced as a partner and

the name of the firm was changed to Huftel, Klawansky

and Farber. Christides continued with this new firm

as a professional assistant from January until he was

admitted as a partner on 1 March 1985. In May 1985

he was also admitted as a partner in the firm in Johannes-

burg , in which firm Barry Farber at that time was

also a partner. During June 1985 he took up office

in /14

-14-

in Johannesburg. From that time onward Farber was in

charge of the firm in Germiston. On 6 June 1985 the

MVA 13 claim was sent to the appellant under cover of

a letter purporting to have been signed on behalf of the

firm Huftel, Klawansky and Farber. On 16 July 1985

the firm acknowledged receipt of a letter from the

appellant in which certain information in connection

with the claim was evidently requested. On the same

date the firm by letter requested the respondent to

telephone Mrs Nadin. On 13 August 1985 the firm,

following up the letter of 16 July 1985, sent to the

appellant under cover of a letter a copy of a statement

dealing /15

-15-

dealing with "the incidents and merits" of the accident in

which the respondent was injured. The last day for

service of the summons fell during the first half of

September 1985. On 8 October 1985, as stated above,

Christides fortuitously discovered the file of the res-

pondent's claim amongst other files which had been left

desk in his old office and which were clearly not

receiving any attentíon

Nadin entered the firm's employ as a legal

secretary during about June 1984 and worked under the supervision

of Christides until he moved to Johannesburg and from then

on she was responsible to Farber until she left the firm

on /16

-16-

on 20 September 1985. The files which related to MVA

claims were under her control, including the file of

the respondent's claim

The evidence shows that as from June 1985

neither Christides nor Farber dealt with the respondent' s

claim and that the last time the matter received attention

was the 13th August 1985 when Nadin sent to the appellant

the statement dealing with "the incidents and merits" of

the accident in which the respondent was injured

The respondent, in applying for relief to serve

her summons, relied on the supporting affidavits of

Christides, Nadin and Farber. The affidavits did not

specifically /17

-17-

specifically allege that the firm was instructed, but

merely referred to the fact that Christides received

the instructions. He obviously received the instruc-

tions on behalf of the firm by which he was employed

and the evidence shows that he in fact dealt with the

matter through the firm.

The /18

-18-

The special circumstances relied upon were

basically the neglect and omission of Nadin in the

performance of her duties. According to Christides

he had designed a system which was adopted by Nadin

under his supervision and carried out by her with in-

structions to report to him. The system was one of

diarising and noting various dates relating

to the meeting of procedural requirements relevant to

MVA claims. The various files relating to such claims

were to be perused on at least a weekly basis and to

be considered particularly

with /19

-19-

was regard to the lodging of the claims and instituting of

action with a view to avoid the claims becoming pre-

scribed. The system was successfully operated under

his supervision and various claims were lodged and settled

with the insurers. Nadin worked as his legal secretary

for one year and he always found her to be exceptionally

reliable and meticulous in her work. When he moved

to Johannesburg in June 1985 the files relating to MVA

claims were left under her control, but under the

supervision of Farber.

Nadin in her affidavit explained the duties

she /20

-20-

she had to perform in connection with claims, how

the system operated to ensure that the necessary steps

were taken timeously and in what respects she was re-

sponsible for the failure of the system as far as the

respondent's claim was concerned. She stated as

follows:-

"AS /21

-21-

"5.As already indicated one of my major

duties in regard to third party claims was to ensure that all the required steps were taken in good time.

6. In order to ensure that this was done, the firm operated a system which con-sisted of the following -6.1 On the relevant file, a list of

items was stipulated with provisionfor a date next to each item.In the particular case of the appli-cant, such a list was in fact af-fixed and I entered dates nextto the entry 'Date of Accident'and the entry 'M V A 13 to belodged by'. There is also pro-vision made for certain other en-tries, such as 'Summons to be is-sued by'. That entry was leftblank. .

6.2 In /22

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6.2 In addition a further list was uti-lised to ensure an additional check on the meeting of dates in regard to M V A matters. This list was kept in my office and contained certain relevant dates which were inspected on every business day to ensure that whatever function was required by that date was in fact

performed. Theapplicant's matter is reflected on the list as well as inter alia the date 6th June 1985, namely the date on which the M V A 13 form was lodged with the Respondent. The firm did not at the time deal with many M V A matters. At the time we only dealt with ten of these type of matters. The system that I was instructed to follow was to inspect the relevant list every business day to ensure that whatever had to be done by certain dates, was in fact done. As it appears from the list, I did not in fact enter the date by which summons had to be issued - I always found

it /23

-23-

it an easy raatter to add on 90 days to the date by which the M V A 13 form was lodged.

9. It now appears that neither a summons was issued by the relevant date (being about the 6th September 1985) nor was an exten-tion obtained for prescription.

10. It is clear to me that I failed to look at the list at the time that I should have done so and also that I did not inspect the file at the time I was supposed to do."

She then proceeded to explain what gave rise

to her neglect and omissions as follows:-

"11. On reflection I am able to find an expla-nation for this failing. I wish herein to fully explain to the Court what gave rise to this omission on my part.

12. It appears that the relevant time was during the month of August and the beginning of September 1985.

13. As already-stated, I left the employ of Huftel , Klawansky & Farber towards the

end /24

-24-

end of September 1985 (the exact date was 20th September 1985.) 14. Towards the end of my period of employment with Huftel, Klawansky & Farber, and par- ticularly during August and September 1985, I was suffering from severe personal dif- ficulties which manifested themselves in personal strain and emotional distress which certainly influenced my working ability detrimentally. I never discussed my personal difficulties and the fact that it was in fact prejudicial to my coping with my duties with Mr. Farber, (my then principal}. Nor did I discuss it in this sense with Mr Christides. There is no doubt that neither Mr. Farber nor Mr Christides would have been aware of the fact that these personal problems of mine were affecting my working capability

15. The said personal problems were related

to matrimonial difficulties existing be-tween my husband and myself.

16. My husband and myself separated in November 1984.

21. The.../259

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21. The most distressing period, emotionally, for myself was certainly the period from July 1985 to September 1985, the time when my husband had now moved to Swaziland.

22. I was experiencing extreme emotional dis-tress as principally, my problem was that I could not manage to maintain two child-ren on my salary and the R300,00 per month that my husband paid towards maintenancë-The difficulty was that I had to decide to remain living under these pressing circumstances or to return to my husband in Swaziland, something which I was in fact unwilling to do.

23. All along, my husband begged me to return to him.

24. I certainly found these factors to in-fluence me in my work environment and felt terribly depressed during the time August to September 1985.

25. Mr Christides leaving the Germiston office to go to the Johannesburg office, increased the pressure of work on me personally and with the frame of mind I was in at the moment I found it extremely difficult to cope adequately.

26. There /26

-26-

26. There is no doubt in my mind whatsoever that my failing to notice that a summons had to be issued by the particular date in the matter of the Applicant, or obtaining an extension of prescription was solely the result of the depressing emotional difficulties experienced at the time as well as my lessened ability to cope with increased pressure of work at that time. The lessening of my ability is also a direct result of my personal problems suffered at the time."

In spite of the fact that according to Christides

Farber was in charge of the firm in Germiston and that

the files relating to MVA claims were left under the

control of Nadin but under the supervision of Farber after

he had left for Johannesburg, Farber in his affidavit

made no mention of anything he had done in connection

with /27

-27-

with the respondent's claim or to ensure that MVA claims

were enforced timeously. He did not even give any

indication whether he was aware of the existence of the

respondent's claim or of the system which was supposed

to have been in operation in respect of MVA claims under

his supervision. He merely confirmed the contents of

the affidavit of Nadin and Christides.

On all the evidence it is abundantly clear that

neither Farber nor Christides did anything about the

respondent's claim from at least the 6th June 1985 when

the claim was lodged until the file was discovered by

Christides on the 8th October 1985, that is to say,

about one month after the date when the summons had to

be /28

-28-

be served to prevent the claim from becoming prescribed

Nadin's major duty in regard to third party claims

was, as indicated above, to ensure that all the required

procedural steps were taken in good time. To this end

she had to note the relevant dates on the files relating

to such claims and also to keep a list in her office of

relevant dates which she had to inspect every business

day. The various files were to be perused on at least

a weekly basis. This was to be done. under the supervision

of Christides and later Farber. She admittedly failed

in her duty (a) to note on the respondent's file the

date when the summons had to be served, (b) to peruse the file

on at least a weekly basis, (c) to inspect the list in

her office every business day, and

(d) to /29

-29-

(d) to report to either Christides or Farber in respect

of her duties. Because of her inattention

to her duties she, on her part,did not take any steps

to bring the file of the respondent's claim to the

notice of Farber or to draw his attention to the fact

that the summons had to be served before 6 September 1985

The court a quo dealt with all this evidence as follows. Christides was the person who was handling the claim. He, and Farber in his absence, either consciously or sub-consciously relied on Nadin in the ordinary course of events to bring the matter to their attention. In the particular circumstances this could hardly be considered as constituting negligence.

The /30

-30-

The circumstances which affected Nadin's "working

ability", viz her emotional distress and the additional

work with which she had to cope after Christides

had left Germiston, could, when considered in their

cumulative effect , be regarded as special circumstances

Even if Nadin was negligent, her negligence would not

preclude the granting of relief to the applicant if her

attorney (Farber) was not negligent. As to the attorney,

he was not negligent since he could not reasonably have

foreseen that Nadin "would fail to look at the list and

check the applicant's file". It follows that the attor-

ney could not reasonably have been expected to issue the

summons before the date on which the applicant's claim

became /31

-31-

became prescribed. Thus the reasoning of the court a guo

Mr Solomon on behalf of the respondent in

effect supported the reasoning of the court a quo and

relied on the conduct of Nadin as constituting the special

circumstances which respondent had to establish. In

my view the reasoning does not see Nadin's neglect and

omission in the correct perspective if regard is had to

the purely secretarial nature of her duties. The

Legislature envisages in section 24(2)(a) that a third

party may instruct somebody else to act on his or her

behalf to pursue and enforce a third party claim against.

an authorized insurer. In the instant case the firm

to which Christides was attached was instructed by the

respondent /32

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respondent and entrusted with this responsibility.

Christides, while he was working in the firm in Germiston,

was the person responsible for the handling of third

party claims. This responsibility involved the duty

to ensure that all procedural steps were taken timeously

In order to assist him with the performance of this

duty, he devised the aforesaid system which Nadin had to

operate under his supervision, and while he was áttached

to the firm in Germiston the system was successfully

operated,that is to say, until June 1985. After he

left the firm in Germiston, Farber was the member of

the firm who was to be responsible for the handling

of third party claims, and Nadin was to operate the

system /33

-33-

system under his supervision. It is, however, reason-

ably clear from all the evidence that was placed before

the court a quo that nothing whatsoever was done by

Farber in connection with the pursuance or enforcement

of third party claims. There was,in fact, nothing

in the evidence which indicates that Farber knew about

the third party claims and the system that was being

operated in the office by Nadin. He clearly did not

supervise the operation of the system and did nothing

himself to ensure that the procedural requirements in

connection with third party claims were complied with

timeously. When Nadin left the firm on 20 September

1985, Farber did not know that the respondent's claim

still /34

-34-

still required the attention of the firm and, worst of

all, he did not know that the claim had become prescribed

For all we know he did not even know of the existence

of the claim.

The conclusion is inevitable that after

Christides had left the firm, the firm in the person

of Farber negligently failed to give the respondent's

claim any attention and, if he was aware of the system

which Nadin was operating, negligently failed to super-

vise the operation of the system and thereby allowed

the claim to become prescribed. Nadin undoubtedly

was remiss in performing her secretarial duties, but

the reason for her remissness can hardly have any

bearing /35

-35-

bearing on Farber's respcnsibility and duty as far as

the respondent's claim was concerned. If anything her

remissness served to emphasise the importance of super-

vision by the person bearing the responsibility of

ensuring compliance with the procedural requirements

of the Act. The culpable neglect on the part of Farber

cannot, of course, constitute special circumstances.

In view of all the aforegoing I am of the opinion

that the court a quo erred in granting the respondent's application.

In the result the following order is made:

(1) The appeal succeeds with costs;

(2) The order of the court a quo is deleted and the following order is substituted therefor "Application dismissed with costs."

(3) The /36

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(3) The order for costs made against the appellant in the application for leave to appeal in the court a quo is set aside and there is substi-stuted therefor an order ordering the respon-dent to pay the costs of the application. (4) The appellant is ordered to pay the costs of the application for condonation of the late filing of the notice of appeal.

ACTING JUDGE OF APPEAL

RABIE, A C J) CORBETT, J A) BOTHA, J A) NESTADT, J A)

concur