Motor Vehicle Accident Fund v Mbingo (35/11) [2011] SZSC 47 (30 November 2011);

 

 

 

 

IN THE SUPREME COURT OF SWAZILAND

 

HELD AT MBABANE       CRIMINAL APPEAL NO. 35/2011

In the matter between:

THE MOTOR VEHICLE ACCIDENTS FUND    APPELLANT

VS

CAIPHAS MBINGO                                          RESPONDENT

In re:-

THE MOTOR VEHICLE ACCIDENT FUND      APPELLANT

AND

CAIPHAS MBINGO                                          RESPONDENT

CORAM                          

                                                                DR. TWUM   J.A.

                                                                FARLAM      J.A.

                                                                MAPHALALA J.A.

HEARD            :       24^TH NOVEMBER 2011

DELIVERED    :       30^TH NOVEMBER 2011

SUMMARY

Motor Vehicle Accidents Fund – fatal accident – claim by widower for loss of support and future support – claims settled – appellant’s subsequent attempt to rescind settlement for alleged non-disclosure of material information – payments under settlement stopped – motion proceedings to enforce payment – order by court a quo for payments to resume – appeal to this Court – appeal dismissed with costs.

 

DR. S. TWUM J.A.

 

[1]    The present matter is an appeal from the judgment of Justice N.J. Hlophe, delivered in the High Court, Mbabane, on 24^th July 2011,

 

[2]    In this judgment, the applicant in the court a quo will be referred to as the “respondent” and the Motor Vehicle Accidents Fund, as “the appellant.”

 

[3]    The appellant, is a statutory body set up under Act 13 of 1991.  It acts as an “insurer” of motor vehicles primarily to pay compensation to people who suffer personal injuries as a result of motor accidents or to pay death benefits called “loss of support” to dependants of persons who die as a result of motor accidents.

 

[4]    On or about 4^th July 2002, Delisile Irene Mbingo, then aged 39 years, was killed in a motor accident.  She was survived by her husband, the respondent, and a minor son, Yandile M. Mbingo.  Before her death she worked as Operations Director at Pamview Consultancy.  She was said to have earned about E10,000.00 per month.  She was also alleged to have been the bread-winner of the family.

 

[5]    In due course, the respondent submitted two claims to the appellant for payments thus:

        (i)     E1, 200, 000.00 for loss of support; and

        (ii)    E300,000 as funeral expenses.

 

[6]    After some negotiations between the parties, the two claims were settled.  It was agreed that yearly instalment payments as set out in two schedules would be made to the respondent.  One schedule contained payments to the respondent himself and the other schedule was payable to the respondent for and on behalf of his minor child.  The two schedules were on the one side executed by an officer of the Fund (appellants) for and on its behalf and on the other side by the respondent and witnessed by his lawyer, Mr B. Dlamini.

 

[7]    It was a further term of the settlement that in each case, the first instalment would be made on 7^th January 2005 and thereafter the second and subsequent instalments would be paid on the 10^th of January, each year.  The annual instalment payable on behalf of the minor son was set at E21, 108.00 and would terminate with a final payment in 2020.  The annual payment to the respondent in his own right was settled at E10,000.00 except that the final payment in 2032 would be E15, 253.00. 

 

[8]    The record shows that the appellant paid the instalments due to the respondent up to 2007 and stopped further payments to him.  Similarly, the appellant stopped making further payments on behalf of the minor child after the payment in 2009.

 

[9]    After repeated demands by the respondent for payment, the appellant remained obdurate; hence the action.

 

[10]  On 2^nd March 2010 the respondent filed Notice of Application in the High Court for an Order:

(i)     “…that the Respondent makes payment of the sums of E10,000.00 and E21,108.00 per year for the years 2008, 2009, 2010 up to 2032 inclusive.

(ii)    Granting costs of this application.

(iii)   Granting such further and/or alternative relief as this Honourable Court might deem fit.”

 

[11]  In his founding affidavit, the respondent repeated the facts as set out in paragraphs 2 to 7 above in support of his claims.  In its answering affidavit sworn to by Helmon Mfana Vilakati, the appellant’s Managing Director, admitted substantially the matters set out in the founding affidavit of the respondent.  In defence, the appellant deposed in paragraph 3 of its affidavit that after the claims had been settled, it discovered that the respondent failed to disclose:

        (a) that he actually had a monthly salary of E2,500.00 from a church; and

        (b) that he had married on 13^th December 2003 and that his new wife was earning income in the region of E13,000.00 per month.

 

[12]  The appellant argued that it was on the basis of these discoveries, that it sought to set aside the settlement in the motion proceedings.  It said if these matters had been disclosed to the appellant prior to the conclusion of the settlement, it would have reduced the quantum of the amount agreed to be paid.

 

[13]  The respondent filed a replying affidavit in response to the appellant’s answering affidavit.  In paragraph 5.2 he stated that he disclosed all relevant facts concerning his personal life, profession and means to the appellant and/or its investigators.  He further stated in paragraph 6.2 that he disclosed the fact of his re-marriage to the appellant’s investigators who went to interview him before the settlement was sealed.

 

[14]  After hearing counsel for the parties and reading the affidavits, the learned Judge gave judgment for the respondent and granted the order he claimed.  He explained that if the appellant considered that the failure of the respondent to fill the claim from fully would materially affect its decision to settle, or the quantum of the claims, it was entitled to withhold the settlement until such time that the respondent had filled the form correctly.  He further rejected the appellant’s submission that the failure of the respondent to fill the form fully or correctly, constituted a fraudulent misrepresentation.  He held that there was no factual basis for that construction.

 

Appeal to this Court

[15]  The appellant was aggrieved and dissatisfied with the judgment of the court a quo and appealed against it to this court.  In its Notice of Appeal, the appellant noted the following  grounds:-

(i)     The learned judge erred in fact and in law in not holding that the information was within the exclusive knowledge of the respondent even prior to the conclusion of the settlement agreement creating a duty on the respondent to disclose it.

 

(ii)    The learned judge also erred in fact and in law to hold that the parties had to have a cancellation clause to the settlement for any reason when allegation of material non-disclosure would in the circumstances arise ex-lege.

 

(iii)   The court a quo erred in fact and in law in concluding that the non-disclosure of such information (which was in the exclusive domain of the respondent) was of no moment or played no part for the appellant to conclude that he had no income.  That if such information was important to the appellant, it ought to have insisted on it and if not disclosed, then it would have been fraudulent disclosure or non-disclosure.

 

(iv)   The learned judge a quo erred in fact and in law to make such finding when the appellant had made allegations that information was discovered in 2010 that were material both at the time when the settlement was negotiated and after the conclusion of the compromise which was material and relevant for loss of support and future loss of support claims.

 

[16]  In the court a quo, the order sought was resisted on four (4) grounds, all of which have been elaborated and persisted in on appeal.  The respective case made out by the respondent on the affidavits he filed and by the appellant in his answers thereto have been set out above.

 

[17]  The appellant’s answer to the respondent’s claim was that it was entitled to rescind the agreement, (like any other contract), without any intervention of the court because the settlement was based on incomplete information supplied to it by the respondent; in that he failed to disclose two material pieces of information which, if he had would have made the appellant settle for less.  These pieces of information were said to be :-

        (a) failure to fill the claim form fully by leaving out details of his employment by a church from which he earned E2,500.00 per month and (b) the information regarding his re-marriage to a woman of some substance.

 

[18]  In my view, the learned Judge rightly upheld the respondent’s claims.  As he pointed out, the appellant was not bound to proceed with the settlement once it realized that the respondent had not filled in the claim-form fully or correctly.  The appellant’s conduct in this regard suggested that it was lackadaisical in examining the form, not caring whether it was correctly filled in or not.  The subsequent effort to rescind the settlement was, subject to what I will say presently, an afterthought.

 

[19]  The appellant further submitted that as the information which it suggested was wrongly withheld was within the exclusive possession of the respondent, his failure to fill the form fully was fraudulent.  The court a quo said there was no factual basis for that submission.  I agree.

 

[20]  In my view, it was a fatal flaw in the appellant’s case when it failed to respond to the respondent’s replying affidavit.  In this affidavit, the respondent controverted the appellant’s allegation that he failed to pass on vital information to it.  He said he informed the appellant’s investigators who called to interview him after he had submitted the form, that he worked as a pastor for which he received a stipend.  He also stated in that affidavit that he informed the investigators that he had remarried and that his said wife was earning a good salary.

 

[21]  Clearly, the appellant was entitled to apply to the court a quo for leave to file a further affidavit to controvert the respondent’s crucial answer to the allegation of willful refusal to disclose critical information to the appellant.  In the result, it is my opinion that no issue was joined by the parties on the contents of the respondent’s replying affidavit.  The obvious conclusion is that the appellant must be deemed to have accepted the respondent’s explanation that it did not conceal any information from it.  On that basis, cadit quaestio.

 

[22]  Before I am done, let me comment briefly on ground (ii) which encapsulates the appellant’s criticism of the court a quo’s statement of the law which governs the circumstances in which a compromise can be rescinded.  That statement was in my view, over-broad in two respects.  The first, was the view that “the settlement resulting in the acknowledgement of a debt was a compromise which had the effect of Res Judicata in the initial matter”.  With all deference to the learned Judge, I demur.  Secondly, it was clearly an over-statement for the court a quo to have held in paragraph 25 of the judgment “that the respondent could only avoid the consequences of a compromise if a right to proceed on the original cause of action had been reserved.”   It is clear that that statement must be subject to a qualification that where fraud or lack of candour is alleged in a party, a compromise secured in those circumstances may be set aside without the consent of the party in default.

        In this case, the comments I have made above notwithstanding, the quintessential matter that emerged from the affidavits of record was that the respondent did not withhold any information from the appellant.  I therefore uphold the judgment of the court a quo and dismiss the appeal.

 

[23]  The final order of this Court is that the appeal is dismissed with costs.

 

 

                                                        _________________

                                                        DR. SETH TWUM

                                                        JUSTICE OF APPEAL

 

 

I agree.

                                                        __________________

                                                        I.G. FARLAM

                                                        JUSTICE OF APPEAL

 

 

I also agree.                                      ____________________

                                                        M.C.B. MAPHALALA

                                                        JUSTICE OF APPEAL

 

 

COUNSEL                APPELLANT                MR. S. MASUKU

                        FOR RESPONDENT   MR. A.M. LUKHELE