THE HIGH COURT OF SWAZILAND
the matter between:
(PTY) LTD PLAINTIFF
ROYAL INSURANCE CORPORATION DEFENDANT
THE PLAINTIFF : MR. CADES
THE DEFENDANT : MR CURRIE
summons issued on the 4th December 1996, Plaintiff sued Defendant for
the following relief:
of the sum of El 11,129.00;
on the aforesaid sum tempore morae at the rate of 24% per annum;
Plaintiff's cause of action is based on the contents of a written
agreement entered into by and between the parties on the 23rd
November 1995 in terms of which the Defendant through its agent BBS
Insurance Brokers (Pty) Ltd insured the Plaintiff's motor vehicle a
Toyota Hi-ace Super 16 registration number SD343CG. A copy of the
certificate of insurance was annexed to the summons as annexure "A."
the 30th March 1996 the insured motor vehicle was stolen. Plaintiff
reported this incident to the agents, After a considerable delay of
plus minus seven weeks, the Plaintiff went to enquire at the offices
of the Defendant and spoke to the Claims
one Mr. Nhlabatsi who informed Plaintiff
the motor vehicle did not appear in their files. Plaintiff had seen
an entry in the books of the Defendant with an entry no. 211 on the
occasion that he visited Mr. Nhlabatsi in his office. Plaintiff then
wrote a letter, exhibit "1" to the General Manager and drew
his attention to what transpired when he met Mr, Nhlabatsi. The
letter is exhibit "1". It is self-explanatory.
to some endorsement on exhibit "1" it was referred to Mr.
Nhlabatsi and subsequently responded to on the 12th June 1996 by the
Assistant General Manager, Mr. Magagula per exhibit "2". On
17th July 1996, Plaintiff's attorneys sent a letter of demand to
Defendant. The Defendant responded to the letter of demand on the
13th August 1996 per exhibit "4". The contents of some of
these letters will be dealt with later when dealing with the
pleadings and the evidence given at the hearing; so too other
documents handed in.
the 10th October 1996, Defendant's attorneys entered a notice of
intention to oppose an application for summary judgement which had
been filed by the Plaintiff but the parties ultimately consented that
the matter follow a normal course. I will refer to the affidavit of
Mr. Magagula deposed to in opposition to the summary judgement
the 4th August 1998, there was in my file the book of pleadings
prepared by the Plaintiff's attorney. There were so many documents
not filed in the book of pleadings e. g. request of further
particulars by the Defendant, furnishing of further particulars by
the Plaintiff, notice to make discovery by the Plaintiff and
Defendant respectively filing of discovery affidavits by the
Plaintiff and Defendant respectively and Plaintiff's replication,
notice of taxation and taxation.
file was in such disarray that Mr. Cades at the end of the day on the
4th August 1998 had to move an application for leave to file
replication. Mr. Currie viciously opposed the application for the
defendant. Mr, Currie submitted that Plaintiff had been ipso facto
barred in terms of Rule 25 to file any replication. Both counsel
agreed however, that the court should as far as possible not be bound
by the rules where justice dictates that it should grant the
application in the interest of equity.
applied my mind on the application and decided that it was in the
interest of justice to grant leave to Plaintiff to file the
replication. It is clear from the attitude of both counsel that
neither of them were aware that infact a replication dealing with the
doctrine of estoppel had infact been filed bearing the date stamp of
the Registrar of the 4th August 1998.
to the evidence led at the trial. It is common cause that BBS were
the insurance brokers for the Defendant and the Manager of BBS, Mr.
Kunene had issued a certificate of insurance annexure "A."
The same Mr. Kunene had insured another motor vehicle belonging to
the Plaintiff on some previous occasion in a similar manner and had
insured a certificate similar to annexure "A." It is also
common cause that Plaintiff had proceeded to his financiers armed
with annexure "A" and the financiers were satisfied with
the contents of annexure "A" and the motor vehicle had
infact been insured.
went and claimed delivery for the motor vehicle from Leites Motors.
Arrangement was made with the insurance brokers for the payment of
part of the premium that was E4, 500.00 and the balance payable over
a period of four months. It is also common cause that the value of
the motor vehicle was El 11 129.00, an amount that is being claimed
by the Plaintiff.
Defendant's defence can be gleaned from a reply to a letter of demand
sent by the Plaintiff's attorneys on the 17th July 1996 and
reply by Defendant's Assistant General Manager by letters dated the
12th June 1996. In the reply, Mr. Magagula states that the Defendant
had not received the premiums for
insurance and that consequently Plaintiff had no insurance cover. Mr.
Magagula also gave evidence in Court. He admitted, however having
written a letter dated 12th June 1996. In that letter, Mr. Magagula
says nothing about termination or withdrawal of BBS agency and the
authority by Defendant. In fact, Mr. Magagula admitted that because
of the insurance certificate by BBS, Defendant was bound (See page 80
of the transcribed record) and I read the question that was put to
So you did not tell anybody about this withdrawal of the authority
apart from BBS? Did you tell the world that BBS no longer had the
authority? That BBS has now limited authority, that you (Defendant)
has now limited its authority? Did you tell anybody? Did you print it
on the forms?"
the answer by Mr. Magagula was:
As much as we didn't tell the world when we gave them the authority,
we wrote to BBS to informing them that the authority had been
You told the world because when BBS issued a certificate of
insurance, it bound you and the world knew you were bound.
Yes we were bound." End of quote.
Greeney who also testified that he was General Manager as way back as
1995/96. It was his evidence that the very first week he took over as
Manager, the first matter he dealt with was BBS Insurance Brokers.
According to him they would collect premiums and not pass them over
to them, (See page 23 of the transcribed record).
would be recalled that the Manager or Managing Director of the
Plaintiff, Mr. Baartjies had in the course of 1995 when Mr. Greeney
was the General Manager for the Defendant insured two motor vehicles
simultaneously. The one which was the subject of this present claim
and another which is not subject to the present claim. The other
motor vehicle's entry was no.322 and the one that is subject matter
of this claim; its entry was 211. These entry numbers were seen by
Mr. Baartjies on the occasion that he visited Mr. Nhlabatsi at the
offices of the Defendant. (See page 14 of the typed record)
between the Defendant and BBS, some correspondence exchanged. One
dated the 17th March 1995 and the other dated the 23rd May 1995
respectively. That would be exhibits "6" and "8"
as handed in at the hearing. The one dealt with termination of the
agency and the other dealt with the provisional reinstatement of the
agency. The one dealing with the termination of the agency, exhibit
"6", I read paragraph 2 thereof:
8 of the Control of Insurance Brokers and Agency Regulation regulates
the receipts and remission of payments. On numerous occasions you
have been in breach of this Section, in particular sub-Section 4 and
5 notwithstanding several warnings." End of paragraph 2.
I have indicated, exhibit "6" does not in any way refer to
the withdrawal of the authority by the Defendant.
letter dated 23rd May 1995 deals with the provisional re-instatement
of agency. It reads as follows and I quote:
the termination of your agency on the 7th March 1995, we indicated
that we would have to reconsider rescinding the termination of your
agency subject to your complying with the following conditions:
remit to the Corporation all prevalence in respect of business in
which the Corporation was on risk as of the 7th March 1995;
furnish the Corporation with your audited accounts for the eleven
months ending on 28th February 1995; you furnish the Corporation
with your cash-flow projections for the period commencing 1st April
1995 (The letter continues) - you have now complied with these three
further indicated that should the Corporation rescind the
termination of your agency further conditions would be imposed as
premiums you collect must be paid in full into the trust account;
only withdrawals that could be made in this trust account would
be premium remittances to the Corporation;
you submit to the Corporation every Friday afternoon proposals
together with the full premiums you had collected during the
clearance of the cheque by your bankers, the Corporation will
then pay your brokerage;
above conditions will be reviewed in December 1995." End of
interest to note here is that Mr. Greeney did not give any evidence
on what the position was in regard to this but it could seem that the
agency of BBS was being reinstated.
August 8th, 1996 the Defendant wrote to BBS and informed it that the
binding authority was withdrawn with immediate effect. This
withdrawal of binding authority was conditional. (See exhibit "9"
paragraphs 1 & 2 of that letter). Exhibit "9" is handed
in by authority and I quote:
are hereby notified that your binding authority has been withdrawn
with immediate effect. You are further notified that no liability
will be undertaken in respect of new business until the proposal has
been accepted by the Corporation. The acceptance of a proposal will
be based on the following conditions:
As regards property insurance, the property is to be inspected by the
Corporation's own personnel, this will apply to the following class
of business: all risks, burglary, commercial all risks, glass,
householders, houseowners, office premises, goods in transit,
All motor vehicles proposed for insurance are to be inspected by the
Corporation's own personnel. Such vehicles are to be brought to the
Corporation's premises for inspection.
"9(2)" falls short of indicating whether or not BBS
Insurance Brokers complied with this, because exhibit "9"
seems to me to be conditional.
that the Plaintiff had insured two motor vehicles almost
simultaneously and according to Plaintiff's Managing Director both
these motor vehicles were given entry numbers by Defendant. One being
211 and the other being 322. Defendant, in my view, should be stopped
from denying that BBS Insurance Brokers be estopped advancing the
defence that BBS Insurance Brokers had the authority withdrawn by the
Defendant. Having dealt with exhibit "6, 8, 9" whose
contents are so ambiguous that even BBS Insurance Brokers can argue
convincingly that their binding authority was never withdrawn.
now turn to deal with Section 8 (3) of the COMMERCE AND TRADE that is
No.33/1973 and I will refer to sub-section 3 that provides as
insurance agent or insurance broker accepting premiums for any type
of insurance, business shall remain responsible for the security of
such premiums whilst they are in his possession, and in the event of
a failure by him to pay such premiums to his principal on due date,
he shall be liable to the person who has paid the premium to him for
any damages whatsoever suffered by such person as a result of such
failure." End of subsection 3.
my judgement, this sub-Section is directed to the insurance agent or
insurance broker and not the third parties. This is only logical,
third parties cannot know if the insurance agent or broker does not
pay the premiums or has paid the premiums to its principal. It is
only the insurance broker and the principal who will be privy to know
whether payment or not were made.
have been referred to MANN VS SIDNEY HUNT MOTORS (PTY) LTD 1958(2)
SA103 GW which sets out the functions of estoppel (See also ARIES
ENTERPRISES FINANCE (PTY) LTD VS PROTEA ASSURANCE COMPANY LIMITED
position is as follows dealing with estoppel for representation. The
operation of estoppel operates as follows:
sole office is either to place an obstacle in the way of a case which
might otherwise succeed, or to remove an impediment out of the way of
a case which might otherwise fail. It has no other function.
Emphatically, it is not a cause of action itself, nor does it create
one, though the application of this, as of any other rule of evidence
in the course of litigation, may result in a total or partial
establishment, or disestablishment, of the case made by one or other
of the parties. To use the language of naval warfare, estoppel must
always be either a minelayer or a minesweeper: it can never be a
capital unit." End of quote.
would wish to add here that in respect to Plaintiff estoppel is not a
cause of action.
Plaintiff can therefore not rely on it in his claim nor can a
Defendant rely thereon in his counter claim. (See in this respect
ROSEN VS BARCLAYS NATIONAL BANK LTD 1984(3) SA974W @953.)
Plaintiff wishes to rely on the estoppel it must be pleaded in the
replication in reply for the Defendant's plea where reliance is
placed upon the true facts." End of quote.
have referred to, earlier on in my judgment that I allowed the
Plaintiff to file the replication and that is in that replication
that the estoppel is pleaded. This is ratio decidendi in the case of
MANN VS SIDNEY HUNT MOTOR VEHICLE (PTY) LTD 1958(2) SA102G.
the result, I am of the view and this is my considered view that in
the circumstances, judgment should be granted in Plaintiff's favour
in terms of prayer (a) payment for the sum of E111 129 00, (b)
interest on the foresaid sum a tempore morae not at the rate of 24%
but at 9% which is the amount that is allowable and then cost of