MAFUSIRE J: (1) This is an application for a default
judgment. My brother judge, BHUNU J, and I raised a query. We felt the claim
did not disclose a cause of action. The Plaintiff is in effect claiming
specific performance yet, by his own admission, he was in breach of his side of
the contract.
(2) In his summons and declaration the
plaintiff claims from the defendant payment of the sum of USD 4 500, less
USD50.
(3) The defendant is an insurance company. At the relevant
time it was the plaintiff's insurer in respect of his motor vehicle. The
plaintiff's claim is for an indemnity, his vehicle having been involved in an
accident and having been declared a write off.
(4) In his declaration the plaintiff avers that when he
submitted his claim, the defendant declined to pay on the ground that the last
premium had not been paid. The plaintiff concedes that indeed the last premium
had not been paid. He however suggests in his prayer that the defendant should
deduct the last premium from the amount allegedly due to him. This is
surprising.
(5) When the above query was brought to their attention the
plaintiff's legal practitioners persisted with the claim. By letter dated the
15 August 2012 they argued that in accordance with condition 8 of the policy
document none of the parties had cancelled the contract and that therefore the
contract was still valid. Although they seem to have wanted to attach the
policy document nothing was attached.
(6) The plaintiff' legal practitioners also argued that the
plaintiff's breach was not material; that he had not refused to honour his
obligations; that his case called for the relaxation of the rules and the
exercise of justice between the parties; that it would be improper for
plaintiff to go “empty handed” but that it should be found that there
was quasi mutual assent by the defendant in that after the accident
the defendant had sent an assessor to assess the damage to the vehicle
and that it had continued to send him statements.
(7)The plaintiff's arguments are untenable. Even though the
plaintiff did not attach the policy document nothing turns on that. I have
considered the plaintiff's claim as set out in his pleadings. He is trying to
enforce a contract of insurance. An insured is entitled to an indemnity if the
risk he or she insured against has occurred. But the indemnity is predicated on
the premium having been paid. The plaintiff states as much in his declaration.
In paragraph 2 of his declaration the averment is that the parties entered into
a contract whereby defendant would provide him with insurance cover “upon
payment of premiums.”
(8) An insurance company is entitled to repudiate liability
if the premium is not paid. The plaintiff concedes that he had not paid the
last premium. He also concedes that indeed the defendant had refused to
indemnify him citing the non-payment of the last instalment. The plaintiff's
solution that the defendant should deduct the amount of the outstanding
instalment from the indemnity is to require the court to order the innocent
party in a breach situation to purge the default of the party in breach. That
is wrong.
(9)It is trite law that where a plaintiff claims specific
performance of a contract he himself must have performed his side of the
bargain, or is able to do so. In Savanhu v Marere NO & Ors, 2009
[1] ZLR 320, the Supreme Court, MALABA DCJ, stated, at page 325A – C:
“The right to claim specific
performance of a contract by the other party is premised on the principle that
the appellant must first show that he has performed all his obligations under
the contract or that he is ready, able and willing to perform his own side of
the bargain. Wessles The Law of Contract in South Africa vol 11 para
3135 states that:
'The court will not decree
specific performance where the plaintiff has himself broken the contract unless
he can show that he has performed his part or is ready to do so, and therefore
he cannot ask for specific performance unless he has either performed his part
of the contract or unless he has been prevented from doing so by the
defendant.'
See also Wolpert v Steenkamp
1917 AD 493 at p 499.”
(10) The plaintiff's argument in the letter from his legal
practitioners seems to be confusing the issues of interpellatio andmora
ex persona. Even though he accepts that he did not pay the last premium,
the plaintiff insists on the contract being treated as having remained alive
because, according to paragraph 7 of the declaration, he “did not receive
any correspondence from the defendant to inform him of the cancellation of the
contract”.
(11) In Asharia v Patel & Ors, 1991 [2] ZLR 276
[SC], the Supreme Court held that where the performance of a contract has
not been agreed upon between the parties, performance is due on
conclusion or so soon thereafter as is reasonably possible. But in that
situation the debtor does not fall into mora ipso facto. He must know
he has to perform. This is known as mora ex persona. It only arises
after interpellatio or demand.
(12) In this case interpellatio or demand on the
plaintiff to pay his instalments was not necessary to place him in mora ex
persona. By his own admission, the payment of the premium by him was
thekey to unlock the indemnity due by the defendant. The time for payment or
performance had expressly been agreed upon.
(13) That the defendant may not have sent him
correspondence about the cancellation of the contract does not change the legal
position. If a party to a contract has committed a major breach of the contract
the aggrieved party does not always have to go to the law; see KERR “The
Principles of the Law of Contract”, 3rd edition, at page 377.
The aggrieved party is entitled to disregard the contract, wait for the
defaulting party to sue and set up the default as a defence.
(14) The above position is aptly summarised in a passage on
pages 377 to 378 of KERR's book aforesaid. It reads:
“If a party to a contract finds
that the other party has committed a major breach of the contract he does not
necessarily have to go to the law. If he is clearly in the right and does not
desire to take any action at all he is entitled to disregard the contract. In
such a case if he is sued on the contract by the other party that party's
default is a complete defence. Thus in Goldestein and Wolff v Maison Blanc
[Pty], 1948 [4] 446 [C], defendant company in Cape Town placed an order
for certain ladies' frocks to be dispatched to them from Johannesburg during
the months of January or February 1945. They were in fact railed on 16April 1945
and when the parcel was tendered to defendant in Cape Town it refused to accept
it. The plaintiff then instituted action for the purchase price and tendered
delivery. HERBSTEIN J found that time was of the essence of the contract
[the goods being fashion goods which both parties knew were purchased for
resale during a season limited in time] and that dispatch six or seven weeks
late was not in compliance with the contract. He found too that;
'There was no
obligation on the defendant, as alleged in the replication, to intimate at the
end of February that it no longer required the goods. It was entitled to
waituntildelivery and then to repudiate(Federal Tobacco Works v Barron
& Co, 1904 TS 483; Strachan & Co Ltd v Natal Milling Co [Pty] Ltd, 1936
NPD 376]'
This is in accordance with the
rule enunciated many years ago by Lord Blackburn inThe Mersey Steel and
Iron Co Ltd v Naylor Benzon & Co, [1894] 9 AC 434 [HL] and adopted in
our law:
“The rule of law …. is
that where there is a contract in which there are two parties, each side having
to do something … if you see that the failure to perform one part of it goes to
the root of the contract, goes to the foundation ofthe whole, it is a good
defence to say, “I am not going to perform my part of it when that which is the
root of the whole and the substantial consideration for my performance is
defeated by your misconduct”
(15) In an insurance contract, the failure to pay a premium
goes to the root and is the very foundation of the contract. Contrary to the
assertion by the plaintiff's legal practitioners, the breach was quite
material. There was no question of quasi mutual assent. The defendant
had repudiated liability.
(16) The plaintiff's argument seems to suggest that it
would be iniquitous if he is left “empty handed”. That implies a claim
for damages. However, plaintiff's current claim is one based in contract. If
his position is probably that he had paid his instalments faithfully except for
the last premium, then he ought to set out such a claim properly. A damages
claim is an illiquid claim. His current action is premised on a liquid claim.
But as I have indicated in this judgment, the cause of action has not been
properly disclosed.
(17) In the circumstances, the default judgement is
hereby refused.
Mabuye Zvarevashe,
plaintiff's legal practitioners
