Napier v Barkhuizen

The respondent insured his motor vehicle with Lloyd’s underwriters, represented by the appellant. The insurance policy contained a clause requiring that summons be served within 90 days of repudiation of a claim, failing which the insurer would be released from liability. After the respondent’s vehicle was involved in an accident, the insurer repudiated the claim on 7 January 2000. The respondent only instituted action more than two years later. The insurer raised a special plea relying on the contractual time-bar clause. The respondent challenged the clause as unconstitutional, alleging that it infringed section 34 of the Constitution (right of access to courts).

The appeal was upheld. The order of the High Court was set aside and replaced with an order upholding the insurer’s special plea based on the time-bar clause, with costs.

This case clarified the horizontal application of constitutional rights in contract law and confirmed that section 34 of the Constitution does not invalidate contractual time-bar clauses merely because they limit the period for enforcing contractual rights. It reinforced the principle that contractual rights can be created subject to agreed limitations, provided they are not contrary to public policy informed by constitutional values.