Allianz Insurance Ltd v RHI Refractories Africa (Pty) Ltd (616/06) [2007] ZASCA 174; [2007] SCA 174 (RSA); 2008 (3) SA 425 (SCA) (3 December 2007)

Allianz Insurance Ltd v RHI Refractories Africa (Pty) Ltd (616/06) [2007] ZASCA 174; [2007] SCA 174 (RSA); 2008 (3) SA 425 (SCA) (3 December 2007)

The Supreme Court of Appeal held that the exclusion clause must be interpreted in its plain and ordinary sense, and restrictively against the insurer. The term 'unintended damage' refers to damage that was not planned or intentionally caused by the insured. The delamination and damage to the epoxy lining were not intended or planned by the respondent, and thus constituted 'unintended damage' within the meaning of the exclusion clause. The appellant's argument that 'unintended' should be equated with 'unforeseen' or 'unexpected' was rejected, as foreseeability does not equate to intention. The court found that the exclusion clause did not expressly exclude damage to the epoxy lining...

Citation
[2007] ZASCA 174
Parties
Appellant: Allianz Insurance Ltd; Respondent: RHI Refractories Africa (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
3 December 2007
Case Number
616/06
Procedural Posture
Civil Appeal / Appeal From High Court; Point in Limine on Interpretation of Insurance Exclusion Clause
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Howie, Brand, Lewis, Combrinck, Kgomo
Legal Topics
Insurance Contract Interpretation, Exclusion Clause, Short Term Insurance, Burden of Proof
Commercial and Corporate Insurance Contract Interpretation Exclusion Clause Short Term Insurance Burden of Proof

Case Brief

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Parties

Allianz Insurance Ltd

Appellant

RHI Refractories Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court; Point in Limine on Interpretation of Insurance Exclusion Clause

Legal Issues

  1. 1 Does the expression 'unintended damage' in Exclusion Clause 1 refer to damage to the epoxy lining or to other insured property?
  2. 2 Is the risk of delamination of the epoxy lining expressly excluded by Exclusion Clause 1, or is the exclusion limited to additional costs of improvements to the original design, plan or specification?

Ratio Decidendi

The Supreme Court of Appeal held that the exclusion clause must be interpreted in its plain and ordinary sense, and restrictively against the insurer. The term 'unintended damage' refers to damage that was not planned or intentionally caused by the insured. The delamination and damage to the epoxy lining were not intended or planned by the respondent, and thus constituted 'unintended damage' within the meaning of the exclusion clause. The appellant's argument that 'unintended' should be equated with 'unforeseen' or 'unexpected' was rejected, as foreseeability does not equate to intention. The court found that the exclusion clause did not expressly exclude damage to the epoxy lining...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs occasioned by the employment of two counsel.