Clifford v Commercial Union Insurance Company of South Africa Ltd. (302/96) [1998] ZASCA 37; 1998 (4) SA 150 (SCA); (22 May 1998)

Clifford v Commercial Union Insurance Company of South Africa Ltd. (302/96) [1998] ZASCA 37; 1998 (4) SA 150 (SCA); (22 May 1998)

The Supreme Court of Appeal held that the misstatements in the proposal form regarding the year of manufacture and registration were material to the assessment of risk under the insurance policy. The insurer was induced to issue the policy on terms it would not have otherwise agreed to, particularly with respect to the 'new for old' clause, which exposed the insurer to a higher indemnity than warranted by the true facts. The court found that, had the insurer known the correct year of manufacture and registration status, it would have either declined the risk, issued the policy on different terms, or deleted the clause. The statutory requirement of materiality under section 63(3) was...

Citation
[1998] ZASCA 37
Parties
Appellant: J D Clifford; Respondent: Commercial Union Insurance Company of South Africa Ltd.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
22 May 1998
Case Number
302/96
Procedural Posture
Civil Appeal / Appeal From Lower Court Judgment
Outcome
Appeal dismissed with costs.
Judges
Van Heerden DCJ, Nienaber JA, Howie JA, Marais JA, Schutz JA
Legal Topics
Insurance Contracts, Material Misrepresentation, Indemnity Policy, Assessment of Risk
Commercial and Corporate Civil Procedure Insurance Contracts Material Misrepresentation Indemnity Policy Assessment of Risk

Case Brief

Summary, issues, holding and outcome

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Parties

J D Clifford

Appellant

Commercial Union Insurance Company of South Africa Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From Lower Court Judgment

Legal Issues

  1. 1 Whether the incorrect statements in the insurance proposal form justified the insurer's repudiation of the indemnity policy.
  2. 2 Whether the misstatements were material to the assessment of risk under section 63(3) of the Insurance Act 27 of 1943.
  3. 3 Whether the 'new for old' clause in the policy applied to the vehicle in question.

Ratio Decidendi

The Supreme Court of Appeal held that the misstatements in the proposal form regarding the year of manufacture and registration were material to the assessment of risk under the insurance policy. The insurer was induced to issue the policy on terms it would not have otherwise agreed to, particularly with respect to the 'new for old' clause, which exposed the insurer to a higher indemnity than warranted by the true facts. The court found that, had the insurer known the correct year of manufacture and registration status, it would have either declined the risk, issued the policy on different terms, or deleted the clause. The statutory requirement of materiality under section 63(3) was...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.