Interfax (Pty) Ltd and Another v Old Mutual Insure Limited (10906/2020) [2020] ZAWCHC 166 (25 November 2020)

Interfax (Pty) Ltd and Another v Old Mutual Insure Limited (10906/2020) [2020] ZAWCHC 166 (25 November 2020)

The court held that the wording of the insurance policy covers business interruption resulting from contagious or infectious diseases within a 50 km radius of the insured premises, provided that the relevant authority imposes quarantine or restricts access in terms of applicable law. The court found that the national government's Covid-19 lockdown regulations, which included the applicant's area, satisfied these requirements. The policy does not require the regulatory response to be exclusively local; a national response that encompasses the local area is sufficient. The applicant established both factual and legal causation between the outbreak and its business losses. Accordingly, the...

Citation
[2020] ZAWCHC 166
Parties
Applicant: Interfax (Pty) Ltd; Applicant: Luggage Glove CC; Respondent: Old Mutual Insure Limited
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
25 November 2020
Case Number
10906/2020
Procedural Posture
Civil Application / First Instance Judgment
Outcome
Application for declaratory relief granted; application for interim payment dismissed.
Judges
Davis, Gamble, Salie
Legal Topics
Business Interruption Insurance, Contractual Interpretation, Causation, Covid 19 Regulations
Commercial and Corporate Civil Procedure Business Interruption Insurance Contractual Interpretation Causation Covid 19 Regulations

Case Brief

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Parties

Interfax (Pty) Ltd

Applicant

Luggage Glove CC

Applicant

Old Mutual Insure Limited

Respondent

Procedural Posture

Civil Application / First Instance Judgment

Legal Issues

  1. 1 Does the promulgation and enforcement of Covid-19 lockdown regulations constitute a defined event under the applicant's business interruption insurance policy?
  2. 2 Is the respondent obliged to indemnify the applicant for losses arising from business interruption due to Covid-19 within the policy's terms?
  3. 3 Does the policy wording require a strictly local outbreak and response, or does a national regulatory response suffice if the local area is included?

Ratio Decidendi

The court held that the wording of the insurance policy covers business interruption resulting from contagious or infectious diseases within a 50 km radius of the insured premises, provided that the relevant authority imposes quarantine or restricts access in terms of applicable law. The court found that the national government's Covid-19 lockdown regulations, which included the applicant's area, satisfied these requirements. The policy does not require the regulatory response to be exclusively local; a national response that encompasses the local area is sufficient. The applicant established both factual and legal causation between the outbreak and its business losses. Accordingly, the...

Court Disposition

Application for declaratory relief granted; application for interim payment dismissed.

Orders

  • It is declared that the applicant enjoys insurance cover under the Business Interruption section of its policy with the respondent, under Marsh Policy Number: 750424*004.
  • With effect from 27 March 2020, the promulgation and enforcement of Regulations made by the Minister of Cooperative Government and Traditional Affairs under the Disaster Management Act 57 of 2002 in response to the Covid-19 pandemic in South Africa and the resultant interruption of applicant’s businesses constituted...