Ma-Afrika Hotels (Pty) Ltd and Another v Santam Limited (6499/2020) [2021] ZAWCHC 32 (22 February 2021)

Ma-Afrika Hotels (Pty) Ltd and Another v Santam Limited (6499/2020) [2021] ZAWCHC 32 (22 February 2021)

The court found that the dispute regarding the indemnity period in the insurance policy was not patently clear and involved an interpretive exercise. Both parties presented arguments based on the wording and structure of the policy, with the applicants relying on the schedule indicating an 18-month period and the respondent on a memorandum limiting extensions to three months. The court determined that ambiguity existed in the policy wording and that the issue was significant for both parties. The respondent raised a new point on appeal, arguing that the wording was unambiguous, but the court held that this could be canvassed on appeal without prejudice. Given the sound and rational basis...

Citation
[2021] ZAWCHC 32
Parties
Applicant: Ma-Afrika Hotels (Pty) Ltd; Applicant: The Stellenbosch Kitchen (Pty) Ltd; Respondent: Santam Limited
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
22 February 2021
Case Number
6499/2020
Procedural Posture
Leave to Appeal / Application for Leave to Appeal to the Supreme Court of Appeal
Outcome
Leave to appeal to the Supreme Court of Appeal on the limited issue of the indemnity period is granted.
Judges
Goliath, Cloete, Mantame
Legal Topics
Insurance Policy Interpretation, Business Interruption Cover, Indemnity Period, Contra Preferentem Rule
Commercial and Corporate Civil Procedure Insurance Policy Interpretation Business Interruption Cover Indemnity Period Contra Preferentem Rule

Case Brief

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Parties

Ma-Afrika Hotels (Pty) Ltd

Applicant

The Stellenbosch Kitchen (Pty) Ltd

Applicant

Santam Limited

Respondent

Procedural Posture

Leave to Appeal / Application for Leave to Appeal to the Supreme Court of Appeal

Legal Issues

  1. 1 Whether the indemnity period for business interruption cover under the policy is 18 months or limited to 3 months.
  2. 2 Whether the infectious diseases extension is subject to the 3-month limitation period.
  3. 3 Whether ambiguity exists in the policy wording regarding the indemnity period.

Ratio Decidendi

The court found that the dispute regarding the indemnity period in the insurance policy was not patently clear and involved an interpretive exercise. Both parties presented arguments based on the wording and structure of the policy, with the applicants relying on the schedule indicating an 18-month period and the respondent on a memorandum limiting extensions to three months. The court determined that ambiguity existed in the policy wording and that the issue was significant for both parties. The respondent raised a new point on appeal, arguing that the wording was unambiguous, but the court held that this could be canvassed on appeal without prejudice. Given the sound and rational basis...

Court Disposition

Leave to appeal to the Supreme Court of Appeal on the limited issue of the indemnity period is granted.

Orders

  • The respondent's application for leave to appeal to the Supreme Court of Appeal on the limited issue of the indemnity period is granted.
  • The respondent shall, in addition to the costs of the main application, pay the applicants' costs in the application for leave to appeal, excluding those pertaining to the hearing on 16 February 2021, on the scale as between party and party as taxed or agreed and including the costs of three counsel.