Propell Specialised Finance (Pty) Ltd v Attorneys Insurance Indemnity Fund NPC (1147/2017) [2018] ZASCA 142; [2019] 1 All SA 79 (SCA); 2019 (2) SA 221 (SCA) (28 September 2018)

Propell Specialised Finance (Pty) Ltd v Attorneys Insurance Indemnity Fund NPC (1147/2017) [2018] ZASCA 142; [2019] 1 All SA 79 (SCA); 2019 (2) SA 221 (SCA) (28 September 2018)

The Supreme Court of Appeal held that the rights of indemnification under the Attorneys Insurance policy are not capable of cession. The nature of the contractual relationship between Attorneys Insurance and the insured is personal and statutorily regulated, involving a delectus personae. The policy is designed to cover only a specific class of legal practitioners, and its terms do not permit the transfer of rights to third parties. The purported cession agreement between BSL and Propell was invalid, as it would have the effect of substituting a non-practitioner as the insured, undermining the insurer's statutory mandate and exposing it to claims from outside the defined class. The...

Citation
[2018] ZASCA 142
Parties
Appellant: Propell Specialised Finance (Pty) Ltd; Respondent: Attorneys Insurance Indemnity Fund NPC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 September 2018
Case Number
1147/2017
Procedural Posture
Civil Appeal / Appeal From Western Cape Division of the High Court, Cape Town
Outcome
Appeal dismissed with costs.
Judges
Lewis, Saldulker, Zondi, Mathopo, Mokgohloa
Legal Topics
Insurance Contracts, Cession of Rights, Delectus Personae, Pactum De Non Cedendo, Professional Indemnity, Locus Standi
Commercial and Corporate Civil Procedure Insurance Contracts Cession of Rights Delectus Personae Pactum De Non Cedendo Professional Indemnity Locus Standi

Case Brief

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Parties

Propell Specialised Finance (Pty) Ltd

Appellant

Attorneys Insurance Indemnity Fund NPC

Respondent

Procedural Posture

Civil Appeal / Appeal From Western Cape Division of the High Court, Cape Town

Legal Issues

  1. 1 Whether indemnification rights under a professional indemnity insurance policy are capable of cession without the insurer's consent.
  2. 2 Whether the contractual relationship between Attorneys Insurance and the insured involves a delectus personae, precluding cession.
  3. 3 Whether the cession agreement between BSL and Propell conferred locus standi on Propell to sue Attorneys Insurance.

Ratio Decidendi

The Supreme Court of Appeal held that the rights of indemnification under the Attorneys Insurance policy are not capable of cession. The nature of the contractual relationship between Attorneys Insurance and the insured is personal and statutorily regulated, involving a delectus personae. The policy is designed to cover only a specific class of legal practitioners, and its terms do not permit the transfer of rights to third parties. The purported cession agreement between BSL and Propell was invalid, as it would have the effect of substituting a non-practitioner as the insured, undermining the insurer's statutory mandate and exposing it to claims from outside the defined class. The...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.