South African Eagle Insurance Company Ltd. v Norman Welthagen Investments (Pty) Ltd. (335/92) [1993] ZASCA 195; 1994 (2) SA 122 (AD); (30 November 1993)

South African Eagle Insurance Company Ltd. v Norman Welthagen Investments (Pty) Ltd. (335/92) [1993] ZASCA 195; 1994 (2) SA 122 (AD); (30 November 1993)

Section 63(3) of the Insurance Act applies only to representations made to the insurer, not to contractual terms or warranties introduced by the insurer and accepted by the insured. In this case, memo 2 was a term stipulated by the insurer and accepted by the respondent; it did not constitute a representation by the insured. The respondent made no prior statement inducing the insurer to contract, and the agreed facts confirm that no relevant representations were made before the policy was issued. Therefore, section 63(3) does not operate to protect the respondent from the consequences of breaching the warranty. The common law rule applies, and the insurer is entitled to repudiate...

Citation
[1993] ZASCA 195
Parties
Appellant: South African Eagle Insurance Company Limited; Respondent: Norman Welthagen Investments (Proprietary) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 November 1993
Case Number
335/92
Procedural Posture
Civil Appeal / Appeal From Judgment of Witwatersrand Local Division
Outcome
Appeal succeeds; respondent's claim dismissed.
Judges
Joubert, Hoexter, Smalberger, Nestadt, Vivier
Legal Topics
Insurance Contracts, Warranty Breach, Statutory Interpretation, Risk Assessment
Commercial and Corporate Civil Procedure Insurance Contracts Warranty Breach Statutory Interpretation Risk Assessment

Case Brief

Summary, issues, holding and outcome

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Parties

South African Eagle Insurance Company Limited

Appellant

Norman Welthagen Investments (Proprietary) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Witwatersrand Local Division

Legal Issues

  1. 1 Whether section 63(3) of the Insurance Act, 27 of 1943, applies to a breach of a warranty in the insurance policy.
  2. 2 Whether the warranty in memo 2 constitutes a representation within the meaning of section 63(3).
  3. 3 Whether the insurer was entitled to repudiate liability for breach of the warranty.

Ratio Decidendi

Section 63(3) of the Insurance Act applies only to representations made to the insurer, not to contractual terms or warranties introduced by the insurer and accepted by the insured. In this case, memo 2 was a term stipulated by the insurer and accepted by the respondent; it did not constitute a representation by the insured. The respondent made no prior statement inducing the insurer to contract, and the agreed facts confirm that no relevant representations were made before the policy was issued. Therefore, section 63(3) does not operate to protect the respondent from the consequences of breaching the warranty. The common law rule applies, and the insurer is entitled to repudiate...

Court Disposition

Appeal succeeds; respondent's claim dismissed.

Orders

  • The appeal succeeds with costs.
  • The order of the court a quo is set aside.