Standard General Insurance Co Ltd and Another v Voest-Alpine Industrieanlangenbau Gesellschaft M.B.H. (685/92) [1994] ZASCA 52; [1994] 2 All SA 360 (A) (29 March 1994)

Standard General Insurance Co Ltd and Another v Voest-Alpine Industrieanlangenbau Gesellschaft M.B.H. (685/92) [1994] ZASCA 52; [1994] 2 All SA 360 (A) (29 March 1994)

The Supreme Court of Appeal held that the co-insurance clause in the policy was designed to protect the insured by ensuring that all co-insurers are bound by the decisions of the leading insurer regarding claim settlements, unless such decisions are made in bad faith or without due professional skill and care. The court found no basis in the policy wording to distinguish between decisions on the merits and other decisions, nor to exclude decisions on quantum. The disputed claim for costs of removing and replacing undamaged refractory linings was found to be covered by the policy, as these costs were necessary to access and repair insured damage. The exceptions relied upon by the...

Citation
[1994] ZASCA 52
Parties
Appellant: The Standard General Insurance Co Ltd; Appellant: Guardian National Insurance Co Ltd; Respondent: Voest-Alpine Industrieanlangenbau Gesellschaft M.B.H.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 1994
Case Number
685/92
Procedural Posture
Civil Appeal / Appeal From Court a Quo
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Corbett, Joubert, Hefer, Eksteen, Mahomed
Legal Topics
Insurance Policy Interpretation, Co Insurance Clause, Follow the Settlements, Contractual Liability, Exceptions to Indemnity
Commercial and Corporate Civil Procedure Insurance Policy Interpretation Co Insurance Clause Follow the Settlements Contractual Liability Exceptions to Indemnity

Case Brief

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Parties

The Standard General Insurance Co Ltd

Appellant

Guardian National Insurance Co Ltd

Appellant

Voest-Alpine Industrieanlangenbau Gesellschaft M.B.H.

Respondent

Procedural Posture

Civil Appeal / Appeal From Court a Quo

Legal Issues

  1. 1 Whether the appellants are bound by the decision of the leading insurer (Allianz) regarding the settlement of the respondent's claim under the co-insurance clause.
  2. 2 Whether the disputed claim for costs of removing and replacing undamaged refractory linings is covered by the insurance policy.
  3. 3 Whether paragraphs 4 and 11 of the exceptions in the policy exclude liability for the disputed claim.

Ratio Decidendi

The Supreme Court of Appeal held that the co-insurance clause in the policy was designed to protect the insured by ensuring that all co-insurers are bound by the decisions of the leading insurer regarding claim settlements, unless such decisions are made in bad faith or without due professional skill and care. The court found no basis in the policy wording to distinguish between decisions on the merits and other decisions, nor to exclude decisions on quantum. The disputed claim for costs of removing and replacing undamaged refractory linings was found to be covered by the policy, as these costs were necessary to access and repair insured damage. The exceptions relied upon by the...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs consequent upon the employment of two counsel.