Indemnity clauses and the Consumer Protection Act
In a recent Eastern Cape High Court judgment which you can read about here, the claimant fell into an unfenced pool at the game reserve and injured herself. The court found in the evidence that the claimant’s conduct was the sole cause of her stepping into the pool and sustaining injuries. She failed to prove causal negligence on the part of the defendant and her claim could not succeed.
The court said that in case it was wrong in that regard it would consider whether or not the defendant’s liability could be excluded by the indemnity contained in the registration document. The relevant registration document contained a number of waiver and indemnity clauses including a clause agreeing that the defendant would not be liable or responsible for any bodily harm “from whatsoever cause arising including not limited to injury…”, a waiver and abandonment of all claims from “… whatsoever nature and howsoever arising …” and acknowledging that the waiver and abandonment relates to “… any claim from whatsoever cause arising …”.
The clauses constituted disclaimer and indemnity clauses which the court referred to as an ‘indemnity’ for the purpose of the judgment.
It was not the claimant’s case that the indemnity had not been brought to her attention.
The claimant argued that the indemnity should be interpreted restrictively and limited to activities such as game viewing, boat cruises and walking trails.
The court declined to do so on the basis that the disclaimer was unambiguous and included the words “not limited to” after listing the specific activities and in any event referred to claims “from whatsoever cause arising”.
The claimant also argued that the indemnity falls within the provisions of sections 48(2)(a) and (b) of the Consumer Protection Act (CPA) and its terms were unfair, unreasonable or unjust and that the defendant had not complied with sections 49(2) and 58(1) of the CPA>. The court was also mindful that the presumption of unfairness referred to in regulation 44(3)(a) of the CPA is indicative only and that a term listed in that regulation may be fair in the particular circumstances of the case.
The court said that, having regard to the regulation 44(3) presumption of unfairness and considering whether or not the indemnity is fair in the particular circumstances, it would focus on the grounds raised by the claimant in support of a submission that the indemnity is against public policy.
The court found that the existence of an indemnity in hotel and game reserve contracts is not unique nor unusual. The claimant herself had said that she had signed such indemnities on previous occasions.
The clause did not exclude altogether her rights of access to the court. The indemnity specifically recorded that there was no exclusion for liability for gross negligence or intentional wrongful conduct. The court also found that the claimant was not in an unequal bargaining position when she signed the indemnity. The overall agreement in which the indemnity clauses were found was for the provision of leisure and hospitality services to the claimant in return for payment. The claimant was not obliged to choose the defendant or for that matter any other reserve. There was no evidence that she objected to the indemnity or was forced to sign it. She signed the indemnity voluntarily. In the circumstances the court found that the indemnity was not unreasonable.
The court was also required to consider whether it would be unfair to enforce the indemnity.
The claimant was aware of the presence of the pool. It was visible from the vantage point of the lounging chairs at the entrance of the deck. She had not forgotten about the pool. In the circumstances the court said it would be not be unfair to enforce the indemnity. The court distinguished the situation from that considered by the court in Naidoo v Birchwood Hotel 2012 (6) SA 170 GSJ, where the court found that the claimant had proved negligence on the part of the hotel but did not make any finding on whether or not the disclaimer clause in question was unreasonable but found it would be unfair and unjust to enforce it. The court in Naidoo held that entry and egress was an integral component of a guest’s stay in a hotel and a guest does not take their lives in their hands when they exited through the hotel gates.
The court said the distinction is that a swimming pool is not an unusual feature at a hotel and is commonplace. It is one of a number of facilities enjoyed by guests. The pool was visible to anyone entering the deck from the pathway. The claimant had prior knowledge of the pool and its position on the deck. It was not unreasonable to expect adult hotel guests to look where they were going and to enter exercise care when on the hotel premises.
Having regard to the provisions of section 49(2) and 58(1) of the CPA the court said that a swimming pool is not an unusual or unaccepted facility at a game reserve and nor is it in the normal course subject to any risk of an unusual character. The activity and walking on the deck to reach the restaurant was not in the court’s view subject to an unusual risk. The pool in question was clearly visible to guests entering the deck at least in daylight and that evening 3 out of 4 persons who were going to dine at the restaurant did not walk into the pool. The court said that demonstrated that an ordinary alert consumer would reasonably be expected to notice the pool.
In the circumstances the claimant was not entitled to rely on any of the provisions of the CPA referred to for assistance and that if causal negligence as alleged by the claimant had been proved (which it was not) the defendant was entitled to rely on the indemnity to avoid liability for the claimant’s damages.