An electrical arcing event to the main switchboard of the insured caused significant damage to the switchboard and an extended power outage. The “property insured” included “individual switchgear for starting and controlling motors and interconnecting wires and/or cables”. The claim was for damage to the combination fuse switch unit. The court held that the use of the word “and” in the phrase “individual switch gear … and interconnecting wires and/or cables” indicated that the concept of “switchgear” was treated as separate from the concept of “interconnecting wires and/or cables”.

Interconnecting wires and cables are undoubtedly electrical wiring, but the drafting indicated that switchgear was intended to be treated differently from that concept. The court refused to interpret the word “and” as being equivalent to “including” in the context. The only two particular kinds of components of the system that were specifically excluded were electrical wiring and fittings. Therefore the combination fuse switch unit was covered.

The insurer submitted that there was no evident commercial purpose or rational for excluding only wires and cables. The court held that where the ordinary and natural meaning of a clause is clear, the insured is not required to establish a commercial reasoning for the particular language that was adopted.

The same reasoning and result is likely in South Africa.

[Rheem Australia (Pty) Ltd v Mitsui Sumitomo Insurance Company Limited [2023] FCA 1570]