This March 2025 High Court judgment considers but does not decide whether a claim that is partly declined has been “rejected” for a policy time‑bar, and permits the claimant to amend to run that argument at trial, where wording and evidence will decide the point.

The claimant sought indemnity for fire damage to its switchgear room and an electricity substation. The insurer declined much of the claim, saying the switchgear was underinsured and the substation was not covered, and issued an unsigned “agreement of loss” tendering a fraction of the amount claimed. The claimant sued for the full amount. One defence pleaded was that the summons was issued more than twelve months after “rejection” under the policy’s time-bar clause.

The claimant had already pleaded several alternatives to avoid the time-bar, including non-compliance with the policyholder protection rules, implied waiver, estoppel and public policy. It later sought to amend to add that, because the insurer offered to pay some of the claim, the claim was not “rejected” within the meaning of the time-bar clause, so the time-bar did not apply.

The insurer objected: a partial payment offer still amounted to rejection of the balance. There was no difference, in substance, between the rejection of a claim for the purposes of the time-bar clause, and a repudiation of part of a claim.

The court framed the issue as whether “rejected” in the time-bar clause means only a claim “rejected outright”, or also one “partially repudiated”. The claimant relied on Hurwitz’s Trustee v Salamander Fire Insurance Company (1917), where a “rejection” in a time-bar clause was decided to mean a “total and not partial rejection”.

The insurer countered that Salamander did not cover cases where a claim is rejected but a token payment in tendered in settlement of any dispute that might arise from that rejection; it said the “agreement of loss” was such a compromise offer, which the claimant disputed. The claimant argued that, at least in respect of the switchgear, its claim was not rejected but reduced on the basis that the switchgear was underinsured.

The court did not resolve the interpretive dispute on the papers. It held that there was a genuine difference of opinion about the meaning of the “agreement of loss”, on which evidence must be heard at trial. An interpretation of the words in the context of the policy will also be required.

The court therefore allowed the amendment.

Time-bar clauses must be clearly drafted in view of the serious consequences of non-compliance.

Drakenstein Municipality v Guardrisk Allied Products and Services (Pty) Ltd and Another