Patrick Bracher (ZA)

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Tribunal upholds Prudential Authority penalty for unrecorded loan & dividends directive

By Patrick Bracher (ZA) on October 15, 2021 Posted in Insurance

An October 2021 decision of the Financial Services Tribunal upholding an administrative order, a directive, and a penalty by the Prudential Authority is worth noting. The Tribunal held there was no basis for successfully challenging the penalty for an intergroup loan arrangement not recorded in writing and for unjustified dividends paid. A small licensed life … Continue reading

Parol evidence: what evidence outside the written contract can be used?

By Patrick Bracher (ZA) on October 12, 2021 Posted in General

In a matter where there was a partly written and partly oral agreement, the court allowed evidence to be admitted regarding the terms of the oral agreement because it did not contradict nor vary the written agreements but rather supplemented them. The parol evidence rule applies where the written agreement is intended to be the … Continue reading

Cyber risks again

By Patrick Bracher (ZA) on October 11, 2021 Posted in Insurance

We have been mentioning for some time the pandemic-like risks associated with cyber events. According to a recent Airmic survey cyber rates have risen by as much as 400% for some insureds. Cyber risks are therefore said to be the most likely new risks to be financed by captives. If a systemic cyber event should … Continue reading

Unconditional performance guarantees are unconditional

By Patrick Bracher (ZA) on September 29, 2021 Posted in Insurance

The Supreme Court of Appeal has again emphasised that a performance guarantee in terms of which the guarantor undertakes to pay an amount if the contractor fails to perform the required work is unconditional. The beneficiary of the guarantee is not obliged to prove an entitlement under the principal contract before it can make a … Continue reading

‘Strategic response costs’ v ‘ex gratia’

By Patrick Bracher (ZA) on September 28, 2021 Posted in Insurance

A recent US case referred to an interim payment to injured third parties as ‘strategic response costs’ covered under the policy. That is a neat phrase to use instead of an ex gratia payment. ‘Ex gratia’ is always controversial because it implies a payment without a lawful obligation. Ex gratia payments are often made for … Continue reading

Insured loss to value of damaged and repaired vehicles

By Patrick Bracher (ZA) on September 14, 2021 Posted in Insurance

In the US state of Georgia, the formula applied with court backing since 2001 for determining how much a car’s value diminishes after a wreck and repair is “the difference between pre-loss value and post-repair value”. Attorneys for two plaintiffs brought a class action alleging that the insurer was underestimating the value of repaired cars … Continue reading

Exploding vape excluded from policy by ‘products completed’ exclusion

By Patrick Bracher (ZA) on August 24, 2021 Posted in Insurance

An electronic cigarette store failed in its claim for an indemnity from its insurer for a vape battery that exploded in a customer’s pocket away from its premises. The policy excluded an event “occurring on any premises other than the designated premises shown in the schedule”. The products-completed exclusion clearly precluded coverage for bodily injury … Continue reading

Burglary claim fails for failure to install a burglar alarm (US)

By Patrick Bracher (ZA) on August 13, 2021 Posted in Insurance

The roof of a sweet shop was damaged when a tree fell onto the building and destroyed part of the roof on 9 April 2019. On 19 May 2019 it suffered an additional loss from a burglary by thieves who entered through the broken roof. The claim failed because of a breach of a policy … Continue reading

Lessee who buys the leased property has rights and obligations as owner not lessor (confusio)

By Patrick Bracher (ZA) on August 10, 2021 Posted in General

The lessee of a property under a 30-year notarial land lease agreement with Transnet Limited sublet portions of the property to sub-lessees who subsequently acquired rights under a lease assignment agreement. When the lessor bought the property, payment obligations under the lease assignment agreement terminated. A sub-lessee who had taken assignment of rights under the … Continue reading

Illegal drug held to be excluded contaminant from insurance policy (US)

By Patrick Bracher (ZA) on August 6, 2021 Posted in Insurance

A US court found that liquid and solid forms of the illegal drug methamphetamine (a highly addictive stimulant known as meth and by other names) was an excluded “contaminant” for the purposes of a house owner’s insurance policy. The insured’s grandson resided with the insured. The police executing a search warrant discovered liquid and solid … Continue reading

Claim denied for professional services exclusion and interpretation rules (US)

By Patrick Bracher (ZA) on August 5, 2021 Posted in Insurance

While performing services on a construction site owned by a Port Authority, an employee of a contractor slipped and fell on wet soil and rocks because of unsafe working conditions and sued for damages. The construction management firm, Techno, was insured under a comprehensive general liability policy. When the port authority was sued by the … Continue reading

Misrepresentation inducing a contract is not a breach excluded by the contractual exclusion clause in a policy (US)

By Patrick Bracher (ZA) on August 4, 2021 Posted in Insurance

A US court found that the exclusion in an insurance policy against losses arising out of or involving a breach of contract or agreement did not exclude a claim resulting from a misrepresentation that induced the contract. The insurer was excused from paying the amount of an arbitration award arising from a business dispute which … Continue reading

Certain private bodies exempted from compiling information manual

By Patrick Bracher (ZA) on August 2, 2021 Posted in Uncategorized

The Promotion of Access to Information Act of 2000 requires most entities to provide an information manual setting out the documents which are readily available to anyone seeking information from the entity. The number of businesses, including private companies, required to prepare a manual is inestimable. Some private companies have now been exempted from the … Continue reading

Interpretation: “subsequent amendment” to a statute does not refer to a replacement statute (Aus)

By Patrick Bracher (ZA) on July 30, 2021 Posted in Interpretation

In June 2021 the High Court of Australia held that a clause in a business interruption policy that excluded diseases that were “declared to be quarantinable diseases under the Quarantine Act, 1908 and subsequent amendments” did not include diseases quarantinable under the Biosecurity Act, 2015 which had repealed and replaced the 1908 Act. The insurers … Continue reading

FAIS Exemption of banks in respect of certain clients extended to 30 June 2023

By Patrick Bracher (ZA) on July 28, 2021 Posted in General

The exemption under the FAIS Act of registered banks from the need to comply with the FAIS Act in respect of certain sophisticated or major clients has been extended once again to 30 June 2023. The exemption relates to clients who are another bank, a South African insurer, a foreign bank or similar business, a central … Continue reading

Non-disclosure did not induce lower premium for insurers (UK)

By Patrick Bracher (ZA) on July 27, 2021 Posted in Insurance

The UK court of appeal refused to avoid a mobile plant policy plus extension on the grounds of non-disclosure of risk-related information because the lower premium was the result of the insurer’s underwriting practices and their own mistake not of the non-disclosure. The insured was in the business of waste collection and waste recycling and … Continue reading

Hospitality guest indemnity upheld under Consumer Protection Act

By Patrick Bracher (ZA) on July 22, 2021 Posted in Uncategorized

This blog was co-authored by James Donald, Candidate Attorney In an April 2021 judgement, the Eastern Cape high court held that a standard form guest indemnity used by a game reserve was not in conflict with applicable provisions in the Consumer Protection Act 2008 (the CPA). The plaintiff was a tourist to South Africa, … Continue reading

Psychiatric centre not covered for excluded sex assault claim (US)

By Patrick Bracher (ZA) on July 8, 2021 Posted in Insurance

In June 2021 the Pennsylvania Superior Court held that a psychiatric centre had no claim against its insurer for a sexual assault lawsuit brought by two patients of the centre because the policy limited cover to claims brought by any employee. The policy also excluded any claim which “involves an allegation of patient molestation” but … Continue reading

Contra proferentem and standard contracts including insurance policies (Aus)

By Patrick Bracher (ZA) on July 7, 2021 Posted in Insurance

The New South Wales Court of Appeal, considering the wording of a business interruption policy in the context of a Covid-19 claim, dealt with the contra proferentem rule which provides that any ambiguity in a policy of insurance should be resolved by adopting the construction favourable to the insured. The court remarked that the contra … Continue reading

Terminal illness claim rejected for lack of proof of life expectancy (AUS)

By Patrick Bracher (ZA) on June 23, 2021 Posted in Insurance

The Australian Financial Complaints Authority (AFCA) rejected a claim for a terminal illness benefit because there was no evidence that the complainant, although seriously ill, had a life expectancy of less than 12 months. The policy only covered death and terminal illness. There was no cover for disability or serious illness. A terminal illness was … Continue reading

When does independent consultant to sub-contractor owe a duty of care to the main contractor? (UK)

By Patrick Bracher (ZA) on June 9, 2021 Posted in General

The UK High Court found that an independent consultant to a sub-contractor relating to the design and construction of a slipform rig did not owe a duty of care to the main contractor and could not be sued for damages for negligence. There was no assumption of responsibility to the main contractor which sought damages … Continue reading

Certifying documents as copies of the original without seeing the originals is dishonest

By Patrick Bracher (ZA) on June 4, 2021 Posted in General

The facts in a Financial Services Tribunal debarment matter were that the financial services’ representative had certified certain documents as copies of the original without having seen the original documents. She failed to ensure that she complied with the statutory requirements for certifying copies and the duties made mandatory upon her through her position as … Continue reading

Moratorium on legal proceedings in business rescue

By Patrick Bracher (ZA) on June 3, 2021 Posted in General

Section 133 of the Companies Act, 2008 provides for a moratorium on legal proceedings against a company which is in business rescue. It does not include an action to recover a deposit on a transaction with the company that was never completed because the money does not belong to the company under business rescue and … Continue reading

Prescription against notary for badly drafted antenuptial contract

By Patrick Bracher (ZA) on June 1, 2021 Posted in General

A notary negligently drafted an antenuptial contract in December 1998. The antenuptial contract was declared void from inception in a judgment delivered in October 2016. The court held that prescription began to run from the date in May 2014 when the claimant was told by his attorneys of the problems with the contract. In order … Continue reading