Patrick Bracher

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Asbestos exclusion upheld in US

An exclusion for claims ‘arising out of asbestos’ was upheld by the US Third Circuit because it is unambiguous and therefore enforceable. The Appeal Court overturned a $36 million judgment against the insurer, which is only part of the policyholder’s liability for $120 million worth of asbestos-related claims. The court did not accept the argument that the … Continue reading

Administrative action can be reviewed from when it adversely affects a person’s rights

The Supreme Court of Appeal decided that a decision by the National Energy Regulator of South Africa to determine gas prices was not reviewable at the stage when NERSA decided on a methodology to determine the prices, but was reviewable when NERSA subsequently determined the prices imposed on customers. In February 2012, NERSA concluded that … Continue reading

Cancellation of contract not justified where most of the price already paid and restitution unlikely

The court refused to uphold cancellation of an agreement of sale for a members’ interest in a close corporation because only a total of R160 000 out of a purchase price of R4 million (96%) was outstanding and three of the appellants had been paid in full. In addition, restitution of the amount already paid was doubtful … Continue reading

How to politely tell someone they are lying

In a recent case which went through two courts in the UK relating to a ‘fiscally clandestine organisation’, the evidence of the various ‘utterly dishonest’ witnesses was described in the following phrases which you may find useful: One witness was ‘egregiously dishonest’ and in his evidence was ‘as heroically dishonest as he is in everyday … Continue reading

Additional insureds you have agreed to insure (US)

A US construction insurance policy included provision for an additional liability insured as ‘any person or organisation with whom you have agreed to add as an additional insured by written contract’. It was held the policy did not cover a project architect with whom there was no such direct written contract. Because the endorsement included … Continue reading

Deliberations of Judicial Services Commission must be revealed

The Constitutional Court has held that the private deliberations of the Judicial Services Commission in exercising its mandate to appoint judges must be disclosed as part of the record of proceedings when a decision is challenged. The judicial candidates are interviewed in public and this is followed by private deliberations and recommendations to the President … Continue reading

Application of insolvency exclusion (UK)

Where a professional indemnity policy excluded claims ‘arising out of or related directly or indirectly to the insolvency of the insured’ the court absolved the insurer from liability in a claim by a financial management company that had lost money on a £200 000 investment when the issuer of a bond went insolvent. The court held … Continue reading

Good faith requirement in a guarantee

Where a retention guarantee was provided to a construction company for an amount to be demanded but not exceeding ‘a good faith estimate of the costs’ claimed, the contractor had to show that the demand was made in the honest belief that it was a correct estimate of what it was entitled to be paid … Continue reading

Ambiguous limits of indemnity (UK)

Where a policy schedule and the wording of the policy were not on the face of it consistent, the court considered the combined effect of the limit for a single claim and a number of linked claims and held that the same £10 million applied to both. According to the schedule, the limit of indemnity for … Continue reading

Defence of lack of authority to conclude agreement rejected

A provident fund entered into an investment consulting agreement but subsequently contended that the signatories were not authorised and that the agreement was beyond its powers granted by the fund rules. Although there were strong objections to the agreement at the trustees meeting approving the agreement, no voting took place but the decision to appoint … Continue reading

Sanctity of contracts is good public policy

A lease was challenged on the grounds that the cancellation for non-payment of rent, after prior notice that the rent had not been paid, should not be enforceable because it was against public policy to cancel the agreement for the lease of a hotel that had been in place since 1982. Although good faith is … Continue reading

Prescribed rate of interest is 10% from 1 May 2018

The prescribed rate of interest has been changed with effect from 1 May 2018 to 10% per annum. The previous rate was 10.25%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts … Continue reading

Minority shareholder who dominated board held to control a company

A court, asked to dismiss a claim against Tesla Motors, found it reasonably conceivable that Elon Musk, a 22.1% shareholder, was a controlling shareholder because of his ‘actual domination and control over the directors’ wielding more power than may be evidenced by the minority shareholding. Normally the courts of Delaware, where the case happened, would … Continue reading

Statutory self-help provision to deduct money from employee’s earnings declared unconstitutional

The Constitutional Court declared unconstitutional a provision in the Public Service Act entitling the government to deduct money due by an employee without any hearing. The employee had been overpaid a salary for a five year period because of a wrong grading and the Department of Health Gauteng deducted R56 257 from a gross salary of … Continue reading
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