Patrick Bracher (ZA)

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Prescription runs from date of acceptance of repudiation of a contract

By Patrick Bracher (ZA) on February 2, 2022 Posted in Insurance

The Supreme Court of Appeal held that where one party to a contract repudiates the contract by expressing an intention not to be bound by their obligations, extinctive prescription to defeat a claim for damages or performance runs from the date that the other party accepts the repudiation and cancels the contract. A contract between … Continue reading

A judgment with a 30 year prescription period includes a maintenance order

By Patrick Bracher (ZA) on January 27, 2022 Posted in General

The Supreme Court of Appeal, not surprisingly, found that a maintenance order made by a court is subject to a 30 year prescription period because it is a “judgment debt” for the purposes of section 11(a)(ii) of the Prescription Act of 1969. The appellant husband had an unpaid maintenance debt of over R3.5 million as a … Continue reading

The “provision of goods and services” as government procurement under section 217 of the Constitution

By Patrick Bracher (ZA) on January 25, 2022 Posted in General

The “provision of goods and services” as government procurement under section 217 of the Constitution The Supreme Court of Appeal held that the requirements of section 217(1) of the Constitution regarding fair, equitable, transparent, competitive and cost-effective procurement were not met where a private contracting party was providing services to smallholder farmers to promote beef … Continue reading

Prescribed rate of interest is 7.25% from 1 January 2022

By Patrick Bracher (ZA) on January 21, 2022 Posted in General

The prescribed rate of interest changed with effect from 1 January 2022 to 7.25% per annum. The previous rate was 7.00%. 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 unless … Continue reading

The law does not require impossibilities and its effect on prescription

By Patrick Bracher (ZA) on December 17, 2021 Posted in General, Insurance

In finding that the Road Accident Fund Act three year extinctive prescription period (with some exceptions) did not apply to the claimant who had become a person of unsound mind because of the motor accident, the Constitutional Court applied the impossibility principle (lex non cogit ad impossibilia). It was held that the claimant’s action had … Continue reading

Who decides whether an arbitration agreement is valid – the court or the arbitrator?

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

In a dispute over whether an arbitration could be held to resolve the dispute between the parties, one party alleged that the arbitration agreement itself did not exist for lack of agreement between them. Where there is a challenge to the arbitration agreement itself, so as to put into question the consent of the parties … Continue reading

Speaker of the National Assembly must decide whether no confidence vote is by secret ballot

By Patrick Bracher (ZA) on December 7, 2021 Posted in General

A political party challenged the decision of the Speaker of the National Assembly to hold a vote of no confidence in the President by secret ballot. The court held that the onus was not on the political party to show the need for a secret ballot by producing evidence or reasons for that procedure to … Continue reading

Disgorged funds to comply with authorities order is not an uninsurable penalty (US)

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

A New York court of Appeals held that a wrongful act liability policy covered funds that the insured disgorged as part of a settlement with the Securities and Exchange Commission. The settlement payment was not excluded from insurance coverage as a “penalty imposed by law” under the policies. The policy provided coverage for “loss” that … Continue reading

Ombud must apply appropriate processes to disputes of fact

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

In November 2021 the Financial Services Tribunal emphasised that “time and again it has been pronounced that when there is a material dispute of fact, there should be a hearing of oral evidence”. It is only once the material disputes of fact are addressed that one can conduct an enquiry into the negligence, causation and … Continue reading

Fitness and propriety re significant owner’s deadline 1 December 2021

By Patrick Bracher (ZA) on November 19, 2021 Posted in General, Insurance

Anyone who is a significant owner of a financial institution is required by Joint Standard 1 of 2020 to have in place procedures for assessing and attesting to fitness and propriety by 1 December 2021. This must thereafter be done on an annual basis and on written request by either Authority. The Joint Standard 1 of … Continue reading

Transferability of water use entitlements and other government-granted rights

By Patrick Bracher (ZA) on November 16, 2021 Posted in General

In a case where the Supreme Court of Appeal found that section 25 of the National Water Act, 1998 (NWA) permits the transfer of water use entitlements subject to a licence being granted to the transferee by the Minister, the court made some important observations about the transfer of government-granted rights generally. The NWA abolished … Continue reading

Municipalities’ power to impose rates may be limited by national legislation

By Patrick Bracher (ZA) on November 8, 2021 Posted in General

The power of municipalities to determine their rates policies is subject to regulatory supervision of the national legislature in terms of section 229(2)(b) of the Local Governance Municipal Property Rates Act of 2004. National legislation limits rates for public benefit organisations (in this case independent schools) to 25% of the rate levied on residential property … Continue reading

Conversion of non-life licence results in lapse of accident and health policies

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

Prior to conversion of its short-term licence to a non-life licence under the Insurance Act, 2017, the insurer underwrote accident and health policies with what are now both life and non-life risk components. Under the Insurance Act non-life insurers are only permitted to conduct accident and health policies insuring costs or loss of income (not … Continue reading

When can you claim compound interest?

By Patrick Bracher (ZA) on November 2, 2021 Posted in General

As a starting point, it is generally accepted that where compound interest is not expressly provided for in an agreement, only simple interest is due. Compound interest is claimable only in certain defined circumstances namely (a) where parties agree to pay compound interest (b) if the obligation to pay interest is alleged and it is … Continue reading

Silent cyber and ransomeware cover (US)

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

The insured was locked out of its computer systems with the hard drives encrypted as a result of a ransomeware attack. It ultimately paid the requested ransom with four bitcoins valued at nearly $35 000 before it regained access to its computer systems. The court held that, if fraud was established, the insurers would have to … Continue reading

Motor collision claimants can recover diminished value of repaired vehicles

By Patrick Bracher (ZA) on October 22, 2021 Posted in Insurance

The Massachusetts highest court found that an insurer is obliged to compensate the claimants not only for repairs to their vehicles to restore them to pre-collision condition but also for what is known as inherent diminished value (IDV). IDV damages are included as part of the amounts to which a claimant is legally entitled to … Continue reading

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