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
The July 2021 Supreme Court of Appeal judgment in Capitec Bank Holdings Limited v Coral Lagoon Investments 194 (Pty) Ltd and Others (10530/2020) [2021] ZAWCHC 65, deferred to the Constitutional Court in Beadica 231 CC and Others v Trustees, Oregon Trust and Others [2020] ZACC 13; 2020 (5) SA 247 (CC) which authoratively dealt with … Continue reading
The dispute arose under a settlement agreement in obliging the defendants to deliver 100 000 cubic metres of “clean sand (top soil excluded)” which was “stockpiled”. It was not clean sand nor properly stockpiled and yielded only two thirds of the amount of clean sand, leading to a large damages claim. The Supreme Court of Appeal … Continue reading
When interpreting a statutory provision, one must proceed from the fundamental premise that meaning must be given to every word (provided the context lends itself to such meaning). The rationale for this principle is that a statute is not taken to use words without meaning. No clause, sentence or word must be construed to be … Continue reading
An insured loss must be caused legally and factually by the insured peril. Even where factual causation is established legal causation does not automatically follow. In Concord Insurance Co Limited v Oelofsen N.O. (1992) the court said that in the contractual context policy considerations do not enter the enquiry (unlike in criminal law or delict, … Continue reading
The interpretation process is objective, not subjective. Where the meaning of any policy is clear, effect must be given to it. The court cannot substitute what it regards as reasonable, sensible or business-like for the words actually used. The court should not in those circumstances rewrite the contract made by the parties. Courts should not ‘make … Continue reading
A forfeiture clause, entitling the lessor to cancel the agreement, without notice to the lessee, in the event of breach by lessee is not void for unfairness in terms of the Consumer Protection Act 2008. The CPA should not be construed to invest the court with the power to refuse to enforce contractual terms on … Continue reading
The application of the contra proferentum rule was one of the issues which the English High Court considered in Financial Conduct Authority v Arch Insurance (UK) Limited and Others. The rule provides that where there is doubt about the meaning of a contract, the words will be construed against the person who proffered them. The … Continue reading
A court may not refuse to enforce contractual terms on the basis that the enforcement would, in its subjective view, be unfair, unreasonable or unduly harsh. It is only where a contractual term or its enforcement is so unfair, unreasonable or unjust that it is contrary to public policy that a court may refuse to … Continue reading
At common law, in the absence of a fraud clause in the insurance policy, fraud can only be relied upon to the extent to which it prejudices the insurer. If an element of the claim is fraudulent only the fraudulent portion of the claim is forfeited at common law. There is no implied term in … Continue reading
An option to renew a lease at a rental to be agreed between landlord and tenant, failing which to be determined by a third party, was not validly renewed by the lessee offering an increased rent that was unacceptable to the landlord and then not invoking the process for third party determination. The tenant gave … Continue reading
Ambiguous insurance contracts may be construed against the insurer. In case of doubt and where there is ambiguity a contract, including an insurance policy, may be construed against the contracting party by whom it was formulated. This is generally known as the contra proferentem rule (see for example, Pereira v Marine and Trade Insurance Co … Continue reading
An insurance contract is presumed to require that the insured peril must be the proximate cause of the insured’s loss (see Incorporated General Insurance Ltd v A.R. Shooter trading as Shooter’s Fisheries 1987). Causation involves two distinct enquiries namely factual causation and then legal causation. The test for factual causation is generally described as the … Continue reading
Even peremptory provisions in a statute may yield to two rules of interpretation: Laws must be interpreted to promote the spirit, purport and objects of the Bill of Rights. Due regard must be had to the purpose of the statute and more particularly whether adopting a strict or literal interpretation is consistent with what the … Continue reading
The Supreme Court of Appeal judgment of Centriq Insurance Company Limited and Oosthuizen contains a useful summary of the general principles of interpretation of insurance policies and other contracts: Insurance policies are contracts like any other. Contract provisions must be construed having regard to their language, context and purpose in what is a unitary exercise. … Continue reading
By Siyabonga Mathe and Romy Allen on Posted in General
Contracting parties cannot escape the enforcement of a contract on the basis of the terms being contrary to public policy unless they can prove that the terms are so unfair, unreasonable or unjust in the circumstances that a court should intervene. The Constitutional Court reaffirmed that although constitutional values such as Ubuntu, reasonableness and fairness … Continue reading
In April 2020 the UK Supreme Court had reason to discuss the difference between ‘significant’ and ‘substantial’ in the context of what is a ‘significant reduction in life expectancy’. The court said that ‘like the skin of a chameleon, the adjective takes a different colour so as to suit a different context’. The word ‘significant’ … Continue reading
We have published a number of blogs about modern concepts of interpretation of legislation and contracts. A June 2020 decision of the Supreme Court of Appeal sets it out well. There is nothing new in what is said but it is a nice little package of how to interpret an agreement: ‘It is trite law … Continue reading
Where a contract has been reduced to writing the writing is regarded as the exclusive embodiment of the transaction and no extrinsic (parol) evidence which would have the effect of contradicting, altering, adding to or varying the written contract may be relied on. This is referred to as the parol evidence rule. The inadmissibility of … Continue reading
The Supreme Court of Appeal held in March 2020 that an invalid clause in a lease does not necessarily result in the unenforceability of the entire agreement. Two parties entered into an agreement in terms of which the lessor let the premises to the lessee for a period of ten years and three months. The … Continue reading
The test enunciated by the English court in Kuwait Airways Corporation v Kuwait Insurance Co [1996] 1 Lloyds Rep 664, confirmed in Mann and Another v Lexington Insurance Company [2000] is no different in South African law. “An ‘occurrence’ (which is not materially different from an event or happening, unless perchance the contractual context requires … Continue reading
Ten years after the 2010 World Cup the Supreme Court of Appeal has given judgment in a dispute between the South African Football Association and a travel business relating to travel arrangements for the competition. The parties had a settlement agreement which was in ‘full and final settlement’ of the dispute relating to whether SAFA … Continue reading
An acknowledgement of debt relating to a loan from one friend to another for a capital amount of R831 000 and interest at 18% per year was held to be a credit agreement for the purposes of the National Credit Act. The agreement identified the capital, the interest at 18%, deferred payments, collection fees to be … Continue reading
Section 8 of the Arbitration Act 1965 allows a court to extend the period allowed for arbitration in terms of an arbitration agreement if ‘undue hardship would otherwise be caused’. The Johannesburg High Court held that it would cause ‘undue hardship’ to refuse to extend a time-bar in circumstances where the events that caused the … Continue reading