Case Notes: The Insurer’s Right to Salvage, Related Issues of Ownership, and Unrelated Issues of Salvage Liens: Hollard Insurance Co Ltd v Wagenaar t/a Race Designs

• Jurisdiction: South Africa
• Date: 25 May 2019
• Author: JP van Niekerk
• Pages: 300-313
• Citation: (2011) 23 SA Merc LJ 300
• Published date: 25 May 2019

The Insurer’s Right to Salvage, Related Issues of

Ownership, and Unrelated Issues of Salvage

Liens: Hollard Insurance Co Ltd v Wagenaar t/a

Race Designs

JP VAN NIEKERK

University of South Africa

1 Introduction

The exercise by a property insurer of its right to salvage is a common

occurrence in insurance practice. Somewhat surprisingly, though, it is not an

issue arising often in litigation, most probably because the value of such

salvage would in the usual case not justify the expense of litigation.

Nevertheless, the issue raises some interesting legal questions, not the least of

which concerns the passing of the ownership in such salvage from the insured

to the insurer.

That was one of the matters raised by the decision in Hollard Insurance Co

Ltd v Wagenaar t/a Race Designs ([2011] JOL 27099 (GSJ)).

2 The Facts

The insurer in this case sought an order for the return of certain

motorcycles in the possession of the respondent, a mechanic, subject to a

determination of the latter’s claim to a lien over them.

The insurer had insured the motorcycles by means of policies issued on its

behalf by a f‌irm of underwriting managers (Apex Underwriting Managers

(Pty) Ltd) to the owners or bona f‌ide possessors of those motorcycles. In

terms of these policies, the insured owners and possessors of the motorcycles

were indemnif‌ied against losses arising from any damage to or destruction of

those cycles.

The insurer had appointed the underwriting manager as an intermediary in

terms of s 48(2) of the Short-term Insurance Act 53 of 1998. It had done so in

a written agreement, as is required by that section. The insurer was a 70 per

cent shareholder in the underwriting management f‌irm. The manager’s

mandate was ‘generally to administer, manage and underwrite in the name of

the [insurer], certain motorcycle insurance policies underwritten by the

[insurer] on the terms and conditions contained in the agreement between

Apex and the [insurer]’.

The underwriting manager’s duties (as set out in par [4] of the judgment) in

terms of this agreement included:

• receiving, processing and paying valid claims and external claims costs;

300

(2011) 23 SA Merc LJ 300

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