Law Union and Rock Insurance Co Ltd v Carmichael's Executor

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA and CG Maasdorp JA
• Judgment Date: 29 October 1917
• Citation: 1917 AD 593
• Hearing Date: 26 October 1917
• Court: Appellate Division

Innes, C.J.:

The point to be determined in this appeal is whether a condition in a policy of life insurance excluding from the protection of the contract all risk of military service beyond the limits of the British Empire is null and void in terms of the Natal Act 1 of 1907. The action was brought to recover a sum of money under a policy upon the life of a man who is alleged by the appellant company to have died of disease contracted while on military service in German East Africa. The Company pleaded the condition referred to; the plaintiff replied that the condition was null and void under the Statute; an exception to this replication was dismissed by the Durban Circuit Court (CARTER, J.), and the correctness or otherwise of that order is the matter before us for decision, leave to appeal having been granted by the trial Judge. Everything depends upon the construction of Act I of 1907. The language is of the widest and most general character. Following upon a preamble which it will be necessary in a moment to examine, the first section enacts that: "No provision in restraint of military service contained in any

Innes, C.J.

contract of Life Insurance effected in Natal, after the passing of this Act, hall be available as a defence to any claim upon the policy, and the policy shall be construed as if no such provision were contained therein." The second clause enumerates the provisions which shall be deemed to be in restraint of military service, including every stipulation which varies the liability Of the insurer in case of such service. A direction that contracts, the proposals of which have been signed in Natal, shall be considered to have been there made, rounds off the measure. And the first question which arises is whether we are to give unrestricted effect to its terms. A preamble has been described by an old English Judge as "a key to open the minds of the makers of the Act and the mischiefs which they intended to redress." But the key cannot be used if the meaning of the enacting clauses is clear and plain. In cases however where the wording is ambiguous, and in cases where the Court is satisfied that the Legislature must have intended to limit in some way the wide language used, then it is proper to have recourse to the preamble. It is often difficult to decide when the terms of an Act are so clear that they must be taken as they stand, and when it is permissible to call in the aid of the preamble. The object must always be to ascertain the object of the Legislature. And it may be necessary in arriving at such intention to cut down general language susceptible of restriction even though the words used are not ambiguous in themselves. Thus a clause in the Factors Act 1889 (Scotland) provided that "a pledge of the documents of title to goods shall be deemed to be a pledge of the goods." Nothing could be plainer on the surface. Yet the House of Lords by reference to the heading of the part of the Statute in which the section appeared restricted its operation to pledges of documents made by mercantile agents. Inglis v Robertson (1898, A.C. 616). And the rule of construction is the same whether the expression of legislative intention be embodied in a preamble or in the heading of a chapter. I never doubted, during the argument, that the present was a case in which it was proper to have regard to the preamble. And an examination of the authorities quoted on both sides, and of others, confirms that view. The consequences entailed by giving effect to the language of sec. I as it stands are so remarkable as to lead to the conclusion that the intention of the Legislature must have

Innes, C.J.

been to restrict the clause in some way. For otherwise it would protect from the operation of a condition like the present an alien mobilised from Natal to join the forces of a foreign power. In like manner a British subject who left Natal to take part in the military operations of a South American Republic would come under the protection of the clause. What possible object could the Legislature have had in interposing in such cases, and in forcing an Insurance Company to assume the burden of increased risk thus incurred? The Act was passed by a body legislating for and in the interests of Natal, not in the interests of other States. We heard much during the arguments about public policy. That is an expression of vague import; but surely public policy demands in general full freedom of contract; the right of men freely to bind themselves in respect of all legitimate...