Mutual & Federal Insurance Co Ltd v DA Costa

• Jurisdiction: South Africa

Mutual & Federal Insurance Co Ltd v DA Costa
2008 (3) SA 439 (SCA)

2008 (3) SA p439

Citation	2008 (3) SA 439 (SCA)
Case No	243/06
Court	Supreme Court of Appeal
Judge	Farlam JA, Lewis JA and Mlambo JA
Heard	May 5, 2007
Judgment	June 6, 2007
Counsel	JD Maritz for the appellant.; N Davis SC for the respondent.

Flynote : Sleutelwoorde B

Insurance — Motor vehicle — Misdescription of year and model of vehicle — Whether misdescription material — Evidence of materiality of misdescription required — Insurer leading no such evidence — In absence thereof, cannot be held that misdescription material. C

Insurance — Policy — Terms of — Exclusionary clause — Clause excluding liability of insurer if destruction of or damage to vehicle caused by or occurring in connection with political unrest — Clause further providing that, if insurer alleging that destruction or damage not covered by policy, onus resting on insured to prove contrary — Such policy exclusion first to be raised as defence by insurer in plea before insured required to prove D exclusion not applicable.

Headnote : Kopnota

The respondent had successfully sued the appellant in a magistrates' court for indemnification in respect of damage caused to a motor vehicle which, the respondent contended, was covered under a motor vehicle insurance policy issued by the appellant. An appeal to a High Court was dismissed. In a E further appeal, the appellant contended, inter alia,

(1)

that the respondent had not proved that the vehicle in respect of which he had claimed was in fact a vehicle insured in terms of the insurance policy issued to him by the appellant; and

(2)

that the respondent had not proved that the damage to the vehicle had not been caused by or in connection with political unrest, the insurer F not being liable for such damage in terms of an exclusionary clause in the policy.

As to (1), it appeared from the evidence that the vehicle in question was a built-up vehicle, from a 1988-model body and a 1990-model engine. At the time of its inclusion in the list of the respondent's insured vehicles, the respondent was under the impression that it was a 1991 model, and it G appeared on the list of insured vehicles as a 1991-model vehicle. The appellant contended that the misdescription of the vehicle entitled it to avoid the agreement between the parties on the basis of material misrepresentation, alternatively non-disclosure by the respondent. The appellant had led no evidence at the trial that the misdescription was material, but contended that evidence on the point was unnecessary. H

As to (2), the appellant relied on clause 13.4 of the policy, which excluded liability on the part of the insurer if the insured property was destroyed or damaged and such destruction or damage was caused by or occurred in connection with various forms of political unrest listed in the policy. The clause made provision for other exclusions of liability. Clause 13.4 also provided that, if the insurer alleged on the basis of the exclusions set out in I the clause that the destruction or damage or physical injury was not covered by the policy, then the onus would rest on the policyholder to prove the contrary. The appellant contended that the respondent had not proved that the damages were not caused by political unrest.

Held, as to (1), that it was true that in some cases a conceded or misstated fact would be held to be material without any evidence having been led on the J

2008 (3) SA p440

A point. But this was where 'the fact speaks for itself'. It could not, however, be said, without any evidence having been led on the point, that the fact with which the court was presently concerned 'speaks for itself'. Evidence of materiality was required in a case such as the present. (Paragraphs [10] and [11] at 443C/D, 444A/B and 442I/J.)

Held, further, that, in the circumstances of the present case, in the absence of B evidence indicating that a reasonable insurer in the position of the appellant, if it had known the true facts, would have refused to extend the cover of the respondent's policy to the vehicle presently under consideration or would have only accepted it at a higher premium, it could not be held that the misrepresentation relied on was material. Contention (1) could therefore not be upheld. (Paragraph [12] at 444B - C.)

C Held, further, as to (2), that on a proper construction of the relevant clause in the policy the exclusion must first be raised as a defence by the insurer in its plea before it became incumbent on the insured to prove that on the facts of the particular case it did not apply. (Paragraph [17] at 445D.) Appeal dismissed. The decision of De Vos J and Legodi J in the Transvaal Provincial Division confirmed.

Cases Considered

Annotations D

Reported cases

Southern African cases

Esso Standard SA (Pty) Ltd v Katz 1981 (1) SA 964 (A): applied

Fire v The General Accident, Fire and Life Assurance Corporation Ltd 1915 AD 213: distinguished E

Hersman v Shapiro & Co 1926 TPD 367: dictum at 379 - 80 applied

Labuschagne v Fedgen Insurance Ltd 1994 (2) SA 228 (W): not followed

Southern Insurance Association Ltd v Bailey NO 1984 (1) SA 98 (A): applied.

Foreign cases

Santer v Poland [1924] 19 Ll LR 29 (KB): considered F

St Paul Fire & Marine Ins Co v Huff Tex Civ App 1915, 172 SW 755: not followed.

Case Information

Appeal from a decision in the Transvaal Provincial Division (De G Vos J and Legodi J). The facts appear from the judgment of Farlam JA.

JD Maritz for the appellant.

N Davis SC for the respondent.

Cur adv vult.

Postea (June 6). H

Judgment

Farlam JA:

[1] The respondent in this matter, a Pretoria businessman, who is a I partner in a firm of panelbeaters, sued the appellant, an insurance company, in the Pretoria magistrates' court for indemnification in respect of damage caused to a motor vehicle which, the respondent contended, was covered under an insurance policy issued by the appellant. His action was successful, the trial court granting judgment in his favour in an amount of R48 050, with interest from 24 July 1996 (the J date the appellant repudiated liability in respect of the claim), and costs.

2008 (3) SA p441

Farlam JA

[2] The appellant's appeal against this judgment was dismissed on A 15 November 2005 by De Vos and Legodi JJ, sitting in the Pretoria High Court, and it appeals to this court with the leave of the court a quo.

[3] In argument before us counsel for the appellant raised three points in support of the appeal, viz:

(1)

the respondent had not proved what he called 'the insured event' B (damage to a vehicle in an alleged collision);

(2)

the respondent had not proved that the vehicle in respect of which he had claimed was in fact a vehicle insured in terms of the insurance policy issued to him by the appellant; and

(3)

that, if he had proved 'the insured event' and that the claim was C brought in respect of a vehicle insured under the policy, the quantum of his damages had not been proved.

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