Refrigerated Trucking (Pty) Ltd v Zive NO (Aegis Insurance Co Ltd, Third Party)

• Judge: Hartzenberg J
• Judgment Date: 05 April 1995
• Docket Number: 2236/93
• Hearing Date: 02 March 1995
• Counsel: J M C Smit for the plaintiff. R A Kuper for the defendant. A R Gautschi for the third party.
• Court: Transvaal Provincial Division

Hartzenberg J:

The plaintiff was for all practical purposes the owner of a mechanical F horse and trailer (the plaintiff's vehicles) on 2 May 1993. The defendant is the executor in the estate of the late Michael Zive (the deceased). The third party, Aegis Insurance Co Ltd (Aegis), carries on the business of insurers. On 2 May 1993 the plaintiff's vehicles collided with motor vehicle PPG 790T, then being driven by the deceased. In its particulars of claim the plaintiff alleges that the negligent driving of the G deceased was the sole cause of the collision. It alleges that it suffered damages in an amount of R515 700,80 and claims that amount plus interest and costs from the defendant.

The defendant pleads lack of knowledge of the plaintiff's allegations, a denial of liability H for the plaintiff's damage or any portion thereof and prays that the plaintiff's claims against it be dismissed with costs. The defendant, however, joined the third party and alleges that, if it be found that it is liable to compensate the plaintiff for some or all of its damages, it is entitled to indemnification by the third party in terms of an insurance policy ('the Aegis policy'). The third party's initial plea was a rather laconic disavowal I of knowledge of the collision and the cause thereof and a denial of liability.

After an initial and a resumed pretrial conference and an amendment of the third party's plea, which was only finalised after the trial had commenced, the facts were for all practical purposes agreed between the parties. The defendant with the consent of the J third party admitted that the deceased was 90% negligent, and that the plaintiff's agreed damages,

Hartzenberg J

A which amount to R490 000, are to be reduced by 10%. The defendant agrees that judgment be entered against it in favour of the plaintiff for R441 000 and costs. Although there is an agreement by the defendant and the third party that R100 000 of the amount of R490 000 represents damage caused either directly or indirectly by fire, the Court has not been asked to give any decision in respect thereof. B

It was agreed that the sole question to be decided is whether the third party is to indemnify the defendant for the total amount of the judgment to be entered against it or only for 50% thereof. As a result thereof Mr Smit, who appears for the plaintiff, became a mere bystander (be it innocent or not). In order to enable the Court to C decide the issue it was further agreed that the following facts were common cause between the defendant and the third party.

The Aegis policy in favour of the deceased was valid and of full force and effect on 2 May 1993 and the provisions in that policy to which I shall refer were applicable. On 2 May 1993 there existed an insurance policy issued by Heritage Insurance Brokers D (Pty) Ltd underwritten by IGI Insurance Co Ltd (IGI) in favour of Golden Mark Promotions (Pty) Ltd (GMP), which was valid and of full force and effect (the IGI policy). Vehicle PPG 790T in particular appears on the schedule referred to in that policy. The deceased was the driver of vehicle PPG 790T at the relevant time with the permission of GMP. Prior to 2 May 1993 the deceased had not been refused any E motor vehicle insurance or continuance thereof by any insurance company or underwriter. A claim was lodged under the IGI policy by GMP in respect of damage to motor vehicle PPG 790T sustained in the relevant collision. The claim was met by IGI. No claim was lodged under the IGI policy by GMP for the damage sustained by the plaintiff as a result of the collision, as claimed by the plaintiff in its summons or at F all. No claim was lodged by GMP on behalf of the deceased or his estate or by the estate in the respect of the IGI policy. It must further be mentioned that a Ms Younger of IGI gave evidence that, after provision had been made for indemnification of the damage sustained by the plaintiff and upon becoming aware of the Aegis policy, IGI G denied liability for such damage on the basis that the deceased was entitled to indemnity under another policy.

This judgment deals with the question of enforceability or not of an extension clause in an insurance policy. The Aegis policy was a personal insurance package covering various risks comprising no fewer than 17 different categories. Section E is entitled H 'Motor'. Portion A thereof deals with motor comprehensive insurance whereas portion B deals with motor third party fire and theft insurance. Clause 2(b) of portion A reads as follows:

'Your driving of other vehicles

(b)

We will also pay all sums for which you are legally liable as a result I of death or injury to persons or damage to property arising out of the driving of a motor vehicle not belonging to nor hired to you under a hire purchase or similar agreement, insofar as such vehicle is not otherwise insured.'

The liability is limited to a sum of R3 million.

J There are a number of general terms applicable to all sections of the policy. Clause 11 of the general terms reads as follows:

A 'Other insurance

If at the time that any claim arises under this policy there may be any other insurance covering the same liability loss or damage we will not be liable to pay or contribute more than our rateable proportion of any such claim and costs and expenses in connection therewith. This condition does not apply to the various Personal Accident and Juno Plus sections of this policy.' B

It is obvious that the deceased was entitled to indemnity for the full amount of R441 000 for which judgment is to be entered against the estate if 'the vehicle is not otherwise insured'.

In s 2 of the IGI policy there appears an extension clause which reads as follows:

C 'The company will indemnify the insured in the event of an accident caused by or in connection with the vehicle or the towing of a disabled vehicle (other than for reward) (as hereinafter defined) attached thereto against all sums including claimants' costs and expenses which the insured shall be legally liable to pay, including all costs and expenses as may be incurred with the D written consent of the company in respect of:

(i)

death or bodily injury to any person, excluding:

'(a)

any person who is a member of the insured's immediate family;

(b)

any person who normally resides at the same residence as the insured, including domestic servants;

(c)

any person being conveyed in or on a caravan or in the open portion E of a vehicle or trailer, or entering or getting onto or alighting from any vehicle;

(d)

any employee of the insured in the course of his employment.

(ii)

damage to property other than property belonging to the insured or held in trust by or in the custody or control of the insured or being conveyed by, loaded into or unloaded from such vehicle, trailer or towed disabled F vehicle attached thereto.

In terms of this section the company will indemnify any person who is driving or using the vehicle on the insured's order or with his permission, provided that such person:

(a)

is not entitled to indemnity under any other policy;

(b)

shall as though he were the insured observe, fulfil and be subject to the G terms, conditions and exceptions of this policy; and

(c)

has not been refused any motor vehicle insurance or continuance thereof by any insurance company or underwriter.'

The liability of the insurer is limited to R2 500 000.

Clause 5(d) of the general conditions of the policy reads as follows:

H 'The extension of the company's liability to any person other than the insured shall give no right of claim hereunder to such person, the intention being that the insured shall in all cases claim for and on behalf of such person, and the receipt of the insured in any case shall absolutely discharge the company's liability hereunder.'

I Clause 8 of the general conditions is very similar to clause 11 of the general conditions of the Aegis policy. It reads as follows:

'Other insurances

If, at the time any claim arises under this policy, there is any other existing insurance covering the same accident, injury, loss or damage, the company shall not be liable to pay or contribute more than its rateable proportion of any J loss, damage, compensation, costs or expenses. However, nothing in this condition

Hartzenberg J

A shall impose on the company any obligation to make any payment under this policy from which it would have been relieved under any exception applicable to this policy or any section thereof.'

The cover provided by both policies is qualified to the following extent: In terms of the Aegis policy the deceased would not be covered 'insofar as such vehicle is otherwise B insured', whereas in terms of the IGI policy he is covered provided that 'he is not entitled to indemnity under any other policy'. If both policies are enforceable, at first blush the...