Sixbar Trading 645 CC v Absa Insurance Company Limited
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Mngadi J |
| Judgment Date | 19 April 2022 |
| Court | KwaZulu-Natal Local Division, Durban |
| Docket Number | 9855/2015 |
| Citation | 2022 JDR 1102 (KZD) |
Mngadi J:
The plaintiff instituted an action against the defendant claiming R1.2m for loss of rental a loss, (it claimed), was covered by an insurance cover issued by the defendant.
The plaintiff is Sixbar Trading 645 CC, a close corporation registered and incorporated in terms of the law. The defendant is Absa Insurance Company Limited a company duly registered in terms of the company law of the Republic of South Africa.
The plaintiff in the particulars of claim stated that a written policy of insurance between the parties was concluded in June 2012. In terms of the policy plaintiff paid certain premiums and defendant indemnified the plaintiff for any damages suffered by the plaintiff as a result of occurrence of certain events including the event which occurred on 2 September 2013 when a fire occurred at the plaintiff's premises situated at 1 Moodie Street in Pinetown. The fire caused damage to the premises resulting in the plaintiff suffering loss of rentals for R1.2m.
Mngadi J
The defendant in its plea admitted that it concluded the insurance policy with the plaintiff in terms of which it undertook to indemnify the plaintiff in terms and conditions contained in the insurance policy and its schedules. The defendant denied that the plaintiff suffered any damages arising from loss of rental in respect of the premises, and therefore it was not liable to the plaintiff in the claimed sum. In essence, the defendant disputed that the plaintiff suffered loss of rentals relating to the premises damaged by fire for which it was liable to indemnify the plaintiff.
The defendant admitted that the premises were owned by the plaintiff; were damaged by fire; were so damaged by fire that they needed to be rebuilt and that no rental could be obtained by letting the premises whilst they were damaged. The defendant contended that it could only be liable to indemnify the plaintiff for loss of rental in terms of the policy if at the time the premises were damaged by fire they were generating rentals for the plaintiff, which it contended, the plaintiff failed to establish.
The plaintiff adduced evidence from two witnesses, namely, Mr. Jusuf Ebrahim Mansoor and Mr. Naeem Akthar. The defendant adduced evidence from three witnesses, namely, Mr. Roland Campbell, Mr. Gavin Maitre and Mr. Neel Fourie. During the course of leading of evidence documents bound into bundles were referred to. The parties having agreed in the pre-trial meeting that the documents will, without further proof, serve as evidence of what they purport to be without admitting the truth of the contents thereof and that copies may be used without the production of the original. A
Mngadi J
bundle written "Plaintiff's Trial Bundle Vol 1' was marked Exhibit A1. This bundle contained the following:
1. CK2 and CK2A of Sixbar Trading 645 CC. 2.CK2 of E Mart Home Improvement Centre CC. 3. Letter from MaxProp to Mam Hassim Family Trust. 4. Schedule of VAT for July/August 2013 of Sixbar Trading 645 CC together with purchases schedule. 5. VAT201 of Sixbar Trading 645 CC for tax period 2013/08. 6. VAT reconciliation schedule for Sixbar Trading 645 CC for September/October 2013 together with purchases schedule. 7. VAT201 of Sixbar Trading 645 CC for tax period 2013/10. 8. VAT statement of account for Sixbar Trading 645 CC of 1 March 2013 to 28 February 2014. 9. Trial balance of Sixbar trading 645 CC from 1 March 2013 to 28 February 2014. 10. Annual Financial statement of Sixbar Trading 645 CC for year ending 20 February 2014. 11. History statement of bank transactions in the account of Sixbar Trading 645 CC for the period June 2013 to September 2013. 12. Reconciliation of payments received from E Mart Home Improvement Centre CC by Sixbar Trading 645 CC for the period June 2013 to September 2013. 13. VAT reconciliation statement of E Mart Home Improvement Centre CC for June/July 2013 together with purchases schedule. 14. VAT Reconciliation statement of E Mart Home Improvement Centre CC for June/July 2013 together with purchases schedule.
Volume 2, which was marked Exhibit A2, contained the following documents: 1. VAT returns for E Mart Home Improvement Centre CC for the period end July 2013. 2. VAT returns for E Mart Home Improvement Centre CC for the period end September 2013. 3. VAT statement of account for E Mart Home Improvement Centre CC 1 March 2013 to 28
Mngadi J
February 2014. 4. Trial balance of E Mart Home Improvement Centre CC from 1 March 2013 to 28 February 2014. 5. Annual financial statement of E Mart Home Improvement Centre CC for year ending 28 February 2014. 6. Extract of general ledger for Sixbar trading 645 CC from 1 March 2013 to 28 February 2014. 7. Undated letter from Maitre and Associates. 8. Photographs of building at 1 Moodie Street prior to renovations. 9. Photographs of building at 1 Moodie Street after renovations. 10. Agreement of lease between Sixbar Trading 645 CC and E Mart Home Improvement Centre. Reconciliation of payments made by E Mart Home Improvement Centre CC to Sixbar Trading 645 CC for the period June 2013 to September 2013.
In Exhibit B, there were the following documents in respect of both Sixbar Trading 645 CC and E Mart Home Improvement Centre. 1. SARS VAT statement of account. 2. SARS Income Tax return ITR 14. 3. Supplementary Declaration for Companies or Close Corporations IT14SD. 4. SARS Income tax notice of Assessment ITA34. 5. Statement of Account Assessed Tax ITSA. and the Reconciliation of payments made by E Mart Home Improvement Centre CC to Sixbar Trading 645 CC as well as Standard Bank bank statements of Sixbar Trading 645 CC from no. 122 to 146 (with no. 134 missing)
Bundle marked Exhibit C contains mainly documents relating to developments subsequent to the fire on 2 September 2013. The documents in the bundle those relevant shall be referred to in the summary of the evidence. Exhibit D is the loss adjustor's bundle. It contained reports made by the loss adjustor. In Exhibit B (the Gavin Maître's bundle) it contained for both Sixbar Trading 645 CC and E Mart Home Improvement Centre CC
Mngadi J
the following documents: Annual General Ledger from 1 March 2013 to 28 February 2014; Annual trial balance from 1 March 2013 to 28 February 2014, Annual Financial Statements 28 February 2014 Exhibit E is the defendant's supplementary affidavit.
I shall start by summarising the evidence of Naeem Akthar although Mr Akthar was the second witness for the plaintiff. He testified that he was from Pakistani where he grew up and got his schooling. His language is Urdu which he reads and writes. He came to South Africa in 1997, when he arrived in South Africa he could not speak English. He has acquired some knowledge of English, which he speaks for general conversation, but he cannot read nor write in English. He started as a packer in a hardware store. He left the job and he sold goods to hawkers. He then opened a small shop selling clothes. In 2001, he opened a hardware store in Pinetown in Railway Road in the premises let to him by A K Ismal at a small rental. He used to work with AK Asmal at the hardware store. He owned the hardware store through a close corporation Sixbar Trading 645 CC (Sixbar) of which he was the sole member. He traded under the name Nu Pinetown Builders Suppliers. In 2007, he opened a second hardware store at 14/16 Chapel Street, Pinetown. This store he opened it under a close corporation with the name E Mart Home Improvement Centre (E Mart) in the premises that he had bought. It was situated on the back of Nu Pinetown Builders Suppliers. He remained the sole member of both the close corporations Sixbar and E Mart. He operated the businesses by buying in bulk and selling for cash. He sought suppliers with the best deals and he bought in bulk. He had more than fifty suppliers.
Mngadi J
Mr Akhtar testified that in about June 2012 a property at 1 Moodie Street in Pinetown, which was a factory, was placed on sale. The property was in a corner about 300 to 400 metres from his businesses. He decided to buy the property as an investment. He then renovated the property and he took an insurance through a broker for the premises. He consulted a property letting company Max Prop which advised him and provided him with a report stating the market related rental for the property to be R190 000.00 a month. He referred to a letter in Exhibit A2 from Maxprop dated 20 December 2012. The letter confirmed instructions to find a tenant for the property constituting 173 square metres of office, 1 280 square metres of shops and storage and 804 square metres of yard and parking at a monthly rental of R191 845 excluding VAT. Mr Akthar stated that the agent advised him that potential tenants complained about the parking, he then opened up the parking. The premises were a proper showroom. He testified that before he could find a tenant for the premises A S Ismal told him that he shall not renew his lease which was due to expire in August 2014. He then decided to expand his premises of E Mart. The expansion, which was carried on whilst trading, was continuing meant that E Mart needed a space to store its stock. The premises at 1 Moodie Street were available since he would move to those premises when his lease with Ismal expired. The premises were more suitable in that the renovations of E Mart premises would be completed within a year and the premises were not far to the premises of E Mart. He then decided that E Mart shall lease the premises from Sixbar for a period of a year at a rental of R140 000 per month plus VAT. Mr Akthar testified that he was advised that the lease for tax purposes must be reduced into writing. His staff prepared the lease from a specimen made available. The person who typed the lease wrote the year...
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