Skilya Property Investments (Pty) Ltd v Lloyds of London Underwriting

• Jurisdiction: South Africa
• Citation: 2002 (3) SA 765 (T)

Skilya Property Investments (Pty) Ltd v Lloyds of London Underwriting
2002 (3) SA 765 (T)

2002 (3) SA p765

Citation	2002 (3) SA 765 (T)
Case No	35243/99
Court	Transvaal Provincial Division
Judge	Southwood J
Heard	September 14, 2001; September 18, 2001
Judgment	November 28, 2001
Counsel	A Subel SC (with him P T Rood) for the plaintiff.; W H Trengove SC (with him C E Watt-Pringle) for the defendants.

Flynote : Sleutelwoorde E

Insurance — Liability of insurer — Liability exclusion clause — Insured claiming payment of value of aircraft seized by F Mozambican customs authorities in terms of policy underwritten by insurer — Insurer averring that, as it appeared that aircraft seized while smuggling cigarettes into Mozambique, it was not liable in terms of exclusion clause contained in policy related to policy held by insured — Whether exclusion clause applicable — Most plausible inference from facts that aircraft used in conspiracy to smuggle cigarettes into G Mozambique — Clear that two policies to be read together but insured's policy lacking specific reference to inclusion of exclusions contained in other policy — Insured's policy independent policy and language thereof indicating that parties alive to difference between it and other policy — Exclusion contained in second policy not applicable to H insured's policy — Even if exclusionary clause applicable, to be restrictively interpreted — Aircraft used to convey cigarettes and such conveyance in itself not illegal as cigarettes bought for export, lawful air waybill issued and South African Customs clearing cigarettes for export — If cigarettes to be introduced to Mozambique unlawfully, such to be done independently of actual conveyance of cigarettes to Mozambique — At time aircraft seized, conspirators having abandoned I their plan to introduce cigarettes into Mozambique unlawfully — Even if exclusionary clause applying to matter, not serving as defence to insured's claim.

Evidence — Production and admission of — Hearsay evidence — Admission of in terms of s 3(1)(c) of Law of Evidence Amendment Act 45 of J

2002 (3) SA p766

1988 — Section requiring court, in exercise of its discretion to admit hearsay evidence, to have regard to collective and interrelated A effect of all considerations set out therein as well as any other factor which, in opinion of court, should be taken into account — Evidence sought to be admitted relating to alleged smuggling conspiracy — Evidence relating to facta probantia of matter and, although circumstantial, tending to support version of conspiracy B to smuggle cigarettes — All factors listed in s 3(1)(c) considered in relation to particular evidence sought to be included — Accepting probative value of statements to be entered into evidence and that they could be accepted as reliable, statements could assist Court in arriving at correct decision on issue in respect of which they were tendered — Evidence received into evidence in terms of s 3(1)(c). C

Evidence — Foreign law — Proof of — Judicial notice in terms of s 1(1) of Law of Evidence Amendment Act 45 of 1988 — Whether applicable — In order to prove that conduct in instant matter unlawful, defendants having to prove applicable law in Mozambique at time of incident — Not case where Court could take judicial notice of law as such could not be ascertained readily and with sufficient certainty — Necessary for D defendants to prove law by means of expert evidence — Where foreign law statutory in nature, party seeking to rely thereon to place statute before Court — Defendants' expert witness properly qualified to deliver expert opinion on subject and his evidence reliable — On strength of expert witness' testimony, defendants proving law they relying on applicable and not unconstitutional. E

Evidence — Documentary evidence — Admissibility — If requirements of s 34(1) of Civil Proceedings Evidence Act 25 of 1965 satisfied, Court having no discretion to exclude document but obliged to admit it — Test for when person 'interested' in terms of s 34(3) of Act a narrow one, indicating material or real or direct interest — Interest itself, however, not having to be so narrowly interpreted as to exclude F anything which would not have allowed that party to either join in proceedings or be joined as party — Interest not limited to mere financial interest but could also include personal interest, provided such not too far removed — In circumstances not found that requirements of s 34(1) satisfied and documents accordingly inadmissible — Documents G in any event inadmissible in terms of s 34(3) of Act as they were made for purposes of proceedings which customs officials intending to bring against parties concerned.

Evidence — Presumptions and inferences — Plaintiff invoking circumstantial evidence — Inference to be distinguished from speculation and to be based on properly proved objective facts — Inference to be H drawn further to be consistent with all proved facts; if this not so, inference not to be drawn — Where more than one inference possible on objectively proved facts, Court could, by balancing probabilities, select conclusion which seemed to be more natural or plausible, in sense of acceptable, credible or suitable, conclusion from among several conceivable ones, even though that conclusion not necessarily I only reasonable one.

Damages — Special damages — Award in foreign currency — South African Court can give judgment, including judgment for delictual damages, in foreign currency — Court exercising this power where loss suffered by plaintiff suffered in foreign currency — Award can be satisfied in South J

2002 (3) SA p767

Africa by payment in foreign currency or of its rand equivalent on date A of payment — Claim in instant matter insurance claim and not delictual claim but parties agreeing on value for item insured expressed in US dollars and that accordingly currency in which plaintiff having suffered loss — Plaintiff entitled to receive mora interest at rate permitted by law — Plaintiff entitled to claim and be awarded sum, irrespective of any fluctuations in relative value of US dollar B and South African rand, with interest thereon calculated at rate of 15,5% from date of repudiation of claim to date of payment.

Headnote : Kopnota

The plaintiff claimed payment of US$1 800 000 and R215 000 from the defendants pursuant to a Lloyds Aviation Hull 'War and Allied C Perils' Policy (war policy) in terms of which the defendants had insured the plaintiff against loss or damage to its aircraft caused by the risks specified in the policy. US$1 800 000 was the agreed value of the aircraft in terms of the war policy whereas R215 000 was the agreed expenditure incurred by the plaintiff in terms of that policy. D

The circumstances which led to the plaintiff's claim centred around the detention of the aircraft at Beira Airport in Mozambique on the suspicion that it was being used in a smuggling operation. The aircraft had been leased by a Kenyan company, Trackmark, from the aircraft operator, PAS, for an indefinite period for the purpose of delivering humanitarian relief supplies in Sudan. The aircraft needed to be flown to Nairobi for this purpose. A few days before the aircraft was due to E leave, however, a client of PAS, V, approached PAS with a request that the aircraft convey cigarettes to Beira. PAS agreed to do this. The aircraft flew from Lanseria Airport, Gauteng, to Beira Airport on 22 July 1998, conveying 250 cases of cigarettes weighing 4 018kg to a consignee in Beira. The aircraft arrived at Beira Airport at about 18:51 local time on 22 July 1998 and was to depart at 06:10 local F time on 23 July 1998. The cargo was, however, not offloaded and no attempt was made to offload the cigarettes. While the crew was preparing for take off, Mozambican customs officers boarded the aircraft. It was alleged that the aircraft was being used to smuggle cigarettes into Mozambique without the payment of customs duties and the aircraft was detained in order to allow further investigation. A customs tribunal later ordered that the aircraft remain at Beira G Airport, where it still was at the time of the trial. All attempts made by the owner and operator of the aircraft to secure its release were unsuccessful.

The relevant risk relied on by the plaintiff was described in s 1(e) of the war policy as the 'confiscation, nationalisation, seizure, restraint, detention, appropriation, H requisition for title or use by or under the order of any government (whether civil, military or de facto) or public or local authority'. The defendants accepted that the Mozambican Government had seized the aircraft within the meaning of s 1(e) but their main defence was that the claims were excluded by the provisions of clause 1 of s IV of another policy in terms of which the plaintiff had been insured, ie the Hull All Risks policy (hull policy). I The war policy contained a number of references to the hull policy and incorporated some of its provisions by reference, providing, in s 4(1) thereof, that the policy was subject to the warranties, terms and conditions as were contained in or may be added to the assured's Hull 'All Risks' Policy. The clause relied on by the defendants provided that the policy did not apply while the aircraft was being used for illegal purposes. J

2002 (3) SA p768

It was alleged that, as the aircraft was being used to smuggle cigarettes at the time it was detained, the A exclusion provided for applied, exempting the defendants from liability.

The defendants bore the onus of establishing their defence. They had no direct evidence to establish the existence of the alleged smuggling conspiracy or to prove that the purpose of the flight to Beira was to convey cigarettes to Mozambique without payment of customs...