About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2010
>>
[2010] ZAWCHC 210
|
|
Coughlan obo Witbooi v Leandra Transport CC (4280/2007) [2010] ZAWCHC 210 (25 October 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN
CASE
NO:4280/2007
In
the matter between:
ADVOCATE
W. COUGHLAN obo
M.H.
WITBOOI
…................................................................
Plaintiff
and
LEANDRA
TRANSPORT CC
….........................................
Defendant
and
SANTAM
LIMITED
…........................................................
Third
Party
JUDGMENT
: 25 OCTOBER 2010
TRAVERSO,
DJP :
[1]
This
claim arises from the tragic incident when a school bus ran out of
control down Kloofnek Road on the slopes of Table Mountain.
Several
children died and/or were seriously injured.
[2]
The
defendant in this matter is a member of the Southern African Bus
Operators Association and as such was afforded insurance cover
by the
third party
("Santam"),
[3]
In
essence this case is confined to the interpretation of the contract
of insurance in determining whether Santam is liable to compensate
the defendant for an indemnity on the basis of a general policy
exception contained in the insurance policy. Santam rejected the
defendants claim for an indemnity on the basis that the bus was not
roadworthy at the time of the accident. It relied on the following
exception:
"3.
Roadworthy
The
insurer shall not be liable for any accident injury loss damage or
liability whilst the vehicle is being used in a condition
which does
not comply with the provisions and regulations of the
National Road
Traffic Act 93 of 1996
, the National Road Traffic Regulations 2000
and/or any other applicable or subsequent legislation and/or
regulations providing
for the use of motor vehicles on a public
roadway in South Africa or any similar legislation which applies to
the countries specified
as the territorial limits in the schedule."
Read
with the following clause:
"6.
Prevention of loss
The
insured shall take all reasonable steps and precautions to prevent
accidents or losses arising. If any vehicle which is the
subject of a
claim in terms of this policy is in an unroadworthy condition at the
time of the occurrence giving rise to a claim
it will be deemed that
this condition has not been complied with and no benefit will be
payable."
[4]
It
is well-established that the ordinary rules relating to the
interpretation of contracts must be applied in construing a policy
of
insurance. Smalberger, JA commented on the rules of interpretation of
insurance contracts as follows in
Fedqen
Insurance Limited v. Leyds
,
1995(3) SA 33 (AD) at 38 A-E:
"The
ordinary rules relating to the interpretation of contracts must be
applied in construing a policy of insurance. A court
must therefore
endeavour to ascertain the intention of the parties. Such intention
is, in the first instance, to be gathered from
the language used
which, if clear, must be given effect to. This involves giving the
words used their plain, ordinary and popular
meaning unless the
context indicates otherwise (Scottish Union & National Insurance
Co Ltd v Native Recruiting Corporation
Ltd
1934 AD 458
at 464-5). Any
provision which purports to place a limitation upon a clearly
expressed obligation to indemnify must be restrictively
interpreted
(Auto Protection Insurance Co Ltd v Hanmer-Strudwick 1964(1) SA 349
(A) at 354 C-D); for it is the insurer's duty to
make clear what
particular risks it wishes to exclude (French Hairdressing Saloons
Ltd v National Employers Mutual General Insurance
Association Ltd
1931 AD 60
at 65; Auto Protection Insurance Co Ltd v Hanmer-Strudwick
(supra at
354
D-E). A policy normally evidences the contract and an insured's
obligation, and the extent to which an insurer's liability is
limited, must be plainly spelt out In the event of a real ambiguity
the contra proferentem rule, which requires a written document
to be
construed against the person who drew it up, would operate against
Fedgen as drafter of the policy (Kliptown Clothing Industries
(Pty)
Ltd v Marine and Trade Insurance C of SA Ltd 1961(1) SA 103 (A) at
108 C)."
(See
too
African
Products (Pty) Ltd v. AIG South Africa Limited
.
2009(3) SA 473 (SCA) at 478 D-F.)
[5]
In
applying these principles to the contract under consideration the
following aspects of the policy exception are vital:
(a)
The exclusion applies in the event of the vehicle being
used
whilst
in
a condition which does not comply with the provisions and regulations
of the
National Road Traffic Act, the
Regulations and any other
applicable or subsequent legislation and/or
Regulations
providing for the use of motor vehicles on a public roadway in South
Africa.
(b)
General policy condition number 6 excludes liability in the event of
a vehicle being in an unroadworthy condition at the time
of the
occurrence giving rise to a claim.
[6]
On behalf of the defendant it was argued that the aforegoing clauses
are vague and that therefore the
contra
preferentem
rule
should be applied when interpreting this agreement.
[7]
A
Court will always give effect to the clear terms restricting the
insurer's liability in the contract. It must however be borne
in mind
that an insurance contract is a contract to indemnify a person
against loss and if vague language is used in a condition
or
exception of risk the Court must give reasonable meaning to such
vague language, bearing in mind the object of the agreement.
(See
Scottish
Union & National Insurance Company Limited v. Native Recruiting
Corporation Limited
.
1934 (AD) 458 at 464.)
[8]
Generally speaking, policy exclusions which merely prescribe the
"roadworthiness"
of
vehicles, do not necessarily mean that the vehicles have to comply
with statutory provisions governing roadworthiness. In this
regard
see
Botha's
Trucking v. Global Insurance Company Limited
.
1999(3) SA 378 (T). In that matter the relevant policy exception
simply provided that:
"If
the insured vehicle at the time of any accident giving rise to a
claim in terms of this policy is found to be in a state
or condition
which is deemed not roadworthy then all benefit under this policy
shall be forfeited."
[10]
In
that case Fabricius, AJ stressed once again that any clause in an
insurance contract which places a limitation upon the obligation
to
indemnify must be interpreted restrictively and that the
onus
rests
on the insurer invoking the condition to prove the breach upon which
he relies. He also accepted the long established principle
that it is
the duty of the insurer to make clear what particular risks he wishes
to exclude. Applying these principles he had the
following to say
about the exclusionary clause at 383 D:
"The
word 'deemed
9
in
ciause 4 can in that context only mean 'regarded' or 'accepted'. The
word 'deemed' in this context can certainly not mean that
the vehicle
can be deemed not to be roadworthy although it is in fact roadworthy.
See Ter Beek v United Resources CC and Another
1997 (3) SA 315
(C) at
3301-331 E.
Accordingly,
can the relevant vehicle be regarded as not roadworthy? There is in
my view no reason why the term 'roadworthy' should
be interpreted
in
vacuo
or
within the ambit of the Road Traffic Act of 1989. Had the insurer
intended this conclusion, it could easily have done so.
'Roadworthy'
in the present context can in my view only mean 'fit for the road' or
'worthy for the road'. It means, in other words,
that it must be in a
suitable condition for using on the road."
[11]
However,
in the matter presently under consideration the insurer specifically
stipulated that it would not be liable if the vehicle
is used whilst
it does not comply with the prescripts of the Act, Regulations or
other similar legislation. The term
"roadworthf
will
therefore, in my view, have to be interpreted within the ambit of the
Road Traffic Act and other legislation referred to in
clause
3.
[12]
It
was common cause between the experts that the vehicle did not comply
with the aforesaid prescripts in certain respects, and Mr.
Swan, who
testified as an expert for the defendant, conceded that the vehicle
was, having regard to the relevant provisions of
the Act and other
legislation, not roadworthy. So for example certain washers and
spacers were missing on the rear axle, the brake
lining in one of the
brake assemblies had worn down to the point that there was metal to
metal contact between the holding bolts
and the brake drum
;
there
was a rod missing from the rear airbag suspension system, which could
potentially have compromised the stability of the vehicle.
[13]
The
statutory scheme referred to in clause 3 consists not only of the Act
and the Regulations but of any other applicable legislation
and/or
Regulations providing for the use of motor vehicles. The clause
therefore introduces an objective standard with which vehicles
insured thereunder had to comply. Regulation 147, and more
particularly sub-Regulations (1) and (6) makes it plain, that
compliance
with the roadworthiness criteria applies
at
all times
,
not merely at the time of the application for, and issuing of, a
roadworthy certificate.
[14]
Once
an objective, external standard has been introduced to a policy
exclusion, non-compliance therewith will be sufficient to trigger
the
exclusion, even if such noncompliance did not cause the loss or
damage complained of.
[15]
In
this regard see
Mutual
& Federal Insurance Limited v. Gouveia
,
2003(4) SA 53 SCA; and
Santam
Beperk v. De Wet Boerderv & Transport
.
2007(3) SA 358 C.
[16]
In
Gouveia
(supra)
an
exclusionary clause which provided that if damage occurred while the
vehicle was driven by a person who did not have a valid
licence the
insurer would not be liable was considered. In the
Gouveia
matter
an unlicensed driver was hijacked and accordingly it was contended
that the fact that the driver was unlicensed, had no causal
connection to the damage arising out of the hijacking and therefore
the exclusionary clause did not find application. On appeal,
Mthiyane, JA (Harms et Farlam, JJA concurring) said the following at
57 E - H:
"[10]
There can be no question that, if the ordinary meaning of the words
in the exception clause is given effect to, the plaintiff
and Cumbe
fell squarely within the terms of the exception clause. Reading
causation into the exception clause is not justified
by its wording.
I agree with the submission that such an approach may have the effect
that even in the case of an accident involving
an unlicensed driver
the insurer would still not be able to rely on the exception clause,
because it would have to prove, not only
the absence of the licence,
but also that the lack thereof caused the accident. The practical
effect would be that the company
would be exempted only if the
unlicensed driver's lack of skill in driving the vehicle caused the
accident That would mean that
not only causation but also negligence
on such a driver's part is required and that, clearly, is not the
intention conveyed in
the clause. It is true that the exception
clause in casu must be restrictively interpreted but equally true is
the fact that the
ordinary meaning of the words must be given effect
to."
[17]
In
De
Wet Boerderv & Transport
(supra),
a
similar exclusionary clause was considered. In that case the driver
had not been issued with a professional driver's licence as
required
by
Section 32(1)
of the
National Road Traffic Act, No. 93 of 1996
. It
was however common cause that he had previously been issued with such
a licence but that it had expired due to the effluxion
of time, and
that he was at the time of the damage the holder of a so-called Code
14 driver's licence. The Court of first instance
(Allie, J)
accordingly
found:
"Mr.
Makhubedu was undoubtedly in contravention of
s 32
at the time of the
collision. He was however for all intents and purposes licensed to
drive the insured vehicle at the time of
the collision."
She
accordingly found that, because the driver was competent to drive a
vehicle, and applying the
contra
proferentem
rule,
he did not fall within the ambit of the exclusionary rule.
On
appeal, the Full Bench (per Thring, J, Cleaver et Dlodlo, JJ
concurring) said the following in this regard:
"Weliswaar
het die bestuurder op die getuienis aan al die vereistes voldoen vir
die uitreik aan horn van 'n nuwe PBP, en sou
die uitreiking daarvan
'n formaliteit gewees het. Dit maak horn egter nie 'n persoon wat
'gelisensieer is om sodanige voertuig
te bestuur nie'. Op die gewone
betekenis van die woord 'gelisensieer' kon hy dit eers geword bet
nadat die PBP aan horn uitgereik
was, want tot dan kan nie gese word
dat 'n lisensie of verlof aan horn toegeken is of dat vergunning aan
horn gegee is om die betrokke
voertuie op 'n openbare pad te bestuur
nie (HAT omskrywing van 'lisensieer' en 'lisensie'): hy het dus nie
aan die vereiste van
spesifieke uitsondering 1(c)(ii) voldoen nie,
naamlik, dat hy 'gelisensieer' moet wees om die betrokke voertuie te
bestuur.
Myns
insiens is die tersaaklike woorde wat die partye in die polis gebruik
het duidelik en ondubbelsinnig. Daar is geen rede waarom
hulle nie
hulle gewone, alledaagse betekenis in die polis moet dra nie, of
waarom hulpmiddels soos die contra proferentem-reel
ingespan moet
word, wat slegs in geval van dubbelsinnigheid of onduidelikheid van
toepassing is.
Die
intellektuele sprong wat die Hof a quo van die woord 'gelisensieer'
na die begrip 'competent' gemaak het is dus na my oordeel
een wat nie
behoorlik gemaak kon word nie. Dit volg dat die geleerde
Verhoorregter myns insiens gefouteer het toe sy dit gemaak
het"
[18]
In
my view the same approach should be adopted in interpreting the
clause under consideration.
[19]
Mr.
De Vries argued that the clause is vague because a literal
interpretation may lead to absurd results. Therefore he argued that
the Court should interpret the clause strictly and in the result in
favour of the defendant because it is common cause that the
vehicle
had been issued, some months prior to the collision, with a
roadworthy clearance certificate. There are two aspects which
militate against this argument. The clause makes clear provision that
Santam will not be liable if the vehicle is not roadworthy
at the
time when the loss or damage occurs. If the insurer wanted to
stipulate that the exclusion would only take effect if the
vehicle
has not been issued with a roadworthy certificate, it could have done
so. Instead it provided for an objective fact to
be the determining
factor. The Court is therefore obliged to interpret the clause in
terms of the accepted cannons of interpretation
and give the words
their literal meaning. I therefore find that Santam has discharged
the
onus
to
show that by virtue of the exclusionary clause it is not liable to
indemnify the defendant
[20]
In
the circumstances I make the following order:
"The
defendant's claim against the Third Party is dismissed with costs."
traverso,
djp