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[2006] ZASCA 174
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Drifters Adventure Tours CC v Hircock (602/05) [2006] ZASCA 174; [2007] 1 All SA 133 (SCA); 2007 (2) SA 83 (SCA) (29 September 2006)
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THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
CASE NO
602/2005
In the matter between
DRIFTERS ADVENTURE TOURS
CC Appellant
and
B L HIRCOCK
Respondent
______________________________________________________________
Coram: Zulman, Farlam,
Conradie, Mlambo and Maya JJA
Heard: 4 September 2006
Delivered: 29 September
2006
Summary
:
Interpretation of an exemption clause read with conditions where the
driver of a tour bus was negligent.
Neutral citation: This
judgment may be referred to as
Drifters Adventure Tours v
Hircock
[2006] SCA 130 (RSA)
___________________________________________________________________
JUDGMENT
___________________________________________________________________
ZULMAN JA and CONRADIE JA
[1] This appeal with the
leave of this court is against a decision of Selikowitz J in the Cape
High Court to the effect that an indemnity
clause in a contract
between the parties did not serve to exempt the appellant from
liability to the respondent arising out of injuries
sustained by her.
[2] The appellant is a
tour operator conducting business under the name Drifters. The
respondent currently resides in Maryland, United
States of America.
Gerhard Wildhelm (Wildhelm) was cited as the second defendant in the
court
a quo
. He was employed by the appellant as a driver of a
tour bus. He took no part in the proceedings and is believed to be
resident in
Switzerland.
[3] On 8 August 1999
while the respondent was a passenger on an adventure tour in Namibia
operated by the appellant, Wildhelm, who
was acting in the course and
scope of his employment with the appellant, negligently drove
appellant’s Mercedes Benz Ecoliner
tour bus thereby causing an
accident in which the respondent sustained injuries. The appellant
admitted that the accident was caused
by the negligence of Wildhelm.
It however denied that he acted recklessly or with gross negligence.
As a result, the respondent instituted
action against the appellant
for damages. The appellant defended the action relying on an
indemnity form signed by the respondent
on 24 July 1999 prior to the
commencement of the tour. The terms of the indemnity will be
considered in more detail presently.
[4] At the outset of the
hearing, the court
a quo
, made an order giving effect to an
agreement between the parties in terms of which the enforceability of
the indemnity would be decided
prior to, and separately from, any
other issues in the case. Accordingly, the only issues that were
considered by the court
a quo
were:
(a) Whether the indemnity
admittedly signed by the respondent is enforceable to exempt the
appellant from liability for its employees’
negligence and, if
so,
(b) Whether the indemnity
is enforceable to exempt the appellant from liability arising out of
its employee’s recklessness or
gross negligence in relation to
the accident.
[5] The court
a
quo
decided that, as a matter of
interpretation, the indemnity clause did not protect the appellant
from its employee’s negligence.
Accordingly, it was unnecessary
for the court to consider the argument that the indemnity clause was
illegal and hence a nullity
or unenforceable.
[6] The appellant’s
indemnity form contains the following three sentences on the front of
it in bold capitals:
‘
I HAVE READ AND FULLY
UNDERSTAND AND ACCEPT THE CONDITIONS AND GENERAL INFORMATION AS SET
OUT BY DRIFTERS IN THEIR BROCHURE AND ON
THE REVERSE SIDE OF THIS
BOOKING FORM. I ACKNOWLEDGE THAT IT IS ENTIRELY MY RESPONSIBILITY TO
ENSURE THAT I AM ADEQUATELY INSURED
FOR THE ABOVE VENTURE. I FURTHER
ABSOLVE DRIFTERS, THEIR STAFF AND MANAGEMENT AND AFFILIATES OF ANY
LIABILITY WHATSOEVER, AND REALISE
THAT I UNDERTAKE THE ABOVE VENTURE
ENTIRELY AT MY OWN RISK.’
The ‘conditions and
general information’ referred to in the first sentence are
contained in a document which is on the
reverse side of the form
headed ‘BOOKING CONDITIONS AND GENERAL INFORMATION’. This
latter document deals under appropriate
headings with some 19
subjects including insurance. Of direct relevance to this matter is
the last subject. It reads:
‘
CONDITIONS
Due to the nature of hiking, camping,
touring, driving and the general third-world conditions on our
tour/ventures, DRIFTERS, their
employees, guides and affiliates, do
not accept responsibility for any client or dependant thereof in
respect of any loss, injury,
illness, damage, accident, fatality,
delay or inconvenience experienced from time of departure to time of
return, or subsequent to
date of return, such loss, injury etc
arising out of any such tour/venture organised by DRIFTERS. Should a
tour/venture be cancelled
by DRIFTERS due to weather conditions or
other reasons, it shall either refund full payment or offer a
substitute tour/venture. Should
DRIFTERS have to curtail a
tour/venture for any reason due to weather conditions or other
factors after the time of departure, DRIFTERS
will not be liable for
any form of refund whatsoever, although everything will be done to
complete a tour/venture or to utilize an
alternative arrangement or
venue. All tours are subject to a minimum of 6 pax travelling,
although a tour may still run with fewer,
at the discretion of
DRIFTERS. Should a client decide to curtail a tour for any reason
whatsoever DRIFTERS will not be liable for
any refund whatsoever.’
[7] In the court
a quo
the appellant contended that the indemnity clause exempted it from
its employee’s negligence. The respondent in turn raised
the
following two arguments in reply:
(a) As a matter of
interpretation, the indemnity clause did not exclude liability based
on the appellant’s fault; and
(b) The indemnity was
illegal and hence a nullity or unenforceable for two reasons:
(i) It was contrary to
certain provisions of the Cross Border Road Transportation Act 4 of
1998; and
(ii) It was contrary to
public interest (policy) for the appellant to include in its contract
an indemnity clause which excluded the
appellant’s liability
for damages in circumstances where cross border tour operators, such
as the appellant, take out public
liability indemnity insurance as a
matter of standard practice and such insurance is necessary to ensure
that such tour operates
in the public interest.
[8] The appellant
contends that the court
a
quo’s
decision that the indemnity clause does not exclude the respondent’s
claim based on the appellant’s vicarious liability
for its
employee’s fault is wrong and that the court
a
quo
erred in its interpretation of the indemnity clause for the following
reasons:
(a) As a matter of
linguistic interpretation, the conditions clause does not cut down
the indemnity clause in the manner contended
for by the court
a
quo
.
(b) In interpreting the
clause by applying the
contra
proferentem
rule in circumstances where the clause was not ambiguous;
alternatively, if the clause is ambiguous, the court
a
quo
incorrectly applied the principles underlying the
contra
proferentem
rule in exclusion clause cases to reach the conclusion that the
indemnity clause did not protect the appellant from its employee’s
negligence.
[9] It is common cause
that the appellant bears the onus of establishing, on a balance of
probabilities, that the indemnity clause
is enforceable against the
respondent. It is also so that indemnity provisions in general should
be construed restrictively.
1
The proper approach to the interpretation of indemnity clauses is
succinctly set out by Scott JA in these terms in
Durban’s
Water Wonderland (Pty) Ltd v Botha:
2
‘
The correct approach is well
established. If the language of the disclaimer or exemption clause is
such that it exempts the
proferens
from liability in express and unambiguous terms, effect must be given
to that meaning. If there is ambiguity the language must be
construed
against the
proferens
.
(See
Government of the
Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd
1978 (2) SA 794(A)
at 804C.) But the alternative meaning upon which
reliance is placed to demonstrate the ambiguity must be one to which
the language
is fairly susceptible; it must not be “fanciful”
or “remote” (cf
Canada
Steamship Lines Ltd v Regem
[1952] 1 All ER 305
(PC) at 310C-D
[1952 AC 192].
’
[10] The indemnity form
signed by the respondent is one document consisting of a front
portion and a reverse side. The indemnity clause
relied upon by the
appellant, as previously stated, appears on the front portion of the
document. It is couched in wide terms but
must be read in the context
of the contract as a whole, including its reverse side. This portion
of the document unequivocally states
at its commencement that the
other contracting party has read and fully understands and accepts
the conditions and general information
set out by the appellant in
their brochure and on the reverse side of ‘THIS BOOKING FORM’.
This is clearly a reference
to the heading ‘Indemnity Form’
appearing at the top of the document. The indemnity appears on the
front of the form
just above the signature of the respondent. Despite
the fact that the latter part of the indemnity clause, read on its
own, is wide
enough to exclude liability for negligence (‘any
liability whatsoever’) one is nevertheless driven to refer to
the reverse
side of the document and particularly the conditions
appearing there, in order to interpret the indemnity clause. A close
examination
of the conditions clause on the reverse reveals that it
makes no mention whatsoever of negligent driving by employees of the
appellant.
Instead it exempts the appellant from responsibility
‘in
respect of loss, injury, illness, damage, accident, fatality, delay
or inconvenience experienced from time of departure
to time of
return, or subsequent to date of return, such loss, injury, etc.
arising out of any such tour/venture organised by the
appellant.’
This portion of the conditions is prefaced with the following:
‘
Due to the nature of hiking,
camping, touring, driving and general third-world conditions on our
tour/ventures, DRIFTERS, their employees,
guides and affiliates, do
not accept responsibility for any client or dependant thereof’’.
[11] It is unnecessary on
the particular facts of this case to decide whether there would, in
the absence of the exemption clause,
be absolute liability under the
contract. It is also unnecessary to decide whether the exemption
clause, again on the particular
facts of this case, exempts the
appellant from liability for damage caused by all negligence
regardless of the activity.
[12] What does arise for
decision in this case is whether liability for damages arising from
negligent driving on a public road has
been excluded under the
contract. It is that question to which we now turn.
[13] In case of doubt, an
exemption clause reasonably capable of bearing more than one meaning
is given the interpretation least favourable
to the
proferens
.
The concept of 'driving' in the conditions part of the contract is to
be interpreted with a bias against the
proferens
,
[14] The appellant's
refusal to accept responsibility for 'driving' is predicated upon the
'nature' of the driving. What, a reasonably
astute customer would
wonder, is meant by the 'nature of driving'? She would soon discover
that the expression occurs among other
'adventure' activities, those
that she hopes to enjoy on the tour. If she reads it in the context
of driving over unmade roads or
slippery, steep or otherwise exciting
terrain the expression 'nature of the driving' might well make
perfectly good sense. If it
is read in the context of passenger
transportation on a public road, it makes only imperfect sense. So,
although it is possible to
interpret the expression 'driving' as
referring to any kind of driving anywhere in the country and on any
terrain, it is probably
not the interpretation that a reasonable
reader would give to it and is, in the light of established canons of
interpretation, not
one we should favour.
[15] At best for the
appellant the reference to driving is ambiguous. If it is, it is
helpful to have regard to evidence in aid of
a correct
interpretation. Mr A W Dott, the appellant's founder, was in
examination-in-chief asked to tell the court how the contractual
indemnities came to be formulated. He said:
'. . .operating in the realms in
sub-Saharan Africa, and obviously what we might refer to as wild life
and rough conditions and third
world sort of anomalies, obviously one
is more subject to risk than someone who might be taking a simple
tour through New York, well
maybe that's not a good example, but you
know, in Germany for example. And obviously as the industry has
evolved and I was one of
the pioneers in the industry. . .we came
upon more and more situations which made it untenable to operate and
more and more difficult
to operate. . . So it became common practice
to obviously try and exclude with certain limited indemnities any
absolutely ridiculous
risk which made it impossible to carry on
normal business practice within the region.'
[16] Significantly absent
from Mr Dott's recital of the risks the appellant wishes to exclude
are those inherent in ordinary road
transportation. This is another
pointer in the direction of interpreting the expression 'driving' in
the restricted way we have suggested.
Moreover, road transportation
is dealt with quite differently in the appellant's business set-up.
The appellant is obliged in terms
of the Cross-Border Road
Transportation Act 4 of 1998 to have a permit which requires it to
hold minimum passenger liability insurance.
The court
a
quo
heard evidence that this requirement is
imposed for the good of passengers and generally for ensuring the
health of the tourism industry
and has met with general approbation
from all carriers. Contracting out of this liability altogether would
be so perverse that we
cannot accept that the appellant would have
done so.
[17] The appeal is
dismissed with costs.
____________________________
R H ZULMAN and J H
CONRADIE
JUDGES OF APPEAL
CONCUR: ) FARLAM JA
) MLAMBO JA
) MAYA JA
1
See
Essa
v Divaris
1947 (1) SA
753(A)
;
Afrox Healthcare
Bpk v Strydom
2002 (6) SA
21
(SCA);
Durban’s
Water Wonderland (Pty) Ltd v Botha
1999 (1) SA 982
(SCA);
First
National Bank of SA Ltd v Rosenblum
2001 (4) SA 189
(SCA) and
Johannesburg
Country Club v Stott
2004
(5) SA 511
(SCA).
2
(
Above) at 989 G-J.