Case summary written by Tayla Bruce and checked by Jordan Dias
Background:
During March 2013, Anabella Resources CC (“the Appellant”) and Genric Insurance Company Limited (“the Respondent”) entered into an insurance agreement (“the Agreement”), in terms whereof the Respondent undertook to indemnify the Appellant for loss or damage which it suffered in the event of the occurrence of an indemnifiable event.
The Appellant traded in gold, cash and diamonds from its business premises located in Johannesburg. On 26 January 2017, Mr. Hadife, the Appellant’s financial manager, was accosted by three armed men that threatened him with a firearm and forcefully removed him from his vehicle whilst on his way to work. Mr. Hadife was forced into another vehicle and was driven to an unknown destination where he was held captive. Mr. Hadife was threatened that he would be killed unless he contacted the Appellant’s manager, Ms. Mathebula, and instructed her to remove R2,400,00.00 from the Appellant’s safe, place it in two boxes and instruct Mr. Phakoago, an employee of the Appellant, to give the boxes to a man in a silver BMW, in the parking lot of the Appellant’s premises (“the Event”).
Notably, it was standard practice for Mr. Hadife to gain access to the Appellant’s safe by requesting (either verbally, telephonically or via WhatsApp voice note) Ms. Mathebula to open the safe and remove what he required. Mr. Hadife would also request access to the Appellant’s safe and instruct Ms. Mathebula to arrange that large amounts of cash were handed over to customers in the parking lot of the Appellant’s premises. This was regarded as acceptable and was the standard manner in which he obtained access to cash within the safe. Accordingly, neither Ms. Mathebula nor Mr. Phakoago deemed Mr. Hadife’s instructions out of the ordinary.
Only after Mr. Hadife was released by his captors, and Mr. Phakogo had handed over the money as instructed, was it explained that the money had been taken unlawfully. The Appellant claimed indemnification from the Respondent, in the amount of R2,400,00.00, together with interest and costs thereon, in that the conduct of the wrongdoers during the Event constituted theft and/or armed robbery, amounting to an indemnifiable event. The Respondent rejected the Appellant’s claim.
In determining whether the Event constituted an “indemnifiable event”, as contemplated in the terms and conditions of the Agreement, the court had to consider whether the wording of the Agreement limited indemnifiable events to events which had to take place at the Appellant’s premises or whether an indemnifiable event could incorporate events which occurred both on and off the Appellant’s premises.
The relevant terms of the Agreement provided that “the cover was limited to the risk of fire, accidental damage, hijacking, theft and armed robbery whilst the property was in the custody and care of the insured and/or its authorised employee…”
Whilst the Agreement did not provide a definition for armed robbery, theft and hijacking were defined as “the seizure of the insured property whilst stored and secured on the premises… where such seizure is accompanied by unlawful removal; of the insured property; or accomplished by means of violence or threat of violence on or against the person or persons who are employed by the insured or the insured whom, at the time of such seizure are in actual lawful control of such insured property.”
The court a quo held that the violence or threats thereof, had to be perpetrated at the premises from which the property was removed, and against an employee who was in “actual control” of the property at the time of removal of the property from the premises. Accordingly, the court a quo denied that the Respondent was liable to indemnify the Appellant.
Court held
Given the absence of a definition of ‘armed robbery’ in the Agreement, the Gauteng Local Division of the High Court, held at Johannesburg (“the Court”), applied the common law definition thereof and summarised the crime briefly as “theft by violence”. The Court held that the common law definition of robbery is not place specific and the force applied to the victim need not be applied in the same place as the place where the taking of the property occurs. There need only be a link between the application of force and the theft. Further, that the force may be exercised remotely, away from the place where the goods are removed.
Moreover, the definition of ‘theft and hijacking’ required that the unlawful seizing of the property, and the violence used to effect the seizing, both had to occur at the premises where the property was located, alternatively that the seizing had to be achieved by way of violence against an employee of the Appellant who was in “actual lawful control” of the property at the time of seizure.
The alternative did not require that the violence occur at the premises from where the seizing of the property occurred, however, it did require that the employee victim be in “actual lawful control” of the property at the time of seizing. The Court referred to “actual control” as “effective control”.
Accordingly, the Court held that Mr. Hadife retained effective control or “actual lawful control” of the safe in which the cash was secured, albeit remotely.
In conclusion, the Event constituted armed robbery and/or theft or hijacking as defined for purposes of indemnification under the Agreement. The Respondent was thus liable to indemnify the Appellant for its losses suffered.
The Court upheld the appeal with costs and set aside the order of the court a quo.
Value
There is an obligation, on the part of the insurer, to give certainty to the risks it wishes to exclude from its indemnification. Absent such certainty, the terms of the Agreement will be applied in favour of the insured, in accordance with the contra proferentem rule (in terms of which a written document is to be construed against the person who drew it up, in instances of uncertainty or ambiguity).
Meta Description
Whether the wording of an insurance policy limited indemnifiable events to events, the components of which all had to take place at the premises of the insured, or whether an indemnifiable event could incorporate events, some of which occurred on the premises of the insured and some of which occurred off the insured’s premises.
Focus Keywords
Insurance, Indemnifiable Event, Insurance Policy, Armed Robbery, Theft, Hijacking, Contra Proferentem Rule, Unlawful Seizure, Use of Force, Effective Control, Policy Wording.
