Santam in unusual bid to join appeal application

IN AN EXTRAORDINARY legal move, South Africa’s largest insurer has effectively called for the postponement of what is expected to be a precedent-setting Supreme Court of Appeal (SCA) battle today to determine whether insurers are liable to pay out businesses for losses due to the Covid-19 lockdown, so that it can join the appeal application.

This comes after the Western Cape High Court last week ruled that Santam should pay its clients Ma-Afrika Hotels and The Stellenbosch Kitchen’s business interruption claims. The judgment ordered the insurer to pay Ma-Afrika for the impact over the entire policy period of 18 months, without limitations.

Santam has served a notice of application for leave to appeal against the judgment.

An earlier judgment ordered Guardrisk to pay its client Café Chameleon’s claim in July, but the insurer appealed against the ruling and the matter is set down to be heard in the SCA today.

Santam’s attorney, Craig Woolley, a director of Norton Rose Fulbright, raised the request with SCA judge Azhar Cachalia in a letter last week, in effect asking for today’s appeal to be postponed so that Santam can join the appeal application.

“Santam’s view is that it would be appropriate for the appeals on both matters (Ma-Afrika – assuming leave to appeal is granted – and Café Chameleon) to be heard together on an expedited basis. It is undesirable that two matters on such similar facts and of such importance to the hospitality and insurance industries be the subject of two judgments of this honourable court handed down several months apart,” Woolley wrote.

He said Santam would file court papers “within a very short time” if leave to appeal was granted.

“We are aware that this correspondence is out of the ordinary … but the timing of the handing down of the Western Cape High Court judgment has left Santam with no option but to approach this honourable court with the aim of achieving some certainty and clarity as soon as possible for the insurance and hospitality industries,” Woolley said in the letter.

However, Ryan Woolley, chief executive of Insurance Claims Africa (ICA), which assisted both Ma Afrika and Café Chameleon in their legal battles against the insurers, said the move was a delaying tactic.

“While ICA recognises Santam’s efforts to expedite its own appeal, there may be no need for a Santam appeal at all as the Guardrisk SCA decision would set precedent on its own,” he said. “It is worth noting that a delay can only benefit insurers. Policyholders’ claims lapse if the claimant is no longer in business. The longer that these tourism and hospitality businesses have to go without policy payments, the more likely it is that they will be unable to survive or preserve the jobs they support.”