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Santam fails to get Guardrisk’s Café Chameleon appeal postponed

Judgment reserved in landmark business interruption insurance case, but decision expected before year end.
Image: Moneyweb

Despite a last-minute request by Santam’s lawyers to have Guardrisk’s Supreme Court of Appeal (SCA) Covid-19-related business interruption insurance case against Café Chameleon postponed, the hearing went ahead in Bloemfontein on Monday.

The call for a postponement by Santam – South Africa’s largest short-term insurer – was part of a new move to try to join the landmark appeal of its competitor.

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Cape café’s ‘precedent setting’ business interruption insurance victory

Guardrisk, which is a subsidiary of JSE-listed Momentum Metropolitan Holdings, did not object to Santam’s request for a postponement.

The two industry players now seem to be banding together in their fight for legal certainty around whether short-term insurers are liable to pay-out business interruption losses linked to the pandemic and related lockdowns.

On Monday, however, the SCA effectively refused Santam’s postponement request. Guardrisk’s appeal hearing was heard and the SCA reserved judgment on the matter. A decision is expected before the end of the year.

Santam’s move to back the Guardrisk appeal comes after it lost its own business interruption insurance battle last week (on November 17), brought before the Western Cape High Court by its clients Ma-Afrika Hotels and Stellenbosch Kitchen. The group plans to appeal the Ma-Afrika ruling at the SCA.

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Santam to appeal Covid-19 ruling

Following the loss Santam’s lawyers on the case, Norton Rose Fulbright, sent a letter to SCA Judge Azhar Cachalia on November 19, requesting a postponement of the Guardrisk appeal. On the same day, Guardrisk’s lawyers on the Café Chameleon case, Clyde & Co, also sent a letter to Judge Cachalia saying that it did not object to a postponement of the appeal.

“The letters went directly to the SCA,” Café Chameleon’s lawyer Ren Dunster tells Moneyweb.

“It seems the letters were not entertained by the SCA. Guardrisk’s appeal hearing went ahead and was completed [on Monday]…. Judgment was reserved and the SCA undertook to try to give a ruling on the matter before Christmas,” he adds.

“I am not surprised by Santam’s move, as the industry is very anxious about the results [of Guardrisk’s appeal]… We are hoping that it will be resolved before the end of the year and are confident in our case,” says Dunster.

Norton Rose Fulbright’s letter to Judge Cachalia called for a joint hearing of the Café Chameleon and Ma-Afrika appeals.

“Whilst there are small differences in the policy wordings in both matters, the issues being dealt with are very similar,” it points out.

“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,” it said.

Read: Santam clarifies Covid-19 position on business interruption cover

“Santam, if and when leave to appeal is granted, will be in the position to file the court record within a very short time and to file heads of argument in whatever shortened period of time this honourable court may suggest and to argue the consolidated appeals as soon as possible as directed by this honourable court,” it added.

“We are aware that this correspondence is out of the ordinary… We request this honourable court’s and all the parties’ indulgence, 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 with regard to the issues before this court,” it said.

In its letter to Judge Cachalia, Clyde & Co said: “The issues that arise in the Café Chameleon appeal are important not only to the parties to the appeal, but also to a great many other insureds and insurers.”


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It also noted the Santam/Ma-Afrika judgment, which was before a full bench of the Western Cape High Court.

“Guardrisk believes that it is in the interests of justice that parties with an interest in an issue should be heard. Furthermore, additional arguments, which may have a different perspective, may assist the court,” Clyde & Co said.

“For the reasons set out above Guardrisk does not object to a postponement of the appeal and will make itself available on any further date that the court may direct,” it added.

Public loss adjustment firm Insurance Claims Africa (ICA), which has joined forces with Ma-Afrika Hotels in its litigation against Santam, strongly opposed Santam and Guardrisk’s attempt to delay the Café Chameleon SCA hearing.

Read: Business interrupted, but insurers don’t want to pay

The group, which is representing some 750 clients on business interruption insurance claims linked to the Covid-19 economic fallout, recently also joined Café Chameleon in its legal battle against Guardrisk .

“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 [a] precedent on its own,” said ICA CEO Ryan Woolley.

“A hearing and judgement in the Guardrisk appeal, will provide the much needed legal certainty and may, on Santam’s attorneys’ own version, obviate the need for an appeal in the Santam application and many of the other pending applications and actions related to the business interruption insurance matter,” he noted.

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So these two insurance companies are playing the long game? You may win your case eventually but confidence in your company will have waned, just do the right thing and pay up people.

If you go out of business, your policy lapses, because one of the parties to the contract no longer exists. This is their long game – delaying things long enough so the establishment goes bust. They’re just all heart, these sharks.

Siphoning off money on a monthly basis, yet steadfastly refusing to do anything in return. Rings a bell.

Insurance, good and INproper !!!

The slogan they must have on the tv

Insurance, poor and dodgy, and a yellow umbrella full of huge holes, more like.

SCA is unfortunately tainted with State capture and mediocrity in the quality of the judgements.

My (quick) reading of the Ma-Afrika v Santam judgement left me with the impression that Santam will have a hard time on appeal if leave is granted.

End of comments.





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