Regent Insurance Company Ltd v King’s Property Development (Pty) Ltd t/a King’s Prop

King’s Property Development (Pty) Ltd owned premises at 8 Press Avenue, Crown Mines, Johannesburg. In March 2010 it obtained insurance cover from Regent Insurance Company Ltd under a Multimark policy, including fire damage and loss of rental. When applying for cover, King’s Property, through its broker, did not disclose that the premises were tenanted by Elite Fibre Gauteng CC, a business manufacturing truck and trailer bodies using highly flammable materials such as fibreglass and resin. On 24 May 2010 the premises were destroyed by fire caused by Elite Fibre’s employees during manufacturing activities. Regent rejected King’s Property’s claim for repair costs and loss of rental, alleging material non-disclosure under the Short-Term Insurance Act 53 of 1998. The High Court upheld the claim on the basis that Regent was estopped from relying on non-disclosure because it had failed to conduct a requested survey. Regent appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the North Gauteng High Court was set aside and replaced with an order dismissing King’s Property’s claim with costs, except for costs occasioned by Regent’s applications for leave to amend its rejoinder.

The case confirms the application of section 53(1) of the Short-Term Insurance Act to both misrepresentation and non-disclosure and clarifies that the test for materiality is objective, while inducement remains subjective. It reinforces the insured’s duty to disclose material facts relating to the nature of the risk and affirms that requesting a survey does not absolve an insured from that duty. The judgment is an important authority on material non-disclosure and inducement in South African insurance law.