Van de Wetering Engineering (Pty) Ltd v Regent Insurance Company

Van de Wetering Engineering (Pty) Ltd sponsored a golf day and organised a promotional competition known as a 'trailer-in-one', where a participant would win a trailer valued at R456 000 if a golf ball landed inside a trailer in one shot. Prior to the event, the company took out a Prize Indemnity Insurance Policy with Regent Insurance to cover liability should the prize be won. Before the competition commenced, the managing director, Mr Andre van de Wetering, announced that company employees could participate for fun but were not eligible to win. Mr van de Wetering himself struck the first shot, which bounced and landed inside the trailer. No other participant succeeded. No winner was announced at the prize-giving. After later reviewing the policy and finding no express exclusion of employees, the company decided to award the prize to Mr van de Wetering and submitted a claim to the insurer. The insurer repudiated liability, contending that Mr van de Wetering was ineligible as an employee and that the insured risk had not occurred.

The appeal was dismissed with costs. The order of the High Court relating to reserved costs made on 28 July 2011 was set aside, and the parties were granted leave to approach the High Court for a fresh determination of those costs.

The case confirms that prize indemnity insurance policies must be interpreted together with the rules governing the underlying competition. It reinforces principles of commercial interpretation in insurance law and clarifies that an insured must establish that the insured peril, including all qualifying conditions, has occurred before an insurer’s liability arises.