Lloyd's Maritime and Commercial Law Quarterly
AVIATION INSURANCE—A RECENT DECISION
R. D. Margo
D.C.L. (McGill); Member of the Georgia Bar.
The reporting of decided cases in the field of insurance serves a far more important function than merely informing the legal profession of developments in the law. It enables members of the insurance industry critically to reappraise their own policy wordings and underwriting practices, and to introduce changes where necessary. This is true of many classes of insurance, even where policies are issued in different countries. It is particularly true of aviation insurance.1
Whether or not it will evoke any response on the part of insurers, the decision of the Supreme Court of South Africa in Rabinowitz & King, N.N.O. v. Ned-Equity Insurance Co. Ltd. and S. A. Aviation Insurance Pool Managers Pty. Ltd.2 raises some interesting issues relating to disclosure and proximate cause. The plaintiffs were the joint executors in the estate of Lionel Brynalyn Tuckett, who died when his Nimbus II glider crashed at Fochville, Transvaal, on Sept. 12, 1976. The first defendant (Ned-Equity) was the insurer of the deceased under a policy of “whole life assurance” in the amount of R.235,000,3 with an additional “reducing term assurance benefit” for R.93,375. The second defendant had insured the deceased under an aviation personal accident policy in an amount of R.300,000. Each of the defendants contended that the death of the deceased was not within the risk insured against, and the first defendant in addition contended that it had lawfully repudiated the policy issued by it. Nicholas, J., in an interesting and lucid judgment, elected to deal first with the question of repudiation, and thereafter with the liability of the respective defendants.
Repudiation
The first defendant based its repudiation on an alleged misrepresentation and non-disclosure relating to the value of certain of the insured’s assets at the time of the application for insurance. It appeared that the insured had been asked, in the proposal form, to furnish information relating to the “value” of his “total assets”. In completing the proposal, he had valued his assets at R. 1,300,000 which was their approximate permanent value. The majority of the assets in question consisted of shares in a
1 Witness, for example, the introduction of the Common North American War Exclusion Clause by United States aviation insurers in response to the decision in Pan American World Airways, Inc. v. Aetna Casualty & Surety Co., [1974] 1 Lloyd’s Rep. 207; affirmed [1975] 1 Lloyd’s Rep. 77; and the improved wording of AVN 1A (the standard aircraft policy in use in the London market) relative to compliance with air navigation and airworthiness orders, in response to Aviation Insurance Co. of Africa Ltd. v. Burton Construction (Pty.) Ltd., 1976 (4) S.A. 769 (A).
2 Case No. 12416/77 (Witwatersrand Local Division). The judgment was delivered on Oct. 19, 1979, and was unreported at the time of writing.
3 At the time of writing, one South African Rand was the approximate equivalent of 53p (U.K.) and U.S. $ 1.23.
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