Deneys Reitz Case Law Update: "Unintended damage" in the context of Contract Works Policies

INTRODUCTION

This is a matter in which the Supreme Court of Appeal was called upon to interpret the meaning of a contract works policy, more specifically the meaning and scope of the defective design or workmanship exclusion clause within the policy.

Defective design or workmanship exclusion clauses, in the context of contract works policies, are notorious. They have given rise to much debate and argument. A substantial body of case law has developed in relation to these clauses, primarily in England and Australia.

The case law that has developed is not always helpful because of the many different wordings (which are also amended from time to time).

In the decision under review, an opportunity for our Courts to examine the general meaning of such clauses did not present itself – instead, by virtue of what became a stated case and because it was not argued that the clause in question was obscure, uncertain and ambiguous, the clause was determined on a literal approach and in accordance with its plain and ordinary meaning.

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