In this recent Australian judgment the appeal court said:

“The contra proferentem principle is a rule of last resort. The rule acknowledges that, in cases of ambiguity, a liberal approach may be adopted in the construction of an insurance contract. However, it is preferable that the court should struggle with the words used as applied to the circumstances of the case to reach a conclusion by reference to the language and logic of the instrument rather than by using mechanical formulae. In any case, even when applying the contra proferentem rule, the court will not pervert the meaning of clear language of the insurance contract.”

These same principles should be applied in South African law.

First published by:Financial Institutions Legal Snapshot