Top insurer gets a R40m wigging from ‘startled’ judge
She comes to man’s rescue after Renasa accused him of arson when his factory burned down, and refused to pay him when he won in court
The commercial insurer of the year went to “quite extraordinary lengths” to avoid paying an R18m claim for machines destroyed in a fire.
Renasa accused Christopher Watson of arson at his Cape Town print-finishing company and then stood by as he remortgaged his home, sold his car and borrowed money from his mother in his vain attempts to keep the business going.
But eight years after his Elsies River factory burnt down, a judge has come to Watson’s rescue, ordering Renasa to pay him the R18m, plus 15.5% annual interest backdated to January 2011.
The insurer’s bill will come to just over R40m, and a disgruntled Cape Town high court judge, Judith Cloete, also ordered it to pay several million rand in Watson’s costs.
Renasa, where the chairperson is insurance veteran Don Eriksson, has been named commercial insurer of the year for the past two years by the Financial Intermediaries Association.
“These awards again confirm Renasa’s position among the industry’s leading insurers,” says the company’s website. Elsewhere it boasts about its “swift and efficient” authorisation of claims.
This is the opposite of what Watson experienced when Canterbury Coaters and all its machinery went up in smoke. According to Cloete’s judgment last week, Watson spent R900,000 over seven months trying to keep the company going and retained all his nine staff.
Meanwhile, Renasa “[focused] exclusively on [Watson] as the only suspect of the arson”. It ignored at least seven written pleas for assistance from Watson, including one in which he said he was “staring bankruptcy in the face”, said Cloete.
“On 11 August 2011, [Watson] personally informed [Renasa] that, with much reluctance, he had no option but to close the factory down.”
Watson sued Renasa and won, and he was also victorious in the Supreme Court of Appeal. But pending another hearing on the size of the payout, the company still refused to hand over even the amount it agreed it owed.
“The suggestion put to [Watson] in cross-examination that he ought to have pursued discussions with [Renasa] more assertively is a little startling,” said Cloete.
“After years of litigation and accusation, and a dogged refusal to make any payment whatsoever, it could hardly be expected by [Renasa] that the impecunious plaintiff should be trying to negotiate for some sort of conciliatory makeweight settlement.
“It is notable that [Renasa] has until today not actually paid, or even tendered to pay, what it regards as being its uncontested liability in respect of the indemnity value of the machinery.”
In 2017, Watson accepted a settlement offer from Renasa on the building destroyed in the fire. “Their bullying resulted in me accepting about half of what I should have received,” the 56-year-old told Times Select.
The Piketberg man said he doubted this was the end of the matter. “In light of the way they’ve behaved all along, I wouldn’t be surprised if they took this all the way to the Constitutional Court,” he said.
Renasa is based in Johannesburg and claims to have annual gross premium revenue of R1.5bn.
Its executive director, Brian Martin, said the company had not yet been able to review Cloete’s judgment. Once it had done so it would decide whether to appeal. “What is not in debate, according to the courts, is that this is a case of arson,” he said.
“Renasa is responsible to many stakeholders ... so it is incumbent on it to pursue appropriate investigation and to defend any claim which appears unusual.
“Renasa’s governance structures are well developed and decisions in this regard can certainly never be taken by any one executive but are carefully considered by the senior executive team of Renasa, which includes highly experienced claims specialists.”
Watson said no one had been arrested for the arson attack that destroyed his factory.