Civil Engineering January-February 2022 | Vol 30 No 1

Construc t i on and i nsurance law T he booklet, titled ENSafrica Construction ENSurance: recent influential court decisions and what they may mean for your business references judicial decisions made in 2019 and 2020. Although many of these deci- sions originate in the United Kingdom, Australia and Canada, they are worth paying attention to as they may prove to be influential on future decisions made by South African courts. We have selected five topics and pro- vide our expert analysis and commentary in respect of each one. While this is not intended to be a reference work, we do hope that it will be useful to those in the construction and insurance industries. The five topics and the judicial decisions to which they relate serve to demonstrate the significant interconnectedness between the fields of construction and insurance law. The selected topics are: 1. The status of interim payment certifi- cates on cancellation of a construction contract and implications for construc- tion guarantees and guarantee insurers. 2. Coverage implications for insurers in a construction contract in circum- stances where the construction all risks insurance policy and the reinsur- ance policy are not back-to-back. 3. Contractual liability exclusion clauses in liability insurance cover, including construction all risks cover. 4. The rectification of an on-demand construction performance guarantee issued by an insurer and the doctrine of strict compliance. 5. The controversial defective workman- ship exclusion in construction all risks insurance policies. In this article we unpack the first of the topics listed above. TOPIC ONE UNPACKED The status of interim payment certifi- cates on cancellation of a construction contract and implications for construc- tion guarantees and guarantee insurers In a recent 2019 decision of the South African Supreme Court of Appeal (SCA) in Intech Instruments v Transnet Limited t/a South African Port Operations , the court ruled that the cancellation of a construction contract rendered interim or provisional payment certificates, issued in terms of the construction contract, to be of no force and effect. In doing so, the court recognised and fol- lowed a previous decision it made some 32 years ago in the matter of Thomas Construction (Pty) Limited (in liquida- tion) v Grafton Furniture Manufacturers (Pty) Limited . Rob Scott Insurance Practice Group | Executive ENSafrica rscott@ENSafrica.com Zara Sher Insurance Practice Group | Senior Associate ENSafrica zsher@ENSafrica.com Recent influential court decisions and what they may mean for your business ENSafrica has released a booklet on construction insurance topics with reference to judicial decisions made in 2019 and 2020. This article forms part 1 of a series that will unpack the various topics covered in the booklet. 36 January/February 2022  Civil Engineering