On 14 March 2019, the Supreme Court of Appeal
(SCA) dismissed an appeal by Centriq Insurance Company Ltd
(Centriq) against a ruling of the Free State High Court holding
liable a financial advisor under a professional indemnity insurance
policy.
The SCA held that Centriq could not rely on an exclusion in the
policy that was at odds with its purpose, which was to indemnify a
financial advisor for breach in connection with negligent financial
advice.
The financial advisor, Mr Jose Francisco Castro (the insured), had
advised a widow, Mrs Marisa Vogel Oosthuizen (Oosthuizen), to
invest the proceeds of her deceased husband's policy in an
amount of ZAR2 million in Sharemax Investments (Pty) Ltd (Sharemax)
in a property development scheme known as "The Villa Retail
Parks Holding 2". The villa was a yet to be completed shopping
complex, a fact that the insured did not draw to Oosthuizen's
attention. The development failed following a Reserve Bank
investigation, which
