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[2014] ZASCA 193
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Visser v 1 Life Direct Insurance Limited (1005/13) [2014] ZASCA 193; 2015 (3) SA 69 (SCA) (28 November 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
NOT
REPORTABLE
Case
No: 1005/13
In
the matter between:
RUTH
CHRISTINE
VISSER
..........................................................................................
APPELLANT
and
1
LIFE DIRECT INSURANCE
LIMITED
..................................................................
RESPONDENT
Neutral
citation:
Visser v 1 Life Direct
Insurance Limited
(1005/13)
[2014]
ZASCA 193
(28 November 2014).
Coram:
Cachalia, Willis, Swain JJA and Fourie AJA
Heard:
21 November 2014
Delivered:
28 November 2014
Summary:
Life insurance policy – repudiation by insurer – alleged
misrepresentation and non-disclosure by deceased of
pre-existing
medical condition – insurer failing to discharge onus.
ORDER
On
appeal from:
South Gauteng High Court,
Johannesburg (Mabesele J, sitting as court of first instance):
1 The appeal is
upheld with costs.
2 The judgment of
the High Court is set aside and replaced with the following order:
‘
(a)
Judgment is granted in favour of the plaintiff for payment of the sum
of R3 200 000.
(b)
The defendant is to pay interest on the aforesaid sum at the rate of
15,5 per cent per annum from 3 December 2010 to date of
payment.
(c)
Costs of suit.’
JUDGMENT
Swain
JA
(Cachalia J and Fourie AJA
concurring):
[1]
The appellant, Ruth Christine Visser (Visser) is a 80 per cent
beneficiary in terms of a life insurance policy issued by the
respondent, 1 Life Direct Insurance Limited (1 Life) in favour of the
late Sibongile Ntobongwana (the deceased).
[2]
The claim of Visser for payment of 80 per cent of the insured sum of
R4 million, on the death of the deceased, was repudiated
by 1
Life on the ground that the deceased had misrepresented and failed to
disclose to 1 Life, certain details of her pre-existing
medical
condition, which materially affected the assessment of the risk under
the policy by 1 Life.
[3]
As a result Visser instituted action against 1 Life in the South
Gauteng High Court, Johannesburg (Mabesele J), for payment
of the sum
of R3 200 000. The claim was dismissed on the ground that 1
Life justifiably repudiated the claim because
the deceased had
provided ‘false information’ to it in respect of her
pre-existing medical condition which had precluded
1 Life from
properly assessing the risk. Leave to appeal having been refused, the
present appeal is with the leave of this court.
[4]
In terms of s 59(1)(
a
)
of the Long Term Insurance Act 52 of 1998 (the Act) 1 Life was
entitled to repudiate the life policy if a misrepresentation was
made
to it by the deceased, which was not true, or which amounted to a
failure to disclose information, if the representation or
non-disclosure was likely to have materially affected the assessment
of the risk under the policy concerned.
[5]
1 Life bore the onus of proving that the deceased had misrepresented
to 1 Life that she had never had any episodes of anxiety
or stress.
It also had to prove that the deceased had failed to disclose that
she had received medical advice or treatment for
fainting in 2005 and
chest pains in 2006.
[6]
1 Life relied upon two sources of evidence to discharge this onus.
Firstly, the transcript of a telephone conversation held
on 28
November 2007 between the deceased and a representative of 1 Life,
during which the deceased was asked and answered questions
relating
to her state of health. The answers furnished formed the basis upon
which the life insurance policy was issued. Secondly,
records of
Groote Schuur Hospital of visits ostensibly paid by the deceased to
the emergency unit at the hospital on 15 August
2005 and 11 July
2006. The records ostensibly contain details of the medical
complaints of the deceased, medical tests carried
out on her, as well
as the observations of the attending doctor.
[7]
Because scant regard was paid in the court a quo to the admissibility
of this evidence, as well as proof of the evidence contained
in this
documentation, the parties were requested to make submissions on the
following issues:
(a) The
admissibility and reliability of the hospital records.
(b) The
admissibility, reliability and completeness of the telephonic
transcript.
As
a result, the parties filed supplementary heads of argument.
[8]
The admissibility of the record of the telephonic conversation and
the hospital records must be distinguished from the evidential
status
of their contents. I accept that the records were admissible without
further proof. The parties agreed at the rule 37 conference
that the
records would serve as evidence of what they purport to be ‘without
admission of the truth of the contents’.
In addition, on 22
February 2012 1 Life delivered a notice in terms of rule 35(9) of the
Uniform Rules of Court calling upon Visser
to admit that the hospital
records and the telephonic transcript were properly executed and were
what they purported to be. On
6 March 2012 Visser made this
admission.
[9]
Before us, there was no issue that the telephonic transcript was
admissible, reliable and complete and I therefore turn to the
evidential status of the contents of the hospital records. The doctor
who conducted the interviews with the deceased should have
been
called to prove the truth of their contents. This was not done. No
explanation appears on the record for this. No application
was made
in terms of
s 3
of the
Law of Evidence Amendment Act 45 of 1988
for the hearsay evidence contained in the hospital records to be
admitted. Again, no explanation appears on the record for this.
[10]
The hospital records were introduced into evidence before the court a
quo by counsel for Visser. He put to a witness, Dr Steyn,
that she
had been presented with ‘certain documents related to the visit
or the supposed visit of the deceased to Groote
Schuur Hospital’.
Dr Steyn, on behalf of Visser, and Dr Kayle, on behalf of 1 Life,
expressed their views on the nature and
seriousness of the deceased’s
medical condition, based upon the contents of the hospital records.
[11]
Counsel for 1 Life (not the same counsel who appeared in the court a
quo) submitted that the trial was conducted by the parties
on the
basis that the contents of the hospital records were not in dispute.
However, an examination of the evidence reveals that
there was no
clear understanding between them as to the evidential status of the
contents of the hospital records. It is, however,
clear that the
parties did not agree that the contents of the hospital records were
correct.
[12]
It appears the learned judge in the court a quo was uncertain of the
status of the evidence contained in the hospital records.
At one
stage he asked ‘is their dispute about the report or what’
but no answer was forthcoming from counsel. When
Dr Steyn expressed
her opinion on the contents of the medical reports, the learned judge
stated the issue was not whether the deceased
was sick, but whether
the deceased failed to disclose that to 1 Life. He added that the
issue was ‘not whether or not we
believe the contents’ of
the hospital records. When Dr Steyn stated that an entry in the
hospital records was incorrect,
he intervened and said the
correctness of the contents could not be challenged, because the
doctor who wrote the notes was not
present. He added that was not the
enquiry, which was whether the deceased failed to disclose the
medical conditions contained
in the notes. He stated that whether or
not the information was correct, or accurate was accordingly
irrelevant. He accordingly
did not appreciate that the contents of
the hospital records were relied upon to prove the pre-existing
medical condition of the
deceased. Only when that issue was proved
could the further issues of misrepresentation or non-disclosure by
the deceased arise.
[13]
The court a quo also laboured under the misconception that the
contents of the hospital records were not in issue between the
parties. He stated that if the parties were agreed that the deceased
suffered from certain medical conditions, then the cause of
those
conditions was immaterial. This statement provoked no response from
counsel.
[14]
The inadequacy and lack of clarity of the hospital records was
referred to repeatedly in the evidence. Dr Steyn agreed that
the
hospital records were incomplete and contained far less information
than they should have. Assumptions therefore had to be
made and one
had to speculate concerning the causes of the symptoms, in the
hospital records. Dr Kayle, who gave evidence for 1
Life, said he
could not fully assess the correctness of the recorded symptoms and
diagnosis of the deceased’s medical condition,
because the
investigation was incomplete. The evidence of Dr Steyn and Dr Kayle
makes it clear that the parties never agreed that
the contents of the
hospital records were true and accurate.
[15]
The absence of any agreement between the parties that the medical
condition of the deceased was recorded correctly in the hospital
records, appears from the record. Counsel for 1 Life put the
following to Dr Steyn:
‘
So
all the doctors, with respect, are in a very difficult position. You
had scanned notes and you may correctly interpret it and
you may
incorrectly interpret it – Correct.
That
should be the approach in this case. You cannot swear by the
correctness or the incorrectness of any of the notes, you can
simply
see what you see. – True.
Understanding
that it is unfortunately incomplete in the sense that it contains far
less information than it should have done. –
True.
Would
that be a fair summary in my approach to the case? – Yes.’
[16]
The submission of counsel for 1 Life that the parties conducted the
trial on the basis that the relevant contents of the hospital
records
were not in dispute is accordingly incorrect. It is also incorrect
that Visser acquiesced in the use of the hospital records
to
establish the primary facts. Because 1 Life’s counsel did not
regard the hospital records as proof of ‘the primary
facts’
Visser could never have acquiesced in their use for this purpose. The
court a quo accordingly erred in concluding
that ‘it is not in
dispute that the illnesses are noted, correctly, in the hospital
records’.
[17]
Counsel for 1 Life submitted however, that Visser had admitted the
truth of the contents of the hospital records in an answering
affidavit filed by her in opposition to an application for the
rescission of a judgment obtained by Visser against 1 Life. 1 Life
alleged in its founding affidavit that the deceased had failed to
disclose that ‘she had been hospitalised for fainting spells
during 2005 and that she had suffered from stress anxiety during July
2006’. It was also alleged that the deceased ‘specifically
confirmed that she had never had any episodes of depression, anxiety
or stress’.
[18]
Visser replied to these allegations in her affidavit as follows:
‘
The
nature of episodes related to the insured’s anxiety, depression
or stress, I suggest cannot be adduced from a Groote Schuur
Hospital
report dated 12 July 2006 and attached hereto marked “POA2”.
. . . Alternatively – there is certainly
no clarity on the
medical correlation substantiated by the applicant [1 Life] between
panic and anxiety, within the papers filed
of record. What is further
evident is that the insured in accordance (with) the visit to
hospital on 12 July 2006, (POA2 refers)
presented with abdominal
pains and not because of episodes of depression, anxiety or stress. I
further fail to see how this aspect
could be viewed as a material
non-disclosure, alternatively how such condition (under the
circumstances) even presented to the
applicant, would have affected
the risk assessment of the insured and lead to the rejection of any
claim.’
[19]
The only statement of Visser which relates to the contents of the
hospital records is that the deceased ‘presented with
abdominal
pains and not because of episodes of depression, anxiety or stress’.
The statement simply reflects what appears
on the hospital records,
and does not refer to any of the other entries. There was no
admission of the truth and correctness of
all of the facts contained
in the hospital records. Even if construed as an admission, Visser
never intended to formally admit
the contents of the hospital
records. The admission was accordingly informal and she would have
been entitled to lead evidence
to contradict or explain the
admission.
[1]
At no stage before
or during the proceedings before the court a quo, did 1 Life contend
that Visser had made the admission now
contended for on appeal.
Visser was never given the opportunity to lead any evidence to deal
with the so-called admission. There
is no basis for the submission
made.
[20]
1 Life therefore failed to discharge the onus of proving the truth
and accuracy of the contents of the hospital records. It
consequently
failed to prove that the deceased had experienced episodes of anxiety
or stress, had received medical advice or treatment
for fainting in
2005 and chest pains in 2006. The issue of whether the deceased made
a misrepresentation during the telephone conversation
as well as the
materiality of any alleged misrepresentation or non-disclosure, does
not arise in the absence of proof of the deceased’s
pre-existing medical condition. In my opinion Willis JA in his
separate but concurring judgment has attempted to deal with issues
relating to misrepresentation and their materiality that need not
even be considered.
[21]
During the later stages of argument in this appeal a member of the
court, Mathopo AJA unfortunately became ill. With the consent
of both
parties argument was concluded in his absence. This judgment is the
decision of a majority of the remaining judges who
are in agreement
and constitute a majority of the judges before whom the hearing was
commenced, in accordance with
s 13(3)(
a
)
of the Superior Court Act 10 of 2013.
[22]
I make the following order:
1 The appeal is
upheld with costs.
2 The judgment of
the High Court is set aside and replaced with the following order:
‘
(a)
Judgment is granted in favour of the plaintiff for payment of the sum
of R3 200 000.
(b)
The defendant is to pay interest on the aforesaid sum at the rate of
15,5 per cent per annum from 3 December 2010 to date of
payment.
(c)
Costs of suit.’
[2]
___________________
K
G B SWAIN
JUDGE
OF APPEAL
Willis
JA:
[23]
I have read the judgment of Swain JA. I agree with the order that he
has proposed and much of his reasoning. I consider that
what is often
loosely called ‘the materiality of the non-disclosure’
must, however, unavoidably be dealt with. For
this reason I have
written a separate judgment.
[24]
The appellant appeals, with the leave of this court, against the
judgment of the South Gauteng High Court, Johannesburg (Mabesele
J),
which dismissed her claim with costs.
[25]
The appellant, Ms Ruth Christine Visser, as the beneficiary of 80% of
the proceeds of a life insurance policy, instituted action
against
the respondent (the insurance company). The deceased’s husband,
Mr Luwasi Ntyeku, was the beneficiary of the other
20%. The insured
was Sibongile Ntobongwana (the deceased). The benefit to accrue to
the plaintiff was R3.32 million.
[26]
The plaintiff was a school teacher. She was also an officer in the
Salvation Army (the Army), a Christian organization that
promotes
good works. The deceased was a youth leader in the Army and it was
through the Army that the plaintiff and the deceased
first met each
other during the middle of 2007. The plaintiff’s husband was a
pastor in the army. The plaintiff and the deceased
struck up a warm
relationship. The plaintiff recognised the deceased’s talent
and that the deceased wanted to improve herself
by starting a
business in the dealership of arts and curios. The plaintiff and her
husband assisted the deceased in starting up
a business selling arts
and curios. The three of them entered into a partnership agreement.
They lent her money and gave her administrative
support and strategic
advice. The business was a resounding financial success. The deceased
was able to buy a flat of her own in
Parow shortly after the business
had been established.
[27]
The deceased took out the insurance policy with the insurance company
with effect from 1 December 2007. The insurance policy
was issued as
a result of a telephonic application by the deceased to the insurance
company. The deceased died on 29 January 2009.
It appears from the
record that she died from unnatural causes.
[28]
The insurance company has sought to avoid payment on the basis that
the deceased, when taking out the policy in question,
had not
disclosed that she had received medical advice and treatment in 2005
and 2006. The non-disclosure allegedly relates to
chest pains,
fainting spells and episodes of anxiety during this period. By reason
of the manner in which this case was conducted
in the high court and
the manner in which the argument was presented in this appeal, I
think it better to consider a few cardinal
principles of the relevant
law before a more detailed examination of the facts. This may be
unusual but an overview of the relevant
legal principles may assist
in understanding the facts as set out hereunder.
Qilingele
v South African Mutual Life Assurance Society
,
[3]
despite controversies in cases which followed it,
[4]
made it clear that an insurer seeking to avoid liability on the basis
of the untruth of a representation made to it, bears the
onus of
proving the requisite elements that would justify its repudiation of
liability in terms of s 19(3) of the Insurance Act
27 of 1943 (the
Insurance Act).
[5]
[29]
Two questions have loomed large in this case. They are simply stated
but more difficultly answered: (a) what are the facta
probanda (the
facts which need to be proven) and (b) what are the proven facts? In
relation to the case which the insurance company
has made out, the
answers to the first question are to be found by reference to the
substantive law of insurance and to the second
by reference to the
law of evidence.
[30]
The issue of whether an insurer has succeeded in establishing the
requisite elements in order to avoid liability in terms of
an
insurance policy by reason of the non-disclosure of facts by the
insured has vexed the courts for some time. It has been instructive
to read the cases that we were requested by counsel to consider.
[6]
These authorities have imparted an overall perspective of the issues
that are relevant when an insurer seeks to avoid liability
on the
ground of the insured’s non-closure of facts. The cases in
question have dealt, more specifically, with the requirement
in terms
of which the insurer must prove, in terms of s 19(3) of the Insurance
Act 27 of 1943, that ‘the incorrectness of
such representation
is of such a nature as to be likely to have materially affected the
assessment of the risk under the said policy
at the time of issue
…thereof.’
[7]
I have also profited from reading Peter Havenga’s article
‘Materiality in Insurance Law: The Confusion Persists.’
[8]
[31]
Necessarily, and self-evidently, first among these elements,
preceding the question of materiality, would be (a) that a
representation
was made and (b) that it was untrue. Both Mr Symon,
who appeared for the insurance company in the appeal and the
insurance company’s
counsel in the trial itself, fairly and
correctly conceded that this was indeed the correct legal position.
This is implicit in
Kriegler JA’s reasoning in
Qilingele
.
[9]
It is more explicit in
Fransba
Vervoer Bpk v Incorporated General Insurances Ltd
.
[10]
That the onus on the insurer is extensive is set free from doubt in
the English case of
Joel
v Law Union And Crown Insurance Company
.
[11]
Joel
’s
case was followed in
Fransba
.
[12]
Fransba
makes it clear that there is a further element which the insurer must
prove. This further element Mr Symon would not concede, despite
my
having tested this with him with some insistence during the course of
argument. It is that the fact or facts in question must
have been
known to the insured at the time when she gave her answers to the
questions posed to her by the insurer.
[13]
[32]
Conceptually, there is a difference between, on the one hand, the
materiality of a non-closure 'in the wider sense’ of
the term
(which includes the elements of (a) the fact of non-disclosure; (b)
the awareness by the insured of the facts which she
may have been
required to disclose and (c) a consideration of the materiality of
that non-disclosure) and, on the other, materiality
'in 'the narrower
sense' (which separates materiality per se from both the
non-disclosure itself of relevant facts and the
concomitant
state of mind of the insured). Conflating the wider into the narrower
sense is easily done but can lead to confusion.
The failure to
distinguish the wider from the narrower sense may explain the
difficulties which the litigants, as well as the trial
court,
experienced during the action. When it comes to a consideration of
the entitlement of an insurer to avoid liability on the
ground of
non-disclosure by the insured, the facta probanda are those which
relate to the two elements of (i) the non-disclosure
itself and (ii)
the consciousness or awareness of the insured of the facts which she
would have been required to disclose. The
materiality of the
non-disclosure is a question of law.
[33]
For reasons that I hope will become manifest later in this judgment,
the question of the materiality (in the narrow sense)
of the alleged
non-disclosure does not even arise in this case because, even if one
accepts that the representations were made,
the insurance company has
failed to establish that they were (a) untrue and (b) were known to
have been untrue by the deceased,
at the time when she made them. Put
differently, the insurer must discharge the onus of proving that the
deceased would, in her
understanding of the questions, have known
that she was telling an untruth in response thereto.
[14]
[34]
In the nature of things, the state of mind of the insured, her
awareness of what she would have been required to disclose,
will
ordinarily be a matter of inferential reasoning. The evaluation
embraces both subjective and objective elements: what is relevant
is
not merely what she thought and understood at the time but also what
facts she, in the context of the questions and her particular
situation, there and then, could reasonably have been expected to
disclose. Relevant to the issue of the facts an insured could
reasonably have been expected to disclose would obviously be whether,
as mentioned previously, ‘the incorrectness of such
representation is of such a nature as to be likely to have materially
affected the assessment of the risk under the said policy
at the time
of issue …thereof.’
[15]
[35]
There will therefore, unavoidably, be an osmotic relationship between
the questions of law and fact.
[16]
This process of osmosis may explain the murkiness that has clouded so
much thinking on the overall question of the materiality
of a
non-disclosure by an insured: the permeability between the questions
of law and fact is indeed gaping. Questions of law and
fact do not
necessarily separate conveniently into hermetically sealed
compartments.
[17]
Nevertheless,
if correct decisions are to be made concerning the issue of the
materiality non-disclosure in contracts of insurance,
there must be
alertness to the distinction between the two separate questions.
[36]
By reason of the fact that this case falls to be decided according
to the law of evidence, my remarks concerning the requisite
elements
for an insurer to avoid liability on the grounds of no-disclosure
should be understood as being strictly obiter.
In no way should
they be understood as the final word on the matter. They are
presented by way of background. The reason
is that, if a
litigant loses a case ‘for want of evidence’ it is
entitled, in my opinion, to have some sense, in the
reasons for
judgment, of what it might have been expected to prove. In any event,
the evidence, or lack thereof, which may have been put before any
court, cannot be considered in abstracto or in vacuo from the
facta
probanda.
[37]
On 16 November 2010, the plaintiff sought and obtained judgment by
default against the insurance company in the South Gauteng
High Court
in the sum of R3.2 million together with interest and costs. The
insurance company thereafter made application for rescission
of this
judgment. In its founding affidavit in support of the application for
rescission, Mr Anton De Souza, the chief executive
officer of the
insurance company said the following:
‘
[20]
An investigation of the claim [by the plaintiff] then took place by
the applicant’s forensic division. The results of
the
investigation, which was conducted by Henk Uys of Telesure Group
Services (Pty) Ltd, whose confirmatory affidavit is attached
hereto
marked “AS8”, are set out below. It emerged in the course
thereof that the applicant had failed to make at least
two material
disclosures and had also made a misrepresentation which were relevant
to the granting of the insurance cover concerned.
[21] The
non-disclosures concerned were the failure of the insured to disclose
that she had been hospitalised for fainting spells
during 2005 and
that she had suffered from stress anxiety during July 2006. A copy of
the transcript of the telephone consultation
conducted at the sales
stage is attached hereto marked ‘AS9.’
The
alleged misrepresentation related to the deceased’s income.
This ground of objection was later abandoned by the insurance
company.
[38]
Further on in the affidavit, the insurance company relied on the
following:
‘
[21.4]
the insured [the deceased] stated that she had not suffered chest
pains at any stage (page 7 of the transcript);
[21.5]
the insured specifically confirmed that she had never had any
episodes of depression, anxiety or stress (page 7 of the transcript);
[21.6]
the insured stated that she was never hospitalised (page 7 of the
transcript).’
In
the answering affidavit the plaintiff denied that there had been two
material non-disclosures and any misrepresentation. She
then
pertinently responded as follows:
‘
AD
PARAGRAPH 21.4
I
deny that from page 7 of the transcript “AS9” (page 50),
that it can be inferred as alleged by the Applicant, that
the insured
stated that she had not suffered chest pains at any stage. The
question at page 7 clearly relates to disorders of the
heart and not
chest pains in general. This I submit does not constitute any
non-disclosure or misrepresentation.
AD
PARAGRAPH 21.5
This
is admitted, as the insured never presented with “episodes”
of depression, anxiety or stress. “Episodes”
clearly
depict the plural and a series of events. The nature of episodes
related to the insured’s anxiety, depression or
stress, I
suggest, cannot be adduced from a Groote Schuur Hospital report dated
12/07/2006 and attached hereto marked “POA2”.
Alternatively
– the interpretation of such question by any person other than
the insured would be purely speculative.
Alternatively
– there is certainly no clarity on the medical correlation
substantiated by the Applicant between panic and
anxiety, within the
papers filed of record. What is further evident is that the insured
in accordance the visit to hospital on
12/07/2006, (POA2 refers)
presented with abdominal pains and not because of depression, anxiety
or stress. I further fail to see
how this aspect could be viewed as a
material non-disclosure, alternatively how such condition (under the
circumstances) even presented
to the applicant, would have affected
the risk assessment of the insured and lead to the rejection of any
claim.
AD
PARAGRAPH 21.6
.
. . She [the deceased] was clearly never ‘hospitalized”
due to referral by a doctor or taken up in hospital due to
a
particular illness. Again the interpretation of the question and
answer thereto will remain speculative in absence of the insured
and
I submit it is not being a non-disclosure under the circumstances . .
. .’
During
argument before us, Mr Symon placed great reliance on these responses
by the plaintiff. In particular, he contended that
there was no
dispute between the parties as to the questions which the insurance
company had put to the deceased, the deceased’s
answers thereto
and what appeared in the hospital records. He contended also that
these answers contained ‘admissions against
interest’. I
shall, in due course, deal more directly with these issues.
[39]
The plaintiff, at no stage, admitted the truthfulness of the contents
of the hospital records. It is trite that the production
in evidence
of documents in terms of R35 (10) of the Uniform Rules of Court,
after these have been admitted in terms of R35 (9),
as happened in
this case does not extend to the truthfulness of the contents
thereof.
[18]
The documents are not evidence that the content thereof is true.
[19]
The contents, unless admitted as being true remain hearsay evidence
and therefore inadmissible unless they qualify for admission
under
one of the recognised exceptions to the hearsay rule.
[20]
[40]
The common law rules regarding the admission of hearsay evidence were
rendered more flexible by the coming into operation of
The Law of
Evidence Amendment Act 45 of 1988 (T
he
Law of Evidence Amendment Act)
>.
The
relevant portions thereof read as follows:
‘
3(1)
Subject to the provisions of any other law, hearsay evidence shall
not be admitted as evidence at criminal or civil proceedings,
unless
–
(a)
each party against whom the evidence is to be adduced agrees to the
admission thereof as evidence at such proceedings;
(b)
the person upon whose credibility the probative value of such
evidence depends, himself testifies at such proceedings; or
(c)
the court, having regard to -
(i)
the nature of the proceedings;
(ii)
the nature of the evidence;
(iii)
the purpose for which the evidence is tendered;
(iv)
the probative value of the evidence;
(v)
the reason why the evidence is not given by the person upon whose
credibility the probative value of such evidence depends;
(vi)
any prejudice to a party which the admission of such evidence might
entail; and
(vii)
any other factor which should in the opinion of the court be taken
into account,
is
of the opinion that such evidence should be admitted in the interests
of justice.
(2)
The provisions of subsection (1) shall not render admissible any
evidence which is inadmissible on any ground other than that
such
evidence is hearsay evidence.
(3)
Hearsay evidence may be provisionally admitted in terms of subsection
(1)
(b)
if the court is informed that the person upon whose
credibility the probative value of such evidence depends, will
himself testify
in such proceedings: Provided that if such person
does not later testify in such proceedings, the hearsay evidence
shall be left
out of account unless the hearsay evidence is admitted
in terms of paragraph
(a)
of subsection (1) or is admitted by
the court in terms of paragraph
(c)
of that subsection.
(4)
For the purposes of this section -
“
hearsay
evidence”
means evidence,
whether oral or in writing, the probative value of which depends upon
the credibility of any person other than the
person giving such
evidence;
“
party”
means
the accused or party against whom hearsay evidence is to be adduced,
including the prosecution.’
No
application was made at any stage during the trial for the contents
of either the transcript or the hospital records to have
been
admitted in terms of
s 3
of The
Law of Evidence Amendment Act. Had
such an application been brought, the outcome may have been
different. As
McDonald’s
Corporation v Joburgers Drive Inn Restaurant (Pty) Ltd & another;
McDonald’s Corporation v Dax Prop CC
& another; McDonald’s
Corporation v Joburgers Drive Inn Restaurant (Pty) Ltd and Dax
Prop CC
[21]
and
Makhatini v Road Accident Fund
[22]
make clear, the admission of the evidence is no mere formality; the
admission of the evidence is not to be had, merely for the
asking.
The court must carefully consider all the factors listed in
s 3(1)
(c)
of the
Law of Evidence Amendment Act. It
was only once this court, in
preparation for the hearing of the appeal, invited the parties to
make submissions in regard to the
whole question of the admissibility
of the transcript and the hospital records that they did so. Apart
from the evidence of the
plaintiff and her husband, both parties lead
evidence in an attempt to address the materiality of the
non-disclosures.
[41]
The trial court said:
‘
[44]
The evidence is that the defendant relied upon false information
provided to it by the deceased and concluded a policy contract
with
her. Had the deceased disclosed her health status the defendant would
have been able to weigh its options to either load the
premium,
reject the application or referring the deceased to a medical doctor
for medical examination and a report which would
enable them to take
an informed decision on the application of the deceased’.
The
judge added that:
‘
[45]
For these reasons, I do not hesitate to come to a conclusion that the
defendant was justified to repudiate the contract. The
result is that
the plaintiff’s claim must fail.’
The
trial court was clearly wrong. The trial court failed to make a
proper distinction between the production of a document in terms
of
Rule 35
(10) and the admissibility of its contents as evidence. A
perusal of the record indicates that the transcripts of the questions
and the answers given by the deceased were, by necessary implication,
agreed to have been truly and correctly recorded. It
certainly
was not the position with regard to the hospital records.
Accordingly, the insurance company failed to discharge the
onus of
proving that the answers were
untrue and,
furthermore, that the deceased would, in her understanding of the
questions, have known that she was telling an untruth
in response
thereto. The insurance company’s defence to the plaintiff’s
claim must fail.
[42]
In view of the fact that the parties conducted the trial as if the
materiality of the non-disclosures rather than the admissibility
of
evidence were the real issue, I should not want the insurance company
to think that the plaintiff has succeeded on purely technical
grounds. The evidential deficiencies in the insurance company’s
case go further than technicalities.
[43]
The insurance company relied on the fact that it appeared to be
common cause that, at the time her telephonic application
for
insurance was made, the deceased was asked the following two
questions, to which she answered ‘No’:
(1)
‘
Do
you have or have you ever had any episodes of depression, anxiety or
stress?’ and
(2)
‘
Have
you ever had any illness or any medical or surgical advice or
treatment other than already stated, e.g. operations, accidents,
hospitalisations?’
The
hospital records show that in 2005, she had been visited the hospital
and complained the she had had, ‘fainting spells’,
an
argument with her boyfriend that she had been robbed as a result of
which she may have had panic attacks and that she was adjusting
to
her new role as mother of a baby then aged three months old. The
hospital record of the 2006 indicates that she had a ‘stabbing
pain over her lower ribs’ that afternoon. The deceased had been
treated as an outpatient. These are the facts upon which
the
insurance company has relied to seeking to avoid liability under the
insurance policy.
[44]
The person who conducted the interview on behalf of the insurance
company did not testify. The doctors with whom the deceased
may have
consulted also did not testify. The evidence of these records is
obviously hearsay. No application was made by the insurance
company
for this evidence to be admitted in terms of
s 3
of the
Law of
Evidence Amendment Act.
[45
]
Both Dr Elmin Steyn, who was called by the plaintiff and Dr Allan
Kayle, who was called by the defendant agreed that the records
showed
that the deceased was not hospitalized (in the sense of being
admitted to a ward as a patient, that the diagnosis, if any,
was
incomplete, inconclusive and certainly not serious). They both agreed
that the records showed that the doctors who may have
examined the
deceased did not find any condition that required immediate medical
care. Interestingly, the record of the second
visit indicates that
the deceased had no past medical history. Dr Steyn said that the
visit after an argument with her boyfriend
was typical of abused
women and could be construed as a cry for help. Both visits
took place late at night.
[46]
The insurance company’s counsel himself, when cross-examining
Dr Steyn put it to her as follows:
‘
Q:
That should be the approach in this case. You cannot swear by the
correctness or the incorrectness of the notes, you simply see
what
you see?
A:
Yes.
Q:
Understanding that it is unfortunately incomplete in the sense that
it contains far less information than it should have done?
A:
True
Q:
Would that be a fair summary in my approach to the case?
A:
Yes’
Even
if the sketchy hospital records are to be considered as admissible
evidence very little, if any, weight can be attached to
them in all
the circumstances of this case.
[23]
There exists real uncertainty as to the accuracy and truth of (a)
what the deceased said and complained of when she went
to the
hospital and (b) the truth and accuracy of such diagnosis as may have
been made. Such weight as could be attached to the
hospital records,
read together with the transcript, would not, when viewed in context,
discharge the onus that rest on the insurance
company.
[47]
There was much debate before us concerning the law of ‘admissions
against interest’ by reason of the ‘privity
of interest’
that existed between the deceased and the plaintiff. Mr Symon argued
that, because of the plaintiff’s
responses in her affidavit
resisting summary judgment, she had made informal admissions.
Moreover, if I understood the argument
correctly, this resulted in
there being vicarious admissions of the truthfulness of what was
recorded in the hospital records as
having been said by the deceased
to those who attended upon her at the hospital. These, he argued,
were admissions against interest
by the deceased. By reason of of the
‘privity of interest’ between the deceased and the
plaintiff, these admissions
could be held against the defendant,
because she referred to them in her affidavit opposing the
application for rescission of the
default judgment. As
Watermeyer CJ said in
R
v Leibbrandt & others,
[24]
there is a ‘danger of arguing in a circle’ when
considering the issue of whether one person’s statement
can or
should be held admissible to the extent of being an admission against
another (sometimes described as a vicarious admission).
[48]
Sight must not be lost of the importance of not confusing the
distinction between the admissibility of hearsay evidence, on
the one
hand, and an admission, on the other. There can be no doubt
whatsoever that there were no admissions of fact either by
the
deceased or the plaintiff that, in themselves, were dispositive of
the issues in the trial. Everything has depended upon the
permissible
inferences that one may draw, on a balance of probabilities, from the
facts – whether these facts were in issue
or admitted.
Ultimately, as Zeffertt and Paizes point out in their
The
South African Law of Evidence
,
all questions of admissibility of evidence relate to relevance,
reliability and the constitutional right
[25]
of all persons to a fair trial.
[26]
The ‘admissions against interest’ point raised by the
insurance is too tenuous too succeed in all the circumstances
of this
particular case: it would result in the admission of unreliable
evidence, denying the plaintiff a fair trial. As the insurance
company has failed to avoid its liability in terms of the insurance
policy, the plaintiff must succeed.
_______________________
N
P WILLIS
JUDGE
OF APPEAL
APPEARANCES:
For
the Appellant: G Smith
Instructed
by:
Franscois
Potgieter and Partners, Cape Town
c/o
Lovius Block Attorneys, Bloemfontein
For
the Respondent: S Symon SC
Instructed
by:
Tugendhaft
Wapnick Banchetti & Partners, Johannesburg
c/o
Honey Attorneys, Bloemfontein
[1]
P
J
Schwikkard
& S E van der Merwe,
Principles
of Evidence,
3
rd
ed (2009) para 26 2 1.
[2]
The
date from which
mora
interest is to run, being 3 December 2010 is the date upon which 1
Life became aware of the judgment obtained by Visser and thereby
acquired knowledge of Visser’s claim.
[3]
Qilingele
v South African Mutual Life Assurance Society
1993 (1) SA 69 (A).
[4]
See,
for example, the cases below in respect of which I acknowledge
counsel’s exhortations to peruse.
[5]
Qilingele
v South African Mutual Life Assurance Society
(supra) at 74A-C. Repealed and replaced by the Long-Term
Insurance Act 52 of 1998 (see s 59 of new Act).
[6]
The
following, in particular, were helpful:
Commercial
Union Insurance Co of SA Ltd v Lotter
[1998] ZASCA 103
;
1999
(2) SA 147
(SCA)
;
Clifford
v Commercial Union Insurance Co of SA Ltd
1998
(4) SA 150 (SCA)
;
Theron
v AA Life Assurance Association Ltd
[1995] ZASCA 61
;
1995
(4) SA 361
(A)
;
Qilingele
v South African Mutual Life Assurance Society
fn
1;
President
Versekeringsmaatskapy Bpk v Trust Bank van Afrika Bpk
&
’n ander
1989
(1) SA 208
(A)
;
Mutual
and Federal Insurance Co Ltd v Oudtshoorn Municipality
1985
1 SA 419
(A)
;
Mahadeo
v Dial Direct Insurance Ltd
2008
(4) SA 80 (W).
[7]
Ibid.
See also s 19(3) of the Insurance Act 27 of 1943.
Qilingele
v South African Mutual Life Assurance Society
(supra) at 74A.
[8]
P
Havenga ‘Materiality in Insurance Law: The Confusion Persists’
1996
(59) THRHR at 339.
[9]
At
74C and 76G.
[10]
Fransba
Vervoer (Edms) Bpk v Incorporated General Insurances Ltd
1976
(4) SA 970
(W) at 977. This case was referred to with approval by
this court in
Mutual
and Federal v Oudtshoorn
(supra) at 435E.
[11]
Joel
v Law Union and Crown Insurance Company
(1908)
2 KB 863
at 880.
[12]
At
977B-D
[13]
Ibid.
[14]
The
nexus between knowledge and understanding is usefully made apparent
in, for example,
The
Oxford Dictionary
2006.
[15]
Ibid.
See also s 19(3) of the Insurance Act 27 of 1943.
[16]
The
German word
Durchdrungen
expresses the process well.
[17]
See
Secretary
for Inland Revenue v Trust Bank of Africa Ltd
1975 (2) SA 652
(A) at 666E; which was followed in
S
v Petro Louise Enterprises & others
1978
(1) SA 271
(T) at 280A-B. In
Magmoed
v Janse Van Rensburg & others
[1992] ZASCA 208
;
1993 (1) SA 777
;
1993 (1) SACR 67
(A) Corbett CJ, delivering the
unanimous judgment of this court said, at 809A, that he was
‘in full and respectful
agreement’ with what Botha J had
said in
Petro
Louise Enterprises
.
In
S
v Basson
[2004] ZACC 13
;
2005 (1) SA 171
(CC) para 48 the Constitutional Court said that it
found Corbett CJ’s analysis in
Magmoed
of the distinction between questions of fact and law to be
‘helpful’.
[18]
See
Absa
Bank Bpk v Ons Beleggings BK
2000 (4) SA 27
(SCA) para 6 and the authorities therein cited.
[19]
Ibid.
[20]
See
Knouwds
v Administrateur Kaap
1981 (1) SA 544
(C) at 551H-552B. Referred to with approval in
Absa
Bank Bpk v Ons Beleggings BK
(supra).
[21]
McDonald’s
Corporation v Joburgers Drive Inn Restaurant (Pty) Ltd &
another; McDonald’s Corporation Dax
Prop CC &
another; McDonald’s Corporation v Joburgers Drive Inn
Restaurant (Pty) Ltd and Corporation Dax
Prop CC
1997
(1) SA 1
(A) at 27D-H.
[22]
Makhatini
v Road Accident Fund
2002
(1) SA 511(SCA)
paras 26 to 35.
[23]
See,
for example,
Narotam
v Madhav & anothe
r
1965 (4) SA 85
(W) at 88A-89A and
S
v Ostilly & others
1977 (2) SA 104 (D)
[24]
R
v Leibbrandt & others
1944
AD 253
at 276.
[25]
See
s 34 of our Constitution, 1996.
[26]
DT
Zeffertt and AP Paizes AP
The
South African Law of Evidence
,
2nd ed, at 481-516.