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[2012] ZAECPEHC 83
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Momentum Group Ltd v Wolmarans (3766/2010) [2012] ZAECPEHC 83 (28 November 2012)
7
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE – PORT ELIZABETH
Case No: 3766/2010
Date Heard: 27/11/2012
Date Delivered: 28/11/2012
In the matter between:
MOMENTUM GROUP LIMITED
...................................................
Plaintiff
and
RIAAN WOLMARANS
............................................................
Defendant
___________________________________________________________
JUDGMENT
___________________________________________________________
REVELAS J
[1] The plaintiff, an insurance
company, instituted action against the defendant for payment of the
amount of R650 000.00,
plus interest and its costs of suit. It
was common cause that 25 December 2007, the plaintiff paid the amount
of R650 000.00
into the bank account of the defendant. The
plaintiff’s case is that the payment was made in error and that
the defendant
had no legal entitlement thereto. The plaintiff relies
on the
condictio indebiti,
alleging that the defendant was
enriched in the amount claimed, at the expense of plaintiff.
[2] The defendant disputes that the
enrichment was unjustified and
sine causa
. He maintains that
the amount paid to him by the plaintiff was owing to him as a
disability benefit payable in terms of a policy
of insurance
underwritten by the plaintiff.
[3] The insurance agreement came
about in the following circumstances: During February 2007, the
defendant was approached by someone
from a division of First National
Bank, (FNB) called ‘Bancassurance’, with a view to sell a
new product in terms whereof
all debts of a client are consolidated
into one account. Salaries would be paid into this account from which
the bank’s clients
would manage and repay all debts at a more
beneficial interest rate. The defendant and his wife met with a Ms
Geldenhuys who was
with Bancassurance at the time on two occasions to
discuss purchasing this product. It was called “One Account”,
and
was provided for under a “Living Series Facility”.
Insurance cover for this consolidated debt was also provided, and
in
particular, the defendant wanted cover for the outstanding amount on
his mortgage bond. The cover under discussion was underwritten
by
Momentum Aspire, a division of the plaintiff.
[4] When the defendant met with Ms
Geldenhuys, he was already insured in terms of a policy (SL
025854338) underwritten by the plaintiff.
The commencement date of
this policy was 1 March 1991, and its maturity date was in 2010.
Under this policy the defendant had basic
(life) cover, as well as
inability and disability cover (“basiese dekking,
“ongeskiktheidsvoordele” and what
was termed as a
“hersteller”).
[5] It was common cause that the
defendant accepted FNB Bancassurance’s offer, for the Living
Series Facility and life cover
in the amount of R650 000.00 (the
amount eventually paid to him on Christmas day, 2007). The monthly
premium for the life
cover was R557.73. No disability or inability
cover was ever included in this policy.
[6] The defendants’ case was
that Ms Geldenhuys had assured him that he would have the same
benefits under this later policy
with the plaintiff, as he had under
the previous 1991 policy. He testified that he was under the
impression that he was purchasing
a policy with the same benefits as
his previous policy, and therefore that he was also covered for
disability and inability. Because
he could not afford both policies,
he said he surrendered the earlier policy. He was paid out a sum of
about R56 000.00 in
two instalments in respect thereof.
[7] On 24 August 2007 the defendant
underwent an emergency coronary bypass operation and submitted a
claim for “Inability
Benefits” on 26 October 2007 with
the plaintiff. During December 2007, Ms Nannie Lombard, a senior
assessor with Momentum
Aspire, who dealt with the claim in question,
approved the defendant’s claim for inability benefits and
authorized payment
of the amount R650 000.00 to the defendant.
It was paid in two instalments. Ms Lombard soon thereafter discovered
that the
defendant had no inability cover, but only life cover.
Accordingly, the defendant was not entitled to the benefit paid out
to him.
The defendant was telephonically advised that the amount was
paid to him in error, and also in subsequent correspondence. He was
also advised not to dispose the money paid to him in error.
[8] Ms Lombard’s mistake, she
explained, was due to a new claims processing system which was
recently introduced into the
workplace by the plaintiff. This new
system reduced paper work, by doing away with the practice of keeping
all files in storage.
In terms of the new system, documents could be
scanned and their information stored on computer (after a certain
period) thereby
obviating the need for storage space and the
considerable storage costs. According to her, she did not receive a
message on her
computer screen to alert her that the defendant was
not covered for inability benefits, when she processed the claim.
Much evidence
was led on precisely how the mistake occurred and it is
not necessary to repeat it herein. It was properly established on the
evidence,
that the defendant was never covered for inability by the
plaintiff, that Ms Lombard made a human error in authorizing the
payment,
and that the relevant records were not tampered with.
[9] Ms Geldenhuys also testified.
She did not remember much of her meeting with the defendant and his
wife, but according to what
she did recall, and based on her
contemporaneous notes, the defendant only wanted extra cover for the
outstanding amount on his
mortgage bond. Inability cover was not an
option. She had only ticked off life cover and the monthly premium in
respect thereof
on the defendants application form. The defendant
also placed his signature beneath the appropriate ticks on that
document reflecting
that he chose only life cover, and also signed on
another page of the agreement. The space on the form which provides
for “Inability
Cover” on the application document is left
open.
Ex facie
the document signed by the defendant, he only
took out life cover. That also became common cause.
[10] The defendant pleaded that the
plaintiff’s agent (Ms Geldenhuys) represented to him “through
her conduct that he
would have the same benefits” as his
earlier, then existing policy. The defendant further pleaded that the
aforesaid representation
induced a reasonable belief on his part,
that the policy included a disability benefit. He contended that he
would not have signed
the contract of insurance, had he been aware of
the true facts. Accordingly, the defendant pleaded that the plaintiff
was estopped
from relying on an error in claiming repayment from him.
[11] Ms Geldenhuys was not aware of
the defendant’s earlier policy which was still in existence,
when the defendant and his
wife came to see her, and it was also not
placed before her. According to her, the defendant said she only
wanted life cover because
he had other cover in place. This accords
with the defendant’s bank records which reflect that he had
other long term policies
with,
inter alia,
Old Mutual. When
the defendant gave evidence, he accepted that Ms Geldenhuys could
only have been made aware of the earlier policy’s
terms if he
had told her about the policy. That puts paid to another question
which arose, namely whether Ms Geldenhuys had a duty
to alert the
defendant to the fact that in terms of the new policy, he did not
qualify for disability or inability benefits. In
other words, it was
the responsibility of the defendant himself to ensure that his new
policy provided for those benefits. The
defendant’s explanation
in court was that a misunderstanding between himself and Ms
Geldenhuys as to the terms of the policy
must have occurred.
[12] In my judgment, the
misunderstanding was not attributable to any representations on Ms
Geldenhuys’ part. The defendant
should have ensured that the
documents constituting the insurance contract he signed and concluded
with the plaintiff, made provision
for disability and inability
benefits. His signature appears twice on the relevant documents. This
was also not the first time
that the defendant concluded an insurance
contract, if one has regard to his bank statements. On the
probabilities, the defendant
was either negligent in not ascertaining
exactly what insurance product he was buying or there was a
misunderstanding between himself
and Ms Geldenhuys. In either case,
the plaintiff cannot be held responsible for the fact that the
defendant was not covered to
the extent that he wanted to be.
[13] The facts of this case simply
do not support a finding of estoppel. No representations were made to
the defendant. Ms Geldenhuys
had no interest in selling the defendant
only the cheaper (Life Cover) product when he wanted disability cover
as well. As a result,
the defendant was not entitled to the amount
paid to him, however regrettable the misunderstanding was. I am
therefore compelled
to find for the plaintiff.
[14] The defendant was advised more
than once that the amount was paid in error, but persisted that he
was entitled thereto. Accordingly,
costs must follow the result.
[15] The following order is made:
Judgment is granted in favour of
the plaintiff. The defendant is to make payment to the plaintiff in
the amount of R650 000.00;
Interest is payable on the
aforesaid amount at the rate of 15.5% per annum from date of demand
to date of final payment;
The defendant is to pay the
plaintiff’s cost of suit.
____________________
E
REVELAS
Judge
of the High Court
Counsel
for the Plaintiff: Adv AJ Lampough
Instructed
by: Keith Sutcliffe Associate Inc
c/o
Rushmere
Noach Incorporated
Counsel
for the Defendant: Adv D Niekerk
Instructed
by: D Gouws Incorporated Attorneys
Dates
Heard: 26, 27 November 2012
Date
Delivered: 28 November 2012