About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 343
|
|
Alfagranite (Pty) Ltd v Alexander Forbes Insurance Company Ltd (38037/2014) [2015] ZAGPPHC 343 (22 May 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 38037/2014
DATE:
22 MAY 2015
NOT
REPORTABLE
In
the matter between:
ALFAGRANITE
(PTY)
LTD
..................................................................
PLAINTIFF/RESPONDENT
and
ALEXANDER
FORBES INSURANCE
COMPANY
LTD
......................................................................................
DEFENDANT
/APPLICANT
JUDGMENT
TLHAPI
J
[1]
The plaintiff had instituted action against the defendant for
repudiating the plaintiff’s insurance claim on account of
an
alleged material non-disclosure, prior to the conclusion of the
insurance agreement, of full details relating to claims
with
plaintiff’s previous insurer, Mutual & Federal.
[2]
The defendant excepted to a portion of the plaintiff’s plea in
replication, contained in the alternative reply to paragraph
2.12 of
the defendants plea. In order to have perspective of the issue
excepted against, in its plea to paragraphs 4,5 and 6 of
the
particulars of claim the defendant pleaded.
“
2.1
During or about
October 2013 the Plaintiff, represented by Stefan Willemse
(‘Willemse’) applied for business short-term
insurance
for twenty four (24) businesses dealing in electronic goods and more
in particular cellular phone and appurtenances.
In the course of
making such application Willemse, in writing, completed a written
“
DECLARATION”,
a copy of which is annexed hereto marked “AFI”.
2.2
In answer to the question posed under numbered paragraph 1 on
Annexure “AF1” Willemse did not give any response
i.e
whether any insurer/underwriter ever cancelled any policy held by the
Plaintiff”
2.3
In response to the questions posed in numbered paragraphs 3,4,5 and 6
of Annexure AF1, Willemse did not give any response to
question 3 but
indicated, with reference to questions 4,5 and 6 that the date of
loss for which a claim was made during the past
three(3) years, the
insurer involved and the type of loss are set out in an attachment, a
copy of which is annexed hereto marked
Annexure “AF2”.
2.4
In Annexure AF1, Willemse declared that the application for insurance
contains full details of the risk and is complete, true
and correct
in every respect and agreed that the application for insurance and
declaration form the basis of the contract
between the
Plaintiff and Defendant.
2.5
-2.10...
2.11.
The answer, statement or representation made by the plaintiff in
Annexure “AF1” in response to the questions posed
in
numbered paragraphs 3,4, 5 and 6 read with the attachment thereto
(Annexure
“
AF2”)
were false in that the Plaintiff omitted from the attachments various
previous claims made by it against Mutual and
Federal.
2.12
The correctness and falsity of the aforesaid representation was of
such a nature so as to materially affect the assessment
of the risk
assumed by the Defendant under the contract of insurance.)
In
replication to 2.12 above the plaintiff pleaded
“
13.
The contents hereof are denied......
In
the alternative to paragraph 13
14.
.......only if the Court should find ....that Plaintiff supplied
information as alleged Plaintiff pleads that the undisclosed
fact was
not material and would Defendant in any way have contracted with
Plaintiff
In
the further alternative to paragraph 13 and 14
15.
...only if the Court should find........that ...the information
...was of such a nature as to materially affect the assessment
of the
risk....the Defendant is estopped from denying that it would not have
contracted with Plaintiff for one or more of the following
reasons:
(a)
Plaintiff
provided Defendant on Defendant’s special instance and request
for the purpose of providing a quotation to Plaintiff
with a mandate
to authorise Defendant to obtain all information regarding
Plaintiff’s short term insurance portfolio
(e.g.
Insurance history and claims experience), from Mutual and Federal.
(b)
Defendant
thereafter provided Plaintiff with a quotation(s) thereby negligently
representing that it indeed obtained and considered
.....information
for Mutual and Federal...and that the Defendant was not withstanding
the information still willing and able to
contract with Plaintiff;
(c)
.......
(d)
........
(e)
........
(f)
...
16.
....Defendant is estopped from claiming that it would not have
contracted with Plaintiff as it did.”
[3]
Mr Ferreira for the defendant submitted that the replication excepted
to, could only be interpreted to mean that once the plaintiff/
insured had supplied a mandate to the defendant /insurer, the
plaintiff was assumed to have complied with its obligation to make
a
full and complete disclosure of all matters material to the
assessment of the risk. A failure by the plaintiff to disclose
information
relating to previous heists and robberies and a
‘positive’ misrepresentation as to the extent of such
incidents was
a material factor to be considered by the defendant.
[4]
The legal principle covering material non-disclosure and the purpose
of the enacted legislation (section 53(1) of the Short
term Insurance
Act 53 of 1998 ) (‘the Act’) was aptly stated in
Regent Insurance v
King’s
Property
(5/2014)
[2014] ZASCA (176) 21 November 2014, par [20]:
“
It
is trite that, at common law, an insured, when requesting insurance
cover, must make full and complete discovery of all matter
material
to the insurer’s assessment of the risk. Failure to do so will
entitle the insured to reject a claim under a policy
and to treat it
as void. Legislation has been enacted, however, to preclude insurers
from treating misrepresentation that are trivial,
as grounds for
avoiding insurance contracts and rejecting claims”
[5]
Mr Ferreira submitted that the plaintiff could not place the duty of
proper disclosure or, by shifting its own obligation, on
the
defendant on the basis of a mandate, by expecting the defendant, to
enquire into the plaintiff’s short term history.
He
submitted further that there was no room for the defence of estoppel
as pleaded by the plaintiff. He argued that the facts herein
were
comparable to those of
King’s
Property supra.
The
plaintiff ( ‘Kings Property’) sought to place the duty on
the insurer to make enquiries relating to the risk to
be insured on
the basis of various revisions to the policy, where information was
present in previous records of Regent that the
premises, which was
the subject of the insurance claim ‘were occupied by a business
using flammable materials. At paragraph
51 of the judgement Wallis J
stated:
“
It
required Mr Lewis to fossick around Regent’s records unearthing
little bits of information that had been disclosed to it
in the past
and assemble them into a picture that would enable him to determine
the nature of the risk and assess whether Regent
wished to grant
cover and if so on what terms”
[6]
According to Mr Kairinos for the plaintiff, the facts in
Regent
weredistinguishable
in that the insurance agreement covering the building was already in
existence when the plaintiff made a request
to have all its
properties surveyed, ‘
the
purpose of the survey was not to ascertain the risk but to survey the
risk’
. In the
present matter the ‘
defendant
requested and obtained a mandate ... for the purpose of assessing the
risk in order to determine the premium to be quoted’.
(my
underlining)
He
further submitted that on the facts and pleadings the estoppel
pleaded in
Kings
Property supra
had
not been established.
[7]
This exception was aimed at obtaining a decision on a point of law
which might dispose of the case in part ‘and avoid
leading
unnecessary evidence at trial’
.
In
Vermeulen v Goose
Valley Investments (Pty) Ltd
2001(3)SA
986(SCA) at paragraph 7 Marais J stated:
“
It
was trite law that an exception that a cause f action is not
disclosed by a pleading cannot succeed unless it is shown that ex
facie the allegations made by the plaintiff and any document upon
which his or her cause of action may be based, the claim is bad
in
law. In the circumstances of this case.....that means that the
excipient had to show ex facie the written documents relied upon
by
the appellant it will not be possible to identify the res vendita on
the ground that there is no reason to suppose that any
admissible
evidence could conceivably exist which would enable that to be done”
In
certain instances caution was also prudent as stated in
Vermeulen
supra
at paragraph
[12] :
“
I
stress that these are not firm findings. It may be that some of the
data which I have postulated probably exists, and would be
admissible
in evidence if it did exist, does not in fact exist. But that will
only be known once the appellant has been given an
opportunity to
adduce evidence. By
allowing
the exception the Court a quo deprived the appellant the opportunity
of showing that the land excluded from the sale can
be indentified
....In short, it was not an issue which lent itself to fair
resolution by way of exception”
[8]
The plaintiff pleaded that it was the seeking and obtaining of the
mandate and the quotation that induced it to contract with
the
defendant. In considering the exception the question I asked myself
was, if material information was indeed obtained by the
defendant,
what happened to such information received or what role did it play
in order to assess the risk for purposes of obtaining
a quotation and
prior to entering into a contract. Alternatively do I confine myself
to the documents annexed to the exception,
Annexures “AF1”
and “AF2” and find
ex
facie
the said
documents that there was no disclosure. Fortunately these are
questions that I need not answer in this application.
[9]
Mr Kairinos argued that not all material facts need to be disclosed
and that there were limitations. He referred to a text General
Principles of Insurance Law p126. The text that I sourced was
Reinecke
et al
,
General Principles of Insurance Law, 2007 at par 195 at page 128 –
129 which gives five limitations to a duty to disclose
material
facts:
“
(a)
Facts which are actually known to the other party to the contract
neednot be disclosed. Apart from the question whether such
facts are
included in the duty to disclose, their non-disclosure does not found
an action based on misrepresentation since a party
obviously cannot
be misled by the non-disclosure of facts already within his
knowledge;
(b)
A proposer for insurance need not disclose facts tending to diminish
the risk, even though strictly speaking, such facts are,
or may be
material in that they are relevant to the risk;
(c)
Material facts which are covered by an express or implied warranty in
the insurance contract need not be disclosed;
(d)
No disclosure is required of material facts of which the proposer has
no Knowledge;
(e)
Material facts of which information has been waived by the insurer
need not be disclosed;”
[10]
The legal principles relating to the duty to disclose and the
ameliorating effects of section 53(1) of the Act, as espoused
in
King’s
Property supra
,
remain applicable when considering the repudiation of a claim by an
insurer. However, in my view and, having regard to what might
constitute a limitation to the duty to disclose, it is important to
first determine the consequences to the both parties, of the
request
for the mandate and information allegedly received from Mutual and
Federal prior to the conclusion of the contract. It
is for these
reasons that the exception should fail.
[11]
In the result the following order is given:
1.
The exception is
dismissed with costs which includes costs of two counsel.
__________
TLHAPI
V.V
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON : 12 MAY 2015
JUDGMENT
RESERVED ON : 12 MAY 2015
ATTORNEYS
FOR THE PLAINTIFF : DOUW STEENKAMP ATT.
ATTORNEYS
FOR THE DEFENDANT: KLAGSBRUIN EDELSTEIN
BOSMAN
DE VRIES ATT.