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[2014] ZAGPPHC 383
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Valoyi v Absa Idirect Limited (27970/2011) [2014] ZAGPPHC 383 (12 June 2014)
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Certain
personal/private details of parties or witnesses have been
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO:27970/2011
DATE: 12 JUNE
2014
NOT REPORTABLE
NOT OF INTEREST
TO OTHER JUDGES
In the matter
between:
CREATEN
VALOYI
...................................................................................................................
PLAINTIFF
and
ABSA IDIRECT
LIMITED
.....................................................................................................
DEFENDANT
JUDGMENT
KUBUSHI, J
[1] The plaintiffs
claim is based on the defendant’s breach of an insurance
contract in repudiating his claim and failing
to compensate him the
amount of R297 990 as a sum covered for his motor vehicle. In his
particulars of claim, the plaintiff alleged
that on the 13 July 2010
the parties entered into a written insurance agreement which covered
risk in respect of the plaintiffs
BMW 525i motor vehicle with
registration number Z[...]. The motor vehicle was insured for R297
990. The plaintiff alleged also
that he complied with the terms of
the agreement which required him to pay monthly premiums of R2112.98,
however the defendant
repudiated his claim which he lodged as a
result of his motor vehicle being involved in an accident and was
damaged beyond repairs.
[2] The defendant in
its defence to the plaintiffs claim pleaded that it is the plaintiff
who breached the terms of the insurance
agreement in that he failed
to disclose to the defendant that his previous insurance policy in
respect of the BMW 330i motor vehicle
was cancelled as a result of
the previous insurer of the motor vehicle finding that he (the
plaintiff) had an unacceptably high
risk. The defendant also alleged
that the plaintiff breached the terms of the agreement in that he
(the plaintiff) misrepresented
to the defendant that his previous
policy did not come into being as a result of a high insurance risk
profile. The defendant further
averred that the non-disclosure as
well as the misrepresentation by the plaintiff was material in that
it had a direct bearing
on the risk assessment it conducted in
respect of the motor vehicle covered. Had the plaintiff disclosed the
fact that his previous
insurer had cancelled the policy due to an
unacceptable risk, the defendant would not have entered into an
agreement of insurance
with the plaintiff on the terms it did and as
such it was entitled to repudiate the claim.
[3] Before the
commencement of the trial the defendant’s counsel handed in a
bundle of documents that were subpoenaed from
Outsurance - the
employer of the plaintiff, which according to him simply goes to the
fact of the plaintiffs knowledge of the insurance
industry. The
plaintiffs counsel did not object to the documents being handed in.
He, however, submitted that the documents were
irrelevant for
purposes of this trial. He indicated as well that he will during
evidence object to any document which he may consider
irrelevant
should such document be referred to during evidence. At the end of
trial I found the documents irrelevant for neither
counsel referred
to them during the course of the trial.
[4]
Amongst the documents discovered there were two bundles of documents.
Bundle “C” and Bundle “D”, which
were mostly
referred to by the parties’ counsel during evidence and which
formed the basis on which the parties relied for
their respective
cases. Bundle
“
C”
is the transcript of the conversation over the phone between the
plaintiff and Telesure’s claims specialist and Bundle
“D”
is the transcript of the conversation over the phone between the
plaintiff and the defendant's sales consultant.
[5] The plaintiff
testified for himself and called no other witness. To the contrary
the defendant tendered the evidence of three
witnesses, namely
Siyabonga Mthunzi Maphalaga (Maphalaga) a manager in the claims
department at Outsurance; Loius Meyer (Meyer),
an employee of
Telesure Group (Pty) Ltd (Telesure), who was at the material time in
question employed as a customer relations specialist;
and Thandeba
Bhengu (Bhengu) employed by Absa iDirect (the defendant) as a loss
adjustor. Although reference is made to Telesure
in this judgment,
sight should however not be lost that the plaintiffs BMW 330i motor
vehicle was covered by Auto and General.
Telesure Group is an
umbrella company of insurance companies like Budget Outsurance, Dial
Direct First for Women and Auto and General
is a part of that group.
[6] I was also
informed by the defendant’s counsel that the defendant had
tried to subpoena Ms Selemela the sales consultant
who was at the
material time in question in its employ and who assisted the
plaintiff at the time of the conclusion of the insurance
agreement
but she was untraceable. A copy of her attempted subpoena was handed
in court.
[7] At the beginning
of the trial the parties were common cause that the defendant
repudiated the plaintiff’s claim. They
were also in agreement
that the issues in dispute which this court had to determine were:
whether the plaintiff disclosed all the
material facts to the
defendant; and whether the plaintiff misrepresented facts to the
defendant.
[8]
It is trite that insurance policies are contracts
uberrimae
fidei
and
this casts upon the insured, or strictly the proponent for insurance,
the duty to disclose to the insurer, before the conclusion
of the
contract, all facts material to the risk which are known to the
insured. The purpose of this rule is to enable the insurer
to be
apprised of all material facts relevant to his or her decision
whether to undertake the risk and, if so, what premium to
charge. The
rationale of the rule is that the special facts upon which risk is to
be computed generally lie in the knowledge of
the insured only. This
duty to disclose exists in addition to the insured's obligation to
answer truthfully all questions put to
him or her by the company in
the proposal form. Failure by the insured to make such disclosure
entitles the insurer to avoid the
contract of insurance. See
Pereira
v Marine and Trade insurance Co, Ltd
.
1
[9] In short, the
plaintiffs evidence is that he is in court on the basis that his
insurance contract has been breached. He was
insured by Absa iDirect,
for his BMW 525i motor vehicle. He took out the insurance in July
2010. He was provided with a quotation
on 13 July 2010. The quotation
was accepted on 28 July 2010. The negotiations and conclusion of the
insurance agreement was done
over the phone. In 2011 he was involved
in a motor vehicle accident and the insurance refused to pay out the
claim. Absa iDirect
refused to pay his claim because it was alleged
that he did not tell them that Auto and General cancelled his policy
in respect
of the BMW330i.
[10] He previously
had a BMW 330i motor vehicle that was insured by General Insurance
Ltd (Auto and General). He had taken out two
insurance policies
underwritten by Auto and General. The first insurance was under
policy number 5[...] for home contents cover
effective from 29
September 2008 and cancelled from 10 March 2009. He was provided with
a letter of cancellation of this policy.
The contract was cancelled
by Auto and General at his request The second policy was for his BMW
330i. They were robbed at the house
where he together with his wife
was shot and the motor vehicle hijacked. The claim for the motor
vehicle was paid out. After Auto
and General paid the claim for the
BMW 330i, they refused to register him for another motor vehicle. He
asked for a quotation but
they refused to provide it. The manager at
Auto and General informed him that they cannot accept his quotation
because the motor
vehicle that he was driving was high risk. He asked
for a letter to show that they will not insure him because he did not
understand
why they would not insure him. He was then told that the
insurance company that will insure him should phone them for any
further
information because there is no letter that can be given to
him. He then bought another motor vehicle, the BMW 5251 which is the
subject matter of these proceedings.
[11] According to
him there were no facts material and relevant to the agreement which
were known to him at the time of the conclusion
of the contract which
he did not tell the consultant of Absa iDirect over the phone. He did
not misrepresent any fact to the Absa
iDirect consultant He told her
the whole truth. He told her that he was insured by Telesure and
explained to her the reasons why
Telesure refused to insure him. He
gave her permission to contact Telesure. The lady from Absa iDirect
called him two weeks after
she gave him the quotation to find out
whether he was still interested to proceed with the insurance. As
such he was under the
impression that she had phoned Telesure to
ascertain the reason for the cancellation.
[12] On the
converse, the defendant’s testimony is that it was advised by
Telesure that the plaintiffs previous insurance
with them was
cancelled due to unacceptable risk. As the plaintiff did not disclose
that he was refused cover due to unacceptable
risk but because his
motor vehicles were high risk the defendant had to repudiate the
claim. The defendant accepted to cover the
plaintiffs motor vehicle
on the basis of the misleading information he provided. The
information given at sale stage, according
to Bhengu is taken in good
faith and accepted as true and correct there is therefore no need to
verify it. This is the practice
in the insurance industry;
verification is done only at the time of lodgement of a claim. Meyer
from Telesure confirmed in his
testimony that the plaintiff was
cancelled because he was a moral risk which is the same as
unacceptable high risk. According to
him, Telesure believed that the
plaintiff would lie to them and put in illicit and fraudulent claims
- that is why they cancelled.
DID THE PLAINTIFF
DISCLOSE THAT HIS POLICV WITH TELESURE WAS CANCELLED?
[13] It is common
cause that the defendant learn't from Telesure that the plaintiffs
previous insurance policy was cancelled as
a result of Telesure
finding that the plaintiff had an unacceptably high risk. This was
discovered at the time that the defendant
was investigating the
plaintiffs claim, which is a norm within the insurance industry. This
was confirmed by Meyer in his testimony
confirmed that the plaintiffs
policy with Telesure was cancelled because the plaintiff was profiled
as unacceptably high risk.
[14]
The defendant’s counsel when cross examining the plaintiff
challenged the plaintiffs testimony in that he (the plaintiff)
did
not inform the defendant that his insurance with Telesure was
cancelled. The plaintiff was put to task about a response which
he
gave to the defendant’s sales consultant. That response was
recorded as
“
Ja,
okay” coupled with an explanation. According to the defendant’s
counsel, this was not a reply accepting that the
policy with Telesure
was cancelled but simply words the plaintiff used to start a
conversation. This challenge to me was a non-issue
because this was
not the defendant’s case. In its pleadings the defendant’s
defence is that the plaintiff failed to
disclose that his insurance
agreement with Telesure was cancelled because of unacceptably high
risk. The issue raised by the defendant
in his defence was not that
the plaintiff failed to disclose that the policy was cancelled, but
that he did not disclose that the
policy was cancelled due to his
classification as unacceptable high risk. I would therefore move from
the basis that failure to
disclose
cancellation was not in issue and to accept the plaintiff evidence
that he did disclose to the defendant that Telesure
had informed him
that the agreement was cancelled.
DID THE PLAINTIFF
DISCLOSE THAT HIS POLICV WITH TELESURE WAS CANCELLED DUE TO
UNACCEPTABLE HIGH RISK
[15] It is also
common cause that Telesure cancelled the plaintiffs policy because of
his profile as unacceptably high risk. It
is also not in dispute that
Telesure did not provide the plaintiff with a letter cancelling its
agreement with him. The plaintiffs
testimony was that Telesure did
not advise him that they cancelled because of unacceptable high risk.
He also testified that he
did not understand the reason why Telesure
cancelled his policy or refused to cover him further. The plaintiffs
further testimony
is that although he asked Telesure to provide him
with a cancellation letter, the claims specialist refused to give him
the letter.
The letter could have, in my view, assisted to easily
determine whether or not the plaintiff was informed of the reason why
his
policy with Telesure was cancelled. In order to ascertain whether
or not Telesure informed the plaintiff about the reason why the
policy was cancelled, the parties relied on the conversation between
the plaintiff and the Telesure’s claims specialist the
transcript of which as already stated was in Bundle
W
C’\
The relevant part of that conversation is recorded as follows:
“
C-Client
S
- Claims Specialist
_
C- NOT A PROBLEM
S - OK MR VALOYI
ANYTHING ELSE THAT I CAN ASSIST U WITH?
C - THERE'S THE
THING OF, OF INSURANCE WHAT I WANT, BECAUSE I DO NOT HAVE TO - I
DON'T KNOW WHO TO SPEAK TO ABOUT IT.
S- MMM
C- BECAUSE IF, IF
ITM MIGHT BE RIGHT - ITS - ITS NOT SOMETHING THAT LIKE, I WILL DO ON
INTENTION... HE ‘FUCK’ IT UP
TOTAL THERE WAS SOMEONE IN
THE CALL CENTRE
S- MMM
C - AND FOR ME TO
BE DENIED INSURANCE LIKE THAT CAUSE WHEN I SPEAK TO YOU, I SAID I HAD
A WISH I WAS GONNA KEEP MY CAR AND PAY INSURANCE.
S - MMM. MMM OK.
OK ITS THE SAME SCENARIO IF A PERSON - UHM - IS A BUSINESS OWNER THEN
DRIVES IT FROM CUENT TO CUENT AND DUE TO
THE ... THE AREA THAT HE IS
DRIVING IN HE’S
BEEN IN A LOT OF
ACCIDENTS AND THE RISK IS BECOMING TOO HIGH OR A PERSON WHO STAYS IN
A COAST AND BECAUSE OF.,. (CELL PHONE RINGTONE...)
C- SO... NOW I...
S - IF ITS
CIRCUMSTANCES OUT OF HIS CONTROL HE DIDN’T ASK FOR IT DIDNT
WISH FOR IT BUT STILL WE AS THE INSURANCE COMPANY HAYE
A RIGHT TO
DECIDE ARE YOU GOING TO BE HIGH RISK OR NOT, SO - WE LOOKED AT YOUR
AGE. WE LOOKED AT THE TYPE OF VEHICLE THAT YOU ARE,
YOU ARE DRIVING
AND WE MADE IT EFFICIENT THAT THE, THE PERSON ITSELF NOT THE
CIRCUMSTANCES BUT YOU, AS YOUR AGE AND THE VEHICLE
THAT YOU ARE
DRIVING IS TOO HIGH A RISK WE CANT TAKE IT WE ARE NOT WILLING TO TAKE
THAT RISK.
C - SO EVEN IF I
SELL IT & MOVE... MOVE WHERE I AM STAYING.
S- IT'S WHAT?
C - I AM MOVING
WHERE I AM STAYING NOW.
S - ITS NOT ABOUT
YOUR AREA ALSO SIR YES IT IS ABOUT YOUR SECURITY SY5TEM. JUST KNOW
WHAT THE CRITERIA IS, ITS NOT ALWAYS JUST DUE
TO THE PHYSICAL AREA
THAT YOU STAY IN, ITS ALSO TO DO WITH THE PERSON THAT DRIVES THE
VEHICLE, THE AREA THERE IS A LOT OF STUFF
WHICH IS NCB DEPENDANT -
EVERYTHING THEY HAVE AT ON NCB THE END OF THE DAY TO BE ACCEPTABLE
FOR US TO INSURE YOUR YEHICLE. BUT
THERE'S A LOT OF OTHER INSURANCE
COMPANIES MR VALOYI.
C- BUT WHAT I AM
SAYING IS...
S- MMM
C - CAN YOU, CAN
I GET NCB LETTER JUST TO SAY THAT BECAUSE, SHOULD I SHOULD I WANT TO
CHOOSE WHY YOU GUYS HAYE... CAN I BE LIKE,
CAN I CHOOSE THE LETTER
THAT, THAT IS THE REASON, NOT BECAUSE I'M THE BAD PERSON OR ANYTHING
BUT BECAUSE THE CARS THAT I’M
DRIVING?
S - MMM SIR, NO
THEY CAN PHONE US, THEY CAN PHONE US AND ASK THAT SO...
C - ITS NOTED AS
UNACCEPTABLE RISK
S- ITS NOTED AS
UNACCEPTABLE RISK
C - IS IT?
S
- SO YOU, YOU, YOU KNOW WHAT DID U HAVE TO DO AND THATS ONLY MY
OPINION. WHEN YOU GET NEW INSURANCE BY SAY FOR ARGUMENT SAKE FOR
INSTANCE OUTSURANCE, TELL THEM LISTEN MY INSURANCE COMPANY CANCELLED
MY POLICY AGAIN DUE TO THE FACT THAT UHM ... THE TYPE OF VEHICLE
&
MY
AGE - IS TOO HIGH A RISK FOR THEM TO CARRY - MY INSURANCE WAS NOT
CANCELLED DUE TO FRAUD - THERE IS A DIFFERENCE BETWEEN FRAUD
DUE ON
TO HIGHER RISK OR UHM ... THE, THE USE OF THE VEHICLE ITS THE SAME
SCENARIO YOU TOLD NICO’S THAT YOU FIRST WANTED
TO GET A QUOTE
FOR THE JAG THROUGH OUTSURANCE AND THEY GAVE YOU EXACTLY THE SAME
ANSWER
C- I
GET YOU
S- ON
TOO HIGH A RISK AND YOU DID NOT SAY THAT TO US
C - NOT
REALLY BEING DUE TO HIGH RISK BUT IT WAS UHM... A HIGH RISK MUST BE A
LOT LOWER
S - LOWER
C - YES
MA’M
S- ABSOLUTELY
C- WHERE
THEY GONNA GIVE ME PREMIUM, IF I DON’T GET IT FROM YOU, WHERE
SHALL I BE GETTING A PREMIUM FOR
R97 000-00 OF WHICH I ‘M NOT
WILLING TO PAY THAT AMOUNT
S- JA
C - ITS NOT LIKE
YOU GUYS GAVE ME HIGH PREMIUM BUT YOU TELL ME YOU CANT INSURE ME
S- JA
C - THATS
ALL
S - JA.
YOU ARE UNACCEPTABLE RISK
C- JA
S - NOT
YOU
C - BUT
I KNOW ITS UHM... MY CAR IS UNACCEPTABLE RISK
S - OK,
OK SO WHEN ARE YOU COLLECTING YOUR NEW VEHICLE, WELL YOU BE DRIVING
YOUR YEHICLE WITHOUT AN INSURANCE
NOW? AS THIS IS WHAT IS GOING TO
HAPPEN?
C - THAT’S,
THAT’S WHAT I’M HEARING FROM YOU BECAUSE I WAS WILLING TO
... TO INSURE MY VEHICLE WITH YOU GUYS,
THAT I GET ALL THE
REQUIREMENTS BUT, ITS NOT BECAUSE I’M GETTING A 525
S - SO YOU DIDN'T
GET A QUOTATION FOR A RANGE ROVER NOW AS I UNDERSTAND C - NO I WAS
JUST WEIGHING OPTIONS 5- WEIGHING OPTIONS?
C- YES, LIKE SEE
IF I GET THIS CAR HOW MUCH IS WILL THE INSURANCE BE, I MUST BUY
SOMETHING CHEAPER INSURANCE WISE, ÍT WILL
HELP ME ... BUY A
CHEAP CAR AND THEN I DON’T GET INSURANCE SHOULD I GET AN
ACCIDENT I WILL HAYE COVER
S - ABSOLUTELY
C - S
NOW I AM BUYING A 5 SERIES
S- OH OK
C- JA
STILL YOU GUYS WONT INSURE ME
S - NO ITS A BIG
CALL, WHY DO YOU BUY A 5 SERIES? ITS A VERY BIG CAR
C- NO THAT
ONE IS NICE, IS A FACT I HAVE A LITTLE BOY
S- OH
C- I NEED A
BIGGER CAR
S- OH OK
C- YES
S- THE VOLVO ITS
ALSO A SAFE CAR …ALSO A BIG CAR
C- VOLVO IS NOT
MY STYLE
S- IS NOT YOUR
STYLE?
C- JA
S - OH OK, AND
THE DODGE?
C - THE DODGE YOU
KNOW WHAT I WANT FROM A CAR? I WANT COMFORT AND THE UHM THE JAGUAR
HAD THE COMFORT BUT UNFORTUNATE IT HAD PROBLEMS
WITH THE MECHANICAL
S- MMM
C- JA
S- OK IT ALL
DEPENDS AND GOOD LUCK MR VALOYI, IF THERE’S ANYTHING ELSE
YOU’RE INTERESTED VOU CAN PHONE ME
C- OK”
[16] In his
evidence, the plaintiff wanted this court to believe that Telesure
did not inform him about the reason his policy was
cancelled. It is,
however, apparent from this conversation that the plaintiff was
advised and he knew that his policy with Telesure
had been cancelled
and that Telesure was no longer prepared to insure him further. It is
also clear from the conversation that
the plaintiff was told and he
was aware that the cancellation was as a result of unacceptable risk.
The difficulty however is that
the claims specialist did not properly
explain to him what the concept of unacceptable risk entailed. From
the conversation it
appears that the explanation given to the
plaintiff was that Telesure considered his age and the motor vehicle
he was driving in
order to conclude that the risk was unacceptably
high. She also explained the risk involved to mean high risk. For
example, she
informed the plaintiff that the insurance company has a
right to decide whether he was going to be high risk or not; and in
doing
so they looked at his age and the type of vehicle that he was
driving and they made it efficient [sic!] that the person and not
the
circumstances, but him, because of his age and the motor vehicle that
he was driving was too high a risk and they were not
willing to take
that risk.
[17] There were also
times where the claims specialist referred to the risk involved as
high risk. For instance, she advised the
plaintiff to tell a company
which would want to insure him that his insurance company cancelled
his policy due to the fact that
the type of vehicle and his age were
too high a risk for them to carry and that his insurance was not
cancelled due to fraud. He
also advised him that there was a
difference between fraud due to higher risk and the use of the motor
vehicle. The two went on
to discuss different types of motor vehicles
which in my opinion could have left one with an impression that what
was considered
was the type of motor vehicle which caused the risk to
be high, rather than the person. It is my view that the claims
specialist
left the plaintiff with an impression that Telesure did
not want to insure him further because the type of motor vehicle he
was
driving was unacceptable high risk.
[18] Another
challenge by the defendant was that the plaintiff ought to have known
what Telesure meant by ‘unacceptably high
risk’ as he was
employed within the insurance industry. It is common cause that at
the time the plaintiff entered into an
agreement with Telesure for
insurance cover he was employed with Outsurance as a claims advisor.
He had been so employed for a
period of four years. However, from the
evidence he gave in court it was clear that the plaintiff did not
understand what unacceptable
risk was. His explanation was that
unacceptable risk and high risk were the same and were in respect of
the item to be insured.
On the other hand the other more clued up
persons in the insurance industry, Maphalanga, Meyer and Bhengu
differentiated between
unacceptable risk and high risk. According to
their evidence unacceptable high risk pertained to the person of the
client whilst
high risk was in respect of the item covered by the
insurance.
[19] The plaintiffs
evidence was corroborated by that of Maphalanga. At the time when he
testified, Maphalanga, was an employee
of Outsurance where the
plaintiff was also employed. He was employed in the claims department
as a motor claims manager. His testimony
was to the effect that at
the level at which the plaintiff was employed he would have known on
a very limited scale what ‘unacceptably
high risk’ would
mean. It was also evident when asked under cross examination that the
plaintiff did not exactly understand
what unacceptably high risk
meant I have therefor to conclude that the plaintiffs experience
acquired within the insurance industry
did not equip him with the
knowledge to be able to differentiate between high risk and
unacceptably high risk.
DID THE PLAINTIFF
FAIL TO DISCLOSE WHAT WAS IN HIS KNOWLEDGE AT THE TIME HE CONCLUDED
THE AGREEMENT WITH THE DEFENDANT?
[20] To my mind what
would have been within the knowledge of the plaintiff at the time he
applied for cover with the defendant and
what he should have
disclosed to the defendant was because of his age the type of motor
vehicles he drove were classified high
risk or unacceptably high risk
which resulted in the defendant refusing to insure his BMW 525i motor
vehicle.
[21] The contents of
what the plaintiff disclosed to the defendant’s sales
consultant can be gleaned from the recorded telephone
conversation
between the sales consultant and him at the point of sale. The
conversation was transcribed and Is contained in Bundle
“D”
of the record as follows:
“
First
Convo
Createn
Valoyi (Client)
_
Hello (Client)
Good day how are
you (Agent)
Good yourself
(Client)
I’m goods
can I please speak to Mr Valoyi? (Agent)
It’s him
speaking (Client)
Mr. Valoyi you
are speaking to Tsoto from Absa Idirect insurance (Agent)
Yes (Client)
And the reason
that I am calling you........(Agent) (Could not make out who referred
her to him)
Ves (Client)
She asked me to
give you a call with regards to your insurance (Agent)
Yes (Client)
Ok, and will this
be a convenient time to do the quote? (Agent)
Ja we can talk
(Qient)
And the quotation
you are requesting, what is it on sir? (Agent)
For my BMW
(Client)
For a car?
(Agent)
Ja (Client)
Are you an Absa
client? (Agent)
No (Client)
I beg yours?
(Client)
Are you an Absa
dient (Agent)
No (Client)
Alright may I
please have your ID NUMBER? (Agent)
Oh, what I’m
gonna do it, I'm gonna take down the details then I’m gonna ask
you these questions in order to get a premium
for you. But before we
continue I just want to inform you that all our calls are recorded
for quality as well as security reasons
and that Absa is an
authorised financial service provider and we hold professional
indemnity insurance. Ok (Agent)
Ja (Client)
I’ve got
the initials of C Valoyi (Agent)
Yes (Client)
Ok and your first
name is? (Agent)
Createn (Client)
Createn, oh, and
your occupation? (Agent)
My (Gient)
What is your
occupation? (Agent)
I’m a
claims advisor (Client)
Claims advisor
(Agent)
Ja (Client)
OK, can I please
have your work telephone number? (Agent)
...
Are you married
in community of property or ANC? (Agent)
Ja in community
of property (Client)
In community of
property (Agent)
Ja (Client)
All right
language of correspondence English or Afrikaans (Agent)
English (Client)
...
Has an insurer
ever cancelled your policy? (Agent)
Ja ok. Let me
tell you what happened I, I had an incident lihe on the 17
th
of May (Client)
Yes (Agent)
Uhm, where there
was shooting in my house and they pinned the BMW (Client)
Ja (Agent)
Right uhm, so I
was Insured with uhm Auto & General (Client)
Ja (Agent)
They are paying
out my claim now, but they cannot give me another quotation for the
BMW they said the cars that I am driving are
high risk so I don’t
know what that means (Client)
Ok (Agent)
So for more
information you can just speak to them (Client)
They, they,
never, ok, they didn't cancel your insurance due to claims rate they
just find out that the car is a high risk (Agent)
No they paid out
the claim (Client)
ja (Agent)
And then after
that uhm I have requested a quotation and then they gave me a
quotation and the one manager called me and say they
cannot insure my
car cause it’s a high risk (Client)
Oh, oh i
understand... (Agent)”
[22] On the basis of
the two telephone conversations quoted above, I am prepared to accept
the plaintiffs version that to him high
risk and unacceptable risk
meant the same thing. I am, thus, satisfied that there were no facts
material and relevant to the insurance
agreement which were known to
the plaintiff at the time of the conclusion of the contract which he
did not disclose to the defendant
nor did he misrepresent any fact to
the defendant His claim should therefore succeed.
WAS THE POLICY IN
RESPECT OF BMW 330i ACTUALLY CANCELLED?
[23] A further issue
which, although not in dispute between the parties, I thought I
should deal with is whether the insurance policy
in respect of the
BMW 330i was cancelled.
[24] The plaintiffs
testimony is that Telesure did tell him that the insurance for the
BMW 330i was cancelled. He did not understand
why Telesure would say
the policy for the BMW 330i was cancelled when Telesure was in the
process of paying out the claim which
was indeed paid. According to
him, Telesure could not have cancelled the policy for the BMW 330i
because they paid out the claim.
If they had cancelled they would not
have paid his claim. The plaintiff understood cancellation to mean
cancelling something that
is still standing and not something that
has expired. According to him the policy for the BMW 330i was at the
final stage because
the claim was being paid out. The only quotation
that was declined was for the BMW 525i and there was no policy for it
yet.
[25] According to
Meyer from Telesure the plaintiffs claim with them was initially
repudiated because of what he referred to as
moral risk on the part
of the plaintiff. The moral risk was as a result of Telesure being
suspiscious about the funds used by the
plaintiff to purchase the BMW
330Í motor vehicle. However, the Board decided that because
the policy contract was adhered
to the claim should be paid and ties
be cut with the plaintiff. Meyer in his evidence conceded that once
the claim was paid there
was nothing further to insure and the
contract would have seized to exist But where they would not want to
insure the person in
future they write that person a letter giving
him or her notice that they will no longer be doing business with
that person again.
This according to Meyer is to protect themselves
for future purposes should the person come back, so that they know
what was decided
previously.
[26]
I am inclined to agree with the plaintiff on this point. What Meyer
described as cancellation can never, in my opinion, be
regarded as
cancellation. It is not understandable how the policy for the BMW
330i could be said to have been cancelled when the
claim was being
paid out The motor vehicle had been hijacked and was not recovered
and there was thus no
menc
After
payment there would have been nothing else to insure. In my view the
policy came to an end after the claim has been paid.
Even in the
circumstances where there was no issue with the insured person once
the claim was paid out where the item insured does
no longer exist
that agreement comes to an end. A new agreement would have to be
concluded to cover a new item. At the very least
a repudiation under
circumstances such as in the instance should have been based on the
failure to disclose that the previous insurer
refusal to insure the
plaintiff.
[27] Consequently I
make the following order:
27.1 The defendant
is ordered to pay to the plaintiff a sum of R297 990 together with
interest thereon, in the event that the aforesaid
amount is not paid
within 14 days after judgment plus costs of suit.
27.2
Interest to be calculated at the rate of 15, 5%
per
annum
from
the date of judgment to date of payment
27.3 The cost of
suit shall include preparation and reservation fees and Value Added
Tax, where applicable.
KUBUSHI j
JUDGE OF THE HIGH
COURT
APPEARANCES
HEARD ON THE: 26
NOVEMBER 2011
DATE OF JUDGMENT: 12
JUNE 2014
PLAINTIFF'S COUNSEL:
ADV BALOYI
PLAINTIFF’S
ATTORNEY: MASHAMBA INCORPORATED
DEFENDANT’S
COUNSEL: ADV DESAI
DEFENDANTS ATTORNEY:
RAMSY WEBBER ATTORNEYS
1
1975
(4) 745 (A) at 755F - H and all the judgments referred to therein