About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2011
>>
[2011] ZAFSHC 217
|
|
Jordaan v Liberty Life Ltd (3890/2007) [2011] ZAFSHC 217 (29 July 2011)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No.: 3890/2007
In
the matter between:
COERT
RETIEF
JORDAAN
........................................................................................
Plaintiff
and
LIBERTY
LIFE
LTD
................................................................................................
Defendant
JUDGMENT:
MOLEMELA, J
HEARD
ON: 5, 6 and 8 May 2009; 25, 26 & 28 May 2010
and
1, 2 & 3 December 2010
HEADS
OF ARGUMENT FILED ON: 15 April 2011
DELIVERED
ON: 29 July 2011
INTRODUCTION
[1]
The plaintiff instituted action against the defendant for the payment
of an amount of R2 251 017,00 being the proceeds of an
insurance
policy issued by the defendant under policy number 5[…] (“the
policy”). The life insured in terms
of the policy was that of
the erstwhile business partner of the plaintiff, namely Mr J H M[…]
(“the deceased”)
who died on the 31
st
December
2005. The commencement date of the policy was 1 March 2000. The
plaintiff was stipulated as both the “owner”
and “100%
beneficiary” of the said policy. During January 2006 the
defendant was notified of the passing away of the
deceased. The
defendant paid the death benefits of the policy to the estate of the
deceased.
[2]
The defendant filed a special plea in terms of which it resisted the
plaintiff’s claim on the basis that the plaintiff
has no locus
standi to institute proceedings against the defendant on account of a
cession in terms of which the plaintiff ceded
his rights, interest
and title to the policy in favour of the deceased (first cession) and
also on account of a cession in terms
of which he (the plaintiff)
ceded all his rights title and interest to the policy in favour of
one Opperman (second cession). I
must hasten to point out that the
special plea makes it clear that the plaintiff’s lack of locus
standi in respect of the
second cession is pleaded in the
alternative, the effect whereof would be that if I find that the
plaintiff signed the first cession,
then the plaintiff would have
divested himself of all rights to the policy and there would
thereafter have been no further rights
capable of being ceded in
terms of the second cession.
BACKGROUND
FACTS
[3]
It is common cause that at all material times and since 1995 the
plaintiff and the deceased were business partners in a property
investment business called JPJ Beleggings CC as well as co-directors
and co-shareholders in an office equipment distributorship
called
Bloemfontein Minolta (Pty) Ltd (“Minolta”). The latter’s
business supplier was a company called Minolco.
The plaintiff and the
deceased had signed a suretyship in favour of Minolco in September
1997 for all sums of money owed by Minolta
to Minolco. It is common
cause that the plaintiff was released from the said suretyship only
in 2006, i.e. after the deceased’s
death. It is undisputed that
in addition to Minolco, the plaintiff and the deceased had bound
themselves as sureties in favour
of other creditors and that Minolta
was, inter alia, indebted to the South African Receiver of Revenue in
a substantial amount
of money.
[4]
It is also common cause that at the 1999 year-end function of
Minolta, the deceased announced that Ryno Opperman (“Opperman”),
Ronaldo Scholtz (“Scholtz”) and Frans Potgieter
(“Potgieter”) had been appointed as directors of Minolta
and that each of them was to be issued with 5% of the shares of
Minolta. Not long thereafter, a certain Mr Louwrens Smith (Louwrens
Smith), an insurance broker, addressed the directors of Minolta and
gave them advice on “buy and sell” insurance policies.
In
November 1999, the plaintiff applied to the defendant for an
insurance policy on the life of the deceased. This policy, which
commenced on 1 March 2000, was brokered by one Chari Terblanche. At
the beginning of 2000, Smith arranged for “buy and sell”
insurance policies to be issued by Old Mutual for Opperman, Scholtz
and Potgieter. These policies were on the life of the deceased
(Mathyssen) and were intended to provide funds for Opperman, Scholtz
and Potgieter to purchase Mathyssen’s shares in Minolta
in the
event of his death. It is common cause that after the plaintiff left
Minolta, the relationship between him and the deceased
became
strained to such an extent that they were barely on speaking terms as
at the time of the deceased’s death. In his
last days of his
life, M[…] (the deceased) was an alcoholic and his death was
as a result of an impairment of his liver.
[5]
Furthermore, it is also common cause that during February 2001 the
plaintiff resigned as a director and employee of Minolta
but entered
into an agreement with Minolta, in terms of which he was allowed to
market and sell only Minolta products. During May
2001 Minolta
severed all ties with the plaintiff pursuant to allegations of his
contravention of the sub-distributorship agreement.
The plaintiff’s
30% shareholding in Minolta was, in terms of an agreement signed in
August 2002, sold to Opperman. On the
same day, the plaintiffs 30%
member’s interest in JPJ Beleggings CC was sold to the
deceased. After the signature of this
agreement, the plaintiff handed
the original policy to the deceased.
[6]
As stated before the defendant paid the proceeds of the policy to the
deceased’s estate and with the assistance of the
deceased’s
attorney, viz Mr Chris Gerber, the proceeds were later accepted as
consideration for Opperman’s acquisition
of the deceased’s
shareholding in Minolta.
ISSUE
TO BE DECIDED
[7]
The main issue to be decided is whether the plaintiff ceded his
rights in terms of the policy to the life assured (deceased)
during
August 2002 and, if not, (ii) whether the plaintiff ceded his rights
in terms of the policy to Opperman at a rugby- suite
on or about 25
October 2003. The plaintiff’s case is that he never signed the
first cession and that the signature appended
to that cession,
purporting to be his signature, constitutes a forgery. With regards
to the second cession, the plaintiffs case
is that the said cession
was subject to a verbal suspensive condition that was never
fulfilled, as he discovered a few days thereafter
that he (plaintiff)
had, contrary to the oral agreement with Opperman, not been released
from suretyship.
[8]
SUMMARY OF EVIDENCE
Opperman’s
evidence
8.1
According to Opperman, the sale of shares agreement between him and
the deceased was concluded late in the evening of 30 July
2002 and
signed on the 31
st
July 2002. This agreement, which bears
the dates 30 and 31 July 2002, was admitted as an exhibit. His
evidence was that he could
not recall exactly which documents were
signed on that night and he could thus not confirm or deny whether or
not the disputed
cession document (signed by the plaintiff as the
cedent and M[…] as cessionary) was signed on that day.
Opperman’s
evidence was that at this same meeting the deceased
showed him the original cession document as well as the original
policy. He
further testified that “just after the 17
th
October 2003” a meeting was held, attended by him, the
deceased, Potgieter and Scholtz regarding the fact that the cession
from the deceased to Opperman could not be registered as the policy
was still in the plaintiffs name.
[8.2]
Opperman also testified that both he and Louwrens Smith (broker)
confronted the deceased about his failure to register the
cession
concluded between the deceased and Opperman. Once again, the deceased
showed him (Opperman) the original policy together
with the original
cession document, thereby allaying his (Opperman’s) concerns
about the ownership of the policy.
[8.3]
Considering the deceased’s tardiness, he (Opperman) decided to
circumvent the deceased and, notwithstanding the deceased’s
assurances, approached the plaintiff with the request that he
(plaintiff) cede the policy in his (Opperman’s) favour. The
plaintiff acceded to this request and signed this cession document at
a rugby suite. He subsequently submitted the cession document
to his
broker. He later learnt that the plaintiff had showed up at the
brokers offices under false pretences and then torn the
cession
document.
[9]
Paula Smith’s evidence.
9.1
Paula Smith, a manager in the administration division of the
Defendant testified that the original cession document (first
cession) was brought to her by the deceased on the 11
th
March 2005. It was dated the 23
rd
April 2001 and had
already been signed by the cedent and cessionary. The deceased was
also in possession of the original policy
document. She filled in the
policy number and the deceased’s details in the cession
document. Due to the fact that the deceased’s
particulars had
not yet been verified in terms of the Financial Intelligence Centre
Act (FICA), she could not finalize the registration
process in the
defendant’s computer system and decided to fax the cession
document to the deceased’s broker, viz Mr
Terblanche, so that
he could do the necessary verification regarding the deceased’s
proof of residence. As the original cession
document was printed on a
flimsy type of paper that could not be faxed without getting
crumpled, she photocopied it in order to
facilitate faxing. She then
gave the original cession and the original policy back to the
deceased. At a later stage on the same
day, someone from Terblanche’s
office faxed the cession document back to her, together with the FICA
verification form confirming
that the deceased’s details had
been verified. She then completed the cession registration process by
faxing a copy of the
cession document to the defendant’s
imaging department. According to her, the deceased was more than keen
to get the cession
registered as soon as possible and even phoned her
later the same day to enquire as to the progress.
9.2
Under cross-examination she could not explain the absence of a
cancelled revenue stamp in the top right hand corner of the cession
document as per the stipulation on the pro-forma cession document.
She confirmed that by 14 March 2005 when notification was forwarded
to the plaintiff by the defendant about the registration of the
cession the plaintiff immediately responded by denying that he
had
signed the cession document. She confirmed that the deceased only
wanted the registration of the cession in his favour and
never
mentioned a possible cession of the same policy to Opperman.
9.3
Paula Smith conceded that it was unusual for a cessionary to come off
the streets with an incomplete document he allegedly signed
with a
third party unknown to her (Smith), requesting that the document,
signed almost four years before being presented to her,
be completed
and be used for purposes of registration of the cession.
Significantly, she testified that whereas in the normal course
of
business a cession is registered very shortly after it is signed and
not several years thereafter, she had, however, agreed
to register
this cession under the aforementioned circumstances.
[10]
Ronaldo Scholtz’s evidence.
Scholtz
largely corroborated the evidence of Opperman regarding the meetings
that were held and the discussions that were had at
that meeting.
During his testimony, he (Scholtz) was referred to the sale of shares
agreement concluded in August 2002 in terms
of which the plaintiff
sold his member’s interest in JPJ Beleggings CC to the
deceased. In the same agreement, the deceased
undertook to provide
the plaintiff with a written undertaking to the effect that he had
been released from all suretyships signed
by himself in respect of
the obligations of Minolta. Scholtz conceded that such a written
undertaking was never provided to plaintiff
by Minolta. Scholtz
further testified that the “buy and sell” agreement
underlying the “buy and sell” policy
taken out by him,
Opperman and Potgieter was drafted by Gerber in 2005.
[11]
Louwrens Smith’s evidence
He
testified that in the meeting held in July 2003, he strongly advised
Opperman, Scholtz, Potgieter to increase their life cover.
The
deceased having failed and/or refused to go for the necessary medical
check-ups, he drew Opperman’s attention to the
high risk he was
running in not having sufficient cover and/or an agreement
incorporating such, in place. Louwrens Smith further
testified that
pursuant thereto, the deceased advised him and the other shareholders
that the plaintiff had ceded the policy to
him (the deceased) and
suggested that such policy be used to pacify Opperman. It was for
this reason that he completed the cession
document dated the 17
th
October 2003, in terms of which the deceased was the cedent and
Opperman the cessionary.
[12]
Louwrens Smith further testified that he emphasized to Opperman that
he was at risk without the cover and pointed out to him
that while
they were struggling to have the first cession registered, there was
a need to apply for life cover on the deceased
life in the amount of
R2 000 000,00. He (Louwrens Smith) accordingly applied for such cover
on the 5
th
November 2003, but the application was declined
by the relevant insurance company.
[13]
Chris Gerber’s evidence
Nothing
really turns on the evidence of Mr Chris Gerber, the deceased’s
attorney who also attended to the administration of
his estate. He
testified that he was not aware of any “buy and sell”
agreement in place between the plaintiff and the
deceased dealing
with the proceeds of the life policies. He conceded that the simple
taking out of a life policy by one partner
on the life of another
partner needs to be supported by a separate buy-and-sell agreement
concluded between the parties.
SUMMARY
OF EVIDENCE OF EXPERTS
[14]
Mr Snyman
14.1
Mr Snyman testified that he was requested by the defendant company to
analyse the cession document, which he, in his report,
referred to as
“the disputed document”. He testified that his report was
based on a comparison between a copy of the
disputed signature with
one single original specimen and one single copy specimen, which was
executed several years earlier. He
did, however, at the joint meeting
of experts have sight of more specimen signatures, which he also
analysed. According to his
evidence, a distinction needs to be made
between variations and differences. Variations are frequently found
in the handwriting
by the same author, while differences would point
to a different author. In his report he stated that he had not
identified “significant
differences” between the disputed
signature and the specimen signatures.
14.2
When asked to explain his choice of words (phraseology) he testified
that his report was meant for laypersons and should not
be understood
to mean that he had recognised that there were any differences in the
disputed signature.
He conceded that if a single dissimilarity or
difference is found in a disputed signature, which cannot be
logically explained,
that would justify a finding of a different
author or false signature
. His contention was that the disputed
signature fell within the variation of the plaintiff’s
signatures. He was adamant that
there were variations between the
disputed signature and the specimen signatures he had examined, but
no differences. His conclusion
was that the signature on the cession
document was the plaintiffs.
14.3
He was confronted with three areas of disagreement between him and Mr
Bester, the expert who testified on behalf of the plaintiff:
(i)
the open hook;
(ii)
the down/upstroke of the letter “J” in the signature; and
(iii)
the “misalignment” of the crossbar and line immediately
to the right of the letter “A” in the signature.
14.4
As regards the letter “J” in the signature of Jordaan
being part of the disputed signature, Snyman testified that
the
variations quite clearly evidence a triangle and teardrop formation,
a V-formation and distortion of the whole letter with
a downward
stroke. Under cross-examination he explained the differences in
configuration pointed out to him as a “wide range
of
variation”. As regards the misaligned crossbar of the “A”
Snyman testified, inter alia, that
should the court find that that
portion of the crossbar of the “A” exiting the “A”
on its right hand side
was not caused as a result of stepping, but in
fact two different lines, then such would be a difference justifying
a finding of
forgery.
[
15]
Mr Bester
15.1
Mr Bester was, according to his evidence, given several specimen
signatures stretching from 1996 to 2007. In court, he explained
the
methodology he employed in seeking to execute the plaintiff’s
mandate. He disagrees materially with Snyman insofar as
Snyman seeks
to rely on the whole concept of “wide degrees of variation”,
it being his evidence that such an approach
is not recognised in
accepted literature. He testified that in analysing handwriting an
expert was obliged to stay true to the
definitions and three basic
requirements, namely:
(i)
a single design;
(ii)
a single method; and
(iii)
a single movement.
15.2
According to Bester, the open hook referred to by Snyman constituted
a fundamental difference and was clearly visible to the
naked eye.
Bester emphasized that, having regard to the definition and the
acceptable approach to construction, it must be found
that the
opening upward stroke of the “J” in the disputed
signature, viewed within the context of the construction
of the same
letter in all the specimen signatures, was nothing less than a
fundamental difference entitling the court to find that
the signature
was fraudulent. Bester was quite prepared to concede that if the
court itself found a similar construction in any
one of the accepted
specimen signatures it was entitled to find that such was then
nothing more than a variation justifying a finding
that the disputed
signature was in fact authentic.
15.3
As regards the misaligned crossbar of the letter “A”
Bester testified that the misalignment was not caused by stepping,
but in fact the lifting of the pen which is a departure from the
basic construction in the specimen signatures.
[16]
The Plaintiff’s case
In
his replication, the plaintiff pleaded that “the primary
purpose of the relevant policy was to secure plaintiff’s
exposure, in his capacity as shareholder, as a surety for and on
behalf of Bloemfontein Minolta (Pty) Ltd”. This he repeated
in
his evidence. He also vehemently denied ever signing the first
cession document. It was not disputed that the plaintiff has
always
insisted on being released from the suretyship.
EVALUATION
OF EVIDENCE
[17]
Counsel for the defendant, viz Mr Gautshi SC conceded from the outset
that the defendant bears the onus of proof in this matter.
Given the
conspectus of the evidence and the submissions made on behalf of the
defendant, it is obvious that the questions that
need to be answered
are the following: (1) whether the policy in question was a “buy
and sell” policy specifically
intended only for the purchase of
Mr M[…]’s shares in the event of his death or whether
the deceased and the plaintiff
had also envisaged that the same
policy could also be utilised to protect the plaintiff in his
exposure as a surety for and on
behalf of Minolta; (2) whether the
plaintiff signed the first cession, by so doing "ceding his
rights in the policy to the
deceased; (3) whether the second cession
was subject to a suspensive condition or not. As there are factual
disputes regarding
all three aspects, these disputes will be
determined in accordance with the principle laid down in
STELLENBOSH
FARMERS WINERIES GROUP LTD AND ANOTHER V MARTELL ET CIE AND
OTHERS 2003(1) SA 11.
Whether
the policy issued by the defendant is a “buy and sell”
policy intended only or
the acquisition of the shares upon the
death of a shareholder
[18]
The policy document records the reason for the policy as follows:
“buy and sell / partners at Minolta”. Although
Paula
Smith (the defendant’s manager) testified that the reason
stated in the policy application form signified that the
policy in
question was a “normal buy and sell agreement, to make
provision for the buy out of one of the parties’ shares
in the
case of death”, it would seem that various individuals were not
on the same wavelength regarding the events this policy
was intended
to cover, notwithstanding the presentation made to the plaintiff, the
deceased, Opperman, Scholtz and Potgieter towards
the end of 1999.
The plaintiff’s version is that the policy was intended as a
“buy and sell” policy but was also
intended to secure
liability arising out of the suretyship. This was vehemently denied
by the defendant’s witnesses, who
were adamant that it was only
intended to be a “buy and sell” policy intended only to
make provision for the purchasing
of one of the shareholder’s
shares in the event of death. Significantly, none of the “buy
and sell” policies
taken out by all these parties was preceded
by a written “buy and sell” agreement. According to both
Gerber and Scholtz,
such a written agreement was only entered into in
2005.
[19]
When one looks at the policy itself, it is silent with regards to the
specific event(s) that the policy was intended to cover.
The general
terms of this policy seem to be standard terms that are normally
stipulated in any capital insurance policy. Given
the nature and
especially the purpose of “buy and sell” policies,
irrespective of whether there is an oral or written
“buy and
sell” agreement underlying them, one would expect such policies
to have special provisions and unique terms
applicable to their
cession so as to preserve the purpose they were intended for and to
ensure that the substratum of the policy
does not fall away. However,
in casu, clause 8 of the general terms of the policy simply provides
as follows:
“
8.
Regte van Partye: Die Eienaar mag enige tyd ‘n Begunstigde
benoem om die sterfte voordeel te ontvang (onderworpe aan die
regte
van enige sessionaris) of ‘n Begunstide skrap. Die Eienaar mag
die kontrak sedeer. Geen sessie, of benoeming of skrapping
van ‘n
Begunstigde is bindend op Liberty Life tensy deur Liberty Life op
rekord aangeteken nie. Liberty Life is nie verantwoordelik
vir die
geldigheid van enige sessie of die benoeming van ‘n begunstigde
nie. Waar ‘n absolute sessie aangeteken is,
word die
Sessionaris die Eienaar van die kontrak.
Enige
betaalbare Voordele is aan die Eienaar of aan sy boedel betaalbaar.
Indien daar egter ‘n Begunstigde benoem is en geen
sessie
aangeteken is nie, is die Sterftevoordeel aan die Begunstigde
betaalbaar. Waar ‘n sessie aangeteken is, is enige betaalbare
voordele aan die sessionaris betaalbaar of, in die geval van ‘n
absolute sessie, word die Sterftevoordeel betaal aan enige
begunstigde wat die Sessionaris in sy hoedanigheid as Eienaar benoem.
Onderworpe
aan enige sessie, mag die Eienaar alle regte ingevolge hierdie
kontrak sonder die toestemming van enige begunstigde uitoefen.
Waar
die kontrak meer as een Eienaar het, moet alle Eienaars die regte
gesamentlik uitoefen.”
[20]
It is evident from this clause that there are absolutely no
restrictions regarding the nomination of a beneficiary as well
as the
cession of the policy. The policy was thus open to be ceded to
anyone, which would include even persons that had no business
relationship with the deceased. As I see it, this means that if the
plaintiff so wished, he could have ceded the policy to anyone
even
before the alleged date of signature of the first cession, such that
by the time the business relationship came to an end,
the deceased
would have been unable to demand that the plaintiff cede it back to
him. I state this only to make a point, being
quite mindful of the
fact that that is not how events unfolded in casu.
[21]
This lack of restrictions, in my view, negates any notion of the
policy having been an out and out “buy and sell”
policy
intended only for the purchasing of a shareholder’s shares in
the event of death. It would seem that the defendants
attitude when
issuing the policy was that what was key was the business
relationship between the owner of the policy and the life
assured as
at the time of the conclusion of the contract only, hence no
conditions were attached to the cession of such a policy
or the
nomination of its beneficiaries. This, in my view supports the
plaintiff’s assertion that the policy was not an out
and out
“buy and sell” policy.
[22]
In seeking to show that the policy was an out and out “buy and
sell” policy, the defendant sought to place significant
reliance on various witnesses’ evidence. I now turn to deal
with these witnesses’ evidence on this aspect. What was
clear
from Mr Louwrens Smith’s evidence is that a “buy-and-sell”
policy is a policy intended to enable existing
shareholders to
purchase the interest of a deceased so as to ensure business
continuity. I must say, just as an aside, that when
one considers the
purpose of a “buy and sell” policy as explained by Mr
Louwrens Smith, one would expect that all five
shareholders of
Minolta (the deceased, the plaintiff, Opperman, Scholtz and
Potgieter) would have taken out policies on each other’s
lives
pro rata to the value of their shareholding, but this was clearly not
the case, as no such evidence was adduced.
[23]
When consideration is paid to the evidence of Louwrens Smith,
Opperman and Scholtz pertaining to what their understanding of
the
policies and the purpose thereof was, it must also be considered that
even though the policies to the various directors were
issued
pursuant to the presentation made by Mr Louwrens Smith towards the
end of 1999, the following differences are critical:
(1)
the plaintiff and the deceased decided to utilise Mr Chari Terblanche
as their broker, while the three other directors (Opperman,
Scholtz
and Potgieter) decided to use Louwrens Smith as their broker;
(2)
the policy in dispute was issued by the defendant, while the other
three directors’ policies were issued by Old Mutual;
(3)
according to Scholtz, there were policies issued to the three of them
on the life of the deceased and there was “a
cross-referencing”.
With regards to the policy in dispute,
there is no conclusive evidence that the deceased and the plaintiff
had reciprocal policies
or that they had cross-nominated each other
as beneficiaries.
[24]
Ms Paula Smith, a manager who has been in the employ of the defendant
for about eight years, seemed clueless as to the pre-requisites
for
the issuance of a “buy and sell” policy by her own
company. All*she really did was to make reference to the description
of the policy as it appears in the application form. This is the same
lady who registered a cession on the strength of a partially
completed cession document signed in her absence and presented to her
by the cessionary in the absence of the cedent. As stated
before, she
handed the original cession back to the deceased. Furthermore,
despite learning that the plaintiff had denied ever
signing the
cession document, she admittedly did absolutely nothing about the
matter.
[25]
In his evidence-in-chief, Louwrens Smith explained that a “buy
and sell" policy was never used to cover for liability
arising
out of a suretyship as there was a policy which was used exclusively
for that purpose. From his evidence, it would seem
that the
difference in these two policies would be the taxability of the
premiums and death benefits and their estate duty implications.
He
was emphatic that the policy that is the subject of this dispute was
a “buy and sell” policy intended only to secure
the
deceased’s shareholding and not other liabilities or
suretyships. His confidence on the exact nature and purpose of the
policy in question seemed to wane with the progression of
cross-examination. When it was put to him that the plaintiff had
never
entered into a “buy and sell” agreement with the
deceased, he initially seemed to be suggesting that a “buy and
sell” policy could exist independently of a “buy and
sell” agreement, stating that there were many such policies
with no underlying written “buy and sell” agreements.
[26]
Under further cross-examination, he testified that as he had had no
hand in the issuing of the policy, he could not elaborate
on the
nature thereof, but went on to suggest that the deceased would also
have taken out a policy on the life of the plaintiff.
He later on
surmised that there was in fact such a “buy and sell”
agreement that was facilitated by Mr Chris Gerber,
the deceased’s
attorney and the executor of his estate. As already pointed out, Mr
Gerber and Mr Scholtz’s evidence
was that the relevant “buy
and sell” agreement was only drafted by Mr Gerber in March 2005
and not prior to the issuing
of the policies. Mr Gerber testified
that he never saw a “buy and sell” agreement concluded
between the deceased and
the plaintiff.
[27]
In my view, another significant aspect that negates the defendant’s
contention that the policy in question was an out
and out “buy
and sell” policy is highlighted by the following evidence of Mr
Chris Gerber under cross-examination:
“
Q:
. .An agreement is concluded between the parties in terms of which
Opperman, Potgieter and Scholtz acquire
the remaining
55%
effective 1 March 2005. So legally and contractually by 1 March 2005
whilst Jordaan is still the owner of this policy in the
eyes and
minds and books of Liberty, M[…] has
sold and alienated and
dissociated from the company in every legal respect as shareholder
and director.
Then I try to understand but then how do you deal
with the policy in the manner in which you did in terms of the L &
D account
when one has regard to the provisions of section
33(a)(i)(A) ...? So what we have got here is Mr Opperman who never
took out that
policy, never acquired the policy and in fact at the
time that he became one of the principal directors and shareholders
of the
company, Mr M[…] had disassociated himself from the
company as shareholder and director, the policy still belongs to
Jordaan
and now we are dealing with it as if Mr Opperman acquired it
and took it out on the life of John M[….] and at the time of
his death they were still partners or shareholders.
A:
He acquired it.
Q:
How did he do that?
A:
By means of a cession from M[…] to him. ...? (my underlining
for emphasis).”
The
above-stated exchange begs the question: if the policy was indeed a
“buy and sell” policy and nothing more and nothing
less,
then why did Opperman still need to have a policy on the life of the
deceased who was, from 1 March 2005 no longer his partner
nor
co-director nor co-shareholder? After all, as it was correctly
contended in the defendant’s heads of argument, the objective
of “buy and sell” policies is to place surviving
shareholders in funds in order to buy the shares of a shareholder
who
happens to die” [or becomes disabled].Here, the shares had
already been sold on 1 March 2005, nine months
before
the
deceased’s death.
[28]As
for Mr Opperman, he was, in his evidence-in-chief, adamant that the
policy in question was a “buy and sell” policy.
However,
under cross examination, he contradicted himself on the purpose of
the policy as follows: (Vol 2 p178 line 3-15):
“
Q:
Was it important for you to have that cession or policy ceded to you?
A:
It was important your ladyship to have a policy ceded to me.
Q:
Yes and why was it important?
A:
Your ladyship to cover my risks.
Q:
Because you were about to expose yourself in terms of the new
dealership and new suretyship agreements you had to sign, not so?
A:
That is correct your ladyship and I was already exposed to the
overdraft and other general creditors of the company.
Q:
And for that reason you contacted Mr Jordaan and asked him about the
cession of this life policy?
A:
That is correct your ladyship."
Ironically,
by admitting that one of the reasons for wanting a policy on the
deceased’s life was to cover his existing exposure
in the
business, Opperman wanted the policy ceded to him for the exact same
reason why the plaintiff wanted to retain the policy,
i.e. to secure
obligations other than the purchasing of shares. It would thus make
sense why the plaintiff would refuse to cede
the policy unless his
suretyship was cancelled. After all, one of the consequences of his
unlimited suretyship was that the creditors
could, at any stage,
choose to sue him and not Matthyssen if Minolta was unable to
discharge its indebtedness to Minolco.
Whether
the plaintiff signed the first cession (dated 23 April 2001)
[29]
It must be pointed from the outset that not a single witness
testified to seeing the plaintiff and the deceased signing the
disputed cession document. If one considers the sequence of events,
it just makes no sense why the plaintiff would be willing to
cede his
policy to the deceased on 23 April 2001, a year before his 30%
shareholding in Minolta was sold to Opperman and his 30%
shareholding
in JPJ Beleggings was sold to the deceased, which sale took place in
July and August 2002, respectively. Furthermore,
according to
Scholtz’s evidence (vol 2 p138-139), the plaintiff resigned as
a director in February 2001 but was given a subdistributorship
contract and stayed on as a shareholder until May 2001. I would
therefore disagree with Mr Gautshi’s argument that the cession
was purportedly signed on the 23
rd
April 2001 due to the
fact that the “dissolution of the business” had resulted
in the substratum of the agreement to
take out the insurance policy
falling away.
[30]
It was argued on behalf of the defendant that the very fact that the
plaintiff and the deceased obtained the cession document
from
Terblanche just two months after the dissolution of their business
relationship, justifies the inescapable inference that
they must have
agreed that the policy would be ceded by the plaintiff. This argument
is flawed on two counts: first of all it does
not take into account
that the plaintiff’s shares were officially sold to Opperman
almost a year
after
the alleged date of the signing of the
cession. Secondly, having gone to Terblance specifically to discuss
the cession of the policy,
they (according to a note made by
Terbanche and alluded to in the defendant’s heads of argument)
both left his office without
signing the document, which lends
credence to the plaintiffs assertion that he had made it clear that
he would not cede the policy
unless he was released from suretyship.
That this suretyship has always been the plaintiffs concern is borne
out by evidence from
various witnesses, which corroborates the
plaintiffs own evidence in this regard. It is also undisputed that
the plaintiff had
at some point directed a letter to Minolco making
enquiries about his release from that suretyship. Scholtz conceded
that he considered
it “untoward” that the plaintiff had
still not been released from the suretyship in favour of Minolco some
four years
after dissociating himself from Minolta. It should be
borne in mind that the suretyship in question was unlimited, as it
was for
all sums of money owed by Minolta to Minolco. In his evidence
under cross- examination, Opperman stated as follows:
“
Q:
In conclusion Mr Opperman, just that there is no confusion about
this, the plaintiff will argue at the close of this case that
he at
all material times was concerned about his exposure as a surety and
co-principal debtor and I want you to comment on every
statement on
that?
A”
M’lady yes, the only time I was aware of that was during the
meeting in the suite where he did discuss it with me.
Q:
He made it clear to you in the suite that he needed to have himself
removed as surety?
A:
Yes he did, m’lady.”
[31]It
is common cause that before presenting the first cession for
registration on the 11
th
March 2005, the deceased had on
at least two other occasions tried to register a cession document in
terms of which he was the
cedent and Opperman was the cessionary. I
find it highly improbable that Opperman would not once but twice, be
shown the original
policy and the signed cession and yet not insist
on it being taken to the defendant for registration. I also find it
improbable
that having seen the original policy and signed cession
and thus having the assurance that the policy belonged to the
deceased
Opperman would deem it “the easiest thing in the
world” to go to the plaintiff to essentially ask him to cede a
policy
that no longer belonged to him, instead of simply asking
Louwrens Smith to attend to the registration of that cession. If the
original
cession was indeed at Minolta’s business premises all
the time as stated by Opperman and Louwrens Smith, then there is no
reason why Louwrens Smith, having strenuously impressed the need for
insurance cover upon Opperman, could not, on one of his visits,
insist on personally taking the original cession for registration.
This would be especially so after realising that the plaintiff
was
still being regarded as the owner of the policy due to the fact that
it had not yet been registered, consequently precluding
the
registration of the other cession in terms of which the deceased was
the cedent and Opperman the cessionary. The aforementioned
factors
suggest that there was no such signed cession document in place.
[32]Another
factor that strongly suggests that the plaintiff could not have ceded
the policy is the undisputed evidence that he
applied for a copy
thereof from the defendant on the 27
th
October 2004, which
was subsequently issued to him. Why would he apply for a copy of a
policy knowing fully well that he had ceded
it to the plaintiff and
that he no longer owned it?
[33]It
is noteworthy that, according to the evidence of the deceased’s
attorney, the deceased was very knowledgeable in insurance
matters.
This is how Mr Gerber couched the deceased’s expertise: “One
should understand the late Mr M[…]. He
was, for a few years
awarded the best insurance broker or agent in South Africa by Old
Mutual and nobody questioned the late Mr
M[…] about anything
pertaining to insurance.” Being such an expert in insurance
matters, his various attempts to register
the latter cession despite
being specifically informed by the defendant and his own broker that
the Plaintiff was still the owner
of the policy as no other cession
was registered is rather odd and, in my view, just goes to show how
irrational he had become.
Under such circumstances, it is not
unthinkable (and I state this with respect) that he could, knowing
that he was no longer able
to obtain new insurance cover due to his
ill-health and in desperation to obtain cover that could pacify the
already impatient
Opperman, resort to forging the plaintiffs
signature on the cession document. He clearly had a lot to gain from
doing so. On the
other hand, the fact that the plaintiff was willing
to cede the policy to Opperman merely upon being released from
suretyship tends
to show that he was not driven by greed to benefit
unfairly from the policy. Significantly, even after tearing the
second cession
up, he was still willing to cede the policy as soon as
he was released from suretyship. This much was confirmed by
Opperman.(vol
2 p114 line 15-16). As it was at that stage common
knowledge that the deceased’s health had already deteriorated
drastically,
the plaintiff could simply have decided to cling to the
policy in the hope that the deceased’s death was imminent.
Instead,
he still expressed his willingness to cede the policy once
he had been released from suretyship.
[34]
Furthermore, considering the concessions from Paula Smith (the
defendant’s administration manager) regarding the oddness
of
proceeding to register a cession valued at more than R2 million rand,
signed four years prior to its presentation to the defendant
and
presented to the defendant in the absence of the plaintiff, it is
clear that this cession was registered by the defendant under
very
questionable circumstances. The strangeness of this matter does not
end there. Paula Smith testified that she handed the original
cession
back to the deceased and was content to file only a photocopy. This
is quite odd, considering that Smith testified that
the original
cession documents were normally kept by the defendant. As things
stand, the whereabouts of the original cession documents
are unknown.
Even after the personnel of the plaintiffs broker phoned her a few
days later to notify her that the plaintiff denied
ever signing the
cession, she did absolutely nothing. Given that the defendant did
absolutely nothing further on the matter, I
find it odd that Mr
Gautshi SC argues that the plaintiffs failure to do anything further
after the telephonic denial by his broker’s
secretary is wholly
inconsistent with the conduct of a person who genuinely believes that
his/her signature has been forged on
a deed of cession, and the
plaintiffs conduct in that regard shows that he was well aware that
he had, in fact, signed the first
cession. I would agree with this
argument if the plaintiff had never registered his denial with the
defendant at all.
[35]
I now turn to evaluate the evidence of the experts. Before I do so, I
need to restate that the plaintiffs case is that the
signature
appearing on the cession document, purporting to be his signature, in
terms of which he was ceding his rights to the
policy to the
deceased, constituted a forgery. The original cession document could,
for one reason or another, not be found. The
experts’ analysis
was thus based on a photocopy of the cession document which was
handed in as exhibit “A”. The
impression I obtained from
my own comparison of the signature on this document and the specimen
signatures was that the signatures
had obvious dissimilarities. I
listened with keen interests to both experts with a view of obtaining
a logical explanation for
the existence of these dissimilarities.
[36]
In his evidence Mr Snyman pointed out that photocopying, faxing and
enlargement of documents results in distortions that may
make
handwriting look different. This distortion is scientifically
referred to as stepping. As I understood his evidence, the more
a
document is photocopied or faxed, the more it will show signs of
stepping. In this matter it is common cause that the cession
document
was at some stage faxed. It is not clear how many times this document
was photocopied or faxed, but from Paula Smith’s
evidence it is
clear that the cession document presented to her was the original
standard pro-forma document printed on a flimsy
type of paper that
could not be faxed due to its soft texture. She therefore photocopied
it before faxing it to the deceased’s
broker, Terblanche, who
later faxed it back to her. She then faxed it to the defendant’s
imaging department to facilitate
the registration of the cession. On
the basis of Snyman’s evidence regarding stepping caused by
faxing and photocopying,
it is clear that this document was subjected
to stepping on no less than four occasions. I must say that when one
examines the
printed letters of the alphabet on the cession document,
stepping or distortion is clearly visible to the naked eye, as there
is
a clear crooked formation of some of the numbers (at the space
provided for telephone number). The different shapes that the same
letters of the printed alphabet have taken also confirms this. For
example, the letter “n” in small letters appears
four
times under the signature line but its distortion has taken four
distinct shapes. The shapes of the letters “d”
and “t”
(of “handtekening”) are clearly different from the shapes
of the “d” and “t”
(of “sedent”).
Having considered these visible distortions, I am inclined to believe
that the poor quality of the handwriting,
due to stepping, undermines
any reliable analysis of the handwriting, resulting in the evidence
of the experts not being of any
assistance to the court.
[37]
Even if I may be wrong in finding that the excessive stepping was
fatal to a proper examination of the signature on the disputed
document, I am in any event of the view that where the two experts’
evidence differ, Mr Bester’s evidence is more probable
than
that of Mr Snyman. Mr Fischer SCargued that when the two experts’
evidence is analysed, it ought to be taken into account
that Mr
Snyman is not an “independent” expert in the true sense
of the word. This argument was based on the fact that
Snyman had
conceded to having undertaken many examination-briefs for the
defendant in numerous matters over a number of years.
More
significantly, so it was argued, it was on the basis of Mr Snyman’s
own opinion (to the effect that there was no forgery)
that the
defendant paid out the proceeds of the policy to the deceased’s
estate. This contention is not without merit. While
I do not expect
Mr Snyman to make concessions were none are justified, it did at some
point of cross- examination appear to me
that he was trying very hard
not to concede any point. I agree with Mr Fischer’s argument,
on behalf of the plaintiff, that
it is not inconceivable that, given
the enormity of the plaintiffs claim, especially considering that the
defendant has not applied
for any other party (either Opperman or the
deceased estate), to be joined in the proceedings. Snyman could find
himself not inclined
to make any substantial concessions with regards
to the existence of differences for fear of “sinking the
defendant’s
case”.
[38]
I am not persuaded by Mr Snyman’s evidence that the first
down-stroke of the disputed signature does not end in a hook.
It
clearly looks like a hook. Considering the different distortions of
the different letters of the printed letters of the alphabet
just
below the signature line, I remain un-persuaded that the end of the
down stroke looks like a hook only because “the
end of the down
stroke touches the “t” and probably “d” as
well”, as per the evidence of Mr Snyman.
Due to the state of
the distortion of both letters, especially as evidenced by the
enlargement of the signature, it is not possible
to discern or figure
out the exact point at which the down stroke touches the “t”
and the “d” respectively.
Simple logic tells me that if
this down- stroke were to touch these two letters that are next to
each other, it would touch the
“t” at its upper-end and
the “d” more towards its lower end and would therefore
not result in the curved
hook that we see here. Given Mr Snyman’s
own evidence that if a single dissimilarity or difference found in a
disputed signature
cannot be logically explained, that would justify
a finding of a different author or false signature, I can therefore
on the basis
of this finding, find that the disputed signature was
forged.
[39]
I am in any case more persuaded by Mr Bester’s evidence that,
indeed, the portion of the crossbar of the letter “A”
exiting the “A” on its right hand side was not caused as
a result of stepping, but rather as a result of misalignment.
This
view is formed from the fact that a simple examination of the
document shows that that crossbar is on a different imaginary
line
than the line immediately to the right of the letter “A”
in the signature. Thus, Mr Bester’s attribution
of this
misalignment to a pen- lift is very persuasive.
[40]
Furthermore, I agree that Mr Snyman’s usage of the words
“significant differences” in his report seems to
suggest
that differences were there but they were not significant. Indeed,
his explanation of attributing the usage of those words
to the fact
that he prepared the report for laypersons does not make sense if
regard is had to the fact that he had been specifically
requested by
the defendant to provide it with a report. Having, according to his
own evidence, prepared many reports accepted by
various institutions,
leading to his testimony in hundreds of court cases, one would not
expect someone with such extensive experience
to use such words
knowing fully well how critical the difference between a variation
and a difference is.
[41]Although
the defendant’s counsel correctly criticised Bester’s
report for not being in line with the Standard Guide
for examination
of Handwritten Items, I find that his evidence was, on the whole,
more acceptable and persuasive than that of Mr
Snyman. Unlike Mr
Snyman, Mr Bester had more data (specimen signatures) to enable him
to make a proper comparison from the outset.
Unlike Mr Snyman, Mr
Bester readily made concessions on several aspects. On the basis of
Mr Bester’s evidence and findings,
I find that the disputed
signature is not the plaintiff’s signature and constitutes a
forgery. This finding is, in addition
to what has already been stated
in the aforementioned paragraphs, bolstered by the evidence of Paula
Smith, who testified that
the plaintiff had, a few days after being
advised by the defendant in writing about the registration of the
cession, denied having
signed any cession document. On the basis of
all the afore-mentioned factors, I find it more probable that the
disputed signature
is not the plaintiffs signature.
Whether
the second cession was subject to a suspensive condition or not
[42]
Mr Gautshi SC contends that the discussion between Opperman and the
plaintiff before the signature of the cession was limited
to an
undertaking by Opperman that, since the plaintiff had helped him by
signing the second cession, he would in turn help the
plaintiff by
requesting Minolco’s manager, Mike Holohan to cancel the
plaintiffs suretyship. In my view, from the evidence
of both Opperman
and the plaintiff regarding the conversation that served as a
precursor to the signature of the second cession,
it is clear that
the plaintiff was prepared to sign on condition that he was released
from suretyship. This is what constituted
the suspensive condition.
That he did make it a condition is bolstered by Opperman as follows:
“I still phoned the plaintiff
and asked him: well, why did you
tear up the cession and he said: well, I told you about the
suretyship, you first help me with
the suretyship and then we can
talk about the cession of the policy, he would have no problem
signing it.” It being common
cause that the deceased died
without the plaintiffs suretyship having been released, the
suspensive condition was never fulfilled.
What is also very crucial
about the second cession is that even if I were to accept that there
was no suspensive condition attached
to it, the provisions of clause
8 of the policy clearly provide that
"geen
sessie, of benoeming of skrapping van ‘n Begunstigde is bindend
op Liberty Life tensy deur Liberty Life op rekord
aangeteken nie.
Liberty Life is nie verantwoordelik vir die geldigheid van enige
sessie of die benoeming van 'n begunstigde nie.”
As
this cession was never registered by the defendant in terms of the
express general conditions of the policy, it was therefore
not
binding. So strict is the defendant about non-recordal of a cession
that it refused to recognise a cession allegedly signed
by the
deceased in favour of Opperman just for the mere fact that it was not
recorded. As stated before, despite the existence
of that signed
cession, the defendant ended up paying the proceeds of the policy
into the estate of the deceased and not to Opperman.
[43]
I disagree with Mr Gautshi SC’s submission that the tearing of
the second cession by the plaintiff is not consistent
with the
existence of a suspensive condition. It must be borne in mind that
the deceased’ difficult personality was attested
to by all his
business associates who testified. His tendency to break his promises
even to the business associates that still
had a good relationship
with him lends credence to the plaintiffs testimony that the deceased
had on several occasions strung him
along and made several
undertakings to release him from suretyship, which undertakings he
never fulfilled. The plaintiffs testimony
that he tore the second
cession out of anger upon discovering that Opperman too, like the
deceased, had lied to him, is thus very
plausible.
[44]
The plaintiff came across as an honest and credible witness and his
version bore no material contradictions. In my view, the
probabilities in this case are overwhelmingly in favour of the
plaintiff. Having considered all the facts and circumstances of
this
matter, I find that the defendant failed to prove that the plaintiff
signed the first cession document. I further find that
in terms of
the provisions applicable to this very policy, which provide that a
cession is only binding on the defendant if it
has been recorded or
been registered with the defendant, the defendant’s reliance on
the second cession is misplaced, as
the second cession was never
registered. In any event, in so far as this second cession was
subject to a suspensive condition that
was never fulfilled, it is
invalid. I therefore find that as at the time of the deceased’s
death the plaintiff was still
the owner and sole beneficiary of the
policy. As such, the proceeds of the policy ought to have been paid
to him and not to the
estate of the deceased.
[45]
I, accordingly, make the following order:
1.
The special plea is dismissed.
2.
The plaintiffs claim is allowed and the defendant is ordered to pay
the plaintiff an amount of R2 251 017,00 together with interest
thereon calculated as from 31 December 2005.
3.
The defendant is ordered to pay the costs of this action.
M.
B. MOLEMELA, J
On
behalf of the plaintiff: Adv. P U Fischer SC
Instructed
by:
Lovius
Block
BLOEMFONTEIN
On
behalf of the defendant: Adv. J R Gautshi SC
Instructed
by:
Webbers
BLOEMFONTEIN