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[2010] ZAFSHC 125
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Flanegan v Absa Versekeringsmaatskappy (Edms) Bpk and Another (559/2008) [2010] ZAFSHC 125 (16 September 2010)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 559/2008
In the case between:
DAVID FLANEGAN
…......................................................................
Plaintiff
and
ABSA
VERSEKERINGSMAATSKAPPY (EDMS) BPK
….....
1
st
Defendant
ABSA MAKELAARS
….........................................................2
nd
Defendant
JUDGEMENT:
MOCUMIE, J
_______________________________________________________
HEARD ON:
10, 11 AUGUST 2010
_______________________________________________________
DELIVERED ON:
16 SEPTEMBER 2010
_______________________________________________________
MOCUMIE J
[1] The plaintiff has
instituted an action for the recovery of R181 844,00 plus VAT on the
said amount; interest on the amount
a
tempore
morae
; that the unsuccessful defendant be
ordered to pay the successful defendant’s costs and or
alternative relief.
[2] The plaintiff is Mr
David Flanagen an adult farmer residing at the farm Grassmere in the
district of Excelsior, Free State
Province. The first defendant is
Absa Insurance Company with registration no 1992/001737/06 a company
duly registered in terms
of the Laws of the Republic of South Africa
with its place of business situated at 21 Cross Street Johannesburg.
The second defendant
is Absa Brokers with registration no
1992/0013737/06 a company duly registered in terms of the laws of
the Republic of South
Africa with its place of business situated at
ACNA Building, Archbell Street, Bethlehem, Free State.
[3] Per agreement
between the parties and in terms of Rule 33(4) of the Superior
Courts Rules of Practice which agreement was
made an order of this
Court the merits were separated from the quantum. The latter to be
adjudicated upon at a later stage.
[4] The plaintiff led
evidence of both Mr David Flanegan, the plaintiff, and Ms Teresa
Flanegan, the plaintiff’s daughter.
The defendant led evidence
of Ms Chantelle van der Berg.
[5] The plaintiff
testified that in November 2008 he contacted the second defendant
telephonically and asked for a quotation on
his crops on his farm.
He gave the second defendant’s representative Ms Chantelle van
der Berg
(“Van der Berg”)
all the
necessary information including his names and his address. Van der
Berg sent him a form handed in as annexure “A”.
Upon
receipt of annexure “A” he noticed that Van der Berg had
completed annexure “A” already and had
written 1.2 tons
to be insured instead of 2.0 tons he had requested. He called her
back immediately and brought this error on
her part to her
attention. She told him to write in the correct tons he wanted to be
insured
ex facie
annexure
“A” and sign such amendment and he did so. His daughter
who works with him on the farm, then faxed the amended
and signed
annexure “A” to Van der Berg.
[6] He testified further
that Ms Flanegan then called Van der Berg to confirm receipt of
annexure “A”. Van der Berg
confirmed receipt of annexure
“A” and then worked out a new premium on 2.0 tons. Van
der Berg gave her the premium
which she inserted in her own
handwriting on the face of annexure “A” as R14 996.00
per month.Ms Flanegan informed
him that Van der Berg confirmed that
the amended policy was immediately in force and effective.
[7] On 4 January 2008
hail damaged 86% of his sunflower and he suffered damages. He
instituted a claim. The first defendant paid
out an amount of R266
825,66 in respect of 1.2 tons and repudiated the claim for the
balance of the policy of R181 440,00 in
a letter dated 30 January
2008.
[8] During cross
examination he denied that he asked to increase the premium proposed
and chose not to take the renewed policy
because he could not afford
it. He however admitted that it was his daughter that spoke to Van
der Berg on the day when she,
Van der Berg, confirmed that the new
policy would be in operation immediately not him as it is reflected
in his pleadings.
[9] Ms Teresa Flanegan
testified. She is the plaintiff’s daughter and works with him
on the farm. She corroborated the plaintiff
in that:
9.1 she spoke to Van der
Berg who gave her a new premium which she inscribed on the face of
annexure “A”;
9.2 she called Van der
Berg to confirm that she had received annexure “A”;
9.3 Van der Berg
confirmed that the amended policy in respect of 2.0 tons of crop was
immediately in operation and effective.
[10] During cross
examination she could not remember whether Van der Berg confirmed
the amended policy on the same day that the
plaintiff inserted the
amendment or not.
[11] Ms Chantelle van
der Berg, testified. During November 2007 she was working for Mr
Nico Odendaal (“Odendaal”)
at Absa Bank Insurance
Brokers as his personal assistant. She is currently employed as a
manager at O’ Hagan Pub in Welkom.
[12] She testified that
indeed the plaintiff called her during November 2007 asking for a
quotation. She related a completely
different version to that of the
plaintiff and his daughter.
[13] She testified that
the plaintiff gave her all his personal details; the name of the
farm; and the tons of crop which he wanted
insured. She wrote down
all the details and forwarded same to the broker, and he made out a
quotation as set out in annexure
“A” for 1.2 tons/ha.
She then faxed annexure “A” to the plaintiff on 21
November 2007.
[14] She testified
further that on 22 November 2007 she received a fax of annexure “A”
from the plaintiff.
Ex facie
the plaintiff had inscribed the
following words:
“
Please
increase my yeald(sic) from 1.2t/ha to 2.0 t/ha and debit my co-op
a/c.”
[Signed by D A Flanegan]
[15] She then called one
Hanelie at Acua to discuss this new proposal and seek guidance on
what steps to take as Odendaal was
not in the office at that time of
the day. Hanelie explained to her that in that case she had to give
the plaintiff an extra
policy to cover the 1.8 extra tons. She
thereafter forwarded the information provided by the plaintiff to
Odendaal wherever he
was. He gave her a new premium based on the new
information.
[16] Thereafter she
called the plaintiff but however spoke to Ms Flanegan and explained
to her what was suggested in the circumstances
i.e. that the she had
to give the plaintiff a separate quote from the one she had already
given to cover the extra 1.8 tons/ha.
She gave Ms Flanegan the new
premium which the plaintiff ought to pay under the increased cover
of 2.0 tons/ha. Ms Flanegan told
her that she will relay the message
to the plaintiff and they will revert to her. During the course of
the same day the plaintiff,
in person, reverted to her and declined
the increased premium.
[17] During cross
examination she denied that she ever said to the plaintiff and Ms
Flanegan that the amended cover was immediately
in operation and
effective from the day that she received annexure “A”.
[18] She however
conceded that:
18.1 there were no
records of what transpired on the day in question between her and
the Flanegans;
18.2 that the new
premium she gave to Ms Flanegan was for 2.0 tons and not 1.8 tons;
18.3 that Ms Flanegan
would not have been able to guess the amount of R 14 996, 00 as she
was not affaire with insurance quotations.
[19] She nevertheless
maintained that the plaintiff called her back rejecting the new
premium contrary to the plaintiff and Ms
Flanegan’s testimony
that it was Ms Flanegan that called her back. She also that she did
not accept the proposed amendment
as she had no authority or powers
to approve a policy on behalf of the second defendant.
[20] The plaintiff’s
case is that the second defendant had accepted his mandate; the
amendment from 1.2 tons to 2.0 tons,
telephonically through Van der
Berg and was liable to all the damages he had suffered per 2.0
tons/hectare of his crops not 1.2
tons as the defendant claimed.
[21] The second
defendant’s case is that although the plaintiff made an
inscription on annexure “A” that inscription
did not
amount to a mandate but a proposal which Ms Van der Berg could not
have accepted on behalf of the second defendant as
she had no
authority to do so. Secondly that the inscription as it read
indicated that the plaintiff was making a new proposal
which implied
that the second defendant had to make out a new policy on 1.8 extra
tons. Thirdly that the plaintiff had originally
given Van der Berg
instructions to insure 1.2 tons and she complied with those
instructions. Fourthly that the plaintiff reneged
on the second
proposal when he was informed of the premium which he deemed high
and not affordable.
[22] I could not find
any of the witnesses to be outright unreliable in their testimony.
Consequently there are two conflicting
and irreconcilable versions
to be found in this set of facts. The proper approach to the
resolution of factual disputes in a
civil case is to be found in
National Employers’ General Insurance Co Ltd v Jagers
984 (4) SA 437
(E) at 440D – H where the court stated:
“
It seems to
me, with respect, that in any civil case, as in any criminal case,
the onus can ordinarily only be discharged by adducing
credible
evidence to support the case of the party on whom the onus rests. In
a civil case the onus is obviously not as heavy
as it is in a
criminal case, but nevertheless where the onus rests on the
plaintiff as in the present case, and where there are
two mutually
destructive stories, he can only succeed if he satisfies the Court
on a preponderance of probabilities that his
version is true and
accurate and therefore acceptable,…”
See also
Stellenbosch
Farmers’ Winery Group Ltd and Another v Martell
et
cie
and Others
2003 (1) SA 11
(SCA)
in paras [5] – [7] at 14 – 15,
Dreyer and Another
NNO v AXZS Industries (Pty) Ltd
2006 (5) SA 548
(SCA).
[23] In my view both the
plaintiff and Ms Flanegan were honest and reliable witnesses. They
corroborated each other on material
aspects of this case that the
plaintiff gave Van der Berg clear instructions to insure 2.0 tons
and she failed to comply with
such mandate. Whether the Flanegans
spoke to Van der Berg on 21 or 22 November 2007 does not detract
from the fact that all three,
the Flanegans and Van der Berg were
ad
idem
that the plaintiff inscribed his instructions and signature
ex facie annexure A reflecting 2.0 tons not 1.2 tons; that Van der
Berg gave the Flanegans the plaintiff a premium payable on quotation
for 2.0 tons and not 1.8 tons. Both the plaintiff and Ms
Flanegan
were consistent in their testimony despite rigorous
cross-examination.
[24] In my view it is
inherently improbable that the plaintiff would propose and insist on
2.0 tons and then change his mind upon
being told about a higher new
premium. The plaintiff and Ms Flanegan did not give an impression
that they could not have afforded
the amount. The difference of R5
999,00 between R8 998,00 and R14 996,00 for such a large ton is
minimal. In any event they were
not seriously taken to task on this
issue.
[25] Van der Berg’s
version is improbable to the extent that it differs from that of the
plaintiff and Ms Flanegan.If she
was advised to make out a
completely new policy to cover the extra 1.8 tons why did she give
Ms Flanegan the premium for 2.0
tons and not the extra 1.8 tons? How
could Odendaal make out a quotation for 2.0 tons instead of 1.8 tons
when she gave him the
plaintiff’s correct mandate of 2.0 tons?
What is revealing in all this is that contrary to business practice
there are
no records or notes or even evidence to show that a
separate and distinct cover was ever contemplated and discussed with
the
plaintiff. What compounds the matter further is that no other
person allegedly involved in this transaction was called to
corroborate
what Van der Berg remembers without reference to any
notes or a file. Recollection can indeed be fallible and in business
the
failure to confirm an event promptly and on paper can be fatal
as it has proved in this case.
[26] What is more
revealing is that Van der Berg ,on her own version, did not revert
to the plaintiff upon receipt of annexure
“A” to inform
him that as far as she could establish it was impossible to make one
cover of 2.0 tons or at least
that since he did not accept the
reviewed premium the original cover will be in operation.
[27] In my view, on a
conspectus of all the evidence, this discussion between Van der Berg
and the Flanegans never took place.
Van der Berg’s version is
far fetched and does not tally with the events as they unfolded as
relayed by both the plaintiff
and Ms Flanegan.The plaintiff was
confident in that he gave the second defendant a mandate to cover
2.0 tons that is why immediately
upon suffering damages he put in a
claim for 2.0 tons and after being informed that the first defendant
had repudiated part of
his claim he challenged the repudiation. In
all probabilities what happened is that after the last conversation
Van der Berg
had with Ms Flanegan who could hear and understand her
clearly she, Van der Berg, simply put the proposal aside and did not
bring
it up to date on the second defendant’s system.
[28] In assessing the
probabilities comprehensively and in retrospect the conclusion seem
inescapable that of the two versions
before the court as to whether
the second defendant was given a mandate to put into operation a
policy for 2.0 tons/ha and failed
to carry out that mandate, the
plaintiff’s is the more probable. That being so the plaintiff
has succeeded in discharging
the onus on it. It follows further that
the claim must succeed.
[29] The last issue that
was raised was whether the first defendant should pay the costs of
this application. Rule 10(4)(b)(ii)
of the Superior Court Practice
Rules provides as follows:
“
(4)
(b)
if
judgment is given in favour of any defendant or if any defendant is
absolved from the instance, the court may order:
(i) …...
(Not relevant)
(ii)
the unsuccessful defendants to pay the costs of the successful
defendant jointly and severally, the one
paying the other to be
absolved, and that if one of the unsuccessful defendants pays more
than his
pro rata
share
of the costs of the successful defendant, he shall be entitled to
recover from the other unsuccessful defendants their
pro
rata
share of such excess, and the
court may further order that, if the successful defendant is unable
to recover the whole or any
part of his costs from the unsuccessful
defendants, he shall be entitled to recover from the plaintiff such
part of his costs
as he cannot recover from the unsuccessful
defendants;”
[30] In this case I have
no reason to order that the first defendant should pay the costs of
this application when it had no direct
and substantial interest
which required it to be joined from the beginning. It is the
plaintiff that decided to keep the first
defendant in the pleadings
because it was not sure who to claim against even after the
pre-trial conference showed clearly that
the plaintiff could not
prove any wrong doing on the part of the first defendant. I
consequently find that no costs order can
be made against the first
defendant.
[31]
In the
circumstances I make the following order
:
ORDER:
1. Payment of the
amount of R181 844,00 by the second defendant;
2. VAT on the amount
of R181 844,00;
3. Interest on the
aforementioned amount a
tempore morae;
4. The second
defendant to pay the costs of this matter.
_______________
B. C. MOCUMIE, J
On behalf of the
plaintiff: Adv. S. J. Reinders
Instructed by:
Van Wyk & Preller
Ing.
BLOEMFONTEIN
On behalf of the
defendants: Adv. P.C.F. van Rooyen SC
Instructed by:
Naudes
BLOEMFONTEIN
BC/eb