Aucamp and Others v University of Stellenbosch

• Jurisdiction: South Africa
• Judge: van Zyl J, Cleaver J and Fitzgerald AJ
• Judgment Date: 15 March 2002
• Docket Number: A19/01
• Hearing Date: 01 August 2001
• Counsel: E Fagan for the appellants. I J Trengove for the respondent.
• Court: Cape Provincial Division

Van Zyl J:

Introduction

[1] The first appellant is the widow of the late Emile Aucamp (the deceased). The second, third and fourth appellants are the children of G the deceased and the first appellant. They are joint parties to the present proceedings in their respective capacities as nominated beneficiaries of the deceased, who had been in the employ of the respondent as a theatre technician from 1 July 1966 until his death on 16 August 1995.

[2] In the belief that the deceased had been a member of the respondent's group life insurance scheme and that certain benefits H would, in terms thereof, accrue to his beneficiaries upon his death, the first appellant made enquiries from the respondent. She was informed, and this is common cause, that the deceased had not been a member of the scheme. I

[3] The appellants subsequently instituted an action against the respondent, claiming damages for pure economic loss sustained by them as so-called disappointed beneficiaries. In this regard they relied on two alternate causes of action, namely, in the first place, the negligent breach of a contractual duty owed to the deceased and, in the second place, a J

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negligent misrepresentation made to the deceased. Either of them would give rise to a claim in delict by the appellants A against the respondent.

[4] The first cause of action related to the respondent's negligent failure to ensure, as it was obliged to in terms of its contract of employment with the deceased, that the deceased was registered as a member of its group life insurance scheme. The alternative cause of action was based on the respondent's B negligent misrepresentation to the deceased that he was in fact registered as a member of such scheme. As a result the appellants, as beneficiaries of the deceased under the scheme, suffered damages in the amount the insurers would have paid them had the deceased been registered as a member of the scheme. C

[5] The claim of the appellants as beneficiaries is, in short, that the respondent knew, or should have known, that its aforesaid conduct would inevitably cause them to suffer damages as aforesaid. The total amount claimed by them was R382 820, later amended to R414 211,02, being the amount of the benefit that would have accrued to them jointly had the deceased been a member of the scheme. The D proportion of their shares in such benefit would be 70% to the first appellant and 10% to each of the remaining three appellants. This was the proportion allocated to them as beneficiaries in terms of the provisions of the respondent's USAF pension scheme, which was established in 1994 and of which the deceased became a member on E 13 October 1994 (paras [26] and [27] below). In addition the appellants claim mora interest on the said amount at the rate of 15,5% per annum as from 13 December 1995, being the date of a letter of demand from the attorneys of the appellants to the principal of the respondent. F

[6] The respondent denied, on the merits, that it was liable to the appellants on either of the alternate causes of action. In addition it raised two special pleas. The first was that the appellants did not have locus standi to bring a claim against the respondent, in that they were not acting as heirs or trustees of the estate of the deceased, nor were they acting as dependants of the G deceased. The second was that their claim had prescribed. In this regard it was alleged that the cause of action had come into existence on the date of death of the deceased, namely 16 August 1995. Service of the amended particulars of claim, however, by which a new cause of action was introduced, took place on 10 August 1999, more H than three years later. In view of its finding on the facts, the Court a quo did not deal with either of these special pleas. They were not abandoned, however, and full argument was addressed to us in respect thereof.

[7] The matter proceeded to trial. Both parties presented evidence to the Court. Much of it turned upon the interpretation of I certain documentation on which the alleged misrepresentation by the respondent was based. Particularly material was the evidence of one Smal, a former employee of the respondent. He testified (para [13] below) as to certain documentation which had emanated from his office and on his recollection J

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of a personal discussion he had held with the deceased, more than seven years before his death, in regard to A his membership of the scheme.

Judgment of the Court a quo

[8] In his judgment Motala J held, on the first cause of action, that the respondent did not have an obligation to ensure that the deceased became a member of the scheme in that membership thereof was B optional for the deceased. At best for the appellants the respondent might have had a 'moral, and perhaps a legal duty' to give the deceased 'a clear option' to acquire membership thereof. The deceased had, however, unequivocally chosen not to join the scheme. C

[9] On the second cause of action Motala J held that certain documentation and seminars relating to, and comparing the benefits of, the respondent's old and new pension funds had indeed constituted a misrepresentation that such pension funds in fact included group life insurance (para [26] below). On the other hand a letter of 12 June 1978 from Smal to the deceased, as backed by Smal's evidence (paras [13] and [23] below), indicated that the deceased could not D have been misled by such misrepresentation.

[10] In this regard the learned Judge observed that he had treated Smal's evidence with caution, and did not believe that he was 'deliberately misleading the Court' or 'fabricating his evidence' E in regard to the discussion he had held with the deceased (para [13] below). In any event, the learned Judge held, the appellants failed to prove a causal nexus between the alleged misrepresentation and their loss. The claim was accordingly dismissed with costs. It is against this judgment and order that the present appeal is directed. F

The evidence

[11] In her evidence the first appellant, Mrs E N Aucamp, testified that she had married the deceased in 1963 and remained so married until his death in 1995, a period of some 32 years. The second, third and fourth appellants were born of their marriage. She herself had been a G theatre technician and part-time lecturer in the employ of the respondent until her retirement and appears to have been well-informed as to the insurance and pension benefits accruing to employees like the deceased. She and the deceased at various times before his death had discussed the topic of their financial future. He H had consistently assured her that, in the event of his death, she and the children would have no 'financial worries' because they were adequately covered by the respondent's insurance scheme. He referred to it as a 'widow's pension' or 'widow's benefits'. In this regard he had impressed her as being knowledgable in insurance matters and having an interest in his financial affairs. It was her belief that the deceased had accepted that the respondent's I pension scheme included group life insurance, in that it was compulsory for all permanent members of staff. There could be no other explanation for his having failed to become a member of a scheme that provided excellent cover at a relatively small premium. He would not, she testified, J

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intentionally or deliberately have rejected so beneficial a scheme, particularly in view of his concern throughout his life with A providing for his wife and children. He had been, she testified, 'an extremely good provider and a very concerned father'. If he had believed that he did not have sufficient life cover for his family, he would undoubtedly have made an attempt to remedy the situation by taking out additional life insurance. B

[12] Mr P A Viljoen, an insurance broker, testified that he had acted as the financial adviser of the deceased from approximately 1986. This had not included advice on life insurance since the deceased had brought him under the impression that he was adequately covered and well insured under the respondent's group life insurance scheme. C In this regard he had had insight into a booklet dealing with the respondent's pension scheme (introduced in 1994) and had attended a seminar relating thereto (para [26] below). His personal impression from the contents thereof was that group life insurance was included in the pension scheme benefits. This concluded the evidence for the D appellants.

[13] The key witness for the respondent was Mr J T R Smal, the former head of personnel finance matters in the administration of the respondent. He had held such position for a period of ten to twelve years, during which time he had been acquainted with the deceased. At the time of his testimony in the present matter he had E been retired for a period of some 12 years. The gist of his evidence was that the deceased, with whom he had had a friendly relationship, had deliberately chosen not to acquire membership of the respondent's group life insurance scheme, despite Smal's efforts to persuade him that it was in his interest to do so. In this regard he F referred to a letter dated 12 June 1978 (para [23] below) in which the deceased was given a last opportunity to join the scheme. When the deceased failed to respond to the letter, Smal invited him to his office to discuss the matter. He explained to him the benefits of the scheme and assured him that he was making a mistake by not opting to join it. According to Smal the deceased was the only one of some G 3 000 staff members who had not joined the scheme. Much to his surprise the deceased was, apparently, still not persuaded to do so and simply left his office without saying a...