Contact Electrical Maintenance (Pty) Ltd v Sanlam Ltd and Another

• Jurisdiction: South Africa
• Judge: Khumalo J
• Judgment Date: 16 June 1995
• Citation: 1996 (2) SA 440 (B)
• Docket Number: 225/95
• Counsel: J H F Pistor for the applicant. No appearance for the first respondent. H Lever for the second respondent.
• Court: Bophuthatswana Supreme Court

Khumalo J:

This is an application in which the following interim order was granted:

'1.

That the application be considered as one of urgency in terms of Rule 6(11) of the Uniform Rules of Court.

2.

That payment by the first respondent of the proceeds or any part thereof in I respect of policy No 114956516 on the life of Robert Sleith to anyone apart from the applicant be interdicted.

3.

That the order set out in para 2 above will be an interim order with immediate effect and that the respondents are called upon to show cause, if any, to this honourable Court at 10 am on Thursday, 30 March 1995, J why:

Khumalo J

3.1

A the proceeds of the said policy should not be paid to the applicant, and in the event of it being found that the said proceeds should not be paid to the applicant, then why

3.2

the premiums, paid in respect of the said policy should not be paid to the applicant by the first respondent; and

3.3

B in the event of it being found that this application cannot be determined on motion proceedings, then and in such event, why

3.4

the aforesaid interim order should not remain of force and effect, pending the outcome of an action for a declaratory order as to who is entitled to C the proceeds of the aforesaid policy, and to the said premiums, and for related relief to be instituted by the applicant against the respondents within 30 days from the date of final determination of this application; and why

3.5

D the respondents should not be ordered to pay costs of this application insofar as such costs are incurred pursuant to any opposition to this application.

4.1

That service of this order, the notice of motion and of all documents attached thereto, may be effected on the second respondent by handing a E copy of each of such documents to the respondent by the person effecting such service without the need to show to such respondent the original of the said documents.

4.2

That a copy of each of the notice of motion, all documents attached hereto and of this order, be delivered to the Master, Mmabatho, and the Master, Pretoria.'

F On 30 March the order was extended to 5 June 1995 when the matter was argued and I reserved judgment.

The facts

(a) Applicant's case

G The facts as set out in Maginess's affidavit can be summed up as follows: The applicant is a company registered in terms of the laws of the erstwhile Republic of Bophuthatswana. One Robert Charles Sleith, now deceased, was employed by the applicant. Maginess is the managing director of applicant. He is the only shareholder in H the applicant company. The deceased was manager in the contracts division of applicant. The business of the applicant was managed by a team consisting of Maginess, his wife and the deceased.

In the course of time the deceased expressed an interest in buying shares in applicant. I This was discussed and there was talk of deceased becoming a 'partner' in the business. I may mention in passing that deceased never bought any shares from the applicant and he never became a so-called 'partner' in the business. The assistant manager of Standard Bank Mmabatho branch advised Maginess that, in the event of the deceased becoming a 'partner' in the business, it would be wise if the 'partners' took out life policies on their respective lives in favour of the company (ie applicant) as J beneficiary in order to ensure that, in the case

Khumalo J

A of the death of a 'partner', the company would be compensated financially for the loss of the services of a man experienced in the management and business of the company. He was also advised that 'in the event of the company being in need of financial assistance from any financial institution, such policies might be a plus point'.

B Pursuant to the aforesaid advice one Tony Sephton, a broker of Sanlam (the first respondent), discussed various policy options with them. It was eventually decided that the applicant would pay the premiums in respect of an annuity and life policy on the lives of Maginess, his wife and the deceased. The person insured would be the beneficiary in respect of the annuity, whilst in respect of the life policy the applicant C was to be the beneficiary. Mr Mike Kinnear finalised the policies. Maginess and his wife received their policies. All these were issued by the first respondent.

Maginess assumed that the policies were issued according to the instructions given to Sephton and Maginess did not check any of the policies to see if they corresponded D with the instructions given. Maginess says he has looked for his policy and that of his wife and he could not find them. In his replying affidavit he says he subsequently found his own policy and he discovered that applicant was not reflected as beneficiary. He has not received copies of these policies from first respondent. Applicant paid the premiums of the respective policies until the deceased's death on 24 October 1994. A E day after the death of the deceased, the second respondent advised Maginess she was a beneficiary under the deceased's policies and requested to be furnished his death...