National Employers Mutual General Insurance Association v Gany

• Jurisdiction: South Africa
• Judge: Wessels JA, Stratford JA and Roos JA
• Judgment Date: 17 March 1931
• Hearing Date: 11 March 1931
• Court: Appellate Division

Wessels, J.A.:

The respondent (plaintiff in the court below) alleged in his declaration that a policy of accident insurance had been granted to him by the defendant (appellant in this Court) on June 15th, 1929, in respect of a certain G.M.C truck, and that this policy was of force and effect on 31st August, 1929, when the truck accidentally injured a minor named van Tonder. Claims were made against the plaintiff by the minor and his father. The plaintiff defended these claims, but judgment was given against him and in consequence he became legally liable to pay £527 Os. 2d., and this amount he paid. In addition he had to pay to his own attorney £126 16s. 4d. and to the father of the minor £48 16s. 4d. The defendant has repudiated liability and refuses to pay any of these sums.

Wessels, J.A.

By another policy dated 15th June, 1929, plaintiff insured with defendant against, accident a certain Super Sentinel steam lorry. On 9th June, 1929, whilst this policy was of force and effect, the lorry caused damage to some railway property, and the plaintiff became liable to pay £15 14s 11d as damages. This claim is also repudiated by the defendant. The plaintiff contended that the defendant was not entitled to repudiate liability and asked the Court to award him the amounts set out above.

The defendant company admitted the policies but denied liability: it admitted the accidents but denied that the amounts set out were correct. It pleaded specially that the plaintiff in June, 1929, through his agents Sherali Abdul Gany and Fathar Abdul Gany, signed and delivered to it proposal forms in writing, dated 6th June, 1929, as the basis of the contract of insurance and on the faith of the statements contained in the proposal forms the defendant granted to him the policies sued on. The questions in these proposal forms were not answered truthfully. Then follow the particulars of the false statements made in these forms:

"(a)

Question 7 of the said proposal form reads as follows: Has any insurer refused to accept or to continue your motor or fire insurance or required an increased premium, or imposed special conditions? If so, state reason. The answer given by the plaintiff was "No," whereas in fact shortly prior to June, 1929, an insurer had refused to continue the plaintiff's motor insurance policies, to wit, the Ocean Accident and Guarantee Corporation Ltd.

(b)

Question No. 8 reads as follows: Has any vehicle owned by you sustained damage? The answer given by the plaintiff was "No," whereas in fact and to the knowledge of plaintiff the following vehicles owned by plaintiff sustained damage (five instances set out here).

(c)

Question No. 9 reads as follows: Has any claim been made upon you in connection with a vehicle? The answer given by the plaintiff was "No," whereas in fact several claims had been made upon the plaintiff, particulars whereof are as follows (five instances set out here).

For the above reasons the defendant was entitled to repudiate liability; as also from the fact that

Wessels, J.A.

The plaintiff's policies with the Ocean. Accident and Guarantee Corporation Ltd had been discontinued by that Company, and that vehicles owned by him had previously sustained damage, and that previous claims had been made against him were within the knowledge of the plaintiff and his agents and were material to the contract of insurance as he and they well knew. The defendant had no knowledge of the said material facts and the concealment thereof induced the said contract of insurance and by reason thereof the defendant became entitled to repudiate liability. . . ."

There was an alternative plea, but this we need not concern ourselves with as the appellant has not referred to it. To this special plea the plaintiff replied that: -

"(a)

The plaintiff being insured with the Ocean Accident and Guarantee Corporation Ltd in respect of a number of different motor vehicles, including the vehicles mentioned in this action, that Company by letters dated 1st June, 1929, discontinued all the said policies, whereupon one J. A. Clark (who is referred to in this replication in his capacity as the duly authorised agent of the defendant) becoming aware of the foregoing facts did on the 5th day of June, 1929, of his own initiative and not at plaintiff's instance, call at the plaintiff's office in Foundry Lane, Durban, to the end that he might obtain the insurance of all the said vehicles with the defendant, and did in fact induce the plaintiff then and there through his agent to agree to insure with defendant, and thereupon on the following day Clark again called on plaintiff and produced forms of proposals and did himself fill up the forms in respect of all vehicles including those referred to in this action, he being aware of all the facts

(b)

As to paragraph 10, the plaintiff says that Clark was aware of any discrepancies between the answers and the true facts and that Clark and not the plaintiff's agents wrote the answers.

Particulars: -

1.

As to question No. 7 Clark was aware, and it is common cause that the Ocean Accident and Guarantee Corporation Ltd had refused to continue the plaintiff's motor insurance

Wessels, J.A.

policies as above set out and notwithstanding that fact Clark himself on the said date filled in the answer now complained of and insisted that it was in order.

2.

As to question No. 8 the plaintiff's agents informed Clark that there had been damage on several occasions to the vehicles, but that they could not give particulars without reference to the Ocean Accident and Guarantee Corporation Ltd., but Clark said such reference was unnecessary and himself on the said date filled in the answer n ow complained of and told the said agents that it was in order.

3.

As to question No. 9 plaintiff's agents informed Clark of the February 1927 claim, and that there had been other claims for which it would be necessary to refer to the Ocean Accident and Guarantee Corporation Ltd for the details, but Clark said that that was unnecessary, and notwithstanding the information given to him, did himself on the said date fill in the answer complained of, and told the said agents that it was in order.

(c)

Accordingly the defendant through the said Clark was aware of the facts and had been given the source for the details of these facts when it issued the policy, and it cannot now repudiate the policy on the ground of falseness of the answers because it would be a fraud to do so, and moreover the defendant having issued the policy and allowed the plaintiff to act upon it, while it was aware of the facts, is now estopped from repudiating the policy by setting up that the answers were false."

This replication was amended, and the word "agents" was altered into "agent," and in b (3) the words "February, 1927, claim" were deleted and "claims in respect of Sentinel truck and Dodge car" substituted.

On September 23rd, 1930, the parties went to trial. The learned Judge in the court below accepted the testimony of the plaintiff is son Asmath Abduhl Gany, who from the record seems to be an educated Indian, actively engaged in plaintiff's business though he held no power of attorney from plaintiff, and rejected the testimony of J. A. Clark, the defendant's Durban representative By doing so the learned Judge accepted in its entirety the story told by Gany to the effect that Clark, the defendant's agent,

Wessels, J.A.

approached him unsolicited and asked him about the plaintiff's insurance, said he had heard that plaintiff wanted to insure, that his Company - a non-tariff company was cheaper than others in the ring, and when told by Abduhl Gany that the Ocean Accident Company had cancelled plaintiff's policies without giving a reason, and asked if they could do so replied in the affirmative. Clark informed Asmath Gany that his Company was willing to take over the insurances. Clark then produced Proposal forms...