THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case No: 1067/2019
In the matter between:
KING PRICE INSURANCE COMPANY LTD
APPELLANT

and

CONCISE CONSULTING SERVICES (PTY) LTD
RESPONDENT

Neutral citation: King Price Insurance Company Ltd v Concise Consulting
Services (Pty) Ltd (1067/2019) [2021] ZASCA 42 (13 April 2021)
Coram:
MBHA, ZONDI and MOLEMELA JJA and KGOELE and
ROGERS AJJA
Heard:
15 February 2021
Delivered: This judgment was handed down electronically by circulation to the
parties’ legal representatives by email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is deemed to be
have been at 10h00 on 13 April 2021.

Summary: Contract – insurance – repudiation – claim of indemnification –
whether false and misleading information provided by the respondent’s employee to
the insurer was attributable to the respondent – whether such information was
material to justify the repudiation of the claim and cancellation of the contract. Held
– the appellant failed to acquit itself of its onus to justify the repudiation and
cancellation of the contract of insurance – appeal dismissed with costs.

______________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Louw J and Joyini
AJ sitting as the court of appeal):

The appeal is dismissed with costs, which costs shall include the costs of two
counsel, where employed.
______________________________________________________________________

JUDGMENT
______________________________________________________________________

Mbha JA (Zondi and Molemela JJA and Kgoele and Rogers AJA concurring)
[1] This appeal concerns a repudiation by an insurance company of a claim for
indemnification under a contract of insurance, on the ground that an employee of the
insured had submitted false, untrue and misleading information, during the claims
process. It is against a judgment and order of the full bench of the High Court,
Gauteng Division, Pretoria (Louw J and Joyini AJ), given on appeal to it from the
Magistrate’s Court of Pretoria, in terms of which the insurer (the present appellant,
which was the successful defendant in the trial court and the unsuccessful respondent
in the full bench appeal) was held liable to indemnify the insured (the present
respondent, which was the unsuccessful plaintiff in the trial court and the successful
appellant in the full bench appeal) in terms of a contract of insurance between the
parties, for damages sustained to the insured’s motor vehicle in an accident on
1 January 2014. The appeal is with special leave of this Court.

[2] It is necessary to set out, briefly, the factual matrix against which the dispute
arose and its litigation history. The respondent, a company registered in terms of the
Companies Act 71 of 2008, was insured in terms of a contract of insurance
(the contract), concluded with the appellant, a company which conducts business as
a short-term insurer in terms of the Short-term Insurance Act 53 of 1998. This
contract was in full force and effect from June 2013 until its cancellation by the
appellant on 17 January 2014 retrospectively with effect from 1 January 2014.

[3] The respondent was the owner of a 2008 Toyota Yaris motor vehicle bearing
registration letters and numbers BSY 487 L (the motor vehicle) which was
comprehensively insured by the appellant in terms of the contract. On
1 January 2014 during the early hours of the morning this motor vehicle sustained
damage during a collision with a wall. The driver at the time of the collision was
Mr Sibusiso Ngobese (Mr Ngobese), an employee of the respondent who was also
registered in terms of the contract of insurance, as being the regular driver of the said
motor vehicle. Mr Paolos Tripani (Mr Tripani), the respondent’s managing director,
reported the incident and lodged a claim telephonically with the appellant on
1 January 2014. Mr Tripani also instructed Mr Ngobese to report the incident to the
South African Police Services, which he did.

[4] On 8 January 2014 the appellant’s Ms Beverley-Ann Marais contacted
Mr Ngobese to obtain a description of the events about the incident. The call was
made to Mr Ngobese after Mr Tripani had explained to the appellant that details
regarding the incident had to be obtained from Mr Ngobese, as he was the only
person who knew how the accident had occurred. The appellant’s assessor, Mr Charl

Victor, conducted further telephonic interviews with Mr Ngobese on 14 and 16
January 2014, when the latter’s version was probed in greater detail.

[5] On 17 January 2014 the appellant repudiated the respondent’s claim and
cancelled the contract retrospectively from the date of the incident. Its ground for
doing so was that during the validation of the claim it had come to the appellant’s
attention that Mr Ngobese had supplied the appellant with dishonest information.

[6] In repudiating the claim and cancelling the contract retrospectively, the
appellant referred specifically to two different portions of the policy wording on
pages 9 and 10, which state the following:
‘Be honest
Always provide us with true and complete information. This also applies when anyone also acts
on your behalf.
. . .
Keep your promises
You need to give us:
. . .
 True and complete information to us and the authorities. We act on the information you
provide, therefore any information which is misleading, incorrect or false will prejudice the
validity of your claim.’

[7] On 21 July 2014 the respondent issued a summons in the Magistrate’s Court,
Pretoria, against the appellant claiming payment of the amount of R75 000, being
the fair and reasonable costs required to repair the respondent’s motor vehicle to its
pre-collision condition.

[8] By the time the appellant pleaded, it no longer relied on page 10 of the policy
wording of the contract. Over and above the policy wording appearing on page 9,

reliance was also placed on the policy wording appearing on page 16, bearing the
heading ‘Fraud or dishonesty. . . Honesty is always the best policy’. The appellant
then pleaded reliance on the following policy wording in the relevant paragraph of
the plea:
‘Fraud or dishonesty. . . Honesty is always the best policy…
If you, or anyone acting on your behalf submits a claim, or any information or documentation
relating to a claim, that is in any way fraudulent, dishonest or inflated, we will reject the entire
claim and cancel your policy retrospectively, from the date on which the incident has been
reported, or from the actual incident date, whichever date is earliest.’

[9] The appellant pleaded further that either at the time or after the respondent’s
claim was lodged with the appellant, and during the investigation process conducted
by the appellant’s assessors, Mr Ngobese being the regular driver of the
motor vehicle, and acting on behalf of the respondent, supplied the following
information to the appellant: that he arrived at his home in Klipfontein View,
Midrand from Soweto at around 02h00 on 1 January 2014 and went to bed; that
while he was sleeping he was woken up by his brother ‘Mpho’ at around 04h00 to
05h00 asking him to assist because Mpho’s wife was going into labour, whereafter
he took Mpho and his wife to Tembisa Hospital where he dropped them off at the
entrance of the hospital; that the collision occurred because the motor vehicle spun
out of control and crashed into the wall after he pulled the handbrake because he had
no brakes due to the motor vehicle being in neutral; that he was not drinking alcohol
prior to or at the time of the collision; and that he was alone in the motor vehicle at
the time of the collision.

[10] The appellant then averred that the aforementioned information was untrue
and dishonest thus entitling the appellant to repudiate the claim and avoid the
contract in that: during the period that Mr Ngobese was allegedly sleeping, he was

in fact driving around the Soweto area; according to the records from Tembisa
Hospital, Mpho’s wife was not treated there on 1 January 2014; and Mr Ngobese
was not alone in the motor vehicle at the time of the collision. Furthermore, he had
consumed alcohol prior to or at the time of the collision and the collision did not
occur as alleged by him.

[11] At the trial, the appellant led evidence to show that the spot where the accident
had occurred was along a straight stretch of road. This was in contrast with
Mr Ngobese’s version that he lost control as he was approaching a turn at the end of
that particular road.

[12] On 7 November 2017 the learned magistrate (Mr Tjale) handed down
judgment dismissing the respondent’s claim with costs. He found, inter alia,
Mr Ngobese was dishonest and that the information or representations made by him
formed part of the claim that was lodged by the respondent; the information or
representations made by Mr Ngobese were material; Mr Ngobese was acting on
behalf of the appellant when he made the representations and that the appellant was
accordingly entitled to avoid the contract of insurance.

[13] The respondent’s subsequent appeal to the full bench yielded positive results.
The full bench upheld the respondent’s appeal and set aside the magistrate’s
judgment in its entirety. The full bench’s reasons may be summarised as follows:
(a)
The appellant as insurer bears the burden of proof to establish on a
preponderance of probabilities whether the respondent made the false
statement or fraudulent representation with the wilful intention to defraud and
this was common cause. The clauses in the contract relied upon by the
appellant to limit its obligation to indemnify required to be interpreted strictly

with proper regard to the main purpose, general nature and object of the
contract of insurance. In casu, the appellant had failed to discharge the burden
to establish dishonesty or fraud on the part of the respondent with the intention
to deceive and defraud the appellant in order to get a benefit it knew it was
not entitled to.
(b)
When Mr Ngobese provided the dishonest information to the appellant, he
was clearly not acting on behalf of the respondent. He was merely providing
information at the request of the respondent. The respondent itself did not
know what the facts were.
(c)
The false statements or misrepresentations made by Mr Ngobese were
insignificant and could not materially affect the assessment of indemnity.

[14] The appellant’s case in this Court is pivoted, as it was in the court below, on
three main grounds namely:
(a)
First, that Mr Ngobese was acting on behalf of the respondent when
submitting the false information to the appellant as contemplated in the
contract of insurance.
(b)
Secondly, that the respondent was obligated in terms of the agreement not to
supply false and misleading information.
(c)
Thirdly, that the misrepresentations and untruths perpetrated by Mr Ngobese
were of a material nature such as to entitle the appellant to both repudiate the
respondent’s claim and avoid the contract of insurance retrospectively with
effect from 1 January 2014.

[15] The respondent’s defence, as appears from the heads of argument, can be
summarised as follows:

(a)
The appellant failed to discharge the onus it had to prove facts pleaded in its
plea, all relating to the false information submitted by Mr Ngobese, including
Mr Ngobese’s whereabouts during the period before the accident; that his
brother’s wife was never treated at Tembisa Hospital on 1 January 2014 and
so forth. Alternatively, such false statements were not material to the
appellant’s liability to compensate the respondent.
(b)
Whatever Mr Ngobese told the appellant’s investigator, Mr Victor, about how
the accident occurred, is not attributable to the respondent, with the
consequence that the respondent has not contravened any of the terms of the
contract of insurance; and
(c)
If it is found that Mr Ngobese provided untrue and misleading information
and if it is found that the information was provided in the process of the
respondent filing a claim as opposed to in the appellant’s validation or
investigation process, the contract of insurance is ambiguous about what
precisely is meant with ‘acting on behalf of the insured’. Consequently, any
reasonable interpretation of that phrase by the respondent should triumph
above the appellant’s interpretation as the appellant is the author of the
contract of insurance.1

[16] During argument before us, the issue about the truthfulness of Mr Ngobese’s
statements was rightly not seriously pursued by the respondent. Indeed, it was not
even dealt with by the full court. The main focus of the debate turned on the two
issues of the materiality of Mr Ngobese’s untrue statements, and whether or not
Mr Ngobese was acting on behalf of the respondent when he gave the information
to the appellant’s investigator during the claims validation process.

1 Van Zyl NO v Kiln Non-Marine Syndicate NO 510 of Lloyds of London [2002] ZASCA 120; 2003 (2) SA
440 (SCA) para 6.

[17] At the outset, I need to dispel outright any notion that at the time Mr Ngobese
gave his statement to the appellant he was submitting the insurance claim in terms
of the contract. Mr Tripani’s uncontested evidence is that after speaking to
Mr Ngobese on the day of the incident, he personally contacted the appellant and
both reported the incident and then registered a claim telephonically. The policy
made provision for all claims to be lodged telephonically by calling a specified
number. Clearly, Mr Ngobese’s statement was given during the validation process,
well after the claim had already been duly lodged.

[18] In my view, the evidence and facts of this matter, viewed holistically, show
conclusively that when Mr Ngobese told the appellant’s investigator, Mr Victor,
how the incident occurred, he was not acting on behalf of the respondent.
Mr Tripani’s uncontested testimony bears this out undoubtedly. Mr Tripani’s
evidence in this regard was as follows:
‘. . . Mr Boot:
. . . And you are happy that [Mr Ngobese] when he gives [sic] the information to the assessor is
acting on behalf of the Company in the finalisation of that claim?--- I would not agree with the
words “acting on behalf of the Company”.
. . . Mr Boot:
Well, he is representing the Company as the Insured Driver. --- He is relaying the information, the
nature of the incident, answering questions.’

[19] Also of importance is that there was no examination or cross-examination of
Mr Ngobese directed to the question whether he was or was not supplying
information ‘on behalf of’ the respondent. The appellant’s legal representative never
put to him in cross-examination that he was acting ‘on behalf of’ the respondent.

[20] In cross-examination, Mr Tripani testified that as Mr Ngobese was the only
person who knew or had information about how the accident occurred, he was the
person the appellant would have had to contact to get a full picture of the accident.
Thus, the appellant was the party that initiated contact with Mr Ngobese. Mr Tripani
only facilitated that to happen. And, in doing so, Mr Tripani never ever asked
Mr Ngobese to fabricate anything that was not true. Clearly, he was not even aware
of what Mr Ngobese was going to say to the appellant’s investigator.

[21] Importantly, sight must not be lost of the fact that the validation exercise
conducted by the appellant, through its investigator Mr Victor, was not a
requirement for the institution or lodgement of a claim in terms of the contract. It
was thus something that was done entirely at the election of the appellant.

[22] It is also important to note that ordinarily ‘acting on behalf of’ must denote
the concept of agency, which undoubtedly Mr Ngobese was not. There is thus no
cogent reason why Mr Ngobese, who was clearly a witness as to how the incident
occurred, should be elevated to an agent for, and thus acting on behalf of, the
respondent in this case.

[23] Although the words ‘on the behalf of’ can in an appropriate case have the
broader meaning of acting for the benefit or in the interests of another, even though
not as an agent,2 I consider that any ambiguity in this respect should be resolved
against the appellant. It would not be in keeping with the drastic consequence of
forfeiture of claims for an insured to be penalised for fraudulent or dishonest
information emanating not from the insured (which would include conduct by an

2 See, for example, South African Warehousing Services (Pty) Ltd and Others v South British Insurance Co
Ltd 1971 (3) SA 10 (A) at 20D-F; Premier Milling Company (Pty) Ltd v Van der Merwe and Others 1989 (2)
SA 1 (A) at 8C-E.

agent authorised to convey fraudulent or dishonest information) but a third party.
However, and even if one applied the broader meaning, the evidence does not show
that Mr Ngobese perceived himself to be acting for the benefit or in the interests of
the respondent. His purpose in providing dishonest information was almost certainly
to shield himself from adverse consequences, whether at the hands of the insurer or
the respondent.

[24] As I have found that Mr Ngobese was not acting on behalf of the respondent
when he gave his statement to the appellant, no fault or culpability of any sort
whatsoever can be attributed to the respondent. It follows that the appeal falls to be
dismissed. Furthermore, in light of my finding in this regard, I do not deem it
necessary to further consider and determine any other issue raised in the appeal.

[25] In the circumstances, the following order is made:
The appeal is dismissed with costs, which costs shall include the costs of two
counsel, where employed.

__________________

B.H MBHA

JUDGE OF APPEAL

APPEARANCES:

For appellant:
P G Cilliers SC (with him B Boot SC)
Instructed by:
Weavind & Weavind Attorneys, Pretoria
Matsepes Incorporated, Bloemfontein

For respondent:
T A L L Potgieter SC

Instructed by:
Savage Jooste & Adams Attorneys, Pretoria

Honey Attorneys, Bloemfontein