A recent High Court ruling in the Eastern Cape Division (Makhanda) underscores a key lesson for insurers and policyholders: minor administrative errors should not undermine a clearly expressed intention, and insurers must focus on the substance, not just the paperwork, when honouring life cover policies.
In Mahlathi and Another v Mpako, handed down on 20 January 2026, the Court confirmed that a beneficiary nomination remains valid even if the policyholder makes an administrative mistake. The judgment held that a completed form received by the insurer during the policyholder’s lifetime was effective despite listing the wrong policy number. The key takeaway: small errors cannot override the policyholder’s clear wishes.
The late Dr Fundiswa Mahlati-Mpako took out a Sanlam life cover policy in October 2014, effective January 2015. She did not initially nominate any beneficiaries. When she died in July 2021, the policy had a death benefit of R1 229 255 and a funeral benefit of R122 926.
After her death, Sanlam detailed the background to Siphiwo Mpako, the deceased’s spouse, and Selina Lotter, the estate’s executrix. Mahlati-Mpako had begun divorce proceedings against Mpako. There were no children from the marriage.
In October 2020, Mahlati-Mpako completed a form intended to nominate beneficiaries for her retirement annuity, naming her sister Khayakazi Veronica Mahlathi, her brother Merriman Nkosohlanga Mahlathi, and Sivenathi Mpako, a foster child. The policy number was left blank. A phone call with a Sanlam employee clarified that she had intended these individuals as beneficiaries for her life cover, not the RA.
To correct the mistake, she submitted a new beneficiary form in November 2020 but accidentally referenced the RA policy number instead of her life cover. Sanlam concluded that, based on the forms and the phone call, her intent to benefit her sister, brother, and foster child was clear. Conflicting claims after her passing led to legal proceedings.
The Court considered the contractual framework. All parties agreed that Sanlam’s “General Plan Provisions” governed beneficiary appointments. These provisions allow policyholders to appoint one or more beneficiaries in writing, signed, and received by the insurer before death.
The policy stated:
“…you may appoint one or more beneficiaries to receive the benefits payable at your death. We will pay the benefits to a beneficiary only if the latter accepts the appointment as beneficiary. However, a beneficiary can only accept the appointment after your death.”
And:
“You may cancel or change the appointment of a beneficiary at any time. The appointment, cancellation, or change must be in writing and signed by you and must reach our head office before your death.”
Siphiwo Mpako argued that the nomination was invalid because Mahlati-Mpako had submitted the wrong form or policy number. But the Court disagreed. Policy provisions required only that the nomination be in writing, signed, and reach Sanlam. There was no contractual requirement to complete a specific form or insert the correct policy number.
Judge Justin Laing quoted the Supreme Court of Appeal (SCA) in Natal Joint Municipal Pension Fund v Endumeni Municipality: “The ‘inevitable point of departure is the language of the provision itself,’ read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.”
He said adding extra conditions would be to “make a contract for the parties other than the one concluded”. The SCA has similarly emphasised that interpretation must respect the words, context, and purpose of the agreement, not what might seem “better” or more “sensible”, Judge Laing noted.
Here, the evidence – including a recording of Mahlati-Mpako’s call with Sanlam – showed her clear intention to benefit her sister, brother, and foster child. Administrative errors were simply that: errors, not obstacles to fulfilling her wishes. Sanlam treated the forms as a facilitation tool, not a legal requirement.
The Court also dismissed Mpako’s argument that the case involved a stipulatio alteri, which would require a perfectly completed form to create rights for the beneficiaries. The completed form, despite the administrative mistake, was enough to show her intent.
The High Court ruled that Mahlati-Mpako had satisfied all the requirements. Her nominated beneficiaries – the sister, brother, and foster child – were entitled to the life cover proceeds. The Court also approved that legal costs may be paid from these proceeds. Sanlam was ordered to pay out the life cover policy to the three beneficiaries.
