The High Court in Pretoria has upheld a Regional Court order that King Price must pay a claimant the amount he owed the bank for his vehicle, which was written off after an accident.
The claimant’s, “SM’s”, Mercedes Benz E-200 was involved in an accident in October 2017. The vehicle was towed to a storage facility and found to be damaged beyond economic repair.
In December 2017, after an interview about events that had occurred before the accident, King Price rejected SM’s claim and cancelled his policy.
One of the reasons it gave for rejecting SM’s claim was that he failed to disclose his whereabouts on the day of the accident, which allegedly included purchasing alcohol.
SM instituted a claim for damages in the Regional Court for the fair, and/or reasonable and/or market-related value of the vehicle.
In February last year, the Regional Court awarded damages of R374 960 and punitive costs in favour of SM.
King Price appealed to the High Court, arguing that SM had not proved the amount of his claim.
The insurer contended that SM was entitled to the insured amount, which was the vehicle’s retail value, not the settlement amount owed to Standard Bank.
It also said the Regional Court did not take into account the value of the wreck, which was in SM’s possession, and that SM was speeding at the time of the accident.
SM argued before the High Court that:
- He had proved his claim per the insurance contract by producing a settlement amount of R374 960 from Standard Bank.
- King Price’s speed defence should not succeed because if it was a material issue for the purposes of the claim, it would have been disclosed in the rejection of SM’s appeal against the refusal to approve his claim.
Acting Judge MR Phooko said an insurer cannot escape liability to indemnify an insured by relying on “some insignificant statement” that was not disclosed, and which is not materially connected to the risk or assessment of the claim.
Regarding King Price’s submissions about SM’s non-disclosure of his whereabouts on the day of the accident, Acting Judge Phooko said even if the submissions were correct, they did not affect the validity of SM’s claim, because his vehicle was covered for any damages that might arise.
He quoted from the case of Ivanov v Santam Limited (2006), where the High Court held that an “untrue or incorrect statement which does not amount to wrongful or material misrepresentation cannot be relied upon to exclude or limit liability simply on the fact of its untruthfulness”.
Acting Judge Phooko said SM answered King Price’s questions about the accident, and it would be unfair for King Price to ask SM about the events related to the accident but then expect him “to give a narration of everything that he did on that day”.
On the issue of speeding, the judge agreed with SM that if this was a material issue, King Price would have stated it in the letter rejecting the claim. In any event, SM’s vehicle was covered against all risks, including those arising from his negligence, such as driving at an excessive speed.
Although King Price contended that SM at no stage claimed a settlement amount of R374 691, SM’s particulars of claim showed he had also claimed “the fair, alternatively reasonable, alternatively market-related value of the motor vehicle”.
Acting Judge Phooko said this was where King Price had an opportunity to counter allege what it thought was a reasonable amount. But King Price did not address this aspect of SM’s claim in its plea or lead any evidence.
Regarding the value of the wreck, again King Price did not address this issue in its plea or lead any evidence.
Acting Judge Phooko said the Regional Court was correct when it found that the insurance agreement was clear about how King Price was going to compensate SM if he suffered damages.
He dismissed King Price’s appeal with costs.