The Supreme Court of Appeal (SCA) has dismissed a policyholder’s claim against King Price Insurance, finding that the settlement amount owed to the bank did not establish his claim to be paid the market-related value of the vehicle.
King Price took the matter on appeal to the SCA after the Regional Court and the Full Bench of the High Court in Pretoria awarded damages of R374 960.50 in favour of the policyholder, Sizwe Mhlongo.
Mhlongo’s Mercedes Benz E-200 was written-off after it was involved in a collision in October 2017.
King Price rejected Mhlongo’s claim and cancelled his policy.
As Moonstone reported in July last year, one of the reasons King Price rejected Mhlongo’s claim was that he failed to disclose his whereabouts on the day of the accident. The insurer also contended that Mhlongo was entitled to the insured amount, which was the vehicle’s retail value, not the settlement amount owed to Standard Bank.
Much of the High Court appeal focused on whether King Price was entitled to void the agreement because of alleged misrepresentations or inconsistencies in Mhlongo’s account of the circumstances surrounding the accident.
The appeal to the SCA was limited to the question of whether Mhlongo had proved the quantum of his claim.
In his summons, Mhlongo claimed damages of R374 960.50, being “the fair, alternatively reasonable, alternatively market-related value of the motor vehicle”.
The SCA noted that the only evidence produced by Mhlongo to establish the quantum of the damages he claimed to have suffered was a written settlement quotation from Standard Bank, which had financed the purchase of the vehicle.
Full Bench erred in two ways
The SCA, in a unanimous judgment, found that the Full Bench had erred in respect of the two grounds on which it dismissed King Price’s appeal.
The High Court found that, correctly interpreted, the agreement between the parties obliged King Price to pay the settlement amount, and hence Mhlongo was entitled to claim that amount by way of contractual damages.
But the SCA said the fundamental issue was not the correct interpretation of the agreement, but the case pleaded by Mhlongo. He pleaded his damages based on the market-related value of the vehicle, not on the settlement amount (which he also did not prove adequately).
Therefore, it was irrelevant to Mhlongo’s case whether, on a particular interpretation of the agreement, King Price was obliged to pay the settlement amount, Acting Judge of Appeal Raylene Keightley wrote on behalf of the Court.
The SCA said the High Court also erred in finding that the onus lay on King Price to plead and prove an alternative basis for the calculation of the damages, which it had failed to do.
Keightley AJA said it is trite that a plaintiff must prove its damages. Having framed his damages as the market-related value of the vehicle, Mhlongo bore the onus of proving the damages so pleaded.
King Price elected to defend the action on the basis that Mhlongo had not discharged his onus – as it was entitled to do. As such, there was no duty on King Price to plead or present evidence to prove an alternative quantum of damages, as the Full Bench suggested. When Mhlongo failed to prove his pleaded damages, that should have been the end of the matter, Keightley AJA said.
“Unfortunately for Mr Mhlongo, there was a fatal incongruity between the case he pleaded and the case he presented to the trial court. In the absence of evidence to establish the market-related value of his vehicle, it could not properly be found that he had proved his claim. The claim ought to have failed for this reason,” she said.
The SCA upheld King Price’s appeal with costs. It set aside the orders of the Full Bench and the Regional Court.