Delphisure Group Insurance Brokers Cape (Pty) Ltd v Kotze and Others (437/2009) [2010] ZASCA 85; 2010 (5) SA 499 (SCA) ; [2011] 1 All SA 109 (SCA) (31 May 2010)

Delphisure Group Insurance Brokers Cape (Pty) Ltd v Kotze and Others (437/2009) [2010] ZASCA 85; 2010 (5) SA 499 (SCA) ; [2011] 1 All SA 109 (SCA) (31 May 2010)

The Supreme Court of Appeal held that Delphisure, through its general manager Kolovos, negligently misrepresented to Scott that the Farmsure crop insurance product was fully underwritten by Lloyds, knowing that this was not the case. Scott, acting on Kolovos's instructions and without knowledge of the true state of affairs, marketed Farmsure to the respondents, who then cancelled their existing crop insurance applications and applied for Farmsure. The court found that the loss suffered by the first respondent was reasonably foreseeable, directly caused by the misrepresentation, and sufficiently closely linked to attract legal liability. Public policy considerations supported imposing...

Citation
[2010] ZASCA 85
Parties
Appellant: Delphisure Group Insurance Brokers Cape (Pty) Ltd; Respondent: Gysbert Johannes Kotzé Dippenaar; Respondent: Gerrit Andries Visser; Respondent: Bexsure (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
31 May 2010
Case Number
437/2009
Procedural Posture
Civil Appeal / Appeal From Western Cape High Court (cape Town), First Instance
Outcome
Appeal dismissed in respect of the first respondent's claim; appeal upheld in respect of the second respondent's claim.
Judges
MPATI, NUGENT, MALAN, LEACH, SERITI
Legal Topics
Negligent Misrepresentation, Pure Economic Loss, Insurance Broker Liability, Causation, Wrongfulness, Policy Considerations
Delict Commercial and Corporate Negligent Misrepresentation Pure Economic Loss Insurance Broker Liability Causation Wrongfulness Policy Considerations

Case Brief

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Parties

Delphisure Group Insurance Brokers Cape (Pty) Ltd

Appellant

Gysbert Johannes Kotzé Dippenaar

Respondent

Gerrit Andries Visser

Respondent

Bexsure (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Western Cape High Court (cape Town), First Instance

Legal Issues

  1. 1 Whether Delphisure was liable for damages arising from negligent misrepresentation regarding the existence and underwriting of the Farmsure crop insurance product.
  2. 2 Whether the misrepresentation caused the first and second respondents to suffer pure economic loss.
  3. 3 Whether the second respondent established factual causation for his claim.

Ratio Decidendi

The Supreme Court of Appeal held that Delphisure, through its general manager Kolovos, negligently misrepresented to Scott that the Farmsure crop insurance product was fully underwritten by Lloyds, knowing that this was not the case. Scott, acting on Kolovos's instructions and without knowledge of the true state of affairs, marketed Farmsure to the respondents, who then cancelled their existing crop insurance applications and applied for Farmsure. The court found that the loss suffered by the first respondent was reasonably foreseeable, directly caused by the misrepresentation, and sufficiently closely linked to attract legal liability. Public policy considerations supported imposing...

Court Disposition

Appeal dismissed in respect of the first respondent's claim; appeal upheld in respect of the second respondent's claim.

Orders

  • The appellant’s appeal in respect of the claim of the first respondent is dismissed.
  • The appeal in respect of the claim of the second respondent is upheld; paragraph 3 of the order of the court a quo is set aside and substituted with: 'The second plaintiff’s claim against the second defendant is dismissed, and the second plaintiff is to pay 30 per cent of the second defendant’s costs.'