Naidoo v Discovery Limited and Others (202/2017) [2018] ZASCA 88 (31 May 2018)

Naidoo v Discovery Limited and Others (202/2017) [2018] ZASCA 88 (31 May 2018)

The Supreme Court of Appeal held that a risk-only life insurance policy with a beneficiary clause is not an asset in the estate of the policyholder or the joint estate during the policyholder's lifetime. The policy has no surrender value or investment portion and only pays out upon the death of the insured. The rights to nominate or revoke beneficiaries are contractual and do not constitute assets that can be alienated under section 15(2)(c) of the Matrimonial Property Act. Therefore, the nomination of new beneficiaries by the deceased did not require the appellant's written consent and did not amount to alienation of an asset in the joint estate. The appeal was dismissed.

Citation
[2018] ZASCA 88
Parties
Appellant: Vasanthi Naidoo; Respondent: Discovery Life Limited; Respondent: Naidoo SD; Respondent: Naidoo G; Respondent: Naidoo VD; Respondent: Naidoo J
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
31 May 2018
Case Number
202/2017
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Johannesburg
Outcome
Appeal dismissed with costs.
Judges
Shongwe, Wallis, Mbha, Hughes, Schippers
Legal Topics
Matrimonial Property Act, Risk Only Life Policy, Beneficiary Nomination, Stipulatio Alteri, Alienation of Assets
Family and Children Commercial and Corporate Matrimonial Property Act Risk Only Life Policy Beneficiary Nomination Stipulatio Alteri Alienation of Assets

Case Brief

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Parties

Vasanthi Naidoo

Appellant

Discovery Life Limited

Respondent

Naidoo SD

Respondent

Naidoo G

Respondent

Naidoo VD

Respondent

Naidoo J

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Johannesburg

Legal Issues

  1. 1 Whether a risk-only life insurance policy with a beneficiary nomination clause is an asset of the policyholder during his or her lifetime.
  2. 2 Whether the nomination of a beneficiary by a policyholder married in community of property constitutes an alienation of that policy as contemplated in section 15(2)(c) of the Matrimonial Property Act 88 of 1984.

Ratio Decidendi

The Supreme Court of Appeal held that a risk-only life insurance policy with a beneficiary clause is not an asset in the estate of the policyholder or the joint estate during the policyholder's lifetime. The policy has no surrender value or investment portion and only pays out upon the death of the insured. The rights to nominate or revoke beneficiaries are contractual and do not constitute assets that can be alienated under section 15(2)(c) of the Matrimonial Property Act. Therefore, the nomination of new beneficiaries by the deceased did not require the appellant's written consent and did not amount to alienation of an asset in the joint estate. The appeal was dismissed.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.
  • The second to fifth respondents must bear their own costs.