Pieterse v Shrosbree and Others , Shrosbree v Love and Others (146/02 , 435/03) [2004] ZASCA 129; [2006] 3 All SA 343 (SCA); 2005 (1) SA 309 (SCA) (23 September 2004)

Pieterse v Shrosbree and Others , Shrosbree v Love and Others (146/02 , 435/03) [2004] ZASCA 129; [2006] 3 All SA 343 (SCA); 2005 (1) SA 309 (SCA) (23 September 2004)

The Supreme Court of Appeal held that section 63 of the Long Term Insurance Act does not entitle the trustee of an insolvent deceased’s estate to the proceeds of insurance policies in preference to nominated beneficiaries. The nomination of a beneficiary under a life insurance policy creates a contract for the...

Source-derived case information.

Citation
[2004] ZASCA 129
Parties
Appellant: Gary Mark Shrosbree; First Respondent: Insolvent Estate of the Late Amelia Pieterse; Second Respondent: Deborah van Rooyen NO; Third Respondent: Momentum Group Limited; Appellant: Gary Shrosbree NO; First Respondent: Colleen Cherry Love; Third Respondent: Sanlam Life Insurance Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
23 September 2004
Case Number
146/02 , 435/03
Procedural Posture
Civil Appeal / Appeal From Court a Quo With Leave
Outcome
The applications by the trustees in both matters are dismissed with costs. The appeal in the Love matter is dismissed with costs.
Judges
MPATI, STREICHER, FARLAM, HEHER, PONNAN
Legal Topics
Long Term Insurance Act, Effect of Insolvency on Life Policies, Nomination of Beneficiaries, Declaratory Relief, Stipulatio Alteri
Banking and Finance Civil Procedure Long Term Insurance Act Effect of Insolvency on Life Policies Nomination of Beneficiaries Declaratory Relief Stipulatio Alteri

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Parties

Gary Mark Shrosbree

Appellant

Insolvent Estate of the Late Amelia Pieterse

First Respondent

Deborah van Rooyen NO

Second Respondent

Momentum Group Limited

Third Respondent

Gary Shrosbree NO

Appellant

Colleen Cherry Love

First Respondent

Sanlam Life Insurance Limited

Third Respondent

Procedural Posture

Civil Appeal / Appeal From Court a Quo With Leave

Legal Issues

  1. 1 Whether the trustee of an insolvent deceased’s estate is entitled, in preference to nominated beneficiaries, to the proceeds of certain insurance policies for distribution to creditors.
  2. 2 Whether section 63 of the Long Term Insurance Act 52 of 1998 vests any interest in the proceeds of insurance policies in the trustee of an insolvent estate.
  3. 3 Whether the nomination of beneficiaries under life insurance policies is affected by the insolvency of the deceased policyholder.

Ratio Decidendi

The Supreme Court of Appeal held that section 63 of the Long Term Insurance Act does not entitle the trustee of an insolvent deceased’s estate to the proceeds of insurance policies in preference to nominated beneficiaries. The nomination of a beneficiary under a life insurance policy creates a contract for the benefit of a third party, and upon acceptance, the beneficiary acquires enforceable rights against the insurer. Section 63 does not purport to divert the proceeds from the beneficiary to the estate, nor does it vest any interest in the trustee. Furthermore, in the Pieterse matter, the policies had not been in force for the requisite three years, and thus did not qualify for...

Court Disposition

The applications by the trustees in both matters are dismissed with costs. The appeal in the Love matter is dismissed with costs.

Orders

  • The application is dismissed with costs.
  • In the Love matter, the appeal is dismissed with costs.