RITCHIE v DELTA PENSION FUND 1992 (2) ZLR 413 (S)

Flynote

Costs — circumstances in which successful party will be deprived of his costs

Insurance — pension fund — age limit to join scheme — person joining fund misrepresenting that he was below age limit — fund paying out to widow but then finding out about misrepresentation — whether fund entitled to recover money paid out under conditio indebiti

Headnote

No person was eligible to join the pension scheme and related life insurance scheme run by the respondent if he was over 55 years of age. When the husband of the appellant joined that scheme he was over 55 but he misrepresented that he was under 55 and this misled the respondent as to his eligibility. After the death of her husband the respondent paid out to his widow, the appellant, a large sum of money representing the insurance benefits payable under the scheme. The respondent then found out that the appellant's husband had been over 55 at the time he joined the pension scheme. It alleged that the appellant had been unjustly enriched by the payment made to her by the respondent and claimed repayment of the sum paid by means of the conditio indebiti.

Held, that an insurance contract is a contract uberrimae fidei under which the party seeking insurance cover is obliged by law to disclose all material facts. Instead of disclosing his true age, the appellant's husband had deliberately falsified his date of birth and this misrepresentation had induced the respondent to allow an ineligible person to join the scheme.

Held, further, that the payment to the appellant had been made under a mistaken belief induced by her husband's misrepresentation that the husband was entitled to be a member of the scheme and that, on his death, his widow was entitled to insurance benefits.

Held, further, that the conditio indebiti applies whenever a payment is made by mistake to a person who is not entitled to that payment except where the person making the payment was so grossly negligent or reckless that it had to be inferred that he intended the payee to have the money whether or not it was owed to him.

Held, further, that the respondent had been somewhat careless in proceeding to pay out the money to the widow despite having been supplied with documentation by the widow which would have enabled it to discover the ineligibility of the husband. The respondent had not, however, been grossly negligent or reckless and it could not be inferred that it had intended the payee to keep the money whether or not it was owed. The respondent was thus entitled to recover the amount paid under the conditio indebiti.

Held, as to costs, that the trial judge was correct to deprive the respondent of its costs on the basis, firstly, that it had been careless in paying the money after it had been given documents showing the true date of birth of the deceased and, secondly, that it had made the appellant more determined to oppose the action to recover the money by making an insulting allegation that her marriage to the deceased had been bigamous.