Parents of woman killed by carbon monoxide at Sani Pass lodge fail in R4m life policy claim

The family of a woman who died from carbon monoxide poisoning in a shower in a Lesotho lodge have been dealt another blow.

The Supreme Court of Appeal (SCA) says they are not entitled to a R4m payout from her life policy because she cancelled it weeks before her death.

Sue Church collapsed in a shower at Sani Mountain Lodge while on holiday in September 2018. According to the SCA judgment, she “was overcome by carbon monoxide fumes from a faulty geyser”.

Litigation ensued when her parents and beneficiaries, Michael and Joan Hogan, claimed R4m from Discovery Life, only to be told the policy had been cancelled.

They successfully challenged Discovery in the high court but on Friday the appeal court reversed the ruling.

Church took out the R3m Discovery life policy in December 2015, with cover escalating until her death.

She cancelled the policy in August 2018, telling a Discovery employee she was moving over to Liberty Life. Discovery informed her that “a notice period of 30 calendar days applied to cancellations”.

“On August 23 2018, and unbeknown to Discovery, Mrs Church instructed her banker, First National Bank, to stop the payment of the debit order in respect of the premium due under the policy for September 2018,” said the SCA judgment.

“As a result, on September 3 2018, when Discovery submitted the monthly debit order to the bank for payment, the debit order was returned unpaid with the following remark: ‘Payment stopped by account holder’.

“On September 10 2018, Mr Makakane, on behalf of Discovery, advised Mrs Church in writing that her policy had been cancelled with effect from September 1 2018.”

Church died on September 22, and five days later her parents paid the September premium on the advice of their daughter's erstwhile broker, and submitted the declined claim two months later.

In their high court litigation, the Hogans said Discovery failed to notify their daughter of the unpaid September premium before cancelling the policy. They contended that Discovery should have afforded her a 30-day “grace period to pay the outstanding premium”.

The high court judgment said: “The fact that Discovery accepted the payment of the premium albeit from the executor or Susan’s broker and the fact that there was no indication or proof provided to either the [Church’s parents] or to the court that the final premium paid was held in a suspense account is an indication that the premium was accepted and that the policy was still in existence in line with the e-mails addressed to Susan informing her that the policy would be effective until September 30 2018.”

But the SCA overturned the ruling and ordered the Hogans to pay Discovery's legal costs.

“To sum up, Mrs Church’s policy was cancelled not for the non-payment of the premium per se but because Discovery elected to accept Mrs Church’s repudiation of the contract,” the SCA ruled.

“As correctly conceded by [the Hogans’] counsel during argument, the grace period provision cannot exclude reliance on repudiation or even a mutual agreement by the parties to cancel the policy.

“It was submitted, during the course of the argument, that Discovery could not be said to have elected to accept the repudiation and cancel the policy as almost all the letters addressed to Mrs Church were automated responses generated by a computer.

“Discovery’s answering affidavit demystified this when it explained that the various letters were sent out by its credit department. Furthermore, each letter responded to a certain set of facts, and was under a signature by different personnel. It can therefore hardly be said that there was no human intervention in the various letters addressed to Mrs Church.”

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