FAIS Ombud Ruling: Complaint against broker dismissed on probabilities

The FAIS Deputy Ombud has dismissed a complaint by a Pretoria truck owner that his broker had failed to abide by his instruction to insure a trailer that was subsequently damaged.

Ms Noluntu Bam, the Deputy Ombud for Financial Services Providers, ruled that Professional Group Insurance (Pty) Ltd, trading as Profgroup and represented by Francois van Rooyen had not been negligent in rendering the financial service to the complainant Andries Johannes van der Walt.

Van der Walt said he had asked Van Rooyen in an email dated 30 June 2006 to provide an insurance quotation for both a mechanical horse and trailer. In a subsequent telephone conversation Van Rooyen had confirmed a monthly premium of about R1 600 per month.

About one and a half months later, on 21 August 2006, he had emailed Van Rooyen with instructions to place the horse and trailer on cover.

He said that on 23 August 2006 he telephoned Van Rooyen to enquire about the email he had sent on 21 August and the respondent had allegedly said: “Don’t worry, your items are covered.”

Two days later, on 25 August, the trailer tipped over and was damaged. He telephoned Van Rooyen to confirm that his insurance was “in order”. He alleged Van Rooyen had assured him that it was.

He then told Van Rooyen of the damage to the trailer and that he wanted to institute a claim. After a long silence, Van Rooyen had exclaimed that the trailer was not covered as he was still sourcing quotes for it and that there was no signed contract in place as yet.

He told Van Rooyen that he had proof that he had asked him to cover both the horse and trailer.

Van der Walt sought compensation for the damage to the trailer. He had two quotes for R41 005.83 and R119 889.76. The lower quote was for basic repairs and the higher quote was for a full repair.

When asked to respond by the Office of the Ombud, Van Rooyen said the complainant had not revealed a “material” fact, namely, that prior to the email on 30 June 2006, complainant had telephonically contacted him to ask for a quote on a mechanical horse only.

Complainant had told him that it was not urgent as he was still investigating his options. The email duly arrived on 14 June 2006 and made no mention of a trailer.

Van Rooyen said the body of the email dated 30 June 2006 was exactly the same as that of 14 June except that there was an added sentence at the bottom pertaining to the request for a quote for a trailer as well. He said that due to the similarity of the emails, he did not see the added part about the trailer. Therefore the quotation he had supplied was only for the mechanical horse.

On 12 July 2006 he telephonically informed complainant about the quotation. Complainant thought it to be a very good premium. The quotation was then faxed to complainant the same day.

Van Rooyen says a material fact, that the quote was for the horse only, was not mentioned by the complainant in his complaint to the Office of the Ombud.

Complainant did not contact Van Rooyen for the next 39 days to inquire about the fact that the quote did not include the trailer.

On 22 August 2006 Van Rooyen received complainant’s email of the previous day. It was at this point that he realised for the first time that complainant also wanted cover for a trailer. He immediately commenced with a revised quotation that would include the trailer. He informed complainant about this when the latter telephoned him later that same day. Complainant said he told him to “speed it up” as he wanted to commence business.

Van Rooyen confirmed that having received the call from complainant on 25 August, he had told him that insurance cover would soon be in place. It was only then that complainant told him that the trailer had tipped over.

Van Rooyen denied having told complainant that cover was in place as contended for by him.

When asked by the Office of the FAIS Ombud to comment on the respondent’s version of events leading to the non-insurance of the horse and trailer, Van der Walt denied receiving the written quotation from respondent. This contradicts the fact that in his complaint he actually refers to the written quotation.

In her determination, Ms Bam said complainant refers to his email dated 30 June 2006 as being the “initial” one, that is, the one where he requests a quotation for both the horse and trailer. He failed to mention the earlier telephonic contact with Van Rooyen requesting a quote for a horse only and which request was confirmed in an email dated 14 June 2006.

This Office expects parties to a complaint not to withhold important or relevant information.

The balance of probabilities about the disputed facts favoured the respondent in the circumstances of this case.

In her ruling, Bam says the complainant had no written confirmation of cover.

Firstly, Van Rooyen said on 22 August 2006, when he first realised that complainant wanted a quote for a trailer as well, he had informed complainant that he was obtaining a revised quotation. Complainant on the other hand, said he was verbally assured that his vehicles were covered.

Secondly, complainant said that on 25 August 2006, Van Rooyen had told him that his insurance was in order. This too was denied by Van Rooyen.

Ms Bam said when Van Rooyen obtained a quote for the mechanical horse only and sent it to Van der Walt, the latter had it in his possession for almost six weeks but did not enquire from Van Rooyen why the trailer had not been quoted for.

She also said nowhere did complainant say he had informed Van Rooyen that he had finally commenced business and had put the vehicles into use.

“The complainant clearly knew that no proposal forms had been completed nor were any arrangements made for premiums to be paid. He also had no written confirmation of cover.

“He alleges he obtained verbal assurance of cover being in place. In my view he should have done more than simply say he wanted cover from that very day.

“He should have obtained written confirmation that the vehicles were in fact covered before putting them to use. Also, he made enquiry whether his insurance was ‘in order’ only after the trailer tipped over. “

Ms Bam said the complainant had made allegations of what Van Rooyen purportedly told him verbally.

“I find it inexplicable that he would communicate with Van Rooyen via email on several occasions but does not confirm an important assurance allegedly given by Van Rooyen that cover was in place.

“I am, therefore, of the view that on the probabilities, Van Rooyen’s version of the verbal discussions is the more probable one in the circumstances of this case.

“After taking all the relevant facts into account, I am compelled to the conclusion that the complaint falls to be dismissed,” said Ms Bam