Malani v Natalia Financial Brokers CC

The appellants, the children of the late Ahmed Ebrahim Malani, sued Natalia Financial Brokers CC for damages, alleging that its member, Mr Krishna Bangaru, negligently failed to submit a beneficiary nomination form to Old Mutual Life Assurance. The deceased had a R5 million life policy, ceded to Nedbank as security, and had nominated Ms Jayanthri Naidoo as beneficiary in 2006. The appellants alleged that in March 2008 the deceased signed a form appointing them as beneficiaries and that this form was handed to Mr Bangaru with instructions to submit it. Mr Bangaru denied receiving such a form or instructions from the deceased. After the deceased’s death in December 2009, the policy proceeds were paid to Ms Naidoo. The appellants claimed pure economic loss as disappointed beneficiaries based on an alleged negligent omission by the broker.

The appeal was dismissed with costs.

The case confirms the strict approach adopted by South African courts in claims for pure economic loss based on negligent omissions, particularly against insurance brokers. It underscores the evidentiary burden on disappointed beneficiaries to prove a clear mandate and instructions from the insured before liability can arise.