Curran v. Norwick Union Life Assurance Society [1987] IEHC 5 (30 October 1987)\
THE HIGH COURT
OLIVE CURRAN
PLAINTIFF
AND
NORWICH UNION LIFE INSURANCE SOCIETY
DEFENDANT
JUDGMENT - MR. JUSTICE BARR
(CONTRACT OF INSURANCE - UBERRIMA FIDES - MATERIAL FACTS)
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30/10/87
THE HIGH COURT
OLIVE CURRAN
PLAINTIFF
AND
NORWICH UNION LIFE INSURANCE SOCIETY
DEFENDANT
Judgment of Mr. Justice Barr delivered the 30th day of October, 1987.
In February, 1985 William Curran, the late husband of the plaintiff, entered into a contract with the defendant Society which was primarily an investment scheme but which also provided life cover in the sum of £12,330.00 payable should the insured die during the currency of the contract and while the market value of units purchased on his behalf from monthly instalments of £70.00 payable by him to the defendant was less than the sum insured.
The contract was based upon a written declaration dated 16th February, 1985 and duly signed by the deceased which, inter alia, is in the following terms:
"... to the best of my knowledge and belief I am presently in good health and I am not in receipt of medical treatment."
No medical examinations or investigations were envisaged by the defendant as being necessary in the ordinary course in connection with such contracts.
It will be observed that, unlike the detailed medical and allied information sought in most proposal forms for life insurance, a person making the declaration in question is asked only to confirm to the best of his knowledge and belief that at the time of making it he is in good health and not undergoing any medical treatment. The reasons given by Mr. Goss, the defendant's principal underwriter in Ireland, why such declarations are so limited in nature by comparison with the norm are twofold. First, the life insurance element in such contracts very rarely gives rise to claims because it is usually of comparatively short duration and is of minor practical significance to the underwriter. Secondly, such contracts are available only to persons who already hold life policies with the defendant and, therefore, proposal forms containing detailed health information would have been already submitted by them. For these reasons the defendant's underwriters take the view that in this particular type of transaction they need enquire only into the state of health of the proposer at the date of his application for cover.
I am satisfied that although the contract in question is primarily a scheme for saving and investment, it contains in it a significant element of life insurance and that the declaration made by the applicant, which I have quoted, relates to the life cover which forms part of the parcel on offer. Accordingly, as with all forms of insurance contract the standard required of the declarant as to the disclosure of all information relevant to the insurance required is uberrima fides.
The medical/surgical background to the declaration made by Mr. Curran is as follows:
In March, 1984 he suffered a severe head injury in a traffic accident which necessitated intermittent lengthy hospitalisation for about 6 months. He was discharged from Lourdes Rehabilitation Hospital at Dun Laoghaire in September, 1984 and I am satisfied from the plaintiff's evidence that her husband had good reason to regard himself as having made a full recovery at that time subject only to regaining strength and mobility. He was not warned of the risk of epilepsy in the future, nor was he advised to remain under any form of medical supervision or treatment. His rehabilitation proceeded uneventfully and by the following February he appeared to have been restored to his full pre-accident state of good health. Accordingly, having regard to the wording of the declaration, he would have had no obligation to disclose the head injury sustained by him in 1984 but for an event which took place shortly before the declaration was signed by him and submitted to the defendant. During the night of 13th/14th February, 1985, two days before the declaration was made, Mr. Curran while in bed asleep had a severe attack of shivering which was witnessed by his wife. He was unaware of having had the attack and seemed to be in good health and none the worse of it on the following morning. However, the plaintiff was disturbed by what she had seen and, contrary to her husband's wishes, she contacted the family doctor, Dr. Patrick Mangan, who also gave evidence. He related the attack to the deceased's head injury and concluded that it was likely to have been a minor epileptic manifestation which might never occur again but which in his opinion required daily medication for at least one year as a precautionary measure.
He visited the deceased on 14th February and believes that he explained to him his diagnosis and the necessity for taking the prescribed medication. In the event, unknown to his wife and doctor until after his death, the deceased did not take the tablets which had been prescribed for him.
On 16th February, 1985 Mr. Curran signed the declaration and submitted it to the defendant thus indicating to them that to the best of his knowledge and belief he was then in good health and was not receiving any medication. His application was duly accepted and the required policy document was issued. On 28th June, 1985 the insured was found dead in his"*1 garage/workshop where he had been working alone for some hours. The plaintiff, who is the executrix of the estate of the deceased, claimed from the defendant the death benefit of £12,330.00 payable on foot of the policy. The insurer repudiated liability on the ground that the deceased's declaration of good health on which the contract was based was untrue to his knowledge at the time when it was made.
The standard of care required of a proposer for insurance n as to the disclosure of facts material to the insurance sought by him has been laid down by the Supreme Court in Chariot Inns v. Assicurazioni Generali 1981 IR 199 -see in particular the opening paragraphs of the Judgment of the Court delivered by Kenny, J. at pp 225/6 which are as follows:
"A contract of insurance requires the highest standard of accuracy, good faith, candour and disclosure by the insured when making a proposal for insurance to an insurance company. It has become usual for an insurance company to whom a proposal for insurance is made to ask the proposed insured to answer a number of questions.
Any misstatement in the answers given, when they relate to a material matter affecting the insurance, entitles the insurance company to avoid the policy and to repudiate liability if the event insured against happens. But the correct answering of any questions asked is not the entire obligation of the person seeking insurance: he is bound, in addition, to disclose to the insurance company every matter which is material to the risk against which he is seeking indemnity.
What is to be regarded as material to the risk against which the insurance is sought? It is not what the person seeking insurance regards as material, nor is it what the insurance company regards as material. It is a matter or circumstance which would reasonably influence the judgment of a prudent insurer in deciding whether he would take the risk and, if so, in determining the premium which he would demand. The standard by which materiality is to be determined is objective and not subjective. In the last resort the matter has to be determined by the Court: the parties to the litigation may call experts in insurance matters as witnesses to give evidence of what they would have regarded as material, but the question of materiality is not to be determined by such witnesses".
In the light of the foregoing it is clear that Mr. Curran had a duty to disclose to the insurers the fact that a few days previously he may have suffered a minor epileptic seizure for which his doctor deemed it wise to prescribe continuing medication and that he might be at risk of a further similar attack in the future. These were material facts which I am satisfied a prudent insurer would be likely to investigate further and to take into account in its assessment of the risk proposed. I accept the evidence of Mr. Goss in that regard. It was immaterial to the deceased's duty of disclosure in the circumstances of the case that he himself may have bona fides believed, notwithstanding his doctors diagnosis, that the episode on the night of 13th/14th February was not epileptic in nature and had no connection with his prior head injury. The inescapable fact remains that he had good reason, based on professional medical advice, to believe that he may have had such an attack and that itself was a material fact which should have been disclosed to the insurers regardless of what his personal opinion as to his state of health may have been. Likewise, he had a duty to disclose that continuing medication had been prescribed for him by Dr. Mangan. Accordingly, in the premises I am obliged to hold that the defendant was entitled to repudiate the contract on the ground that the declaration of health made by the deceased was misleading in material particulars pertinent to the insurer's assessment of the risk proposed.
I wish to make clear however that I accept unreservedly the evidence of the plaintiff regarding the probity and integrity of her late husband. There is no evidence to suggest that in making the declaration he consciously and deliberately set out to deceive the defendant. It seems highly unlikely that he adopted that course.
Accordingly, I allow the defendant's appeal and discharge the Order of the Circuit Court. No Order as to costs.