Scottish Court of Session Decisions

Connelly v. Norwich Union Healthcare [2003] ScotCS 16 (24 January 2003)

OUTER HOUSE, COURT OF SESSION
	OPINION OF T. G. COUTTS, Q.C. SITTING AS A TEMPORARY JUDGE in the cause ALAN CONNELLY Pursuer; against NORWICH UNION HEALTHCARE LIMITED Defenders:   ________________

 

Act: Davidson; Drummond Miller, W.S.

Alt: Glancy, Q.C.; Dundas & Wilson, C.S.

24 January 2003

This action relates to a claim by the pursuer that he is entitled to payment by the defenders in terms of a policy of permanent health insurance which he and the defenders' predecessors concluded in March 1992. The policy had a commencement date of 26 March 1992. Thereafter the defenders accepted premia from the pursuer. In order to obtain such insurance the pursuer filled in a proposal form which, it is now admitted, was inaccurate in two respects. The pursuer untruthfully answered the question whether he had made any application for health insurance to any other insurance company within a period of three months preceding the application. In fact he had done in so in January and February 1992. Further, in response to a question, "Have you ever had arthritis, rheumatism or any other injury or physical defect or deformity?", he replied, "No" despite the fact that he had been attending medical practitioners in respect of knee pain over a period of three years and had undergone X-ray and arthroscopic inspection of his knee. He had been certified as unfit for work by his GP on a number of occasions as a result of that pain. These untruthful answers were given in the context of a contract which requires the utmost good faith.

Matters went further. The pursuer had claimed and received benefit from his policy of £10,126.68 as a result of a claim made on 26 June 1992 until 27 September 1993 in relation to alleged disablement caused by knee pain.

On 19 January 1996 the pursuer submitted a further claim to the defenders alleging disablement. That claim was presented on the basis that he suffered from tinnitus. On or about 14 June 1996 the defenders made some payments to the pursuer in terms of the policy but as a result of the pursuer's failure to attend for medical examination ceased payments after 31 August 1996.

At no stage in the voluminous averments by the pursuer does he state that he has obtained or is able to present any medical evidence that on and after 1 January 1996 he was suffering disablement in terms of the policy. On the contrary the pursuer has averred, and produced, medical opinion dated April 1996 which indicated that the pursuer was fit to attend work. That opinion was given by an ENT surgeon, plainly consulted by the pursuer on the basis of the claim for disablement which related to tinnitus.

Various averments are made by the pursuer relating to depression. At the highest point is an averment that a consultant psychiatrist, Dr Murphy, who examined the pursuer in October 1999 said: "At present I have no doubt that Mr Connelly is totally unable to engage in or attend to his occupation". There are no relevant averments about any earlier date, the previous extent of the disability or its nature in October 1999.

The pursuer had made an unsuccessful complaint to the Insurance Ombudsman about the defenders' refusal to make payment to him under the policy in February 1997.

It was in all these circumstances that the present action was raised in 2001. It contained a series of conclusions, three for various declarators, another for production and reduction of a notice of termination, another for interdict and interim interdict, another for decree ad factum praestandum and the seventh for payment of certain sums of money.

The defenders tabled pleas to the relevancy and the lack of specification of the pursuer's pleadings. The terms of the policy so far as relevant provide a definition of full disablement, quoted in condescendence 6 as being "total inability of the insured to engage in or attend to his occupation caused solely by injury sustained or illness contracted by him prior to the expiry date". The expiry date is 13 December 2004. There was an exclusion period for the first four weeks following commencement of the disablement.

Payment under the policy was conditional upon various matters. The relevant condition 4 reads:

"The Company must be notified in writing within the Exclusion Period indicated in the Schedule of the commencement of any period of Disablement for which a claim may be made. The Grantee(s) shall furnish at his/her (their) own expense all certificates, information and evidence as the Company may require. The Insured shall submit to medical examination as often as required by the Company and/or take a blood test at the Company's expense."

Other conditions which are referred to in the pleadings on exclusion of benefit include the insured's intemperance. Averments were made about the pursuer's consumption of alcohol prior to the time at which he was examined by said Dr Murphy.

The defenders' principal attack in terms of Note 1 of their Note of Arguments was directed to the proposition that in terms of the policy it was for the defenders to determine in the first instance whether they would admit or pay a claim. In terms of condition 4 above quoted a claimant must submit certificates, information and evidence in support of any claim as required by the defenders and submit to medical examination if called on to do so. The defenders further pointed out that they had averred that at no time since the claim was made has the pursuer submitted to the defenders any evidence in the form of medical certificates or reports which state that the pursuer is or has been suffering from a medical condition amounting to disablement, within the meaning of and restrictions in, the policy schedule, as a result of tinnitus or any other medical condition throughout the period from January 1996 to the present. Although that averment was subject to a general denial, the defenders aver that the pursuer had not founded on directly, or by incorporation, any medical report which is capable of supporting the proposition contained in his second conclusion. In any event, if there is such, the defenders argued that they were prejudiced by the lack of specification in the pleadings of such reports. The defenders also founded on an alleged lack of specification in relation to alcohol consumption, in that the pursuer does not indicate any period of time in which policy condition 2 did not operate to deprive him of benefits he would otherwise have been entitled to.

Finally the defenders attacked the pursuer's plea of waiver in respect of the incorrect answers given in the proposal form and also his plea of personal bar both being as irrelevant because he did not offer to prove that he acted or refrained from acting to his prejudice or otherwise in any way in reliance on the defenders accepting premia from him.

In response counsel for the pursuer, as I noted him, said that the pursuer could succeed in the face of all contrary medical information produced if "he can put the consultant on oath" and thereby ascertain that the pursuer has been disabled since 1996.

In relation to that, as I see it fundamental matter, I consider the pursuer's case as presently pled, which founds entirely upon disablement from "approximately" 1 January 1996, to be irrelevant in the context of a claim said to arise under the policy. I consider the defenders to be correct in their contention that it is in the first instance for them to make a determination and they have got to be supplied with the material desiderated in condition 4 in order to do so. There is no averment let alone a medical report, to indicate that the pursuer was suffering from disablement in terms of the policy from the date specified in the conclusion. There is no alternative date and no alternative conclusion. The conclusions all depend upon a declarator that the pursuer's disability began at "approximately" 1 January 1996.

In my opinion the contract is clear in its demands. It is for the pursuer to provide the medical reports and information necessary. A mere assertion that he is disabled for some reason subsequently proposed does not fall within the terms of the policy. It makes no sense in the context of the terms of the policy for the pursuer to come to Court and say that he might establish at a proof before answer the date in the conclusions by examination or cross-examination of doctors in the witness box. If that were the case an insured person need only raise an action instead of making a proper claim in and under the terms of the policy in the hope of establishing an essential fact, ie. disablement. That stage has not been reached in this case. Court action would, it is thought, be appropriate if there were such a conflict of medical evidence as required to be resolved between experts on behalf of the pursuer and on behalf of the defender. It amounts in my view to an abuse of process to attempt to short circuit the policy provisions by seeking a declarator from the Court in relation to disablement prior to and, as in this case, without the submission of the necessary medical evidence to the insurer. The pursuer is, it appears, an assisted person and the remedy of expenses in relation to unnecessary procedure may not have much significance in this action.

Since, as pled, the action is misconceived and is dependent upon a date in January 1996 for which there is no relevant supporting averment I shall sustain the defenders' first plea-in-law and dismiss the action.

I would only add that had I been satisfied that there was a basis of a case on the pleadings with regard to the commencement date I would have allowed a proof before answer on the other matters. I would have considered that the matter of the pursuer's disability and disallowance of benefit because of intemperance would require proof. It is an exception to the policy which it would probably be for the defenders to establish. In relation to the matter of waiver and personal bar again, while prima facie I would have considered that the defenders were entitled to repudiate the entire policy on the grounds of the untruthfulness of the pursuer in his application, I could not hold that the Court could not be persuaded in the light of the whole circumstances that the defenders because of some action or inaction or by acceptance of premia subsequent to discovery of the pursuer's breach of the need for utmost good faith to find that, for some purposes, the defenders might be bound. In that context I referred to Armion Ltd v Daejan Developments Ltd 1979 SC (HL) 56 at 69, Howden (James) & Co Ltd v Taylor Woodrow Property Co Ltd 1998 S.C. 554 and Moodiesburn House Hotel Ltd v Norwich Union Insurance Co Ltd 2002 S.L.T. 1069.

In the event however I shall dismiss the action by sustaining the defenders' first plea-in-law.