United Kingdom House of Lords Decisions

Cook v. Financial Insurance Company Ltd [1998] UKHL 42; [1998] 1 WLR 1765 (3rd December, 1998)

LORD BROWNE-WILKINSON

My Lords,

I have the misfortune to disagree with the majority of your Lordships. Since the appeal raises no point of general importance I can state my reasons very shortly indeed.

The question is whether the plaintiff is suffering from a "disability resulting from . . . any sickness, disease, condition or injury for which [he] received advice, treatment or counselling from any registered medical practitioner during the 12 months preceding the commencement date." On 26 July 1992 he suddenly collapsed. He saw his doctor on 30 July and 4 September 1992. He had been suffering from pain and breathlessness. His doctor could not accurately diagnose his condition: it might have been a viral infection or respiratory disease or a heart disease. In fact she advised him to go and see a cardiologist. In her covering letter to the cardiologist she said "obviously with the history I would like to exclude angina." All this happened just before the commencement date. The cardiologist diagnosed angina but not until after the policy had been entered into. It seems to me clear that, although undiagnosed at the time, the plaintiff was suffering from a medical condition which was angina and in relation to which he had received advice and counselling. I can see no reason why in order to suffer a disability resulting from a "condition" the exact nature of that condition has to be identified. If, in fact, treatment is given for a condition within the 12 month period and the disability results from that condition the exact identification of the condition is not of any relevance: the case falls within the exclusion clause.

For these reasons and those given in the Court of Appeal by Hobhouse L.J. I would dismiss the appeal.

LORD JAUNCEY OF TULLICHETTLE

My Lords,

 The physical condition which disabled the plaintiff from work on 14 December 1992 was the same condition from which he was found by the judge to have been suffering since at least 4 September 1992. For that condition he received treatment, albeit inappropriate, from his general practitioner and advice to consult a cardiologist who, just after the commencement date of the policy, diagnosed that condition as angina. The general practitioner prescribed treatment and advice was given for the physical condition from which the plaintiff was suffering, and no other, and it matters not that the precise diagnosis had not then been made.  I entirely agree with the views expressed in the speech of my noble and learned friend Lord Browne-Wilkinson and for the reasons which he gives, and those contained in the preceding paragraph, I would dismiss the appeal.

LORD LLOYD OF BERWICK

My Lords,

The plaintiff, Mr. Jeffrey Harry Cook, is a self-employed builder, trading as Cook & Sons. He is a customer of the National Westminster Bank. In October 1992 he was advised by the bank manager to take out a business development loan repayable by instalments over three years, so as to pay off his overdraft. He was also advised to take out insurance, at an additional cost of £6.40 per month, to cover the loan repayments should he fall ill. The plaintiff agreed. Accordingly on 15 October 1992 he took out a loan of £4,000, and signed the bank's application form for insurance cover. The premium was debited to his account on the same day.

The form of policy, known as a Group Disability Insurance Policy, was negotiated between the bank and the defendants, the Financial Insurance Co. Ltd. It is common ground that there came into existence a contract of insurance between the plaintiff and the defendant on the terms of the policy, commencing on 15 October 1992.

On 16 October the plaintiff attended an outpatients' appointment at the Corbett Hospital, Stourbridge. He was diagnosed as suffering from angina. He continued working as a builder until 14 December, when he was advised by his doctor to give up work. On 11 January 1993 he made a claim on the policy. The claim form was accompanied by a statement from his doctor that he was prevented from working by reason of angina, that he had first consulted her for this complaint on 30 July 1992, and that the complaint was first diagnosed on 19 October 1992, that is to say, four days after the cover commenced.

The defendants declined to pay, relying on an exclusion clause in the policy. The plaintiff commenced proceedings in the Birmingham County Court on 13 March 1995. On 15 November 1996 Judge Boggis Q.C. gave judgment in favour of the plaintiff for an agreed sum of £6,101. But his decision was reversed by a majority in the Court of Appeal. There is now an appeal to your Lordships.

The sole issue is whether the defendants can bring themselves within the terms of the exclusion clause on the rather special facts of the present case. The outcome is important for the parties, especially the plaintiff. But the case does not raise any question of general importance in insurance law.

The application form contained the following declaration:

 "I/We wish to apply for cover and declare that I am/we are in good health and fit for work in the business for which the loan is granted, that I/we have not undergone any major surgical operation, nor had any major illness, nor received any counselling or undergone any medical tests in connection with Aids or H.I.V. and that I/we have not consulted a doctor in the past 12 months other than for minor illness (if you cannot sign this declaration but still wish to apply for cover please list your medical history on a separate sheet of paper). I/We realise that failure to disclose relevant facts may result in the insurance being declared null and void. I/We agree that this application shall be the basis for the contract of insurance."

It is not suggested that the plaintiff was in breach of any of the terms of the declaration. Nor was he asked to undergo a medical examination.

The plaintiff did not see the policy itself, but he was sent a Certificate of Insurance. The Certificate provides:

 "Please read this Certificate carefully and keep it in a safe place. If you are not entirely satisfied with the protection provided you may within 14 days of the commencement date return your Certificate for cancellation and any premium you have paid will be returned to you.  Introduction  (a) The application form for this insurance is incorporated in and forms part of this contract of insurance between the insured person and the insurer under the terms of the master policies 1500A and 1500B between National Westminster Bank Plc. and the insurers, sight of which are available on request.  (b) If there is any discrepancy between this Certificate of Insurance and the master policy wording the master policy shall prevail.  (c) Provided that the premium is paid and the insurer agrees to accept it, and the eligibility criteria are met, the insurer will provide the insurance in the terms set out in this Certificate.  Exclusions  No benefit will be payable for disability resulting from:  (a) Any sickness, disease, condition or injury for which an insured person received advice, treatment or counselling from any registered medical practitioner during the 12 months preceding the commencement date."

The Certificate refers to master policies 1500A and 1500B. It appears that the relevant policy is 1500B. Its terms differ from those set out in the Certificate. But coincidentally the relevant exclusion clause is the same both in the Certificate and in the policy.

Since the plaintiff had the right to return the Certificate within 14 days if not entirely satisfied with the protection afforded by the cover, the Certificate must be construed in the sense in which it would have been reasonably understood by him as the consumer; and since the application form is, by the terms of the Certificate, incorporated in and forms part of the contract of insurance, the two must be read together so as to make sense of the whole: see Fowkes v. Manchester and London Life Assurance and Loan Association 3 B. & S. 917.

The evidence before the judge was that the plaintiff was 54 in 1992 and had enjoyed excellent health prior to the onset of angina. He had always been an athlete and regularly went out for training runs of 10 or 11 miles. On 26 July 1992, after running about 9 miles without any pain, he suddenly collapsed. An ambulance was called. His heart was checked. But nothing abnormal was found. He was not taken to hospital. He was advised to see his G.P., Dr. Rosemary Thorns. He saw Dr. Thorns on 30 July. She could find nothing wrong. She thought he must simply have fainted.

She saw him again on 4 September 1992. He had suffered pain in his neck, chest and jaw while out running, and complained of breathlessness. Dr. Thorns thought he might be suffering from a viral infection, and prescribed a mild antibiotic. However she decided to ask for a second opinion. As she explained in her evidence, she could have sent him either to a cardiologist or to a consultant in respiratory diseases. She chose Dr. Flint, a cardiologist. On 7 September she wrote:

 "This fit 54 year-old came to see me at the end of July having collapsed suddenly while running--he had run 11 miles. He was fine when he came round and I saw him here and could find absolutely no reason for it. He has, however, come back and now complains that while running he gets pain in his neck, radiating to his jaw which finishes he immediately stops running. He actually describes it as a pain in his trachea with breathing difficulties and he does have mild pharyngitis at the moment.  "Obviously with the history I would like to exclude angina and would appreciate your help, although I do acknowledge that it might be a mild infection at the moment causing the problem which I have treated with erythromycin. However, it keeps happening and it does settle immediately he stops running.  "I would appreciate your opinion."

The judge made an important finding about Dr. Thorns' reference in this letter to excluding angina. Her view was that the symptoms did not match angina. She was not expecting a diagnosis of angina, and she only decided to mention angina as she was dictating the letter. She did not tell the plaintiff.

On 12 September the plaintiff was complaining of anxiety and lack of sleep. He was still going on training runs. But he was finding that he could not take deep breaths. On 22 September Dr. Thorns prescribed a Ventolin inhaler which she would not have done, as the judge found, if she had thought he was suffering from angina.

The plaintiff received no further advice or treatment between 22 September and 15 October when the insurance cover commenced. On 16 October he attended Dr. Flint's clinic, where he underwent a series of tests. He was diagnosed as suffering from angina. This diagnosis was confirmed by letter to Dr. Thorns dated 19 October.

The judge made two further findings as follows: First, that Mr. Cook was in fact suffering from angina from at least 4 September, and secondly, that when angina was first diagnosed on 16 October Dr. Thorns was surprised. The latter finding is important, having regard to the medical statement which accompanied the claim form, in which Dr. Thorns had said that she was first consulted for angina on 30 July 1992.

The questions which arise on these facts may be stated as follows:

(1) Did the plaintiff receive advice, treatment or counselling for angina prior to 15 October? If not,

(2) Is it enough to bring the case within the exclusion that he received advice, treatment or counselling for symptoms which later turned out to be those of angina?

I turn first to Judge Boggis. In an admirably clear and succinct judgment he answered the first question in the negative. "I am satisfied" he said "that in the period 30 July 1992 to the appointment on 16 October 1992 Mr. Cook did not receive advice, treatment or counselling for angina." He then turned to the second question, which he dealt with as follows:

 "In my judgment the words 'for which' link the sickness with the advice, treatment or counselling. Treatment cannot be given for a sickness unless the sickness is recognised. The policy does not envisage seeking to ascertain, possibly years later, what was the real cause of the insured's illness. It deals only with sickness, disease, conditions and injuries which are recognised at the time and treated at the time."

In the Court of Appeal Hobhouse L.J. held that the judge's conclusion that the plaintiff had not received advice for angina (which Hobhouse L.J. regarded as a conclusion of fact) was inconsistent with his primary findings of fact, and not one which he was entitled to reach. Hobhouse L.J. agreed with the judge that the plaintiff was not counselled in respect of angina. He regarded it as debatable whether he was treated for angina. But he held that the plaintiff undoubtedly received advice for angina when he was advised to see Mr. Flint.

Hutchison L.J. agreed with Hobhouse L.J.:

 "I would go further, however, and say that when he consulted his doctor with symptoms which later were shown to have been the symptoms of the angina from which he was in fact suffering, he received advice and treatment from her for the condition which later caused his disability, even though the true nature of that condition had not been diagnosed and the treatment was inappropriate."

In a dissenting judgment Evans L.J. agreed with the judge, and so would I. We now know that the plaintiff's disability resulted from a disease of the heart known as angina. In order to escape liability the insurers must show that the plaintiff received advice, treatment or counselling for that disease prior to 15 October. It is not suggested that he received counselling for angina. Nor, in my view, did he receive treatment for angina, since neither Ventolin nor a mild antibiotic could possibly be regarded as a treatment for angina. Did he then receive advice for angina? My answer would be no. He received advice in respect of symptoms which turned out to be those of angina, when he was advised to see Dr. Flint. But he did not receive advice for angina.

If, as I think, treatment for a disease requires some knowledge on the part of the doctor of the disease which he is treating, in order to bring the case within the exclusion clause, so advice for a disease must also require knowledge on the part of the doctor of the disease about which he is giving advice. A doctor does not give advice within the meaning of the clause by saying "I do not know what is wrong with you; go and see another doctor." The earliest date on which the plaintiff received advice for angina was therefore 16 October, when he saw Mr. Flint. If on 7 September Dr. Thorns had suspected angina, it might have been different. But on the facts as found by the judge, that was not the case. Dr. Thorns did not suspect angina. She chose to exclude angina by getting a second opinion. But she might just as well have chosen to exclude respiratory disease.

I turn to the second question. Is it enough that the plaintiff received advice for symptoms which turned out to be those of angina? In my opinion the answer must also be no, unless the insurers can read the word "condition" as including symptoms of a generalised kind which might indicate any number of different diseases, or none. That is, as I understand it, the way the word was understood by the majority in the Court of Appeal. But I can see no justification for so reading the word, especially in the context of "sickness, disease . . . or injury". "Condition" in this context means a medical condition recognised as such by doctors.

The point is a narrow one, and made to seem all the narrower because the contract of insurance was concluded on the day before the plaintiffs saw the consultant. But one can imagine cases where the time-scale is much longer. Take a man who complains to his doctor that he is suffering from headaches. The doctor can find nothing wrong, and recommends a strong painkiller. Eventually it transpires that the man has a brain tumour. Can it really be said that he received advice for his brain tumour when he first went to see his doctor? Clearly not. Nor, I think, can it be said that he received advice for his condition.

At the other end of the scale one might take the case of a man with a very high temperature who is taken to an isolation hospital suffering from Cape Congo Fever or some other rare disease. Obviously he is receiving treatment within the meaning of the exclusion clause from the moment of his arrival in hospital, even though the disease cannot at first be diagnosed. Where the present case fits on the scale was a question of fact for the judge. I see no reason to disagree with his finding.

It is said that the purpose of the exclusion clause is to exclude liability for disability which may eventuate, not for disability which must eventuate. But if this were the purpose, then it would be easy enough to exclude liability for any disability resulting from sickness, disease or injury from which the insured was in fact suffering before the commencement of the policy. But the insurers did not mean to go that far. Hence the qualification introduced by the words "for which." If there were any doubt as to the meaning of the exclusion clause, which I do not think there is, then on well known principles of construction I would not hesitate to construe it against the defendants, all the more so because of the terms of the undertaking in the application form.

In Fowkes v. Manchester and London Life Assurance and Loan Association the policy incorporated a proposal and declaration as the basis of the contract. The policy contained a proviso that if any statement in the declaration were untrue, the policy would be void. But the declaration contained a proviso that if any statement were "designedly" untrue, the policy would be void. It was held that the declaration and the policy must be read together, and "untrue" in the policy must be read as "designedly untrue" or wilfully false.

In the present case the plaintiff signed a declaration that he had not consulted a doctor other than for minor illnesses. When he came to read the exclusion clause he was entitled to assume that it related only to major illnesses for which he had consulted a doctor. It could not relate to minor illnesses with which, as the insurers had made clear from the form of the declaration, they were not concerned.

For all these reasons, which are substantially the same as those given by the judge, and Evans L.J. in the Court of Appeal, I would allow the appeal.

LORD STEYN

My Lords,

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Lloyd of Berwick. For the reasons he has given I would also allow the appeal.

LORD HOPE OF CRAIGHEAD

My Lords,

I have had the advantage of reading in draft the speech which has been prepared by my noble and learned friend Lord Lloyd of Berwick. I agree with it, and for the reasons which he has given I too would allow the appeal.