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You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> Zeller v. British Caymanian Insurance Company Ltd (Cayman Islands) [2008] UKPC 4 (16 January 2008) URL: https://www.bailii.org/uk/cases/UKPC/2008/4.html Cite as: [2008] Lloyd's Rep IR 545, [2008] UKPC 4 |
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Zeller v. British Caymanian Insurance Company Ltd (Cayman Islands)
[2008] UKPC 4 (16 January 2008)
Privy Council Appeal No 44 of 2006
David Robert Zeller Appellant
v.
British Caymanian Insurance Company Ltd Respondent
FROM
THE COURT OF APPEAL OF
THECAYMAN ISLANDS
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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL
Delivered the 16th January 2008
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Present at the hearing:-
Lord Bingham of Cornhill
Lord Hope of Craighead
Baroness Hale of Richmond
Lord Carswell
Sir Henry Brooke
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[Delivered by Lord Bingham of Cornhill]
"Check each item Yes or No… To the best of your knowledge and belief, has any person named in this application had, within the last seven years, or does such person now have, any of the following?"
There follows a list of specified medical conditions (a) to (o), mostly described in untechnical language, with beside each a box in which to signify Yes or No. Examples are (a) "Cancer, tumor or other growth" and (f) "Substance abuse (drugs or alcohol dependency, abuse or addiction)". Relevant for present purposes are "(d) Goiter, thyroid trouble, diabetes", against which Mr Zeller signified Yes and wrote in "Thyroid", and (k) "heart trouble, abnormal blood pressure (hypertension or hypotension), anaemia, rheumatic fever", against which Mr Zeller signified No.
"IT IS UNDERSTOOD AND AGREED THAT:
(a) The coverage will become effective the first of the month following approval of the application by British Caymanian Insurance Co. Ltd. (hereafter "Insurer") which reserves the right to reject or accept any enrollment application. Coverage provided by Insurer is not effective until receipt and approval of the application by Insurer. The coverage will become effective the first of the month following approval of the application by Insurer.
(b) The statements and answers made herein are complete and correct to the best of my knowledge and belief. Should any statements or answers contained in this application be untrue (if such statements are fraudulent or material to the acceptance of this application) then the contract(s) may be cancelled by the Insurer and their obligation shall consist only of the return of any subscription charges actually paid, less the amount of any benefits paid under the contract;
(c) The employee shall repay to the Insurer the amount of any payment made in error to the employee on behalf of the employee or any covered family member as the result of a claim.
(d) Upon presentation of the original or a photocopy of this signed questionnaire I authorize any medical, professional, hospital, clinic, other medical or medically related facility, governmental agency or other person or firm to provide the Insurer information including copies of records concerning advice, care or treatment provided to me and/or my dependents including without limitation, information related to mental illness or use of drugs or alcohol.
IMPORTANT: PLEASE VERIFY THAT ALL THE INFORMATION ON THIS APPLICATION IS PROVIDED. ALL INCOMPLETE APPLICATIONS WILL BE RETURNED TO THE APPLICANT FOR MORE INFORMATION, THIS WILL CAUSE A DELAY IN THE PROCESS OF ENROLLMENT.
The form concluded:
"I hereby authorize my employer to deduct from my earnings, at such intervals as agreed upon, such amount needed to cover my contribution toward the premium charges for the coverage applied for. And I certify that all data furnished on the front and back of this form is true to the best of my knowledge" [sic]
Mr Zeller and a representative of his employer signed the form on 21 November 2001. Mr Zeller was included in the group scheme as from 1 December 2001, with an exclusion of his hypothyroidism and all related conditions.
"But the question always is, was the knowledge you possessed such that you ought to have disclosed it? Let me take an example. I will suppose that a man has, as is the case with most of us, occasionally had a headache. It may be that a particular one of those headaches would have told a brain specialist of hidden mischief. But to the man it was an ordinary headache undistinguishable from the rest. Now no reasonable man would deem it material to tell an insurance company of all the casual headaches he had had in his life, and, if he knew no more as to this particular headache than that it was an ordinary casual headache, there would be no breach of his duty towards the insurance company in not disclosing it. He possessed no knowledge that it was incumbent on him to disclose, because he knew of nothing which a reasonable man would deem material or of a character to influence the insurers in their action."
Thus the applicant is expected to exercise his judgment on what appears to him to be worth disclosing. He does not lose his cover if he fails to disclose a complaint which he thought to be trivial but which turns out later to be a symptom of some much more serious underlying condition. It is, however, clear that question (b) is directed to conditions, not listed in section A, about which the applicant had consulted a doctor. On this point Mr Zeller's evidence was clear and uncontradicted. Apart from the trivial complaints just mentioned, he had consulted his doctor about his thyroid condition and nothing else. On these attendances by Mr Zeller, usually made to renew the prescription for his thyroid condition, the doctor had taken blood and taken the opportunity to give him an overall check, but he had not consulted the doctor about anything other than the thyroid condition and had not in any event understood the results to be significant. It appears to the Board that Mr Zeller's negative answer to question (b) was true; there is no ground for holding that it was not true to the best of his knowledge and belief. Question (c) was framed so as to elicit disclosure of any departure from good health not previously mentioned in section A or in answer to questions B(a) and (b). Thus the thyroid condition was excluded, because disclosed in answer to A(d). The minor ailments were excluded, because properly not disclosed in answer to B(b). Should he, then, have disclosed the heart murmur and the raised cholesterol level as a departure from good health? The answer must be Yes if he so regarded them or should so obviously have so regarded them as to throw doubt on the truthfulness of a negative answer. The answer is No if he genuinely did not know and honestly did not believe that they amounted to a departure from good health. On this point the evidence is clear: thyroidism and minor ailments apart, he honestly believed himself to be and to have been in excellent health. He had never taken any medication for either the heart murmur or the raised cholesterol level, nor been treated in any other way. There is no suggestion he had ever been off work for either condition. His doctor had given him a clean bill of health on his departure to Cayman. He plainly believed himself to be in excellent health, as evidenced by his life-style. Question (c) did not call for an affirmative answer.