Higgs v Colina Imperial Insurance (Bahamas) Ltd

• Jurisdiction: Bahamas
• Judge: Jones, J.A,Isaacs, J.A.,Jones, JA,Allen, P
• Judgment Date: 08 November 2016
• Neutral Citation: BS 2016 CA 129
• Docket Number: SCCivAp No. 135 of 2015
• Court: Court of Appeal (Bahamas)
• Date: 08 November 2016

Court of Appeal

Allen, P.; Isaacs, J.A.; Jones, J.A.

SCCivAp No. 135 of 2015

Higgs

and

Colina Imperial Insurance (Bahamas) Limited

Appearances:

Mr. Glen Higgs, Pro Se

Mr. Terry North with Ms. Keri Sherman, Counsel for the respondent

Brinks-Mat Limited v. Elcombe and Others [1988] 3 All ER 188 mentioned

Brit UW v. F & B Trenchless Solutions Ltd [2015] All ER (D) 76 (Aug) applied

Carter v. Boehm , [1558-1774] All ER Rep 183 applied

Dalglish v. Jarvie 2 Mac. & G. 231 mentioned

Henwood v. Prudential Insurance Co of America (1967) 64 DLR (2d) 715 mentioned

Pan Atlantic Insurance Co Ltd. v. Pine Top Insurance Ltd. [1994] 3 All ER 581 applied

Sea Glory Maritime Co and another v. Al Sagr National Insurance Co M/V “Nancy” [2013] EWHC 2116 (Comm) , 2009 Folio 576, (Transcript) applied

Synergy Health (UK) Ltd v. CGU Insurance plc (t/a Norwich Union) and others [2010] EWHC 2583 (Comm) , 2009 Folio 843, (Transcript)

The King v. The General Commissioners for the Purposes of the Income Tax Acts for the District of Kensington, Ex parte Princess Edmond De Polignac [1917] 1 K.B. 486 applied

Trading & Shipping (Singapore) Pte Ltd v. Baominh Insurance Corporation [2011] 1 All ER (Comm) 573 mentioned

Insurance - Payment under life insurance policy — Whether the trial judge erred when the judge gave no weight to the evidence presented by the appellant in her failure to apply the test for underwriters evidence as laid down by Pan Atlantic insurance Co. Ltd v. Pine Top Insurance Ltd [1994] 3 All ER 581 — Insured failed full and frank disclosure of every material circumstances including medical history — Full and frank disclosure — Material nondisclosure of the facts — Whether it was material to the ability of insurer to avoid paying the policy — Insured died from an disclosed condition — Whether the trial judge erred when permitting the case to proceed to trial without the respondent responding to the interrogatories — Whether the trial judge erred in failing to apply the law of waiver in insurance claims — Questions posed by the respondent illustrated that the insurer required direct and forthright answers to them; and it could in no way be said that they displayed no interest in the incorrect responses given by the insured so as “therefore, be said to have waived disclosure of them” — Appeal dismissed.

Held (Allen, P dissenting): Appeal dismissed. Costs to the respondents, to be taxed if not agreed.

Per Isaacs, JA: For an insurer to be entitled to avoid a policy for misrepresentation or non-disclosure, not only did the non-disclosure have to be material but it also had to have induced the making of the policy on relevant terms. It is immaterial to the ability of the insurer to avoid the policy that the insured did not die from the undisclosed condition as there is no requirement to establish a causal connection between the non-disclosure and the death of the insured. In the present case the non-disclosure influenced the rate of premiums that would have been charged and could have resulted in the respondent declining to undertake the risk at all.

Authority has laid down that an insurer as a result of asking certain question may show that he is not interested in certain other matters and can, therefore, be said to have waived disclosure of them. Whether a waiver is present depends on an objective construction of the proposal forms. In the present case the questions posed by the respondent's form show that the insurer required direct and forthright answers to those questions and it could in no way be said that they waived disclosure.

Jones, J.A

Per Firstly, a fact or circumstance is material if it would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk. The fact must be one affecting the risk. Of relevance, will be the nature of the risk, insurance practice in relation to that risk and the circumstances at the time when the disclosure ought to have been made. Evidence of insurers can be used to prove the materiality of the representation made, or of the circumstances not disclosed. Secondly, to avoid the policy, not only does the misrepresentation or non-disclosure have to be material, but it should have induced the making of the policy. So, an underwriter who was not induced by the misrepresentation or non-disclosure of a material fact to make the contract cannot rely on that misrepresentation or non-disclosure to avoid the contract.

Finally, the burden of proof is on the insurer to prove the inducement. Evidence given on this issue is unavoidably based on assumptions with the benefit of retrospection, but the court can reject such evidence where necessary.

On the facts of this case, there was no dispute in the court below that the insured died within the contestability period. Further, the trial judge had three important things before her; the “Disclosure Form”, a letter from the insured's physician and the “Build and Blood Pressure Chart”. From all this, the trial judge was entitled to accept the evidence of the respondent's that several of the answers given by the insured in her application were false and further that relevant material facts connected to her health status were not disclosed. Therefore, the court below was entitled to find, as she did, that the respondent insurer discharged their burden of proof on a balance of probabilities. She was also entitled to find that the insured's undisclosed facts were material to the risk undertaken and that the non-disclosure induced the making the insurance contract with the insured on the terms that it did.

Carter v. Boehm (1766) 3 Burr 1905 at 1909-1911 applied

Henwood v. Prudential Insurance Co. of America [1967] SCR. 720 considered

Pan Atlantic Insurance Co Ltd. v. Pine Top Insurance Ltd. [1994] 3 All ER 581 applied

St Paul Insurance v. McConnell [1996] 1 All ER 96 considered

per Allen, P: There were two issues to be considered: firstly, whether the nondisclosure by the insured was material in the sense that it would influence the judgment of a prudent insurer in fixing the premium or determining the risk; and if so, whether it actually induced the respondent to make the contract with the insured. The burden of showing that the non-disclosure was material and induced the issuing of the policy rests on the party seeking to avoid the contract.

These are questions of fact.

In the present case, there was conflicting evidence from the respondent witnesses as to whether the risk would have been insured had there been full disclosure by the insured. In these circumstances the judge could not reasonably have found that the evidence discharged the respondent's burden and even if the non-disclosure was material, there was no evidence from which the judge could reasonably have inferred that the non-disclosure induced the respondent to issue the contract of insurance.

Carter v. Boehm (1766) 97 Eng. Rep. 1162 applied

Henwood v. Prudential Insurance Co. of America [1967] SCR. 720 mentioned

Pan Atlantic Insurance Co Ltd. v. Pine Top Insurance Ltd. [1994] 3 All ER 581 applied

Isaacs, J.A.

1 The appellant appeals from the judgment of Madam Justice Estelle Gray-Evans given on 11 June 2015. For reasons which will emerge later in my judgment, I would dismiss this appeal.

BACKGROUND

2 The history of this case is succinctly stated in the introduction to the appellant's submissions hence I gratefully adopt it:

• “1. The appellant Glenn Travis Higgs, lost a decision in the lower Court on an action filed against the respondent; Colina Imperial Insurance Company, for non-payment of an insurance claim taken out on the life of his Common-law wife; Jenette Eliza Gibson, who died on 25th September 2007.

• 2. The appellant who is the beneficiary on the policy taken out with the respondent Company, filed his action on 18th December 2008.

• 3. The respondent's defence was that their Underwriter was induced to issue the policy due to the fact that the insured; “concealed from the defendant facts then material to be known to it, that is to say, that the Insured had been treated for hypertension on the 9th January 2004 and the 6th January 2006 respectively but of which the defendant was ignorant.”

• 4. The case in the lower Court was decided primarily on the hypothetical evidence of the respondent's Underwriter who, claimed that she would have asked for a higher premium, or rate the policy, had the insured blood pressure reading of 147/90, been fully disclosed.

• 5. The Judge who accepted the authority of Pan Atlantic Insurance Co. Ltd. v. Pine Top Insurance Ltd. [1994] 3 All ER 581, as the law in the (sic) Bahamas in the case, however declined to use the objective test for evaluating Underwriters evidence as laid down in Pan Atlantic and Pine Top which is the primary ground of this appeal.”

THE APPEAL

3 By his appeal filed in 2015 the appellant asks that the judgment of the learned judge be set aside and that judgment be entered for him with damages, cost and interest in this Court and the court below.

4 The grounds of the appeal are as follows:

1

The learned Judge was wrong on the law when she gave no weight to the evidence presented by the plaintiff in her failure to apply the test for underwriters evidence as laid down by The House of Lords in the case of; Pan Atlantic insurance Co. Ltd v. Pine Top Insurance Ltd[1994] 3 All ER 581. 2. The learned Judge was wrong on the law, when she refused to hear the plaintiff's application for an order for the defendant to answer the plaintiff's interrogatories, and allowed the case to proceed to trial without those answers. 3. The learned Judge was wrong on the law when she failed to apply the law of “waiver” in insurance contracts, as laid down by Lord Mansfield in the case cited by the respondent of Carter v...