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[2017] ZAGPPHC 146
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Nannen and Others v Momentum and Others (6769/05) [2017] ZAGPPHC 146 (18 April 2017)

IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Case Number: 2275/05
6769/05
18/4/2017
Reportable:
Yes
Of
interest to other judges: No
Revised.
In
the matter between:
ASHIM
KUMAR
NANNEN                                                                             1
st
PLAINTIFF
YUNEEL
NANNEN                                                                                        2
nd
PLAINTIFF
CHINTAMONEY
NANNEN                                                                             3
rd
PLAINTIFF
ASHIM
KUMAR NANNEN N.O
4
th
PLAINTIFF
and
MOMENTUM                                                                                              1
st
DEFENDANT
MOMENTUM
GROUP
LIMITED                                                                2
nd
DEFENDANT
FIRSTRAND
LIMITED                                                                               3
rd
DEFENDANT
Coram:
HUGHES J
JUDGMENT
HUGHES
J
INTRODUCTION
[1]
This trial commenced on 19 February 2014 before Webster J and was
concluded on 07 August 2014. The delivery of the judgment
was delayed
as a result of Judge Webster being ill health which eventually led to
his retirement. The matter was handed over to
me to hear argument in
December 2016 hence this judgment.
[2]
Initially there were two actions instituted under case number 2275/05
and case number 6769/05. The first case, case 2275/05,
was initiated
by Ashim Nannen, son of the deceased, Doughraj Nannen, in his
capacity as executor of the deceased estate. The second
case 6769/05
was instituted by the beneficiaries, that being Ashim Nannen, Yuneel
Nannen, both being sons of the deceased and Chintamoney
Nannen, the
wife of the deceased. The deceased's wife has since passed on and is
represented in these proceedings by the executor
of her estate, being
Ashim Nannen. In both actions the relief sought is payment by the
defendants of the death benefit payable
as a result of the death of
the deceased under policy number 98539133 (the policy). For
convenience these two actions were consolidated
in terms of rule
33(4) of the Uniform Rules of Court.
[3]
The defendants resist this action on the basis that the deceased
misrepresented and failed to disclose material facts when he
applied
for the policy that was issued by the second defendant, Momentum
Group Limited (Momentum). In terms of section 59 of the
Long-Term
Insurance Act 52 of 1998 (the Act), the defendants plead that they
are entitled to avoid the policy owing to the deceased's

misrepresentation and non-disclosure.
[4]
It is common cause that in these circumstances the defendants bear
the onus to prove that indeed there was a material misrepresentation

and non-disclosure on the part of the deceased. Be that as it may,
the parties agreed that the plaintiffs would begin. The parties

accepted that this case was essentially against Momentum who had
issued the policy.
THE EVIDENCE
[5]
I do not propose to regurgitate the testimony of the witnesses but
will set out those facts that are pertinent to the determination
of
the issue at hand. The plaintiffs called two witnesses namely Ashim
Nannen and Dr Van Vuuren and the defendants called three
witnesses
namely Dr Alan Peter, Mr Kerford and Ms Lee-Anne Hale.
The Documentary Evidence
[6]
The deceased completed an application for insurance with Momentum
dated 11 October 2001. At section 12- Health Questioner portion,
the
deceased recorded that he sustained an ankle injury in September
2000. He stated that he was treated by Dr Tuson for this injury.
[7]
To the question as to whether the deceased was expected to seek
medical advice within the next eight weeks. The deceased responded,

yes, and advanced that it was for the removal of steel plates in his
left ankle in November 2007. The question termed as the
misrepresentation
in this dispute is:
'If
not already stated, have you during the past five
years
had
any X-rays, ECG's, other examinations, Genetic testing, Tumour
markers,
other, operations or
been
hospitalised,
received medical advice(excluding colds and flu)'
His
response was in the negative. This application also sought
confirmation that on signature the information supplied was correct

and complete. It further sought that one understood that
'Momentum
will cancel the insurance contract that was issued under this
application if I have withheld any important information
on this
application form, or answered any question(s) incorrectly'.
[8]
On 20 November 2001 a confidential medical report for Momentum was
completed by Dr Geyer, a medical practitioner for Momentum.
On this
document the deceased disclosed that in the past five years he had a
check­ up for Tuberculosis (TB) at work in 1998
and that in 2000
he had an x-ray taken of his fractured left ankle. He also disclosed
that he had gained weight over the past year,
being 2000. In the same
report he confirmed that he had scars on both sides of his left
ankle, had varicose veins on both legs
and a small umbilical hernia.
[9]
It is noted on an undated pre-admission form for Kenridge Hospital
that the deceased recorded that he had high blood pressure
and was
taking medication daily for the past two months.
[10]
The blood collected from the deceased on 24 March 2000 was analysed
by Van Drimmelen Laboratories. The referring doctor recorded
was Dr
Irwin Luke (Dr Luke). In the report of Van Drimmelen the haemoglobin,
beta, alpha and sedimentation are recorded as raised.
It is also
recorded that the deceased had very high anisocytosis and raised
white blood cell count.
[11]
There are also undated handwritten notes of Dr Luke and a typed note
dated 15 August 2002 which bears Dr Luke's name but is
unsigned. The
latter is addressed to Peter Kerford the investigator of the
defendant.
Dr
Alan Peter
(Dr Peter)
[12]
Dr Peter's curriculum and qualifications were not in dispute disputed
and accepted by the plaintiffs. His expertise were that
of a
Pulmonologist in the field of lungs and a Specialist Physician. He
was instructed to compile a medical legal report from the
purported
notes of Dr Luke whom the deceased was alleged to have consulted.
These consultations took place within the five year
period prior to
the inception of the policy. During one of the consultations Dr Luke
referred the deceased to Van Drimmelen Laboratories
for blood tests
to be conducted.
[13]
In essence, Dr Peter was called upon to advance a diagnosis of the
blood tests conducted on the deceased together with the
notes of Dr
Luke. This come about as a result of Dr Luke's demise in 2002 prior
the action by the plaintiffs. At this juncture
I must point out that
the practise notes of Dr Luke and their authenticity are being
challenged by the plaintiffs.
[14]
Dr Peter in his medical report concluded that the blood tests results
pertained to the deceased and these indicated that the
haemoglobin
count exceeded the normal range. He explained that the blood tests
results of March 2000, the haemoglobin count was
recorded as 18.4,
whilst the normal rate would be between 14 and 18. He testified that
the raised haemoglobin level could be an
indicator of polycythaemia.
However, he did venture to state that there could be several causes
creating spurious result of raised
haemoglobin and these could be
dehydration, large uses of drugs which deplete the body of water, but
the culprit which results
in polycythaemia with raised haemoglobin is
lung disease. With damaged lungs the body will create more red blood
cells to assist
with the oxygenation of the body and in doing so will
result in a polycythemic state with raised haemoglobin.
[15]
From the notes of Dr Luke, Dr Peter testified, that mention is made,
of the deceased having presented himself with a problem
with his left
ankle, for which Dr Luke referred him to Dr Tuson at Kenridge
Hospital. As regards the notes of Dr Luke in respect
of the diagnosis
of polycythaemia made by Dr Luke, he testified that:
'It
would support the diagnosis of polycythaemia, but the cause of which
is still not accurate and not evident from what we have
and that to
further investigate this patient
a
repeat haemoglobin level
would have been deemed necessary and that would have been asked to
have been done in couple of months
,
six months or
so
onwards, to establish whether the patient still had
a
haemoglobin level and from the notes that Dr Brink, the comments
that Dr Brink made[the
notes and comments made by Dr Brink]Mr
Nannen did have
a
blood test done on 13 February 2002 and that
haemoglobin level was reported
as
18.1
'.
[16]
Dr Peter pointed out that even though the haemoglobin level had
dropped from 18.4 on 24 March 2000 to 18.1 on 13 February 2002,
the
indicators were still that of having polycythaemia. He testified that
the impact on the future modality of the deceased, if
he had
polycythaemia was as follows:
'If
he was polycythaemic and he had raised haemoglobin level there
are
negative consequences to that. If we start with just
a
poLycythaemia due to lung disease, which he did not have, or
polythaemia due to any other cause, people who have polycythaemia are

prone to high blood pressure, headaches, sometimes blurred vision,
they are prone to developing gout, they have four or five times

increase risk of bleeding in the gastro intestinal tracts, ulcers and
bleeding into the brain. They have increased clotting, because
the
blood cells
are veRy thick and you can get clotting in any
vessel in the body and
so
there are negative consequences to
leaving
a
patient with
a
vety high haemoglobin
untreated. The treatment of choice in most instances is for the
patient to become
a
blood donor or have
a
venesection,
which would then drop the haemoglobin count.'
[17]
Dr Peter testified that Dr Luke would have made the diagnosis of
polycythaemia from his consultation with the deceased and
the blood
tests results. These results reflected that they were conducted on 24
March 2000 at 14h50 and they were uplifted at 15h51.
The patient
being a sixty year old male.
[18]
During cross-examination Dr Peter made numerous concessions:
18.1.
That he was advised that the clinical notes were that of Dr Luke;
18.2.
That he could not for certain say the clinical notes pertained to the
deceased and not the deceased's wife;
18.3.
That one could not make a diagnosis on the results alone which were
on hand before Dr Luke, but he confirmed that the results
supported
the diagnosis. The cause thereof was still not accurate and evident
and required further investigation by means of repeated
blood tests.
At best these results, he stated, was 'a
flag is [being] raised'.
The raised haemoglobin levels alone did not confirm that there
was polycythaemia, other indicators such as raised red cell count
and
raised haematocrit were required as well. Dr Peter testified that the
raised results should be classified as 'a
state'
and not 'a
diagnosis'
and as such he admitted that the raised haemoglobin
could have resulted from, but not limited to, dehydration, hangover,
sleep apnoea
and stress; and
18.4.
Lastly, he conceded that he was not a specialist in Haematology but
persisted that with a raised haemoglobin level, a suspicion
for
polycythaemia was raised.
[19]
When asked, if in the circumstances that prevailed the diagnosis of
polycythaemia had been
'proven',
Dr Peter responded as
follows:
'The
state of polycythaemia requires a [indistinct], further tests would
then be necessary to rule in the cause forpolycythaemia
or actually
discount it, because it may have been a laboratory error that ...In
Mr Nannen's case Dr Luke was writing and describing
a state of
po/ycythaemia on that result which he had and that s why he said I
felt, I felt he was a polycythaemia, and I am quoting
Dr Luke. So Dr
Luke has not made a definitive diagnosis in his notes and I amjust, I
am askedto re/ate was this [indistinct] that
he felt he was
polycythemic correct from the results that he [indistinct] but I have
to agree that [indistinct]'
Peter
Anthony Kerford
(Mr Kerford)
[20]
Mr Kerford was employed in the forensic division, as a forensic
examiner, at Momentum, the first defendant. He explained the
process
he followed in order to obtain the medical records of an insured. He
testified that once he received the notification of
the claim, he
consulted with the medical practitioners and institutions that
attended upon the insured. By doing so he stabled
a medical history
of the consultations and claims submitted on behalf of the insured.
[21]
On the 29 July 2002 Mr Kerford wrote a letter and faxed it to Dr Luke
requesting
'...a report relating to all the consultations,
including symptoms, treatments, surgery,
prescribed[prescription]required, nature
of illness, any relevant
medical history mentioned by your patient. Pease also include any
details of laboratory tests and physical
examinations conducted, as
well as the results thereof.'
pertaining to the deceased.
[22]
Mr Kerford stated he received a call when the report was ready and he
went personally to the doctor's rooms to uplift the completed
medical
report which was accompanied by an invoice. This meetingwith Dr Luke
was sometime after the 15 August 2002, as the report
is dated 15
August 2002. The remittance advice, dated 04 October 2002, was issued
to him after effecting payment.
[23]
Ms Kerford’s testimony is that after he received the documents
from Dr Luke, he transmitted them to the claims department,
who were
then charged with the adjudication of the claim. He was not involved
in that process.
[24]
In cross-examination it was put to Mr Kerford, that he could not have
received the medical report, as he had testified that
he did in
August 2002, as at that time Dr Luke was severely ill with cancer,
and had just had a tumour removed. It was further
put to him, that
the Dr Luke had not been to his practise since July 2002, until he
met his demise on 11 September 2002.
[25]
Adv Keet, representing the plaintiffs put to Mr Kerford that an
arrangement had been set up with Mr Nannen to meet at Dr Masters

rooms on 09 August 2002 to
'obtain the letter in question, because
at that point in time you had not received anything from Dr Luke
'.
Mr Kerford replied that he could not remember such arrangement and as
such could not dispute or admit same. However, he was adamant
that he
received the
'signed letter by Dr Luke dated 15 August 2002 from
Dr Luke's offices'
.
[26]
The signed copy of the letter of Dr Luke only surfaced on the second
day of the trial being 20 February 2014. He persisted
that he had
uplifted the signed copy from Dr Luke at his rooms.
Ms
Lee-Anne Hale
(Ms Hale)
[27]
Ms Hale was a senior underwriter employed by Momentum who received
the deceased's application and issued the policy. At the
time of the
trial she was employed as head of underwriting projects. She was
employed in the underwriting department of Momentum
since 1986.
[28]
Ms Hale confirmed that in the medical portion of the application from
the deceased, the deceased disclosed that he had been
hospitalised
for a broken ankle in September 2000 and was treated by Dr Tuson of
Kenridge Hospital.
[29]
She further confirmed that, with regards to the request in paragraph
15 of the application, which states:
'if he had in the past five
years had X-rays,
ECG,
other examinations, genetic testing,
tumour markers, operations
or
been hospitalised
or
received any medical advice, excluding colds and flu'
, the
deceased responded in the negative. She concluded by saying that she
placed reliance on the information provided by the deceased,
as a
prospective insured.
[30]
Ms Hale testified that from the information supplied by the deceased
on his application form there was nothing of any real
concerned. She
further testified that to the question regarding whether he had seen
any doctors, specialist, alternative medical
practitioners or
traditional healers in the past five years, he again responded in the
negative.
[31]
Ms Hale stated that she was not involved in the assessment and
repudiation of the deceased's claim. On receiving Dr Luke's
report,
she was asked to comment thereupon, she stated that had she had the
report then, she would not have granted the policy
without further
tests being conducted. There would have either been a loading levied
on the policy of between 70% up to 200% if
it was granted. By a
loading she explained that this would have resulted in the policy
premium being much higher than that which
was quoted.
[32]
During cross-examination Ms Hale conceded that the state of high
polycythaemia, high anisocytosis, sedimentation, raised Alpha
and
Beta, no space was provided to insert same on the application form
duly completed by the deceased. There was also no place
to note a
liver condition or changed liver condition. She further conceded,
that the main issue linked to the repudiation of the
policy was that
of polycythaemia. Lastly, it emerged from cross-examination that from
the documents at hand, the various states
of high polycythaemia, high
anisocytosis, sedimentation, raised Alpha and Beta were not conveyed
to the deceased.
Mr
Ashim Kumar Nannen
(Mr Nannen)
[33]
Mr Nannen testified that after his father's death, on 3 May 2002, he
lodged a claim with the defendants. He was directed to
Mr Kerford,
who was investigating the claim, on behalf of the defendant. Mr
Kerford had indicated to him, that he was having some
trouble
locating a Dr Luke, who had attended to the deceased. Mr Nannen was
surprised as he was not aware that the deceased had
been seeing a Dr
Luke.
[34]
On or about the 07
th
or 08
th
August 2002 Mr
Nannen went to Dr Luke's rooms and was informed that the doctor was
unavailable as he was severely ill. He had a
brain tumour and cancer
and due to his illness he had not been to his practise for one and
half or two months. He testified that
he was also informed by Mary,
whose surname was undisclosed, Dr Luke's receptionist, that the
patients' files were with Dr Masters.
On receiving this information
he advised Mr Kerford and they made arrangements to meet at Dr
Masters rooms on 09 August 2002. He
stated that on his arrival at the
doctors rooms, Mr Kerford had already met with Dr Masters and had the
relevant files of the deceased
in his possession.
[35]
Mr Nannen testified that, on 09 August 2002, after advising Dr
Masters that he was the executor, he was allowed access to the

deceased's file. This was a red file but did not have the names of
the deceased on the documents. He stressed that since the letter
of
Dr Luke is dated 15 August 2002 it could not be from Dr Luke himself
as he was severely ill and had not been to his rooms since
July 2002.
[36]
Mr Nannen confirmed that the deceased had broken his ankle whilst at
work with him and the family took him directly to Kenridge
Hospital.
He did not attend at Dr Luke's rooms for that injury is reflected in
the disputed documents from Dr Luke. He was adamant
that the deceased
was not a patient of Dr Luke.
[37]
In cross-examination, Mr Nannen conceded that the documents that
appeared on pages 35-38 of bundle 'CC' were the documents
in the red
file. They were in the file which was shown to him in Dr Masters'
rooms and later handed to him. He also concede that
the practise
notes of Dr Luke which were discovered were in fact the documents
which appeared at pages 35-38 of bundle 'CC'.
[38]
What also emanated from cross-examination was that the aforesaid
documents that were discovered, had been done so by Mr Nannen's

previous attorney. As such, Mr Nannen could not recall if the
attorneys had advised him where they had obtained the documents from.

It was however pointed out to Mr Nannen that in fact the discovery
was done by his erstwhile attorneys instead. Then he profusely
tried
to point out that the documents must have been explained to him
before he signed the discovery, but as it was a long time
he could
not recall where the attorney had said they attained the documents
from. It was noted that the discovery of the documents
in question
took place on 15 August 2010.
[39]
With regards the blood tests that were conducted on the deceased, Mr
Nannen was steadfast in his version that even though the
blood tests
had the referring doctor as Dr Luke and bore the name of the
deceased, his father had never been a patient of this
doctor.
[40]
The thrust of Mr Nannen's evidence is that both his parents' names do
not appear on the documents from Dr Luke; that only his
mother might
have been referred to Dr Luke but the deceased was not a patient of
the doctor; he could not account for the invoice
issued by Dr Luke
and paid for by the defendants in respects of tests conducted on the
deceased.
Dr
Hesther Jansen Van Vuuren
(Dr Van Vuuren)
[41]
Dr Van Vuuren's expertise as a Haematologist were not disputed. The
crux of her evidence was that from the blood tests conducted
on the
deceased, there was an indication of polycythaemia because of the
raised levels of the haemoglobin of 18.4. However, the
red blood
cells and haematocrit were normal. The doctor confirmed that she and
Dr Peter were in agreement that without further
tests the current
blood test were not sufficient to prove polycythaemia.
[42]
Dr Van Vuuren testified that it was not absolutely clear from the
documents that the notes referred to the deceased. She made
mention
that the blood test results which were on hand could have been caused
by a number of reasons namely dehydration, hangover,
stress,
infection, inflammation to mention but a few.
[43]
In her evidence in chief she stated that the process to establish if
a patient was polycythaemia is as follows:
'...die
eerste ding sat wees is ek sat kyk watter parometers is almal
verhoog, is dit byvoorbeeld net die rooisel telling, is dit

byvoorbeeld net die hemoglobien of net die hematokriet, want as n
mens wil sê iemand is polisitemia gaanjy graag wit hi§
al
drie moet hoog wees. So se nou al drie is hoog dan witjy dit
bevestig. 'n Enkele waarde is nie n diagnose nie en n enkele toets

van daardie drie is ook nie diagnosties nie, sojy wit seker maak dat
dit wet die geval is. As jy dan kan bevestig die patiënt
is
polisitemies dan moet jy kyk is it primer, met ander woorde dit n
beenmurg kondisie ...'
[44]
Dr Van Vuuren further testified that the recording on the blood tests
of 15.1 for
anisositosis
would be termed as a non-specific
value where normal is 14.8. When asked if the findings of Dr Luke of
sedimentation being high,
she responded that it was high. Dr Van
Vuuren ensured the Court that what was presented was not a sickness
or a diagnosis, but
rather
'dit is n merker van ‘n toestand
wat jy moet gaan soek.'
[45]
Dr Van Vuuren conceded in cross-examination that the notes of Dr Luke
'described the blood test quite well'.
Further, that the blood
tests, in question, on all probability pertained to the deceased. Her
reasoning was that the nursing staff
who would have conducted the
blood tests would have ensured that the blood was taken from the
correct person, referred by the referring
doctor. She stated that she
would not have used the phase polycythemic as was done by Dr Luke,
instead she would have used the
phase raised haemoglobin.
[46]
Dr Van Vuuren also stated that the hand written notes recorded by Dr
Luke together with the blood tests from Van Dimmelen,
are probably
set out in the unsigned typed notewhich did not have the deceased's
name on. A comparison exercise embarked upon by
Adv. Mundell, for the
defendant, between the hand written notes of Dr Luke, the blood
results from Van Dimmelen, the medical report
prepared by Dr Geyer
and the typed unsigned notes, revealed that
'on the probabilities
if one looks at the
notes
that appear at
35,
the
handwritten
notes, they
correlate almost identically with
those
that appear at page 34'.
She confirmed that they
indeed correlated.
[47]
In conclusion, Dr Van Vuuren stated that if it was not clear that a
patient had polycythemia further tests were required, for
if one did
have polycythemia as a primary problem in a patient with lung or
heart disease, one would at some stage require chemotherapy,
as
eventually, 10% of these cases , could develop into acute leukaemia.
THE ANALYSIS
[48]
What are the probabilities that the deceased fills in the
questionnaire, undergoes medicals for the Momentum and advances the

same information which appears in both Dr Luke's hand written notes
and his typed note? In
Bates and Lloyd Aviation (pty) Ltd and
Another v Aviation Insurance
Co
1985 (3) SA 916
(A) at pages
9391-940A it was held that:
'The
process of reasoning by inference frequently includes consideration
of various hypotheses which are open on the evidence and
in civil
cases the selection from them, by balancing probabilities, of that
hypothesis which seems to be the most natural and plausible
(in the
sense of acceptable, credible or suitable).'
The Non-Disclosure
[49]
It common cause and trite that the general rule is that he who
asserts must prove. Thus in this case the onus to prove the

non-disclosure lies with the defendants and all that the plaintiffs
need prove is the death of the deceased. See
Van Wyk v Lewis
1924
AD 432
;
Cecilia Goliath v Member of the Executive Council for
Health,
Eastern
Cape
(08512014)
[2014] ZASCA 182
(25
November 2014) at para [8].
[50]
In Momentums' letter declining the plaintiffs claim and cancelling
the policy of the deceased from inception, the defendant
states the
reason as follows:
"The
medical history obtained for the deceased indicated that Mr D Nannen
consulted Dr I Luke,
a
specialist surgeon, on two occasions.
Mr Nannen was diagnosed with: Bilateral varicose veins and swollen
feet.
Polycythaemia
with high anisocytosis and
a
raised white blood cell count.
Raised sedimentation.
Raised
protein and Beta and Alpha globulin.
Liver
change with raised ALP.
Unconjugated
bilirubin and raised total protein.
The
above conditions were diagnosed prior to the application and
inception of the policy concerned, and were not disclosed to
Momentum.'
[51]
In addition, the defendants made mention that the deceased was at
risk of a number of conditions being cardiac, cancer, and

respiratory, inflammatory, and high risk of thrombosis. Not to
mention his non-disclosure of being treated for hypertension.
Accordingly,
the defendant declined the plaintiffs' claim for the
death benefit and the policy was cancelled from inception.
[52]
The plaintiffs contend that the defendants cannot repudiate and
cancel unless they can show that the misrepresentation and

non-disclosure materially affected the assessment of the risk under
the policy at the time of it being issued. To this end the
plaintiffs
argued that it placed reliance on section 59(1) of Long-Term
Insurance Act 52 of 1998 (the Act).
[53]
As argued by the plaintiffs in their heads of argument
'...notwithstanding the falsity of the answers, [the] defendant is
not entitled to repudiate the claim unless it shows that the
representations by the plaintiff (in the form of the false answers
furnished to the questions) 'materially affected the assessment
of
the risk under the policy concerned at the time of its issue'.
Thus
the plaintiffs reliance on s 59(1) of the Act as it places the onus
on the defendants to show that the representations and
non-disclosure
are such that they materially affect the assessment of the risk under
the said policy.
[54]
On the other hand Momentums' case is that a reasonable, prudent
person would consider it necessary for the deceased to have
disclosed
his attendances on Dr Luke, thus enabling the defendants to form
their own view of such information. To the extent of
even allowing
for further tests to be conducted in order to assess the risk which
was to be assumed.
[55]
The defendants contended that the underwriter, Ms Hale, was made
aware of the deceased's consultation with Dr Luke. In fact
the
deceased did not disclose this information in his policy application.
Ms Hale testified, which testimony was not contested,
that had she
had the information of the consultations with Dr Luke, she would have
insisted that the deceased undergo additional
tests and examinations
prior to the policy being issued. This was because the contents of
the consultation of Dr Lukewith the deceased
would have
'materially
affected the risk to be assumed by the defendant'.
[56]
It was further argued by the defendants that both Dr Van Vuuren and
Dr Peter concurred that the high haemoglobin results of
the Van
Drimmelen blood tests report were to be considered as a
'red flag'
and that further medical examinations were required. The
additional examinations would have revealed or rule out whether the
deceased
suffered from polycythaemia, whether it was derived from a
secondary cause or was polycythaemia vera. The defendants concluded
by stating that the purpose of disclosure by the deceased, which he
failed to do, was for this exact reason, in order for the Momentum
to
be in a position to better assess its risk by conducting further
examinations and tests.
The
law
[57]
Section 59 of the Long-Term Insurance Act, 52 of 1998, reads as
follows:
'59
Misrepresentation and failure to disclose material information
(Heading
substituted by s. 19 of Act 17 of 2003 (wef 1August 2003).]
(1)
(a) Notwithstanding
anything to the contrary contained in a long-term policy, whether
entered into before or after the commencement
of this Act, but
subject to subsection (2) -
(i)
the policy shall not be
invalidated;
(ii)
the obligation of the
long-term insurer thereunder shall not be excluded or limited; and
(iii)
the obligations of the
policyholder shall not be increased, on account of any representation
made to the insurer which is not true,
or failure to disclose
information, whether or not the representation or disclosure has bean
warranted to be true and correct,
unless
that representation or non-disclosure is such as to be likely to have
materially affected the assessment of the risk under
)he policy
concerned at the time of its issue or at the time of any variation
thereof
. [My
underlining]
(b)
The representation or non-disclosure shall be regarded as material if
a reasonable, prudent person would consider that the particular

information constituting the representation or which was not
disclosed, as the case may be, should have been correctly disclosed

to the insurer so that the insurer could form its own view as to the
effect of such information on the assessment of the relevant
risk.
[Sub-s.
(1) substituted by s. 19 of Act 17 of 2003 (wef 1August 2003).)
(2)
If the age of a life
insured under a long-term policy has been incorrectly stated to the
long­ term insurer, the policy benefits
shall, notwithstanding
subsection (1), be those which would have been provided under that
policy in return for the premium payable
had the age been correctly
stated: Provided that if the nature of that long-term policy, or kind
of long-term policy, is such as
to render such arrangement
inequitable, the Registrar may direct the long-term insurer to apply
such different method of adjustment
to the policy benefits of that
long-term policy, or type of long-term policy, as the Registrar
considers equitable in relation
to the misstatement of age.'
[58]
What has emerged through the cases is that there exist a duty ex lege
to disclose in insurance contracts. See
Tucker Land Development
Corporation (Pty) Ltd v Hovis
1980 (1) SA 645
(A) at 652G -H:
'It
should therefore be accepted that in our law an anticipatory breach
is constituted by the violation of an obligation ex lege,
flowing
from the G requirement of
bona fides
which underlies our law
of contract. It would also be desirable, in order to obtain clarity
of thought, to jettison the terminology
of offer and acceptance in
this regard, and to denote a creditor's decision to act upon an
anticipatory breach not as an 'acceptance'
but as an election. (Cf
Kerr
Law of Contract
2nd ed at 289 - 90.) Once the existence
by operation of law of an obligation not to commit H an anticipatory
breach is accepted,
the question remains as to how that obligation
can be violated. The answer generally given is: by repudiation.'
[59]
It is trite that a duty to disclose material facts, which are known
to the insured exist when seeking insurance cover from
an insurer so
as to assist the insurer to assess and estimate the risk needed to be
covered. Further, the provision of the material
facts has a bearing
on the risk to be engaged by the insurer and the premiums that risk
attracts. Thus it is apparent to me, that
the failure to disclose
material facts or the providing of misrepresentations by an insured,
has a negative effect on the insurance
contract concluded by the
parties.
[60]
In dealing with a material non-disclosure and a misrepresentation, as
the least, one ought to first prove its materiality and
then show
that the said non­disclosure and misrepresentation induced the
insurer to issue the policy to the insured. See
Clifford v
Commercial Union Insurance Company of SA
[1998] ZASCA 37
;
1998 (4) SA 150
(SCA) at
page 1560-H. The test is one which is objective and based on the
thinking of the prudent and reasonable person.
[61]
This was dealt with in
Mutual
&
Federal Insurance
Company Ltd v Oudtshoom Municipality
1985 (1) SA 419
(A) at
434C-F where Joubert JA in the majority judgment had the following to
say with regarding the test to establish whether non-disclosure
or
misrepresentation was material:
'It
is not surprising therefore that the prudent and reasonable insured
test made its appearance sporadically in the field of maritime

insurance. This test is more favourable to an insured since the
standard of judgment is the objective judgment of a prudent and

reasonable insured and not the subjective judgment of the insured in
a particular case. In its report of 1957 the Law Reform Committee
in
England recommended that "for the purpose of any contract of
insurance no fact should be deemed material unless it would
be
considered material by a reasonable insured". The Law Commission
in its report of 1980, according to Birds, Modem Insurance
Law,
(1982) at p 102-103, urged "that while the test of materiality
remain broadly the same, questions expressly asked being
presumed to
be material, the proposer should be bound to disclose only those
material facts which he knows or ought to know which
a reasonable man
in his position would disclose, having regard to the nature and
extent of the insurance cover which is sought
and the circumstances
in which it is sought'.
And
further at 435F-1:
'It
is implicit in the Roman-Dutch authorities and also in accordance
with general principles of our law that the Court applies
the
reasonable man test by deciding upon a consideration of the relevant
facts of the particular case whether or not the undisclosed

information or facts are reasonably relative to the risk or the
assessment of the premiums. If the answer is in the affirmative,
the
undisclosed information or facts are material. The Court personifies
the hypothetical
diligens
paterfamilias i.e. the reasonable
man or the average prudent person
(Weber v Santam
Versekeringsmaatskappy Bpk
1983 (1) SA 381
(A) at 410H-411D). The
Court does not In applying this test judge the issue of materiality
from the point of view of a reasonable
insurer. Nor is it judged from
the point of view of a reasonable insured. The Court judges it
objectively from the point of view
of the average prudent person or
reasonable man. This reasonable man test is fair and just to both
insurer and insured inasmuch
as it does not give preference to one of
them over the other. Both of them are treated on a par.'
[62]
The test itself is premised on the reasonable prudent person
acknowledging that the information not disclosed or that which
was
misrepresented should have been provided to the insurer, for the
latter to have made an informed decision. See
President
Versekeringsmaatskappy Bpk v Trost Bank van Africa Bpk en 'nAnder
1989
(1) SA 208 (A) at 216 F-G. Having illustrated the aforesaid
the insurer needs to show that the misrepresentation or
non-disclosure
materially caused the insurer to issue the policy.
These are both delictual in nature and require objective tests.
[63]
The other view is that when establishing a material non-disclosure
the test is objective but when establishing misrepresentation
the
test in this instance is subjective. To this end see
Qilingele v
South African Mutual Life Assurance Society
1993 (1) SA 69
(A).
Now after
Qilingele
came
Clifford
and Schutz JA, who
delivered the majority judgment, did not decide on the issue whether
the
Qilingele
test could be wrong. However, in
Regent
Insurance v King's Property
(5/2014) [2014] 'ZA.SCA (176) 21
November 2014 at para [23] Lewis JA wrote as follows on the tests:
'...the
test in respect of both misrepresentations and non-disclosures is an
objective one, thus bringing the legislation in line
with the common
law. Two principles enunciated in
Clifford
remain applicable.
First, the
onus
rests on the insurer to prove materiality (at
155E-G), this in accordance with the decision in
Qi/inge/e;
and
second, the insurer must prove that the non­ disclosure or
representation induced it to conclude the contract. Thus the
insurer
must show that the representation or non-disclosure caused it to
issue the policy and assume the risk. As Schutz JA pointed
out (at
156E-I), however, once materiality has been proved it would be
difficult for the insured to overcome the hurdle of showing
no
causation, a matter to which I shall return.'
The Plaintiffs Case
[64]
The case of the plaintiffs is that in this instance we have a
straight forward case of misrepresentation where the deceased

expressly vouched for the truth of his representations and did so in
the form of a warranty in founding the insurance contract.
As such,
to found materiality, one ought to look at the distorted facts
advanced by the misrepresentation as opposed to what should
have been
represented and the disparity that exist between these should be of
such significance as to have encouraged the insurer
to embark on
concluding the insurance contract instead of declining it outright or
undertaking the contract on other terms.
[65]
The plaintiffs argued that the test applicable in these circumstances
was that which is contained in
Qilingele,
being that which
merely dealt with a misrepresentation and as such the test to be
applied was a subjective one. The defendants argued
that the test was
objective and that the test emanates from
Oudtshoorn Municipality.
[66]
The plaintiffs further argued that the defendants had to prove that
the deceased was in fact suffering from the condition alluded
to by
Dr Luke, that being polycythaemia, and that he was aware of this
diagnosis and failed to disclose the information material
to such
diagnosis. The plaintiffs submitted that the defendants failed to do
so, as Dr Peter had testified that Dr Luke had not
made a diagnosis
but rather alluded to a state that the deceased had been in.
The Defendants Case
[67]
The case of the defendants is that this case comprises both a
misrepresentation, the deceased having failed to state on his
policy
application that he saw Dr Luke, thus warranting incorrect and
incomplete facts. In addition, this case also includes the

non-disclosure of the deceased having consulted Dr Luke and having
undergone blood tests with Van Drimmelen Laboratories.
[68]
In the aforesaid circumstances the test applicable according to the
defendants is an objective one and is aptly set out in
the case of
Mahadeo v Dial Direct Insurance Ltd
2008 (4) SA 80
0N) at para
[19) where Boruchowitz J advocates the test of, a reasonable person
would have considered those consultations to be
relevant to the
defendants risk and its assessment of that risk.
[69]
The argument of the defendants is succinctly set out in the
supplementary heads of argument which follows below:
'In
simple terms, both Dr Peter and Dr Van Vuuren confirm that the Van
Drimmelen blood test results (reportd on by Dr Luke) establish
the
need for further investigations. That is the essence of the second
defendant's case. Had it been given the information (namely
that the
deceased had consulted with Dr Luke on at least three occasions
within the required period) it would have required of
the deceased to
undergo further tests. Those tests may well have disclosed that the
deceased suffered polcythaemia. Had that been
so, and on the
unchallenged evidence of Ms Hale, the insured/second defendant would
not have issued the policy of insurance. Even
the increased
haemoglobin levels recorded by Dr Luke would have resulted in a
"loading" of thepolicy in the sense of
an increased
premium.'
The Hand Written Notes
and the Typed Note of Dr Luke
[70]
The first port of call is to determine whether the typed note
addressed to Mr Kerford is in fact that of Dr Luke. There are
hand
written notes which are purported to pertain to the deceased, but
these do not bear the names of the deceased. The contents
of these
hand written notes are in essence reflected on the unsigned typed
note addressed to Mr Kerford. Mr Ashim Nannen, though,
disputes that
the deceased was attended to by Dr Luke, he only concedes that his
mother might have consulted Dr Luke.
[71]
Of interest is the fact that it was the plaintiffs who discovered the
hand written notes of Dr Luke. In the hand written notes,
mention is
made of
'wife'
but the name of the deceased as I said does not
appear. Even so, one cannot wish away the objective facts that emerge
from this
hand written note. From Mr Nannen's own testimony he
conceded that when he sought information of the deceased from Dr
Masters,
who had taken over the files of Dr Luke, the hand written
notes in question were the notes that were extracted from the red
file,
concerning to the deceased.
[72]
Bearing in mind that Dr Masters had never treated the deceased and
had no reason to fabricate these hand written notes.
[73]
The evidence of all the experts indicate that the probabilities glean
towards the hand written notes and the typed note constituting
notes
pertaining to the deceased. As was conducted with Dr Van Vuuren, when
the cross references between Dr Luke's typed note,
the hand written
notes and the medical information provided by the deceased to Dr
Geyer for his medical report, what appears in
the hand written notes
is in the typed note and the medical report. Pertinent references
such as the left ankle injury, the varicose
veins and the umbilical
hernia, which the deceased, himself, disclosed to Dr Geyer at his
medical examination on 20 November 2001,
appear in both the typed
note and the hand written notes.
[74]
The deceased also disclosed in his application that he had broken an
ankle in September 2000 which was attended to by
'Dr Tuson
Kenridge'
and in the typed notes an annotation is made that on 14
September 2000 he appeared before Dr Luke with a fractured ankle for
which
he was referred to Dr Tuson. The left ankle fracture, the
umbilical hernia, his obesity/too fat, the bilateral varicose veins
and
swollen right foot, these annotation appear in both the hand
written notes and the typed note.
[75]
In my view, on an examination of all the evidence the most probable
conclusion is that the hand written notes as well as the
typed note
are medical notes relating to the deceased. On the plaintiff's own
version the hand written notes were obtained from
Dr Masters when he
requested information from Dr Luke regarding the deceased. I have
already stated above that Dr Masters had no
course to fabricate these
hand written notes. These notes have the same annotations with
regards to the information that the deceased
provided, in person, to
Dr Geyer. The only conclusion to be reached is that the notes, both
hand written and typed pertain to the
deceased. The next question is,
where would Dr Luke have obtain such detailed information, but for,
the deceased himself. The information
in all three documents and the
fact that the hand written notes obtained from Dr Masters are
purported to be Dr Luke's, brings
me to the only conclusion, that the
typed note and the hand written notes can only be that of Dr Luke.
[76]
The deceased was a patient of Dr Luke in 2000. Thus, the doctor
recorded what appears in the hand written notes and it probable
for
the reasons Ihave set out above that he prepared the typed version
for Mr Kerford. There is the testimony of Mr Nannen that
by the time
the typed note was executed Dr Luke was far too ill to have provided
it. In my view, as he was mistaken about the deceased
not having
consulted Dr Luke he is mistaken that the typed notes were provided
by Dr Luke.
[77]
Having concluded that the notes pertain to the deceased and are those
of Dr Luke the next issue is whether the defendants discharged
the
onus in proving their defence of non-disclosure and
misrepresentation.
Discharge
of the onus by the Defendants
[78]
The evidence advanced by the defendants is in my view clear that the
deceased misrepresented when he did not disclose that
he had
consulted with Dr Luke on at least three occasions in 2000. Further,
that the non-disclosure of the consultations with Dr
Luke and the
information established from such consultations deprived the
defendants from seeking further medical examinations
and tests to
property assess the risk to be embarked upon by the defendants. This
emanates from the undisputed evidence of Ms Hale
that the information
from the consultations and tests conducted by Dr Luke, would
materially have affected the risk to be undertaken.
She also stated
that, with that information from further examinations and tests could
have been conducted which would procure different
results which could
have necessitated either a
'loading'
on the premiums or the
policy would not have been provided at all.
[79]
As stated above both doctors conceded that the blood test results
depicted a
'red flag'
that necessitated further investigation.
In my view, even though the state of polycythaemia had not been
confirmed as a diagnosis,
the defendants were deprived from
establishing the risk it needed to cover without the advantage of the
further tests and examinations.
[80]
It matters not that the deceased could not have had the knowledge of
the terminology in the blood test reports or the state
referred to in
the medical notes, as proffered by the plaintiffs, the fact remains
is that the deceased as a reasonable person
would have known that the
fact that he consulted with Dr Luke and conducted blood tests was
relevant information for the defendants
to conduct an assessment as
regards the risk it was sort to cover.
[81]
In my view, the information which was submitted by the deceased on
his policy application clearly induced the defendants to
insure the
risk as reflected in the policy application and the medical report.
[82]
This was so much as conceded by the plaintiffs in their heads
however, the plaintiffs go on to say, that even so, the
misrepresentation
was not material such as to warrant the defendants
avoiding the insurance contract.
[83]
The plaintiffs reliance on the subjective test stated in
Qilingele
cannot hold muster. As put forward in the cases of
Oudthoom
Municipality, President Versekeringsmaatskappy
and
Regent
Insurance supra,
misrepresentations (be they positive or
negative) and non-disclosures in insurance contracts are to be
treated on the basis of the
reasonable person test in determining
materiality.
[84]
Ifind that on the evidence, the defendants have discharged the onus
in proving that the deceased, as a reasonable person, would
have
considered the fact that it he failed to disclose and the
misrepresentation made in the policy application was reasonably

relevant to the risk and assessment by the defendants.
Consequently
I make the following order:
The
plaintiffs claim is dismissed with costs.
_____________________
W.
Hughes
Judge
of the High Court Gauteng, Pretoria
Counsel
for the Plaintiffs: Adv. D KEET
Counsel
for the Defendants: Adv. A R G MUNDELL SC