Discovery ordered to pay R25 million to man who became ‘totally and permanently unable’ to work

Discovery Life was ordered to pay more than R25 million to a man who became “totally and permanently unable” to work as a stockbroker after suffering a string of “deeply traumatic events”.

The man, referred to in court papers as PR, claimed he could not carry out his work duties between 28 December 2014 and 30 November 2015.

PR had suffered a string of deeply traumatic events, which left him with a combination of post-traumatic stress disorder and unspecified bipolar mood disorder.

Despite psychotherapy, occupational therapy and an extensive range of drug treatments, he would never recover. Still, Discovery repudiated his claim because his insurance cover expired on 30 November 2015.

The insurance company said there was no evidence that he had become totally and permanently unable to perform as a stockbroker by that date.

The company’s legal representative told the court that the question was whether the repudiation was reasonable on the information he supplied to Discovery when he submitted his claim.

In his ruling, Judge Stuart Wilson, of the Gauteng High Court in Johannesburg, said the man was a very successful stockbroker before the onset of his condition and the insurance policy he took out was evidence of his success.

His monthly premium due on the policy was in the region of R20 000. His job was demanding.

His treating psychiatrist and occupational therapist had given unchallenged evidence that his work as a stockbroker required a resilient personality and fine judgement.

The man’s job involved the investment of his clients’ funds and the skilful purchase and sale of financial assets in a manner that would maximise the return on those funds.

The man’s therapist said his job was high-pressure and high stakes – and, like all jobs that involve a degree of deal-making, it required an agile set of social skills.

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PR’s financial rewards included the money needed to purchase a villa in Mauritius.

However, on 28 December 2014, things took a turn for the worst.

While on holiday at the villa, his girlfriend drowned in a swimming pool at a resort.

PR found his girlfriend floating in the swimming pool and tried unsuccessfully to resuscitate her.

In January 2015, he was arrested and questioned by the Mauritian police. He was then charged with his girlfriend’s murder and detained, pending trial.

According to the judgment, PR appeared to have suffered a breakdown. He was admitted to the secure ward of a local hospital and stayed there for four days.

Agitated and tearful 

A Mauritian state psychiatrist assessed him and found that he was psychologically distressed. The doctor noted evidence of depressive illness.

By March, PR had lost 20kg. The doctor said he looked mentally and physically exhausted.

By December 2015, his legal representative asked the doctor if he could stand trial. By then, he had lost 30kg.

“He was agitated, tearful and at times incoherent. His memories were confused. He could not sustain a logical narrative account of his experiences.”

As the interview went on, he became more distressed, read the judgment.

The same month, when the doctor saw him, he appeared “calm and lucid, but his mental state deteriorated as the interview went on”.

PR said he was held in a dark, airless room, often in filthy conditions.

He was later diagnosed with post-traumatic stress disorder and major depression.

The doctor further said PR might be suffering from bipolar mood disorder – but could not confirm the diagnosis.

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PR was eventually acquitted of his girlfriend’s murder.

He returned to South Africa in March 2016 and was hospitalised in Pietermaritzburg, KwaZulu-Natal, where he was diagnosed with post-traumatic stress disorder and major depression.

The doctor, who treated him for three years, said there was no significant likelihood of his condition improving in the foreseeable future.

Wilson found in favour of the man, saying: “On a balance of probabilities, I find that PR was incapacitated on 30 November 2015; that he has remained incapacitated since then; and that the care and treatment that might have rehabilitated him has been exhausted.

Totally and permanently unable 

“It follows from this that PR was ‘totally and permanently unable’ to perform as a stockbroker on or before 30 November 2015, but not earlier than 28 December 2014.”

Wilson said the event that established Discovery’s liability was the onset of the man’s permanent incapacity on or before 30 November 2015.

The second event that established Discovery’s duty to pay out was the point at which there were facts which would have satisfied a reasonable insurer that the man’s incapacity was permanent.

Wilson said that happened in April 2019, when a doctor formed the view that there was no realistic prospect of significant improvement in the man’s condition.

It follows from all this that Discovery became liable under the policy on or before 30 November 2015. It had a duty to pay out, at the very latest, by 1 May 2019, because that is when a reasonable insurer would have known that PR’s incapacity was permanent.

 

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“The subjective reasonableness or otherwise of Discovery’s opinion of whether and when PR’s condition became permanent is irrelevant to its duties under the policy.”

Wilson found that Discovery had not conducted itself reasonably.

“Discovery repudiated PR’s claim on 25 August 2016. Its letter rejecting PR’s claim is hard to parse. It vacillates between the proposition that PR has no claim because his policy had by that time expired and the proposition that it had not at that point been established that PR’s incapacity had become permanent on or before 30 November 2015 and that PR’s claim was not ‘ready for assessment’.”

The judge said once PR submitted his claim, Discovery was under a duty to establish whether he had suffered a permanent incapacity on or before 30 November 2015, as it was that event that triggered its liability under the policy.

He, therefore, found Discovery liable under the policy.

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