Pretoria - Discovery Life has lost its bid to appeal against an earlier order which compelled it to pay more than R25 million to a man who is no longer able to work as a stockbroker.

The Gauteng High Court, Johannesburg, earlier ordered the insurance company to pay more than R25 million to a client after it was found to have been unreasonable to reject his claim.

The client, identified as PR, challenged the repudiation of his claim on a policy he held with Discovery.

PR, who worked as a stockbroker, claimed that at some point between December 28 in 2014 and November 30 in 2015, he had become totally and permanently unable to carry on as a stockbroker.

During that time, he suffered a string of deeply traumatic events that had left him with a combination of post-traumatic stress disorder and an unspecified bipolar mood disorder.

He said that, despite psychotherapy, occupational therapy and an extensive range of drug treatments, he would never recover to the extent necessary to work as a stockbroker.

The insurance policy he took out with Discovery was due to pay out, in the event of permanent incapacity, more than R25 million. The monthly premium due on the policy was in the region of R20 000.

Discovery rejected his claim on the basis that his insurance cover expired on November 30 in 2015, and that there was no evidence that he had become totally and permanently unable to perform as a stockbroker by that date.

But Judge Stuard Wilson ruled that Discovery was liable in terms of the contract to pay him the money.

The insurance company returned to court to apply for leave to appeal against the judgment.

PR’s policy promised a “Capital Disability Benefit” in the event that he became permanently incapable of working as a stockbroker. In his judgment, Judge Wilson held that PR did become permanently incapable of working as a stockbroker on or before November 30, 2015, when his policy lapsed.

The policy lapsed because PR stopped paying his premiums.

He stopped paying his premiums because he had been incarcerated for several months leading up to November 30, 2015, following the death of his girlfriend in Mauritius.

He was also suffering from what turned out to be a combination of a post-traumatic stress and bipolar mood disorder.

“He still suffers from those conditions today. They have incapacitated him, and prevented him from resuming what was, before his incarceration, a very successful career as a stockbroker,” the judge said.

Counsel for Discovery argued that Judge Wilson had misconstrued the meaning and application of PR’s policy.

In his judgment, Judge Wilson found that the insured event, which triggered Discovery’s liability under the policy, was the onset of PR’s permanent incapacity to work as a stockbroker.

He also found, however, that Discovery was entitled to delay payment on the policy until it was reasonably satisfied that PR’s incapacity was permanent on or before November 30, 2015, when PR’s policy lapsed.

Discovery repudiated PR’s claim on August 25, 2016.

Judge Wilson found that Discovery was not entitled to repudiate the claim and that it was instead required, under the policy, to satisfy itself of whether PR’s incapacity had in fact become permanent before his policy lapsed on November 30, 2015.

“Had it done so, Discovery would have come to the conclusion that PR’s incapacity was permanent on that date. Accordingly, Discovery was bound to honour PR’s claim and to pay out the sum of over R25m that it was agreed was due to PR if his claim was good,” the judge said.

It was further argued on behalf of Discovery that leave to appeal should be granted because the judgment, as it now stands, will have a wide-ranging impact on the insurance industry.

But Judge Wilson also rejected this part of the argument. He said Discovery has conducted itself in a manner inconsistent with the objective meaning of its own policy.

“If that is so, then the impact of my judgment is only on Discovery, and only on claims made under PR’s policy… I cannot accept that this unspecified impact on Discovery is compelling enough to ask the Supreme Court of Appeal or a full Bench of this court to entertain an appeal that otherwise lacks prospects of success,” Judge Wilson said.

Pretoria News