Lata v Colonial [Fiji] Life Ltd [2011] FJMC 59; Civil Case 62.2008 (19 April 2011)

IN THE MAGISTRATES COURT AT NASINU

Civil Case No. 62/2008

KAMLESH LATA
[1st Plaintiff]

KAMLESH LATA
[2nd Plaintiff]

-v-

COLONIAL [FIJI] LIFE LIMITED
[Defendant]

Mr. Raman P. Singh for the Plaintiffs (Kohli and Singh)
Mr. Devanesh P. Sharma for the Defendant (R. Patel Lawyers)

Judgment

1] By writ of summons the plaintiffs commenced this action against the Defendant Company, seeking judgment to pay money relating to the policy No.8072098-Bula Saver Policy. This Policy was made between Mr. Tharkur Narayan Charan, the deceased, was the husband of the Plaintiff and the Defendant Company. The Defendant agreed to insure the life of the said Mr. Charan in the sum of $20,000 and together with bonus. Upon proof of death of Mr. Charan, the Defendant is to pay said sum together with bonus. The 1st Plaintiff is the nominee and the beneficiary and 2nd Plaintiff is the Administratrix of the estate of Tharkur Narayan Charan. Mr. Tharkur Narayan Charan died on 09th August 2005. The Plaintiff informed the Defendant and proved the death of said Mr. Charan. But the Defendant refused to pay said sum, avoided the liability on the material non disclosure of the Mr. Charan at the time of obtaining the said Policy. The Defendant says that insured failed (Mr. Charan, sometimes called as Mr. Thakur or the deceased) to disclose that he was suffering Diabetes Mellitus since 1999.

2] The Defendant filed statement of defence and the Plaintiff thereafter filed reply to the counter claim. Parties then agreed following facts.

3] AGREED FACTS

1. The 1st Plaintiff is the nominee and the beneficiary of the Policy No. 8072098 of the deceased Thakur Narayan.
   
2. The Defendant issued a Bula Saver Policy No. 8072098 to the deceased on 16th July 2003. (hereinafter referred to “as the said policy”).
   
3. The sum insured was for a fixed sum of $20,000.00 plus accumulated bonuses at the time of death.
   
4. The beneficiary nominated under the Policy was the 1st Plaintiff.
   
5. The said Thakur Narayan Charan died on 9th August 2005.
   
6. The Defendant was notified of the death by copy of Certificate of Death dated 15th August 2005.
   
7. A claim was lodged by the 1st Plaintiff in writing on 15th August 2005.
   
8. By a letter dated 15th March 2006 the Defendant advised the 1st Plaintiff that it was declining the claim on the grounds of material non-disclosure by the deceased.
   
9. The amount due under the Policy in the event of the death of the deceased and if Policy is held to be valid is $20,000.00 being the cover of the Policy plus accumulated bonuses at the time of the death.
   

4] ISSUE TO BE TRIED
The sole issue to be decided by the Court is whether the deceased suffered from Diabetes Mellitus before or at the time of proposal for the insurance policy and whether there was material non-disclosure by the deceased in failing to disclose this fact to the Defendant.

5] The trial was heard on 23-11-2010 and both parties have filed their written submission respectively. The judgment fixed for today.

FACTS

6] At the hearing the plaintiff gave evidence for herself and the defendant called one Dr. De Asa and Mr. Sekope Waqa.

7] The summary of evidence as follows;

(1) The Plaintiff, Mrs. Kamlesh Lata. said that she is the legal wife of late Mr. Charan and he died on 09th August 2005. The EX-8 is the death certificate and admitted by the Plaintiff. They married in 1983 and have three children. The deceased Mr. Charan was an Accountant and obtained a life Insurance Policy from the Defendant Company. The Policy was Identified and tendered as EX-1. She said that in that policy she was named as the beneficiary. Amount insured was $20,000 and premium had paid until the death of the insured. On 08-08-2005 evening his husband was taken to the Nasese Medical Centre due to short of breathes and she accompanied him. Dr. De Asa then attended the deceased and examined, the deceased was given some tablets and was sent home. Then following morning, patient condition was serious and they went to the Dr. ASa place again. Then her husband was transferred to the CWM hospital by Dr.Asa She said her husband passed away without attending a doctor at that morning. In her evidence in chief she categorically said that her husband did not speak to the Dr. Asa and his condition was not so good. She said she gave the medical history and victim was not having any previous medical history. She said that she did not tell that her husband Mr. Charan was suffering from diabetes since 1999. Upon her husband’ death she made a claim to the defendant and they denied to honor the policy by EX-5. In that they denied the claim on material non disclosure of diabetes. Then she made an appeal to the defendant and it was turned down. She said her husband was admitted to the CWM in 1999 for high fever. The question of diabetes emerged in 2004 and he was treated by Dr Dip. She prayed orders accordingly in her favour. She asked to be compensated for $20,000.00 plus bonuses and interest from August 2005.

8] The plaintiff was cross examined at length. The Following issues were highlighted during Ms. Lata’s cross-examination.

(1) Ms. Lata did not have Letters of Administration but she was seeking to bring the claim on behalf of the Estate.

(2) She did not obtain or produce any medical records from Dr. Dip Chand.

(3) She did not have any copies of prescriptions for diabetes medication.

(4) She said that when the diabetes got high, Mr. Charan would give himself medication.

(5) She said that Mr. Charan checked himself as and when required for diabetes.

(6) She admitted that after Mr. Charan’s death she had collected $18,000.00 from FNPF following his death.

(7) She denied that Mr. Charan was able to speak when he came to Dr. De Asa.

(8) She said that in 1999 the Mr. Charan did go to CWM but only for a high fever.

(9) She could not explain how the two medical reports had the data that the Mr. Charan was diagnosed with diabetes in 1999.

(10) She denied giving any such information to the Doctors.

(11) She said that even at CWM there were no doctors but only the nurses attended to the Mr. Charan.

(12) She said that she subsequently discussed matters with a Doctor at CWM Hospital.

(13) She admitted that Mr. Charan personally completed the Insurance Application Form.

(14) She said that Mr. Charan was employed from 1993 to 1995 at Ram Sanehi Industries and then from 1995 to his death he was employed at CKP Fishing.

(15) She said that Mr. Charan was an Accountant. She was now doing the same job that Mr. Charan had done previously.

(16) She accepted the accuracy of the medical reports except the part about the diabetes.

(17) She wanted the $20,000.00 plus interest plus costs.

9] In re examination that witness said her husband was treated for high fever as an outpatient in the CWM (Colonial War Memorial) hospital. There are no medical history and she did not know whereabouts of the Dr. Dip to call him as a witness.

10] Then the Plaintiff closed her case. At the trial the Defendant called two witnesses, Dr. De Asa and Mr. Sekope Waqa. A summary of Dr. De Asa’s evidence is set out below:

Dr. De Asa gave his qualifications and experience.

(1) He has been operating Nasese Medical Centre since 2002.

(2) They have four doctors at the Centre.

(3) He is 63 years old.

(4) He recalled the day Mr. Charan came in on 8th August 2005 and said that on the night of 8th August 2005 he presented himself at the Centre. He said Mr. Charan was ambulatory and coherent.

(5) Dr. De Asa said that Mr. Charan volunteered information about his past medical history to him and told him that he had had Type 2 Diabetes since 1999.

(6) Dr. De Asa checked Mr. Charan and prescribed antibiotics and a cough mixture and asked him to come for an x ray the next day. He gave him an X Ray Form.

(7) Dr. De Asa said that he was told the symptoms had persisted for one week and Mr. Charan was suffering from short breath and a cough.

(8) Dr. De Asa could not recall whether Mr. Charan came the next day or not. He could not recall seeing Mr. Charan. He said there are 4 doctors there so anyone of them could have attended.

(9) Dr. De Asa said that his Centre sees about 40 patients per day ad he personally sees about 20 patients.

11] Dr. De Asa was cross-examined by Mr. Singh for the plaintiff and a summary of the cross-examination is summarized below:

(1) Mr. Singh’s suggestion was that Dr. De Asa was a client of Colonial and so by implication he would give favorable evidence on their behalf.

(2) Dr. De Asa refuted this and said that he was one of a number of Doctors on Colonial’s panel of doctors.

(3) He said that it was not lucrative at all to be on the panel of Doctors for the Defendant because they could charge only $2.50 per patient and he had only seen one patient in the last two months.

(4) Mr. Singh next questioned Dr. De Asa about his Report and said that he only obtained the information about the diabetes from looking at the CWM Report.

(5) Dr. De Asa admitted that he had looked at the CWM Report but that he made his own contemporaneous file notes about what Mr. Charan had told him and he had put down what was said to him by Mr. Charan. Dr. De Asa had the file notes with him in Court but Mr. Singh did not see it fit to cross examine on the same or have it tendered.

(6) Dr. De Asa said that it was perfectly normal for him to refer to the medical reports from CWM Hospital because at the time he wrote his report Mr. Charan had died.

(7) Mr. Singh pressed Dr. De Asa about the allegation that the Mr. Charan did not speak to him.

(8) Dr. De Asa refuted this.

(9) Dr. De Asa said that his office is an open space area and Mr. Charan was sitting when he examined him.

(10) He said the wife was present and she may have been talking as well.

(11) Dr. De Asa said that he used the words “it is noted...” in his letter as it is his style of writing.

(12) Dr. De Asa said that he used the past tense because when he wrote his report the Mr. Charan was already dead.

(13) Mr. Singh tried to imply that Dr. De Asa was negligent in only giving Mr. Charan antibiotics and a cough mixture.

(14) Dr. De Asa clarified his diagnosis and said that the symptoms in his examination coupled with past medical history as related to him by Mr. Charan did not indicate anything else and unless he saw an x ray he really was unable to diagnose anything else.

(15) Dr. De Asa maintained his position that Mr. Charan related his past medical history to him.

(16) Dr. De Asa also pointed out that Mr. Charan told him that he was suffering from Type 2 Diabetes in 1999 whereas in the CWM Hospital Report it was stated that he was suffering from Diabetes Mellitus.

12] The second witness called by the Defendant was Mr. Sekope Waqa. A summary of Mr. Waqa’s evidence is as follows:

(1) He set out his qualifications and background.

(2) He confirmed that he dealt with and was familiar with the file and the claim.

(3) He explained the basis on which Insurance Applications are treated. For those under 50 there is no requirement to get a medical report unless there is disclosure made of some illness or condition that would prompt an examination. This is why the Defendant treated the answers given by Mr. Charan in the application form as material disclosures.

(4) If a person declares an illness or other condition then the Defendant can still insure but they will need to assess the risk after going through the medical report.

(5) In the case of Mr. Charan the Defendant wrote to doctors and hospitals upon receiving the claim. This was normal practice.

(6) The Death Certificate stated that one of the causes of death was diabetes so it raised a question / concern that how could this man die of diabetes related disease in August 2005 when in July 2003 he had declared he had never suffered from the illness.

(7) Two medical reports stated that the Mr. Charan and his wife had indicated to doctors when questioned about existing medical conditions on 8th and 9th August 2005 that Mr. Charan was suffering from diabetes since 1999.

(8) He said that the Defendant felt it could rely on the two medical reports since they were prepared by independent medical institutions.

(9) He said that the Defendant concluded that there was material non-disclosure in this matter. Deliberately withholding information about a specific medical condition is fraudulent. The non disclosure was material since it would have alerted the Defendant to the additional risks that they would have to face and the additional risk they would need to assess.

(10) Mr. Waqa said that the Defendant expected applicants to be honest and act in good faith. Insurance policy contracts he said were contracts of good faith.

13] Mr. Waqa was cross-examined by Mr. Singh as follows:

(1) Mr. Singh’s main line of questions in cross-examination was that there was no independent medical report from 1999 that showed that Mr. Charan had suffered from diabetes.

(2) He told Mr. Waqa that the medical reports relied upon by Dr. Waqa and Dr. De Asa were second hand information and neither of them had conducted any tests on Mr. Narayan to confirm he had diabetes.

(3) Mr. Waqa stood his ground and said that they had relied on Mr. Charan’s answers and that had he disclosed he was suffering from diabetes then they would have required additional information and possibly have submitted him to a medical test to see whether they were prepared to assume the risk of insuring him. Mr. Waqa refuted Mr. Singh’s claims about hearsay evidence saying that such information was from two medical centres and was attributed to Mr. Charan.

(4) Mr. Waqa confirmed that a medical condition such as diabetes would require further assessment of the risk. It was a relevant factor before they approved cover. They would need to know the extent of the diabetes and the medication being taken by the applicant.

14] In the light of above evidence, it is evident that Mr. Charan, the insured, had suffered Diabetes Mellitus at the time of his death. This illness has led to his cause of death as major illness. The plaintiff says that it was diagnosed by Dr. Dip in 2004 and the deceased treated himself when the blood sugar level was high. The deceased took Dionil tablets as the medication. The question is to be address here is when was the deceased got Diabetes? The defendant says according to the deceased statement to Dr.De Asa he suffered Diabetes in 1999 prior to the policy was taken. Therefore under material non disclosure of the insured, they can avoid the liability.

The Law and Determination

15] Law on material non disclosure and burden of proof is mentioned in Rajendra Prasad Brothers Ltd v FAI Insurances (Fiji) Ltd [2004] FJHC 353; HBC0205j.2001s (19 May 2004) D. Pathik J ;

(ii) Burden of Proof

The burden of proof is on the defendant to prove that the exclusion clause applies to this case.

The defendant is required to, on a balance of probabilities, prove that ...of the exclusion clause are satisfied:

(a)...; and

(b)....

(iii) Standard of Proof

“... hence strong evidence is required to be produced to prove even on balance probabilities” (Emphasis added)

16] In Pan Atlantic Insurance Co Ltd v Pine Top Insurance Co Ltd [1994] 3 All ER 581 (HL) held that an insurer relying on non-disclosure must establish that the disclosure in question would have been material not only to a prudent insurer but also to the actual insurer.Further Lord Lloyd of Berwick observed at 638:

“Whenever an insurer seeks to avoid a contract of insurance or re-insurance on the ground of misrepresentation or non-disclosure, there will be two separate but closely related questions. (1) Did the misrepresentation or nondisclosure induce the actual insurer to enter into the contract on those terms? (2) Would the prudent insurer have entered into the contract on the same terms if he had known of the misrepresentation or non-disclosure immediately before the contract was concluded? If both questions are answered in favour of the insurer, he will be entitled to avoid the contract, but not otherwise.

The evidence of the insurer himself will normally be required to satisfy the court on the first question. The evidence of an independent broker or underwriter will normally be required to satisfy the court on the second question. This produces a uniform and workable solution, which has the further advantage, as I see it, of according with good commercial common sense.”

17] It is also be noted in Assicurazioni Generali SpA v Arab Insurance Group [2003] Lloyd’s Rep IR 131 (CA) where Clarke LJ said at 149:

“In all the circumstances I would summarise the relevant principles of inducement in this context in this way:

1. In order to be entitled to avoid a contract of insurance or reinsurance, an insurer or reinsurer must prove on the balance of probabilities that he was induced to enter into the contract by a material non-disclosure y a material misrepresepresentation.

2. There is no presumption of law that an insurer or reinsurer is induced to enter in the contract by a matenon-disclosure&#1b>or p>or presentation.

.

3. The facts may, however, be such that it is to be inferred that the particular insurer or reinswas so induced even in the absence from evidence from him.

4. In order to prove inducement the insurer or reinsurer must show that the non-disclosure or misrepresentation was an effective cause of his entering into the contract on the terms on which he did. He must therefore show at least that, but for the relevant nondisclosure or misrepresentation, he would not have entered into the contract on those terms. On the other hand, he does not have to show that it was the sole effective cause of his doing so.”

18] These principles were followed by QBE Insurance (International) Limited v Jaggar and anor [2006] NZCA 358 (13 December 2006)

19] There is no dispute that the Plaintiff’s deceased husband had a valid Bula Life Insurance Policy No. 8072098 with the Defendant who is an insurer. The sum insured was $20,000 including bonuses at the time of the death. The premiums were up to date at the time of death. It is an agreed fact that the Plaintiff’s husband died on 9th August, 2005. The Plaintiff, a beneficiary and trustee made a claim on the policy. However, the claim at the trial proceeded on the basis of the first Plaintiff who is the nominee under the insurance policy, and the claim is made by her in person.

20] The Defendant refused to pay on the death of the deceased the benefits to the Plaintiff on the ground that there was a material non-disclosure in the proposal. The allegation is that deceased insured had not disclosed at the time of the proposal that he was suffering from a diabetic condition and this entitles the insurer to avoid the policy. Therefore it is patent that the defendant should prove the material non disclosure.

21] In the evidence, it was revealed the Defendant issued the insurance policy on 4 July 2003. There was no medical examination of the applicant (now deceased) carried out to establish whether or not he was medically fit. No examination of such a kind that the deceased was suffering from diabetes at the time that the application for the insurance policy was made. This is not to say that the deceased was actually suffering from diabetes at the time of the application.

22] The Defendant is relying on the alleged admissions by the deceased and Kamlesh Lata contained in the medical reports. These reports are part of the agreed bundle of documents. The plaintiff submitted that the fact that the documents have been tendered in the agreed bundle is that the municipality of the document is agreed to not the truth as to the contents.

23] The Defendant seems to rely on then alleged admissions only. There is no direct evidence of the deceased health prior to entering into the contract of insurance. I note that the parties’ agreed bundle of documents itself includes the Plaintiff’s denial of alleged admissions. See the Plaintiff’s letter dated 07th April 2006 to the Claims Manager-Colonial Health Insurance “The diabetic problem was only known when he Mr. Thakur had some dizziness and vomiting in late 2004. He visited Dr. Dip Chand who after a medical check confirmed that the symptoms were of diabetes”

24] The plaintiff has already denied that she or her husband gave the medical history pertaining to the diabetic since 1999. It is pertinent to say that there was no evidence that Mr. Thakur was aware of any diabetic problem until late 2004, after the policies current at the time of his death had been issued. There was, of course, no obligation on him to disclose any change in his health after the issue of those policies (NSW Medical Union Ltd v. Transport Industries Insurance Co. Ltd. (1985) 4 NSWLR 107).

25] Law on disclosure of material facts are lucid and several basic principles are enunciated Fiji Court of appeal in Blue shield (Pacific) Insurance Ltd v Wati [1997] FJCA 25; Abu0048u.95s (14 August 1997)

“The duty of disclosure is distinct from the requirement not to misrepresent facts. It arises out of the fact that a contract of insurance is a contract uberrimae fidei. A person seeking to be insured must disclose to the intended insurer any facts within his or her knowledge that are material, that is to say which would affect the mind of a prudent insurer in deciding whether or not to provide cover (Mayne Nickless Ltd v. Pegler [1974] 1 NSWLR 228). Facts are material if the person seeking the insurance knows that the intended insurer regards them as so, even though he or she might otherwise not regard them as material (Glicksman v. Lancashire and General Insurance Co. Ltd. [1925] 2 KB 593). The manner in which a person seeking insurance generally finds out what the intended insurer regards as material is by reference to the questions which the intended insurer requires him to answer. Of course, some persons may have such knowledge by reason of their having worked in the insurance industry or in connection with it. Mr. Stanton submitted that, because Dr. Dass was a medical practitioner, he would have had that knowledge. However, there was no evidence that he ever carried out medical examinations on behalf of an insurer or that he had any specialist qualifications relevant to the assessment of medical risks. In Condogianis v. Guardian Insurance Co. Ltd. [1921] 1 AC 125 the House of Lords held that, if upon the fair construction of a question which an insurer requires to be answered the person seeking to be insured gives a truthful answer, the insurer cannot contend that it wanted more information. In Dr. Dass' case the insurer asked only whether there had been a radical change in the status of his health from what it was two years before.'

26] The only available evidence that Mr. Thakur suffered diabetic since 1999, before this court are two medical letters/reports. One was issued by Dr. Ye Htut Soe, a medical officer who was attached to the CWM Hospital. In that letter;

"The above patient (Mr. Thakur) came to Accident and Emergency Department, CWM Hospital on 09/08/2005 for shortness of Breath.

According to his wife's information the patient was sick and shortness of breath and went to Dr De Asa's clinic yesterday......The patient had no history of hypertension or cardiac disease. But, he was suffering from Diabetes Mellitus since 1999....

According to his wife, the decease checked his blood sugar at home by himself and brought ant diabetic medicine Tablet Daonil from chemist shop and treated by himself. We did not have any medical records in our CWM Hospital"

27] The latter was issued by Dr. Virilio C. De Asa of Nasese Medical Centre on 05-12-2005 to the DW2-Mr. Sekope Waqa. In that letter he mentioned that;

"Above named patient (Mr. Thakur) presented to Nasese Medical Centre for the first time on the evening of 08-08-2005 with one week history of non-productive cough and breathlessness. Chest X-ray showed bilateral bronchitis changes on both base of lungs. Heart was not enlarged.

He was noted to have type 2 diabetes since 1999. No history of hypertension or heart problem. There was also no other previous consultations at Nasese Medical Centre"

28] It is to be noted that only Dr. De Asa had been called as a witness for the defendant. Dr. De Asa said that history of diabetes was given to him by the Deceased and he was ambulatory and coherent. But the Plaintiff, the deceased's wife gave evidence that her husband was very weak and did not tell anything to Dr. De Asa and she explained everything to Dr. De Asa. The deceased died following morning. According to Dr. Ye Htut Soe, the history was given by the deceased's wife, the plaintiff. This is two contrary positions, but deceased state of affairs may have been worsened on that morning. But the defendant failed to call Dr. Ye Htut Soe as a witness. The plaintiff has denied that she made this admission. As I mentioned earlier then burden goes to the defendant to prove that she (The Plaintiff) made the admission.

29] In Blue shield (Pacific) Insurance Limited – vs – Maureen Chandra Wati (supra) which is cited above, Fiji Court of Appeal observed;

"As the Respondent already given evidence denying that she made the admission, the onus was on the appellant to prove that she did. Detailed evidence which had been adduced from Mr. Prasad by the appellant. On the evidence which had been given it was, in our view, not unreasonable for the learned trial judge to as he did; even if he accepted Mr. Prasad's evidence, it would have been surprising if he had concluded that any admission made by the respondent added substantially to the sum of the established facts regarding Dr. Dass health in 1988 and 1989 and of his knowledge that those facts were material and should be disclosed".

30] I note that these reports cannot be treated as Medical records or reports. It is commonsense that diabetes to be traced and diagnosed by medical laboratory test through urine or blood. Everyone has some kind of sugar level in their blood if that level exceeds, he is known/diagnosed as diabetes patient. To ascertain the sugar level medical test to be done. In this case it was not done by these doctors and only evidence of Dr. De Asa suggested that the deceased told that he suffered diabetes since 1999. To prove this fact the deceased should be called as a witness and which cannot be done. In that event this fact becomes hearsay.

31] In CIVIL EVIDENCE ACT NO 27 OF 2002, section 2 interprets hearsay evidence.

"hearsay" means-

(a) a statement made otherwise than by a person while giving evidence in the proceedings which is tendered as evidence of on matters stated; and

(b) references to hearsay include hearsay of whatever degree.

32] In Section 3 says that hearsay evidence must not be excluded on the ground that it is hearsay. To admit hearsay evidence, certain formalities to be followed under said Act. In this case those formalities have not been followed by the defendant who relies upon them.

33] It is dubious whether the deceased was competent to make such a statement as he was sick and there are two contrary evidence/ position before this court. In that event section 7 of said Act applies.

7-(1) Hearsay evidence must not be admitted in civil proceedings if or to the extent that it is shown to consist of, or to be proved by means of, a statement by a person who at the time he or she made the statement was not competent as a witness.

(2) For the purpose of subsection (1), "not competent as a witness" means suffering from such mental or physical infirmity, or lack of understanding, as would render a person incompetent as a witness in civil proceedings.

34] On the other hand the deceased was not a doctor nor is his wife, the plaintiff a doctor. The mere assertion without producing any medical records as Mr. Charan suffered diabetes since 1999 is no good, strong evidence since medical opinion has to be formed to resolve this problem. Dr De Asa said that the deceased told about the medical history. But this also falls into hearsay as the deceased also giving hearsay statement since he is not a doctor and not performed any kind of medical test to ascertain his sugar levels. In the sense it amounts to multiple hearsays. In this case Dr. De Asa is not an expert witness as he did not perform any medical tests relating to the history of deceased's diabetes. Further in his letter indicated that he performed X ray on the deceased ""Above named patient (Mr. Thakur) presented to Nasese Medical Centre for the first time on the evening of 08-08-2005 with one week history of non-productive cough and breathlessness. Chest X-ray showed bilateral bronchitis changes on both base of lungs. Heart was not enlarged. But Dr. De Asa said, on evidence in chief, on that evening X ray room was closed and he instructed patient to come on following morning to do X ray. But following morning the Patient's condition was serious and transferred to CWM hospital immediately. Dr. De Asa was not particular what happened on following day. Then how Dr de Asa says "Chest X ray Showed..." Dr De Asa never treated this patient before that date. Other fact is Dr. De Asa admitted that he is in the panel of Doctors of the Defendant Company and his independency as a witness is questioned by the Plaintiff. Therefore Dr De Asa's evidence cannot be treated as strong evidence to resolve that Mr. Charan had diabetes since 1999. On the other hand the Medical, a letter of Dr. Ye Htut Soe is also not strong evidence as it contains hearsay evidence. It is based on the plaintiff's mere assertions but the plaintiff refuted this statement therefore it value is very low and diminished.

35] As this court noted earlier the existence of the condition and the fact of knowledge of the condition by the deceased are issues that have to be proved by the insurer, the defendant. I hold that the Defendant, insurer has not discharged that burden on balance of probabilities. The Deceased may have suffered Diabetes latently but it does not make policy invalid under material non disclosure. This was established in the case Fidelity and Casualty Co of New York v Mitchell [1917] AC 592. "The fact that the disease is latent in the system does not make the statement inaccurate". This principle was also adopted in NSW Medical Union Ltd v Transport Industries Insurance Co Ltd (1985) 4 NSWLR 107, where it was held that there is no obligation on the insurer to disclose any change in his/her health after the issue of those policies.

36] I have carefully considered both parties' evidence that have placed before me. I am afraid the evidence of the defendant cannot be accepted under law as those are hearsay evidence. If I treated them as direct evidence but that is also not sufficient to resolve this issue. The question of diabetes since 1999 is the crux of this matter to be proved by the defendant on balance of probabilities by acceptable evidence of law. I hold that the defendant failed to discharge its onus.

37] Hence the Plaintiff is entitled to the benefits under the policy and the defendant cannot avoid the liability therein. Therefore, considering above mentioned facts and specially that there is no reliable and substantial evidence with relates to medical condition (diabetes) of the deceased prior or when the insurance policy was accepted, I hold that the defendant has manifestly failed to prove their defence on the balance of probability to avoid the liability.

38] Hence I grant the judgment against the defendant as the Plaintiff prayed in her statement of claim with current legal interest as to the claim, $1000 as cost (Summarily assessed).

39] Judgment for the Plaintiff to be entered accordingly.

On 19th April 2011, at Nasinu, Fiji Islands

Sumudu Premachandra
Resident Magistrate-Nasinu