Page 1 of 31 THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE CV No. 2012 - 03492 Between RIAN MOYOU Claimant And MEDISERV INTERNATIONAL Defendant BEFORE THE HONOURABLE MR. JUSTICE ANDRÉ DES VIGNES Appearances: Mr. Kenneth Sagar instructed by Mr. Derrick R. Sankar for the Claimant Mr. Saeed Trotter for the Defendant JUDGMENT INTRODUCTION 1. The Claimant alleges that on 25 th August 2004 he entered into a Mediserv Medical Fund Contract with the Defendant for the provision of medical insurance coverage for himself and three members of his family. In or about October 2007, the Claimant was diagnosed with carcinoma of the stomach. In 2008, the Claimant submitted several claims for medical expenses incurred by him for the treatment of his condition but the Defendant repeatedly refused to reimburse him. Accordingly, the Claimant claims damages for breach of contract and reimbursement of the cost of his medical expenses in the sum of $131,379.06, interest and costs. 2. The Defendant denies that it agreed to provide medical insurance to the Claimant and his family members and contends that, in accordance with the terms of the applicable Contract,
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THE REPUBLIC OF TRINIDAD AND TOBAGO
IN THE HIGH COURT OF JUSTICE
CV No. 2012 - 03492
Between
RIAN MOYOU
Claimant
And
MEDISERV INTERNATIONAL
Defendant
BEFORE THE HONOURABLE MR. JUSTICE ANDRÉ DES VIGNES
Appearances:
Mr. Kenneth Sagar instructed by Mr. Derrick R. Sankar for the Claimant
Mr. Saeed Trotter for the Defendant
JUDGMENT
INTRODUCTION
1. The Claimant alleges that on 25th August 2004 he entered into a Mediserv Medical Fund
Contract with the Defendant for the provision of medical insurance coverage for himself and
three members of his family. In or about October 2007, the Claimant was diagnosed with
carcinoma of the stomach. In 2008, the Claimant submitted several claims for medical
expenses incurred by him for the treatment of his condition but the Defendant repeatedly
refused to reimburse him. Accordingly, the Claimant claims damages for breach of contract
and reimbursement of the cost of his medical expenses in the sum of $131,379.06, interest and
costs.
2. The Defendant denies that it agreed to provide medical insurance to the Claimant and his
family members and contends that, in accordance with the terms of the applicable Contract,
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the Claimant is not entitled to be reimbursed for his expenses as: (a) his illness was a pre-
existing condition which was excluded from coverage under the Contract; (b) his illness was
associated with or related to his past tobacco use which was also excluded under the Contract;
and (c) he misrepresented his smoking history on his claims. Accordingly, the Defendant
counterclaims for a declaration that it is discharged from liability in respect of the Claimant’s
alleged loss.
THE CLAIM
3. By Claim Form and Statement of Case filed on 24th August, 2012, the Claimant alleged as
follows:
a. On 25th August, 2004, the Claimant entered into a Mediserv Medical Fund Contract
(“the Original Contract”) with the Defendant for the provision of medical insurance
coverage for himself and three family members and was assigned Account No. 301540
under Plan Code CF110;
b. In or about October 2007, the Claimant was diagnosed with carcinoma of the stomach
and incurred the following medical expenses amounting to $131,379.06:
i. 3rd March, 2008 - Cancer test costing $2,955.00;
ii. 4th April, 2008 - Surgery and hospital bill costing $110,113.00;
iii. 3rd July, 2008 - Test costing $2,955.00;
iv. 7th September, 2008 - Cancer Test, Pathology Report and Blood Test costing
$2,900.00;
v. 8th November, 2008 - Test and Chemotherapy costing $12,456.06
c. Pursuant to the Original Contract, the Claimant submitted claims to the Defendant for
reimbursement of his medical expenses but the Defendant, by several letters from its
Claims Examiner II, Ms. Anna R. Bahadur, denied liability. By letters dated 27th May,
2008, 11th September, 2008 and 20th October, 2008, Ms. Bahadur indicated, inter alia,
that the Claimant was ineligible for reimbursement on the grounds that:
i. he failed to consume the necessary incubation period; and
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ii. his medical condition was outside the scope of the contract as it was associated
with the use of tobacco products.
d. By letter dated 16th July, 2008, the Claimant’s Attorney-at-Law wrote to Ms. Bahadur
to indicate, inter alia, that the medical reports of Dr. Kavi Capildeo and Dr. Denaesh
Ariyanayagam dated 12th June, 2008 and 25th June, 2008 respectively, outlined that the
Claimant’s symptoms in October 2007 appeared to be unrelated to any cancer-related
symptoms in 2006. Dr. Ariyanayagam’s report also indicated that there was no
incubation period documented for his medical condition and that the denial of the
Claimant’s claim on that basis was medically unjustifiable. Further, he stated that the
Claimant’s consumption of tobacco approximately 20 years ago did not contribute to
his illness;
e. The Claimant sought another medical opinion from Dr. Anesa Ahamad and, by letter
dated 8th July, 2008, Dr. Ahamad stated, inter alia, that it was unlikely that the
Claimant’s epigastric pain in 2006 was related to the diagnosis of gastric
adenocarcinoma; and
f. By failing to reimburse the Claimant for his medical expenses, the Defendant is in
breach of contract, in particular, Clauses 2A-2-1(7), 33, 47, 71 and 78 thereof.
DEFENCE AND COUNTERCLAIM
4. By Defence and Counterclaim filed on 16th November, 2012, the Defendant contended as
follows:
a. The Defendant did not enter into a contract for the provision of medical insurance
coverage for the Claimant and/or three of his family members. The Defendant is a
Friendly Society (pursuant to Section 5(1)(a) of the Friendly Societies Act, Chapter
32:50) and not an insurance company and is not authorized to and does not conduct
business as an insurance company;
b. The Claimant and the Defendant are members of a society named or styled the Ventures
and Investments Programme (“VIP”), with the Defendant being the Trustee of the Fund
established under a Mediserv Medical Plan (“the Plan”) for the benefit of the members
of the VIP. The Defendant is a risk management company which provides medical
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assistance and risk management services to the VIP and the Fund and the Plan are
managed and regulated in accordance with the Original Contract;
c. As a member of the VIP and together with the Defendant and other members, the
Claimant agreed for the Defendant, as trustee, to manage the Plan and the Fund in
accordance with the terms of the Original Contract. The VIP members contributed to
the Fund and the Defendant was authorized to set rules and terms and conditions for its
operation with the objective of protecting the viability of the Plan and the Fund;
d. By the terms of the Original Contract, the Claimant agreed to accept the rules of
conduct and conditions set by the Plan Administrator and the Defendant was permitted
to add, vary or delete any terms and conditions of the Original Contract at any time
without notice;
e. The Original Contract was revised in 2007 and replaced by Contract Version No.
PMC20070301 (“the Revised Contract”) which became effective on 1st March, 2007.
By letter dated 19th January, 2007, the Defendant notified the Claimant that the
Defendant intended to review the Original Contract. Prior to the Claimant’s anniversary
date of 1st October, 2007, his contract was renewed under the terms of the Revised
Contract. Accordingly, at all material times in 2008, the Revised Contract was the
applicable contract;
f. The Defendant is not bound by the terms and conditions of the Original Contract since
this was amended and/or altered and/or superseded by the Revised Contract. In any
event, the Claimant placed reliance on certain clauses in the Revised Contract in
support of his allegations of breach of contract by the Defendant;
g. The Defendant does not admit or deny the cost of the Claimant’s medical expenses and
puts him to strict proof thereof. In any event, even if the expenses incurred by the
Claimant were eligible for reimbursement under the Plan, the Plan does not provide
100% coverage for expenses incurred and any entitlement would be subject to the
schedule, rules and controls as set out in the Revised Contract and in particular, the
Summary of Benefits;
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h. The Defendant denies the assertions, findings, conclusions and opinions outlined in the
medical reports of Dr. Capildeo and Dr. Ariyanayagam. Further, the meaning of
“Incubation Period” as used in the practice of medicine carries a different meaning
from the meaning intended in the Revised Contract. “Incubation Period” as used in the
Revised Contract is an observation period used to determine whether any specific risks
are to be accepted within the Plan;
i. The Claimant was a past tobacco user and under the general exclusion clause of the
Revised Contract, (Clause 2A-4-4), all risks associated with tobacco or with tobacco
use are absolutely excluded. Accordingly, the Claimant’s admitted use of tobacco in
the past was a risk factor to his cancer, which is a risk excluded according to the
Incubation Period for carcinoma;
j. The findings of Dr. Ahamad do not affect the Defendant’s right to determine that the
Claimant’s illness is related to a risk absolutely excluded from the Plan;
k. When the Claimant made the claim for epigastric pain in 2008, the Claimant disclosed
that he had presented symptoms of epigastric pain in March 2006, a date within twenty
four months of the commencement date under the Plan on 1st October 2004.
Accordingly, the Defendant is entitled to treat the Claimant’s epigastric pain as a pre-
existing condition, which was an excluded risk under the Revised Contract. Further,
the Claimant failed to provide a medical certificate that he was cured of the pre-existing
epigastric pain, as required under Clause 2A-2-1(10) of the Revised Contract and the
Defendant is entitled to treat the 2008 diagnosis as a continuing illness;
l. None of the doctors relied upon by the Claimant expressed the underlying cause of the
Claimant’s condition and the Defendant was entitled to rely on Clause D of the Table
of Incubation Periods which provided that the Defendant is entitled to determine which
class the illness shall be listed within in the Table of Incubation Periods;
m. The Defendant is not in breach of contract for failing to reimburse the Claimant for
monies expended by him as the Claimant was not eligible for reimbursement for any
treatment, services and expenses related to or arising out of, directly or indirectly from
tobacco use as well as pre-existing conditions;
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n. The Claimant submitted medical claim forms seeking reimbursement for medical
expenses in which he either failed to indicate whether he had ever used tobacco or
tobacco products or indicated that he had never used tobacco or tobacco products. In
these forms, the Claimant certified that the answers therein were true and correct and
accepted that to omit and misrepresent any material fact would constitute a breach of
contract. However, by letter dated 1st April, 2008, the Claimant admitted that he had
used tobacco or tobacco products during “his twenties”;
o. The Defendant denies that when the Claimant applied to join the Plan he indicated that
he smoked during his twenties or that he did tests in relation to tobacco use, the results
of which were acceptable to the Defendant;
p. The Claimant’s use of tobacco does not and did not exclude him from the Plan but the
Revised Contract excludes coverage for illnesses related to tobacco use; and
q. Section 2A-4-7 of the Revised Contract provides that no legal action may be brought
to recover under the Plan if after one year of the occurrence of the loss, no written
notice of intended legal action has been given.
THE REPLY AND DEFENCE TO COUNTERCLAIM
5. By Reply and Defence to Counterclaim filed on 22 February, 2013, the Claimant contended
that:
a. He neither admits nor denies that he was assigned as a member of VIP and put the
Defendant to strict proof thereof;
b. The Defendant is a duly registered as a limited liability company under the laws of
Trinidad and Tobago and is not a Friendly Society as alleged;
c. He did not receive from the Defendant any notice of intention to review the Original
Contract and he did not renew his coverage under the Revised Contract;
d. The meaning and purport of the term Incubation Period is as stated in Dr. Capildeo’s
medical report as well as Paragraph K of the Original Contract and Page 5/Section 33
of the Revised Contract, all of which bear the same meaning;
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e. In completion of his application form to join the Plan, the Claimant disclosed his past
tobacco use which had stopped 29 years before. Consequently, the Defendant arranged
for its doctor to conduct tests on him and thereafter he was permitted to enter into the
contract with the Defendant;
f. His smoking some 29 years ago did not cause his medical condition. As a result, the
Defendant is liable as his claim falls outside of Clause 78; and
g. Some of the medical claim forms which he submitted for reimbursement contained a
clause asking whether he ever used tobacco or tobacco products but he did not omit or
misrepresent any material fact or breach the contract. The medical claim forms do not
form the basis of the contract and in no way affected the mind of the Defendant in
accepting the risk.
ISSUES
6. The following issues arise for determination in this matter:
a. Is the Defendant an Insurance Company or a Friendly Society?
b. Was the Claimant a member of the VIP?
c. What was the applicable contract as at the date of the Claimant’s claims - the Original
Contract or the Revised Contract?
d. Is the Claimant barred from bringing this action as a consequence of his failure to give
written notice of intended legal action?
e. Did the Defendant breach the contract by its refusal to reimburse the Claimant for his
medical expenses on the grounds that:
i. The Claimant failed to indicate in his claim forms whether he had used tobacco
or tobacco products or indicated that he had never used tobacco or tobacco
products?
ii. The Claimant’s epigastric pain was an excluded risk under the Pre-Existing
Condition clause, since the symptoms thereof presented themselves in March
2006 during the incubation period set out in the Revised Contract. Further, in
the absence of a medical certificate certifying that the epigastric pain symptoms
Page 8 of 31
in 2006 had been cured, the Defendant was entitled to treat the Claimant’s
diagnosis of carcinoma of the stomach in 2008 as a continuing illness?
iii. The Claimant’s past use of tobacco was an excluded risk under the terms of the
contract?
f. Is the Claimant entitled to the relief sought? If not, is the Defendant entitled to be
discharged from liability under the Plan?
DISPOSITION
7. For the reasons hereinafter set out, I am of the opinion and so find that the Claimant is entitled
to succeed in his claim for reimbursement of his expenses in the amount of $128,404.06 and
that the Defendant’s Counterclaim should be dismissed. I also find that the Claimant is entitled
to interest on the sum of $113,048.00 at the rate of 2.5% per annum from 27th May, 2008 to
the date of judgment herein and on the sum of $15,356.06 at the rate of 2.5% per annum from
11th September, 2008 to the date of judgment herein. I also order the Defendant to pay the
Claimant’s costs, to be determined based on the amount awarded pursuant to Rule 67.5 of the
Civil Proceedings Rules 1998 (as amended).
ISSUE A: Is the Defendant an Insurance Company or a Friendly Society?
8. I am of the opinion that the Defendant is not an insurance company for the following reasons:
a. In his evidence, the Claimant stated that “I entered into a family Mediserv Medical
Fund Contract… with the Defendant for the provision of medical insurance coverage
for myself and my family…”1 However, under cross-examination he accepted that the
term “medical insurance” was not used in the application form that he signed. He also
admitted that the word “insurance” was never used in the contract and that no
representative of the Defendant told him that it was an insurance company. As he put
it “they never volunteered that information”;
b. In its Defence, the Defendant denied the Claimant’s allegations that it was an insurance
company and that it provided medical insurance coverage to him and contended that it
was not authorized to conduct business as an insurance company. In his evidence, Mr.
Samuel Bernard stated that the Defendant was not an insurance company and was not
1 Witness Statement of Rian Moyou at para. 3.
Page 9 of 31
licenced to conduct business pursuant to the Insurance Act. This evidence was not
challenged in cross-examination;
c. According to Section 2(1)(a) of the Insurance Act, Chapter 84:01, the Insurance Act
governs all companies which carry on in Trinidad and Tobago, insurance business
which falls into any of the classes specified in the First Schedule of the Act. Section 3
of the Insurance Act defines “insurance business” as the business of or in relation to
the issue of or the undertaking of liability under policies to make good or indemnify
the insured against any loss or damage including liability to pay damages or
compensation contingent upon the happening of a specified event in the currency in
which the premium had been paid. Sections 11(1)(a) and 11(2) also stipulate that,
subject to the Insurance Act, no person may carry on insurance business in Trinidad
and Tobago unless that person is a company within the meaning of the Companies Act
or any other written law and mandates that such a company shall not carry on insurance
business of any of the classes specified in the First Schedule as insurer unless it is
registered by the Central Bank in respect of that class of business. The relevant section
of the First Schedule states that:
“1. “Ordinary long-term insurance business” means business of any of the
following classes:
… (b) the effecting and carrying out of contracts of insurance against the risks …
(ii) of the persons insured becoming incapacitated as a result of disease or
of a disease of a specified class,
if, in the absence of special circumstances specifically provided for in such
contracts, they cannot be terminated before the expiration of five years from the
date on which they were entered into…”
On the evidence before me there is nothing to suggest that the Defendant was registered
by the Central Bank as a company carrying out insurance business in accordance with
the above stated provisions of the Insurance Act. Further, the express terms of the
Original Contract did not specify that medical insurance was to be provided by the
Defendant to the Claimant. Therefore, I am of the opinion that the Claimant has failed
to prove that the Defendant was an insurance company and his allegations in that regard
amounted to no more than bald assertions.
Page 10 of 31
9. Further, I am of the opinion that the Defendant is not a Friendly Society. In its Defence, the
Defendant contended that it was a Friendly Society and by virtue of Section 5(1)(a) of the
Friendly Societies Act it was exempt from registration. The Friendly Societies Act states
that:
“5. (1) The following societies shall be societies to which this Act applies:
(a) societies (in this Act called friendly societies) for the purpose of
providing by voluntary subscriptions of the members thereof, with or
without the aid of donations, for—
(i) the relief or maintenance of the members, their husbands, wives,
children, fathers, mothers, brothers or sisters, nephews or nieces, or
wards being orphans, during sickness or other infirmity, whether
bodily or mental, in old age (which means any age after fifty) or in
widowhood, or for the relief or maintenance of the orphan children
of members during minority;…
However, this Act shall not apply to a friendly society which contracts with any person for
the assurance of an annuity exceeding two hundred and fifty dollars a year, or of a gross
sum exceeding two thousand five hundred dollars.
6. (1) Every society to which this Act applies shall be registered under this Act; and it shall
be deemed to be a sufficient compliance with the provisions of this section if, before any
subscriptions or fees are collected from any member, the Registrar, by writing under his
hand, permits any person named therein (hereinafter referred to as a “permitted person”)
to take the necessary steps for the formation of a society and the society is in fact registered
within six months of the permission being given.
7. (1) A society shall not be registered under this Act unless it consists of thirty-five persons
at least…”
The Defendant has failed to provide any evidence to enable this Court to determine that it
is a friendly society that is exempt from registration under the Act. In his witness statement,
Mr. Bernard baldly asserted that “Mediserv provides risk management services to assist
Page 11 of 31
members of a friendly society known as the Ventures & Investments Programme (VIP),
with managing their medical and wellness risks.”3
10. Accordingly, I find that the Defendant is neither an insurance company nor a friendly society,
since neither the Claimant nor the Defendant has adduced evidence to prove either contention.
ISSUE B: Was the Claimant a Member of the VIP?
11. Having considered the evidence adduced on this issue, I am of the opinion that the Claimant
was a member of the VIP.
12. In its Defence, the Defendant contended that the Claimant was a member of the VIP. In his
Reply, the Claimant contended that he could neither admit nor deny this and put the Defendant
to strict proof.
13. In his witness statement4 Mr. Bernard referred to the Claimant’s membership application form
which was approved by the Defendant. He also gave evidence that on the said form the
Claimant gave certain assurances in respect of his acceptance as a VIP member. This form was
annexed as SB5 to his witness statement.
14. Under cross-examination, Mr. Bernard indicated that the said form contained two (2)
applications: (1) an application to become a member of the VIP; and (2) an application to
participate in the Fund. Upon an examination of SB5, the first part of the document appears to
be an application for membership in the VIP and the second part, an application to participate
in the Plan. In respect of the application for VIP membership, SB5 clearly indicated that on 5th
August, 2004, the Claimant applied to become a member of the VIP. Therein, he indicated that
he was informed about the VIP by another member, Rolfe Moyou and that he desired excellent
service from the VIP. Further, the following words appeared on the form immediately above
where the Claimant affixed his signature: “I hereby apply for membership in the VIP…” Also
of note is the fact that in the following section of the form, which was the application for
membership in the Plan, the words “Venture Investment Programme” were included as the
Name of the Group.
3 Witness Statement of Samuel Bernard at para. 3 4 At paragraphs 25 and 26
Page 12 of 31
15. Under cross-examination on SB5, the Claimant stated that “I was given an application form. I
read it and signed it…”
16. Accordingly, the Defendant has proved to my satisfaction that the Claimant applied to become
a member of the VIP and was thereafter accepted.
ISSUE C: What was the applicable Contract as at the date of the Claimant’s claims – the
Original Contract or the Revised Contract?
17. It is not in dispute that at the time of the Claimant’s acceptance into the Plan and the
commencement date of the Claimant’s coverage under the Plan (1st October, 2004), the
Original Contract was the applicable version of the Mediserv Medical Fund Contract.
18. The Defendant alleged, however, that the Original Contract was revised in 2007 and that in
January 2007 the Defendant notified the Claimant of its intention to review the Original
Contract. The Defendant relied on clause 7 of the General Fund Description in the Original
Contract which provided that “The Principal agrees that the Company is hereby permitted to
add, vary or delete any terms or conditions of this agreement at any time without notice.”
19. In his witness statement,5 Mr. Bernard stated that the Defendant was permitted under the
Original Contract to make changes as it saw fit so as to manage the Fund and the Plan and that,
by letter dated 19th January, 2007, the Claimant was notified of the proposed changes. He also
stated that the Claimant did not raise any objection to the proposed draft revised contract which
became effective on 1st March, 2007. Accordingly, as at the date of the submission of the
Claimant’s claims, the applicable contract was the Revised Contract.
20. Under cross-examination, Mr. Bernard insisted that the Defendant was authorised to make
changes to the Original Contract and that this was not callously done.
21. In his Reply and Defence to Counterclaim, the Claimant denied receipt of the notification letter
or a copy of the Revised Contract until the latter was supplied to his Attorney-at-Law. In his
witness statement, he denied that he approved of or agreed with or signed as accepting the
terms of the Revised Contract and stated that he did not have an opportunity to review it and
was not bound by its terms since it was varied without his knowledge or approval. He also
denied receiving the notification letter.
5 Para. 23 – 24, 29-30.
Page 13 of 31
22. Under cross-examination, the Claimant maintained his position.
23. According to Chitty on Contracts:6
“At common law a contract may validly give to one contracting party the power
unilaterally to vary the obligations of the parties to the contract”
24. Halsbury’s Laws of England put it this way:7
“At common law, one party cannot unilaterally validly vary the terms of the contract
(except by way of release), but such unilateral variation may constitute a repudiation of
the contract by him. However, the original contract may validly grant to one of the
contracting parties a unilateral power of variation.”
25. Further, Wilken and Ghaly on The Law of Waiver, Variation and Estoppel8 stated as
follows on agreements permitting variation:
“2.43 The common law allows agreement permitting variation in two cases. First, when
the parties incorporate within the contract a set of rules themselves providing their own
variation or amendment… Second, where the parties have either expressly or impliedly
agreed that one or both of them should have the power to vary agreement, subject to one
caveat, that party will have that power. The caveat relates to powers to vary unilaterally.
Not only may such powers fall foul of the unfair contract terms legislation but Courts may
also require the power to be expressed in clear and unequivocal terms.” [emphasis mine].
26. By way of his written submissions, Counsel for the Claimant, Mr. Sagar submitted that the
purported variation of the Original Contract was unilateral and without the Claimant’s consent
and such a term in a contract was onerous, unconscionable, whimsical and oppressive. Counsel
relied on A Schroeder Music Publishing Co. Ltd v Macaulay (1974) 3 All ER 616 to support
his submission that the Original Contract should be compared with a contract where there was
no negotiation between the parties and as such there was no presumption that the terms were
fair and reasonable. As such, the Court should consider all the provisions to determine whether
the bargain was fair.
27. In my opinion, the issue of the unconscionability of the term of the Original Contract which
authorised the Defendant to vary the terms of the contract without notice to the Claimant was
6 Volume 1. 32nd Editio (2015) at para. 22-039 7 Volume 22 (2012) at para. 582. 8 3rd Edition (2012) at para. 2.43
Page 14 of 31
not raised by the Claimant in his Statement of Case or in his Reply and Defence to
Counterclaim. Significantly, in his Reply and Defence to Counterclaim, the Claimant did not
make any allegation that the relevant clause in the Original Contract which authorised the
Defendant to vary the contract without notice was oppressive, onerous, unreasonable and
capricious or that there was an implied term that the Defendant would not exercise this power
in an unreasonable, onerous, capricious or unconscionable manner. Further, although the
Claimant in his Witness Statement denied receipt of the notification letter or that he approved
of or agreed with or signed as accepting the terms of the Revised Contract and contended that
he was not bound by its terms, his allegations of breach of contract as set out at paragraph 19
of his Statement of Case relied entirely on clauses from the Revised Contract.
28. In light of this, in the absence of any pleading of the existence of an implied term and the
breach thereof by the Defendant, I find that the Claimant is not permitted to raise this issue for
the first time in the closing submissions. Further, there is no evidence that when the Defendant
revised and replaced the Original Contract in 2007 it acted dishonestly, for an improper
purpose or to the prejudice or disadvantage of the Claimant.
29. Accordingly, I am of the opinion that at the time when the Claimant submitted his claims for
reimbursement of medical expenses in 2008, the applicable contract between the parties was
the Revised Contract.
ISSUE D: Is the Claimant barred from bringing this action as a consequence of his failure
to give written notice of intended legal action?
30. I am of the opinion that the Claimant is not legally barred from bringing this action by virtue
of his failure to give written notice of his intention to initiate legal proceedings against the
Defendant.
31. In its Defence, the Defendant averred that pursuant to Section 2A-4-7 of the Revised Contract,
no legal action may be brought to recover under the membership plan if, after one year of the
occurrence of the loss, written notice of the intended legal action has not been given to the
company. However, the Defendant failed to lead any evidence to support this plea.
32. On the evidence, the Claimant incurred loss on the dates when the Defendant denied his claims
by letters from the Defendant’s Claims Examiner II, Ms. Bahadur dated 27th May, 2008, 11th
September, 2008 and 20th October, 2008. In his Statement of Case, the Claimant alleged that
Page 15 of 31
his former Attorneys-at-law wrote several letters to the Defendant in respect of its denial of his
reimbursement claims. In its Defence, the Defendant admitted receiving these letters.
33. On an examination of the said correspondence sent to the Defendant dated 20th August, 2008,
7th November, 2008 and 30th December, 2010 respectively, it is clear that the Claimant put the
Defendant on notice that he intended to pursue legal action against it.
34. In the circumstances, I am satisfied that the Claimant gave notice to the Defendant by letters
from his Attorney-at-Law dated 20th August, 2008 and 7th November, 2008 of intended legal
action. Accordingly, the Claimant is not barred from pursuing this claim against the Defendant.
ISSUE E: Did the Defendant breach the contract by its refusal to reimburse the Claimant
for his medical expenses on the grounds that:
a. The Claimant failed to indicate in his claim forms whether he had used tobacco or
tobacco products or indicated that he had never used tobacco or tobacco products?
b. The Claimant’s epigastric pain was an excluded risk under the Pre-Existing
Condition clause, since the symptoms thereof presented themselves in March 2006
during the incubation period set out in the Revised Contract. In the absence of a
medical certificate certifying that the epigastric pain symptoms in 2006 had been
cured, the Defendant was entitled to treat the Claimant’s diagnosis of carcinoma of
the stomach in 2008 as a continuing illness?
c. The Claimant’s past use of tobacco was an excluded risk under the terms of the
contract?
35. I am of the view that the Defendant breached the contract by its refusal to reimburse the
Claimant for his medical expenses (in relation to certain claims as identified below) based on
its determination that:
a. The Claimant’s responses on the claim forms with regard to his use of tobacco or
tobacco products amounted to a misrepresentation which entitled the Defendant to deny
liability;
b. The Claimant’s epigastric pain was an excluded risk under the Pre-Existing Condition
clause and the Defendant was entitled to treat the Claimant’s diagnosis of carcinoma
of the stomach in 2008 as a continuing illness; and
c. The Claimant’s past use of tobacco was an excluded risk under the terms of the contract.
Page 16 of 31
36. Halsbury’s Laws of England11 states as follows with respect to the interpretation of express
contractual terms:
“358. The basic principle is that interpretation is 'the ascertainment of the meaning which
the document would convey to a reasonable person having all the knowledge which would
reasonably have been available to the parties in the situation in which they were at the
time of the contract', or which is 'reasonably available to the person or class of persons to
whom the document is addressed'. It is clear from this that the document setting out the
parties' agreement is to be interpreted objectively. The knowledge reasonably available to
the reasonable person is referred to as the 'background' or the 'matrix of facts'…
360. It remains the case that the primary source for understanding what the parties meant
is their language interpreted in accordance with conventional usage, and where the parties
have used unambiguous language the courts must apply it even if it produces a
commercially improbable result. But it has also been acknowledged that the process of
interpretation is a 'unitary exercise' in the sense that the courts do not consider the words
used in a vacuum but always in the context of the 'background'. If, in that context (as is
often the case), there are two possible constructions, the court is entitled to prefer the
construction which is consistent with business common sense and to reject the other. It is
not necessary to conclude that, unless the most natural meaning of the words produces a
result so extreme as to suggest that it was unintended, the court must give effect to that
meaning, though clearly the courts are more likely to depart from the ordinary meaning of
the words used if that meaning would lead to an absurd result. Furthermore, it is the task
of the court to construe the contract as a whole and an over-literal interpretation of one
provision without regard to the whole may distort or frustrate the commercial purpose. On
this basis, the court may give effect to the intention of the parties by transposing words;
supplying omitted words ; rejecting misnomers or surplusage ; correcting grammatical
errors; and construing ambiguities to save a document. What is not permitted is for the
courts simply to produce the contract which they think the parties ought reasonably to have