IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)
						CASE NUMBER:17351/2010
						DATE:15 SEPTEMBER 2010
In the matter between:

and

JUDGMENT

1.1. That the Respondent forthwith reinstates the membership of the Applicant as a member of the Respondent;
1.2. That the Respondent is ordered, for so long as the Applicant remains a member of the Respondent, to deal with and process and pay all claims submitted by or on behalf of the Applicant in terms of its rules and is interdicted from declining to deal with, process and pay any such claim;
1.3. That the Respondent is ordered to stop the reversal of any payments made to any service providers in respect of the hospitalisation of the baby born to the Applicant and his ex-wife on 9 February 2010;
1.4. That, in the event that any reversals of payments have already been made in respect of the hospitalisation of the baby born to the Applicant and his ex-wife, that such payment be re-effected forthwith;
1.5. That the Respondent forthwith make available to the Applicant a copy of its rules;
1.6. That the Respondent is ordered to pay the costs of this application."

What gave rise to this application is the following. The applicant, who is a medical practitioner, completed an application form to be admitted to a "Hospital Plan" with the respondent on 20 December 2009. The cover was in respect of his "wife", himself and five children. At the time his "wife" was pregnant. On 9 February 2010 she gave birth to her sixth child, a daughter, who was born with a heart condition. This resulted in her undergoing a procedure whereby a pacemaker was implanted. The procedure was performed at the Sunninghill Hospital. Another one of his children developed a condition which is known as a muco-coele in December 2009. A procedure to drain this muco-coele was performed on her during December 2009 prior to the applicant completing the application form in respect of the hospital plan.

On 29 June 2010 the respondent wrote to the applicant, informing him that his membership with the respondent had been terminated, because of his non-disclosure of the fact that his daughter had had a muco-coele, which was alleged to have been a material non-disclosure on the part of the applicant. The applicant was of the view that the disclosure was not material as muco-coele is a minor condition, which is not directly linked to any of the questions contained in the applicant's application form. By virtue, however, of the allegations contained in the founding affidavit to this application, the respondent realised that there were certain other non-disclosures and/or material representations contained in the application form which had been submitted to it.

The other material misrepresentations and/or non-disclosures relied on by the respondent are the following:
1. In the application form the applicant referred to Tasneem as his wife. In fact he had been divorced from her since October 2006. He, therefore, falsely created the impression that they were still married.
2. He indicated in the application form that he was still living with his wife at the same address, whereas in truth and in fact they were separated and lived apart. The respondent's rules provides that ex-spouses may remain as adult dependants, but this does not apply to persons who are already divorced at the time when the principal member joins the scheme.
3. He claimed that Zareefa, who was born in June 2005, was his daughter in the following circumstances: On 31 October 2006 he and his wife were divorced and his wife was awarded custody of four minor children. Yet, a fifth child was included in the application form which was ostensibly born more than a year prior to the divorce.  In addition, the applicant disclosed that his spouse was pregnant at the time that the application was made. At that stage however the parties had been divorced for more than two years.

18. Thus, the test in respect of both positive and negative misrepresentations is not whether the reasonable person would have disclosed the fact in question, but whether the reasonable person would have considered the fact reasonably relevant to the risk and its assessment by an insurer.

It is trite that a person in the position of the applicant has a duty of good faith to a party in the position of the respondent. This includes a duty not to misrepresent or fail to disclose a fact which is material to the contract proposed to be entered into.

material to the question of his and his declared dependants membership of the scheme. Where, as in this case, the respondent has been induced to enter the contract with the applicant on the strength of misrepresentations and nondisclosures, he is entitled to avoid the contract. This is so, irrespective of whether the misrepresentations or nondisclosures were fraudulent, negligent or completely innocent.

I have no doubt that in the eyes of any reasonable, right thinking person, these misrepresentations to which I have referred would be regarded as material. The reasons for this are so self-evident that I do not believe that it requires any further motivation. By the same token, however, I am not convinced that the applicant's failure to disclose the existence of his daughter's muco-coele was material. It is common cause that this is a minor ailment, less serious apparently or at best as serious as a common cold. The nature of the questions contained in the applicant's form indicate that the information required by the respondent related to serious and/or chronic conditions, which may in the future require hospital treatment. There is no suggestion that muco-coele falls within that category.

There was no suggestion that such treatment was not available at State hospitals or alternatively that the applicant, or his "wife", would be unable to afford to pay for such medical expenses pending the outcome of the decision by the council of medical aid schemes. Both the applicant and his "wife" are medical doctors and they do not appear to be destitute.

In the circumstances the application is dismissed with costs, such costs to include the costs of 16 and 19 August 2010.