Court orders Discovery to pay client R25m incapacity claim

A “successful” stockbroker who had to quit his job following a traumatic personal incident has emerged victorious in the multi-year battle with financial services group Discovery to pay out his R25-million claim.

The man, who cannot be named for legal reasons, took out an insurance policy with Discovery, which would pay out in case he suffered permanent incapacity to earn a living.

He paid R20,000 a month in premiums towards the policy. The man, whom the Joburg High Court only referred to as PR, owned a villa in Mauritius.

It is at this villa that in December 2014 during a holiday with his girlfriend, disaster struck. PR’s girlfriend drowned in a swimming pool at the resort where the villa is located. He tried unsuccessfully to resuscitate her.

PR was immediately flagged as a suspect in the murder of his girlfriend. In January 2015, he was arrested and questioned by the Mauritian police. He was later charged with his girlfriend’s murder and detained pending a court trial.

On the day of his arrest, PR suffered a breakdown and was admitted to the “secure ward” of a local hospital and remained there for four days.

Evidence before the high court showed that PR’s health deteriorated rapidly and by March 2015, he had lost 20kg, and “looked mentally and physically exhausted,” according to Mauritian state psychiatrist, Dr Banymandhub.

PR was later acquitted of his girlfriend’s murder and in March 2016, returned to South Africa, where he was hospitalised in a Pietermaritzburg health facility.

He was then diagnosed with post-traumatic stress disorder and major depression. A doctor who attended to him found that PR’s Mauritian ordeal had a negative lasting impact on his daily life. He does not drive and struggles to keep appointments.
Judge Stuart Wilson, presiding over the matter at the Joburg High Court, said it was not challenged that PR’s incapacity could not have been diagnosed as permanent until an appropriate course of care and treatment had been administered.

“In this case, the kind of treatment required – in the form of drugs, in the form of psychotherapy and in the form of occupational therapy – can take months or years to perfect and to implement. In order to assess whether PR’s condition was permanent, Discovery had to have regard to evidence generated well after his policy expired,” the judgement reads.

“In closing the door to that evidence when it repudiated PR’s claim, Discovery was plainly unreasonable. Had it conducted itself reasonably, it would have become aware, by no later than May 1 2019, that PR’s incapacity had become permanent, and it would have been bound to pay out on the policy by that date.”

The judgement then found that Discovery is liable to PR under the policy and ordered the company to pay to him the sum agreed between the parties and that “interest will be payable on that amount from May 1 2019, being that date on which a reasonable insurer would have been satisfied that PR’s incapacity had become permanent.”

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