Insurance company, Discovery Life instituted action seeking to recover a staggering R16 million it paid to a man who claimed that he was unable permanently unable to work due to depression.
The KwaZulu-Natal man, Sunil Pranpath, who is an accountant by profession had different policies with Discovery Life.
Pranpath had a disability and income protection cover in the event that he became totally and permanently unable to perform his duties as an accountant.
In June 2023, he lodged a claim under both policies when he experienced orthopaedic injuries which he suffered after he was knocked over by a car whilst walking.
The claim was accepted and the money was paid.
In February 2015, he lodged a mental and behavioural disability claim under both policies, saying that he suffered from major depression and chronic pain which prevented him from working.
The claim was approved and paid in December 2016.
According to court papers, it was a contractual requirement for a valid claim that Pranpath must have suffered and continue to suffer a loss of the majority of his income.
As a result, such claims are therefore constantly under review because it is possible that an insured client might recover and regain the ability to work, in which event the insured is no longer entitled to receive disability and income protection benefits.
Discovery Life conducts those reviews by requiring the insured person to complete claim review forms and questionnaires periodically.
Subsequent to the initial benefits being paid, Pranpath completed three continuous claim forms starting from June 2018, August 2019, and August 2020.
In all of the reviews, Pranpath represented that he was totally unable to work as an accountant, was not working as an accountant, and did not foresee that he would return to work at any specified date or time.
He indicated the same in a quality of life questionnaire which he completed in September 2019.
However, it was discovered that Pranpath was able to work and continued to work throughout the period of August 2019 to August 2020, meaning his the responses to the review forms and questionnaire were a misrepresentations.
Pranpath denied the accusations.
To prove that the claims were fraud, the insurance company said it conducted surveillance on Pranpath for a couple of days in October 2019 and it discovered that he was earning an income as an accountant as he was spotted at his work place during normal working hours.
In addition, in September 2020, he refused to provide his income tax assessments and bank statements for the period of 2012 to 2017 despite contractual obligations requiring him to do so.
Discovery sought relief in the KwaZulu-Natal High Court in Durban to compel Pranpath to provide full financial information dating back from 2012 until date.
The documents included incorporation documents, bank statements, management accounts, financial statements (whether audited or unaudited), tax submissions, assessments and returns, records relating to payment of staff and PAYE and EMP 501 returns.
The insurance company also wanted to know sole proprietorship through which he trades or traded under the name of Sunil Pranpath Inc, and three corporate entitles of which he is the sole member and or director.
In his response, Pranpath said that it would be too costly for him to obtain the documents and added that some of the requested documents had already been obtained under subpoena, and some of the documents did not exist and almost all the documents were not relevant for various reasons.
Discovery indicated that it did not require Pranpath to produce documents which are not in his possession, merely that he disclose their present whereabouts if known and added that his complaints regarding costs were unfounded.
Acting judge Anna Annandale was not convinced with Pranpath’s argument and said the documents were relevant to assist Discovery to make an informed decision.
“Even if certain documents ultimately turn out not to be relevant, that does not necessarily mean that the application was bad,” said the judge.
Pranpath was ordered to provide Discovery Life all the documents that were requested from him within 10 days.
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