Eghan Modeste v Nagicor (St Lucia) Limited

EASTERN CARIBBEAN SUPREME COURT IN THE HIGH COURT OF JUSTICE SAINT LUCIA COMMERCIAL DIVISION CLAIM NO. SLUHCM2022/ 0020 BETWEEN: EGHAN MODESTE Claimant and NAGICOR (ST LUCIA) LIMITED Defendant Before: The Hon. Mde. Justice Cadie St Rose-Albertini High Court Judge Appearances: Ms Asha James, for the Claimant Mr Daune Jn Baptiste, for the Defendant 2022: November 24 December 9 – Written Submissions December 29 – Authorities 2023 October 3 DECISION

[1]ST ROSE-ALBERTINI, J. [Ag] : Before the Court are two applications for summary judgment, filed by each of the parties to this claim.

[2]The claim concerns a Policy of Medical Insurance (“the Policy”) entered into between the claimant and Clico International Life Insurance Limited (“Clico”) in 2008. It is stated on the face of the Policy that the premium is $81.31 (“the 2008 premium”) the Policy Date is 28th October 2008 (“Policy Date”), and the expiry date is 28th October 2048 (“expiry date”).

[3]In April 2021 the defendant informed the claimant that it had completed the acquisiiton of all policies held by Clico, including the claimant’s policy for medical insurance. Then in August 2021 the defendant notified the claimant that the Policy would expire in November 2021 and thereafter the monthly premium of $81.31 would increase.

[4]The claimant took the positionthat the Policy was to remain in force, at the 2008 premium, until the expiry date in 2048, and continued making monthly payments of the said amount.

[5]The defendant contends that at the 2008 premium, the Policy became commercially impracticable, and the claimant was offered an upgraded package of benefits at an increased premium, which the claimant rejected. Notice of intention to not renew the Policy on the existing terms was given to the claimant in August 2021, and in November 2021 the defendant proceeded to treat the Policy as having expired and returned to the claimant premiums paid for the months of November and December 2021, and January, February and March 2022.

[6]Both parties accept that the Policy as issued by Clico was set to expire on 28th October 2048. However the defendant says it had the right to review and renew the Policy on each anniversary on the Policy Date, this being 28th October of each successive year, and to provide different terms if necessary, up until the expiry date in October 2048.

[7]The claimant being dissatisfied with the defendant’s actions, filed this claim, and thereafter an application for summary judgment was filed by each party.

The Issue

[8]The sole issue for consideration is whether summary judgment should be given in favour of the claimant, or the defendant. The Law on Summary Judgment

[9]CPR15.2 empowers the Court to enter summary judgment in the following circumstance:s “15.2 The court may give summary judgment on the claim or on a particular issue if it considers that the – (a) claimant has no real prospect of succeeding on the claim or the issue; or (b) defendant has no real prospect of successfully defending the claim or the issue.”

[10]The application of this rule is well established in this jurisdiction. In this regard, in Dr. Martin Didier et al v Royal Caribbean Cruises Ltd1 the Court of Appeal stated: “In disposing of a claim using the Part 15 summary judgment procedure, the legal issues in the case are considered by the court and then it is determined, on a balance of probabilities and in light of the affidavit evidence adduced by the parties, whether one party or the other has no real prospect of succeeding on the claim. A judgment entered on a summary judgment application is a judgment on the merits which operates as issue estoppel. No further litigation on the same issue(s) will be entertained by the court.” [22] Either a claimant or a defendant may apply for summary judgment to be entered on a claim or a particular issue pursuant to CPR 15.4(1) and (2), or the court may exercise its powers and deal with the claim or issue summarily at any case management conference pursuant to CPR 15.4(3). A party who applies to have summary judgment entered on a claim must file affidavit evidence in support of the application and so too must a respondent who wishes to rely on evidence. This filing of affidavit evidence is a crucial part of the summary judgment procedure and forms the basis for the court’s application of the legal test for entry of summary judgment. [23] While a claimant’s pleaded case may be properly constituted, it may very well be completely hopeless in the face of a defendant’s defence, and therefore, the claimant will have no real prospect of succeeding. Similarly, a defendant who puts forward a defence which clearly cannot stand up to a claimant’s pleaded case will have no real prospect of successfully defending the claim. In either of these instances, it would be appropriate for the court to enter summary judgment on the claim pursuant to Part 15 of CPR provided that the issues in the claim are ones which are suitable to be dealt with using the summary procedure. In disposing of a claim summarily, the court would essentially consider the legal issues in the case, determine, on a balance of probabilities and in light of the affidavit evidence adduced by the parties, whether one party or the other has no real prospect of succeeding on the claim and enter judgment accordingly. This will be a judgment on the merits.” 1 SLUHCVAP2014/0024 delivered on 6th June 2016 at para 1 of the headnotes and para 22-23, of the judgment

[11]The Court of Appeal accepted that summary judgment is suitable for cases where abbreviated procedure and affidavit evidence will sufficiently expose the facts and the legal issues.2 The Claimant’s Application

[12]The grounds of the application are that: 1. In breach of the Policy the defendant unilaterally increased the monthly premium before the expiry date and changed the expiry date to November 2021. 2. CPR10.5(1)requires that a defence must contain all the facts upon which a defendant intends to rely and CPR 10.5(4) requires a defendant who denies an allegation in the claim to state the reasons for doing so and to set out its own version in the defence. Further CPR10.7 stipulates that a defendant may not rely on any allegation or factual argument which is not set out in its defence. The defendant has admitted all of the material facts pleaded by the claimant, by express admissions in its defence but has failed to set out its own version of the events. Such admitted material facts include the following:- a. the Policy exhibited to the statement of claim as EM1 is the only document containing the terms and conditions of the medical insurance policy, and has not been changed by the parties after the date of issue; b. the Policy was set to expire on the expiry date in 2048 and the 2008 premium was to be paid monthly until such expiry date; c. from the date of issuance of the Policy, until the filing of the claim, the claimant tendered payment of the 2008 premium, each month; d. by letter dated 21st February 2022 exhibited with the statement of claim as EMS the claimant requested that the defendant provide evidence of any other document that contained terms of the Policy, and up to the time of filing the claim the defendant had not provided any such document; e. the Claimant, on several occasions objected to the defendant’s assertions that the Policy allowed increases to the premium, or to permitted termination before the expiry date in 2048 (see exhibits EM4 EM6, EM10). 2 See Robert Edward Jones v Her Majesty’s Attorney-General sued on behalf of New Zealand Police [2003} UKPC 48 at para. 5. 3. It is said at paragraphs 4(D and 4(g) of the defence that offers of ‘new terms’ were made to the claimant but the defendant has not shown any basis upon which it was empowered to unilaterally change the terms or to offer new terms. 4. All the facts upon which the parties can rely are sufficiently exposed at this stage of the proceedings and accordingly, there are no disputed issues of material facts. 5. Further, the evidence in respect of the only issues in dispute is complete at this stage of the proceedings, namely, (i) the interpretation of the express terms of the Policy, such evidence being the Policy itself and (ii) the availability of exemplary damages to the claimant, which evidence is exhaustively contained in the exhibits to the statement of claim. 6. On the basis of the agreed facts and the evidence the defence is unsustainable because: a. the Policy expressly and unequivocally states the expiry date, and that the 2008 premium is to be paid until such expiry date; b. the Policy contains no terms empowering the Defendant to unilaterally change the 2008 premium before the expiry date, or to change the expiry date to an earlier date; c. other than the Policy contract, there is no other document containing terms of the Policy and no disclosure of documents later in the proceedings will reveal otherwise; and d. contrary to the defendant’s denials at paragraph 3 of the defence, the claimant was informed that the Policy would expire on 1st November of 2021 (see exhibit EM7) 7. Based on the admitted facts and the evidence already adduced, the claimant is entitled to the relief claimed including exemplary damages, as the conduct of the defendant was reprehensible and showed a cynical disregard for the rights of the claimant, which falls within the scope of an intention to profit from such conduct. Consequently, the defendant should be punished, deterred and prevented from engaging in such conduct by an award of exemplary damages. 8. The points of law upon which the dispute is premised admits a plain and obvious answer, in favour of the claimant, and summary judgment should be given, as the defendant has no real prospect of defending the claim. Further, the overriding objective of reducing wasted resources would encourage summary disposal of the claim in favour of the claimant, and the matter ought not to proceed beyond the initial stages.

[13]The application is supported by the affidavit of Mr Aghan Modeste, which contains a chronology of the facts and matters as alluded to above, and he prays that summary judgment be entered in the following terms: (i) that the Policy remain in effect until the expiry date in 2048; (ii) the monthly premium remain fixed at $81.31 until the expiry date in 2048; (iii) the claimant be awarded exemplary damages of $100,000.00; and (iv) costs be assessed on application by the claimant.

The Defendant’s Application

[14]In summary the defendant seeks an order that the claim be summarily dismissed, with costs. The grounds are that: 1. The claimant has no real prospect of succeeding on the claim, as the Policy has been terminated in accordance with its terms and conditions. 2. The Policy afforded the defendant the ability to not renew the terms beyond the anniversary of the Policy Date, by providing notice of such intention, and the defendant’s non-acceptance of the 2008 premium remitted persistently by the claimant, after notice was given, resulted in lawful termination of the Policy. 3. The terms of the Policy did not contemplate a fixed premium from inception until the expiry date, and it is only that the Policy provided that it would not be renewable after the expiry date. 4. The Policy did not require the defendant to provide coverage to the claimant beyond the date when the next premium was due and payable, and the claimant essentially seeks an order for specific performance which is not an appropriate relief in these circumstances. 5. The claimant’s pleadings and the prevailing circumstances do not support a claim for exemplary damages.

[15]The application is supported by affidavit of Ms Adele Jn Baptiste, General Manager of the defendant. She deposed that in 2008 Clico encountered grave financial difficulties and the court appointed a Judicial Manager, who approved a Scheme of Transfer of Insurance Business Agreement between Clico and the defendant. Under this Scheme the defendant acquired all Clico’s medical insurance policies, which included the Policy belonging to the claimant.

[16]She agreed that the Policy, which is exhibited as AJ13, called for a monthly premium of $81.31 and stated an expiry date of 28th October 2048. Upon review, the defendant concluded that the almost 13-year period since issuance, had made it commercially impracticable to renew the Policy, thus by way of email dated 10th August 2021 shown as exhibit AJ2, the claimant was informed of the intention not to offer renewal terms on the current plan. Considering the claimant’s desire for medical insurance coverage, the defendant composed and offered him an upgraded insurance policy, which included better coverage at an increased premium which ranged from $118.00 to $160.96. The claimant rejected the offer and insisted that the defendant was obligated to keep him covered at the 2008 premium, until the expiry date. The claimant made multiple attempts to continue to pay the 2008 premium, however the defendant did not accept these payments.

[17]Ms Jn Baptiste stated that under the terms of the Policy the defendant was not duty bound to provide coverage to the claimant at the 2008 premium, until October 2048. Further, by the terms of the Policy the defendant was not required to provide coverage beyond the date for which premiums had been paid by the claimant and accepted by the defendant, and was entitled to indicate its intention not to renew the Policy. Additionally, the Policy was not renewable after the anniversary of the Policy Date on or after the claimant’s 65th birthday, being 28th October 2048, when it would expire.

[18]Mr Modeste filed an affidavit in response to the defendant’s application, persisting in the assertion that the Policy was to continue at the 2008 premium until the expiry date, and further, that the basis of the claim is breach of contract and not specific performance as suggested by the defendant. He reiterated the chronology of events leading up to the filing of the claim and provided further details of the coverage to which he was entitled under the Policy. He stated that the defendants posture that the Policy was commercially impracticable was an indication of its high handed conduct, for its own benefit. The claimant further stated that he obtained the Policy at age 25 and was bound to receive medical coverage up to a limit of $1,000,000.00 at the 2008 premium, which was to remain in effect for 40 years, until 3 Also exhibited to the Statement of Claim as EM2 he attained the age of 65. He stated that the defendant had not met the threshold for establishing that the claim was not viable.

The Claimants Submissions

[19]Counsel for the claimant submitted that the defendant has no prospect of successfully defending the claim, as all the material facts relevant to the claim are undisputed and exhaustively before the court. As the facts pleaded by the claimant have not been disputed, the claimant’s application remains unchallenged, and the defendant has produced nothing to demonstrate that there is indeed a real prospect of defeating the claim. [20) Counsel contends that the central and only issue in dispute is whether on the face of the Policy which expressly and unambiguously stipulates the expiry date and the 2008 premium, the defendant is entitled at its convenience, to terminate the Policy and/or to increase the premium, before the expiry date. Counsel argued that the defendant has failed to identify any clause in the Policy which challenges the express language that it will expire on the expiry date and that the 2008 premium be paid until such expiry date. Although the defendant denies the claimant’s allegations of breach and loss, the defendant has failed to show how or why it is not in breach of the clear and express terms of the Policy. Thus, there is no chance of successfully defending the claim, the defence cannot withstand the claimant’s pleaded case, and any prospect of success of the defence is fanciful.

[21]Regarding the defendants applicatoi n, Counsel for the claimant submits that it is without merit, because the express and unambiguous terms of the policy provide no avenue for the expiration of the policy before the expiry date, no avenue for terminating the policy or varying the premium, or determining new terms, before the expiry date. The Policy which was issued in 2008 was acquired by the defendant on the same terms and conditions, thus the defendant cannot unilaterally change the terms of the Policy, and in any event the very terms of the Policy do not permit this. Moreover the defendant has failed to identify any terms which permits termination, and all that is said is that the Policy was commercially impracticable in its current form.

The Defendant’s Submissions

[22]Counsel for the defendant submitted that the relevant facts are not in dispute, however the disagreement between the parties concern the construction of the terms of the Policy. Although the 2008 premium and expiry date are stated in the Policy, the defendant always had the right to terminate the contract or vary the premium. In 2021 the defendant communicated with the claimant on multiple occasions, and then by email of 10th August 2021 conveyed its intention not to renew the Policy on its current terms. Instead, the claimant was offered an upgraded policy at an increased premium. The claimant rejected the offer and made multiple attempts to pay the 2008 premium, which the defendant repeatedly refused to accept.

[23]Counsel says that the claimant’s contention that the Policy binds the defendant to provide medical coverage at the 2008 premium until expiry in 2048 is unsustainable, and several clauses in the Policy support the position that the defendant was entitled to not renew the Policy, provided the claimant was given adequate notice. Further, the claimant’s contention that the defendant could only be relieved of its obligations if he failed to pay the 2008 premium, is flawed, as the defendant was not compelled to provide coverage beyond the date that premiums had been paid and accepted.

[24]Counsel submits that the Policy would have expire by effluxion of time and could not be renewed beyond the expiry date, provided it remained in force between the parties up to that time. This is only one way by which it could come to an end, but the Policy is replete with references to its “renewal” and expressly states that” “This Policy shall not be renewable beyond the anniversary of the Policy date on or after the lnsured’s 65th birthday, on which date it will expire.”4

[25]Counsel further submits that this term commonly features in various risk policies, save and except life assurance policies, and relied on the following extract from McGee in The Modern Law of Insurance to amplify its meaning. The extract states:- 4 See Tab 1 of Defendant’s List of Authorities under the rubric “Eligibility For and Termination of Coverage” (5 lines from the bottom of the page. “As a general principle the ‘renewal’ of an insurance contract is properly regarded as the creation of an entirely new contract, albeit that the tenns are often very similar to those of the previous contract …” (26) Further, clause 10 of the ” General Provisions” unambiguouslysays that premiums must be paid in advance and in accordance with the premium rates in effect, and states: “All premiums are payable in advance to the Company, in accordance with the Company’s premium rates in effect on the date of each renewal.” (27) Counsel argued that this means on each renewal date the premium in effect could be different to the premium previously paid, and this clause completely erodes the claimant’s contention that the 2008 premium was fixed until 2048. Counsel opined that the claimant’s construction of the clause offends business common sense, and is commercially impractical, as it would be unreasonable for the defendant to maintain the 2008 premium until 2048, without any regard for inflation, among other things.Thus, the Policy could have come to an end as it did, prior to the expiry date, once it was not renewed by the parties. The only significance of the expiry date expiry date is that it merely served to indicate the date upon which the Policy would automaticallyexpire,and the date beyond which no further renewals could be considered. (28) Counsel says renewal is an event which occurs annually on each anniversary of the Policy Date, and such successive renewal on each anniversary would end on the expiry date, and there could be no renewal after 2048. Thus, it is incorrect to say that renewal of premium will only be applicable in 2048, because the clear wording of the Policy is that it is not renewable beyond the expiry date, but is renewable on all prior anniversary dates, which would be from 28th October 2009 and continuing in each successive year until 2048, at which time it will come to an end. It is the defendant’s position that an insurance policy is a contract, and while contracts may have specified termination dates, they can also be terminated prior to such date for several reasons, and this principle equally applies to the Policy. Counsel contends that the law and the terms of the Policy do not support the central plank of the claim, which is that the 2008 premium was to remain fixed until October 2048, consequently the entire claim must fail.

[29]Counsel submits that an examination of clause 3 under the “General Provisions” will reveal that the Policy was terminable by the defendant upon providing the claimant with at least 30 days’ notice of the intention not to renew the Policy. In that regard, it provides: “3. Grace Period: Unless not less than thirty days prior to the premium due date the Company has delivered to the insured or has mailed to his last address as shown by the records of the Company written notice of its intention not to renew the Policy beyond the period for which premium had been accepted a grace period of thirty-one days will be granted for the payment of each premium falling due after the first premium, during which grace period benefits will be suspended.”

[30]Counsel posits that the term ‘grace period’ does not apply to the non-payment of premiums, as suggested by the claimant. The clause does not state 30 days after the premium is due, but rather notice may be given 30 days prior to the premium due date, of intention not to renew. Thus, to say that renewal arises only in 2048 makes rubbish of the grace period clause, as the claimants interpretation would means that the insurer could only give notice of its intention to not renew once, which is 30 days prior to the expiry date. As the clause clearly speaks of notice of an intention not to renew, it must be construed in the context of the entire Policy. Counsel submits that consistent with this clause, by email dated 10th August 2021, the defendant informed the claimant that it would not be offering renewal on the same terms, as of 1st November 2021, thus the claimant was provided with notice as required under clause 3 of the Policy, which was in excess of the 30-day requirement.

[31]Further, Counsel says that clause 10 of the “General Provisions” provide that: “10. Payment of Premiums The payment of any premium shall not continue this Policy in force beyond the date when the next premium is due and payable, except as may be otherwise provided herein”.

[32]This means that the Policy did not provide for its compulsory existence from October 2008 until October 2048, and could have been terminated before that date, in multiple scenarios, including non-acceptance of the 2008 premium by the defendant. Thus, the non-acceptance of the claimant’s payments of premium after notice was issued of the defendant’s intention not to renew on the current terms, had the immediate effect of discharging the defendant of any obligation to provide the claimant with medical coverage.

[33]In support of this position Counsel relied on an extract from MacGillivray on Insurance Law5 which states the following: “In the case of risks other than life, the assured is not given an absolute right of renewal, the continuance of the policy being conditional not only upon the payment of the premium by the assured but also upon the acceptance of it by the insurers (Law Accident Ins. Soc. v Boyd 1942 S.C.384;Simpson v Accidental Death Ins. Co. (1857) 2 C.B. (N.S.) 257. In any such case the insurers may terminate the risk at each renewal period by refusing to accept the premium tendered.”

[34]Counsel submits that as clause 10 also says that “All premiums are payable in advance to the Company, in accordance with the Company’s premium rates in effect on the date of each renewal”, the use of such wording makes it clear that the premium may be subject to change on each anniversary of the Policy Date. Further, the extract from McGee explains what is renewal, and it requires participation from both parties. If the premium is not agreed then there is no new contract and the Policy comes to an end. Thus, to say that the premium is fixed does not reflect the clear wording of these clauses, and they do not convey that the claimant would pay the 2008 premium until 2048.

[35]Counsel further contends that the defendant’s actions in refusing to accept the premium tendered by the claimant, is cogent evidence of the Policy having come to an end, and the following conclusions flow from the examination of the Policy and the applicable law: (a) The Policy was not renewable beyond the expiry date, and the arrival of that date was only one way in which the Policy could have come to an end; (b) The expiry date identified a time when the parties would be barred from renewing the Policy; (c) The 2008 premium was not fixed and was subject to review and possible adjustment by the defendant at the time of renewal; (d) The Policy could have been and was properly terminated by the defendant providing the claimant with the requisite notice; and (e) Notwithstanding the expiry date, the payment of premium did not continue the Policy in force beyond the date when the next premium was due and payable, and the non­ acceptance of the claimant’s payments of the 2008 premiums, resulted in termination of the Policy. [36) Concerning exemplary damage Counsel submitted that the dicta of Devlin LJ in Rookes v Bernard which the claimant sought to rely upon provides three scenarios in which exemplary 5 Tenth Edition at page 175, paragraph 7-38 damages may be awarded, and they are: (i) oppressive arbitrary or unconstitutional conduct by a servant of a government; (ii) where the defendant’s conduct is calculated to make a profit; and (iii) where there is a statutory right to exemplary damages. None of these are applicable to the present case.

[37]In concluding Counsel opined that the defendant has demonstrated a very real prospect of successfully defending the claim, and as such the claimant’s application and request for exemplary damages ought to fail. As the claimant is evidently without any prospect of succeeding on the claim, the defendant’s application for summary judgment should succeed.

The Claimant’s Reply Submissions

[38]In reply submissions the claimant countered that the clause which says “This Policy shall not be renewable beyond the anniversary of the Policy date on or after the lnsured’s 65th birthday, on which date it will expire” merely speaks of the expiry date of the Policy, and does not say that the defendant is entitled to terminate before that date. It gives no right to terminate, or to vary the premium before then. Further, the extract from McGee does not support the defendant’s position, as it simply says in the event of a renewal new terms and conditions will apply, and renewal of the Policy arises only after the expiry date in 2048.

[39]Concerning renewal the claimant submits that the last clause on page 4 of the Policy which says, “Notwithstanding the above clause, if this policy is active after the age of sixty (60) coverage will be extended to the age of seventy (70).” is important as it conveys that the expiration date is indeed 2048 when the claimant is 65 years, however there is provision for extending the Policy up to the age of 70. It is the claimant’s view that this bolsters the position that renewal of the Policy and change in the premium will only apply in 2048, from the age of 65 to the age of 70. Further, when the Policy was issued the claimant was 25 years and the mathematical calculation would have been done to render the Policy viable for 40 years. Thus, renewal on the anniversaries of the Policy Date, as suggested by the defendant is misguided and the defendant is treating the Policy as a motor vehicle or house insurance policy which is renewable on each anniversary date. Such policies require valuation or inspection of the subject for renewal. If that was the case with medical insurance, in like manner he would have been required to undergo further medical examinations and present confirmation of his current health status on each renewal date. The claimant contends that to say the Policy was commercially impracticable is subjective and irrelevant, as it contained clear terms and conditions which were to remain in place until the expiry date. [40) Concerning clause 10, the claimant submits that it conveys that the premium is to be paid in advance for a coverage period, on each premium due date. Thus, if a premium is paid for June 2022 it would provide coverage until the next date that the premium is due for July 2022. Premiums are paid in advance for the month that the premium covers, and this clause does not say that the defendant has a right to early termination. [41) Regarding Clause 3 the claimant submits that it is headed “Grace Period’ and the right to terminate arises only in the event of non-payment of a premium. If upon non-payment the defendant does not give 30 days’ notice of the intention to not renew, then a grace period of 31 days will apply in respect of the unpaid premium, to regularize such payment. Hence the reason for calling it a grace period, which is instructive in interpreting this clause. It does not say the defendant has a right to terminate despite premium payments being up to date and there is no provision in the Policy which allows the defendant to terminate, once premiums are up to date. It is only if the claimant fails to pay the monthly premium that the defendant would be discharged from its obligation under the Policy. The claimant further argued that it is inconceivable that provision for termination would be addressed in a grace period clause, as suggested by the defendant, and clause 3 is only intended to provide a period of grace within which to regularize the payment of a late premium. Equally clause 10 does not absolve the defendant of its responsibility to provide coverage, as long as premiums are being paid and it is only that payment of premium for one month does not automatically engage the subsequent months.

[42]The claimant further submits that if termination before the expiry date was intended by the parties, this would have been expressly stated in the section called “Eligibility for and Termination of Coverage”. What was mutually agreed is that the Policy was a fixed term contract, for a specific purpose over a specific period. Further, clause 1 which is headed “Entire Contract; Changes” under the “General Provisions” says that the Policy constitutes the entire contract of insurance and that no changes can be made to it, except in relation to paragraph 3, on page 4 of the Policy which says that the premium will increase if a child is born to the insured while the Policy is in force and becomes eligible as a covered dependent.

[43]The claimant says the extract from McGee does not support the defendant’s contention that the premium rate may be reviewed at each anniversary of the Policy date. All it says is in the event of renewal after the claimant’s 60th birthday, new terms and conditions will apply until the age of 70. Therefore clauses 3 and 10 do not give the defendant the right to vary the premiums or terminate the Policy prior to the expiry date. Although the extract states that there is no absolute right of renewal, this will only apply where the period of insurance is not fixed over a protracted period and instead operates on a strict annual basis, as in the case of vehicle or house insurance, where a homeowner or vehicle owner cannot insist that a policy be renewed upon expiration. In the present case if each payment of a premium meant a ‘renewal’, then the premium would change from month to month. Similarly, the extract from MacGilliray refer to a renewal period which applies to vehicle and house insurance which are subject to annual renewal. This must be contrasted with the present case where the Policy made no mention of annual renewal and instead it commenced on the Policy Date in 2008 and was to expire on the expiry date in 2048, after which date it could not be automatically renewed. The claimant submits that the construct of the Policy shows that what the parties envisaged from inception was a fixed premium, where the limit of coverage and the expiry date were fixed at that time, and not a circumstance where the parties would renew the Policy on each anniversary of the Policy Date, as occurs with vehicle and home insurance.

[44]The claimant contends that the defendant’s assertion that an upgraded policy was offered is erroneous, as the Policy already provided coverage up to a limit of $1,000.000.00, and the two options offered were for $250,000.00 and $1,000.000.00. All that was upgraded was the premium, for the defendant’s own benefit. For these reasons the claimant says the defence is without merit, none of the clauses gives the right to terminate before the expiry date and there is no provision for termination once all premiums are paid and the Policy is up to date. The defendant has breached the Policy for its own benefit and an award of exemplary damages would be applicable in these circumstances. Analysis [45) The claimant’s case is that the defendant is obligated to provide medical coverage at the 2008 premium until the expiry date in 2048, because the Policy makes no provision for termination, cancellation or increased premiums (unless a child is born to the claimant}. The Policy may only be terminated in the event of non-paymentof premium, but in any event there is a grace period of 31 days within which to regularize late payment of a premium. Thus, with no avenue to exit the Policy, and the defendant must continue to meet the coverage obligations at the 2008 premium, until 2048. [46) The defendant says that the terms of the Policy itself conveys otherwise, and contemplates that notice of intention not to renew beyond the period for which a payment has been accepted, may be given within the requisite period, and this stipulation is not restricted merely to instances of non-paymentof a premium. The Policy may also come to an end by refusal to accept the premium paid by the claimant, once notice on an intention not to renew has been duly given to the claimant. [47) The following extracts from Halsbury’s Laws of England6 are pertinent:- 154. Termination of policy by cancellation by the insurers. The express terms of a policy may give the insurers power to determine the insurance on giving a stipulated notice1, If such a power is exercisable at will, the insurers are not bound to give any reasons for exercising it2,. However , the insurance will not in any case expire until after expiration of the notice and repayment of the appropriate portion of the premium, if that is provided in the condtiionJ. 162. Conditions in policy as to renewal. Most non-continuing policies of insurancecontain conditions providing for the renewal of the insurance, but these are normally framed on the basis of mutual consentbeing required1, A condition to this effect does not mean that the insurers are bound to accede to an application by the insured for renewal or to accept a premium tendered by the insured for renewal2,. An offer of renewal may come from the insurers, such as where they send out a renewal notice, and then payment of the appropriate premium amounts to acceptance of their offer so as to create a binding contract and there is no room for refusing to take the premium. If the renewal notice stipulates a higher rate of premium and the insured refuses to pay it, the offer has lapsed and cannotbe revived s Volume 60 (2018)) later by the insured tendering the increased premium;] _. In any case there is no obligation on the insurers to send out a renewal notice1_. 163. Conditions obliging the insured to renew. In some rather special forms of insurance it may be made an express condition of the policy that the insured, no less than the insurers, is obliged to renew1, In such a case there is no question of any bargaining or resiling at the renewal date; the insured is there and then legally liable to pay the premium which has then fallen due. The obligation to renew in such a case may extend over a fixed number of years2, or it may attach indefinitely in the absence of notice to determine the insurance;] _. 164. Renewal as a fresh contract. Where the policy is renewable only by mutual consent, each renewal constitutes a fresh contract1, Consequently, on each renewal the duty of fair presentation of the risk (in a non-consumer insurance contract) reattaches2., and the insured must disclose any facts which have become material during the preceding period of insuranceJ. In practice a fresh proposal is not used, but the original proposal is treated as if it were repeated on each renewal, and it is therefore the duty of the insured to correct any statements in the proposal which have since become inaccurate1_. On the other hand, as on each renewal there is a fresh contract, it follows that a renewed policy is not liable to be avoided by a misstatement which would have avoided the original insurance if it has in fact become correct before the renewal9.. A renewal takes effect on the same terms as the original policy unless there has been express agreement between the parties to vary those terms§.. 165. Allowance of days of grace. In the case of an insurance policy providing for avoidance in the event of non-payment of a periodical premium or of a premium for renewal, in the absence of any term in the policy relaxing the requirement, the policy lapses unless the premium is paid by the date prescribed by the policy1, However, it is the usual practice in many classes of insurance, either by express stipulation or by the custom of the particular insurance business, to allow a period of grace after the expiration of the period of insurance for a renewal premium to be paid. In the case of life assurance it is usually laid down by express provision in the policy, and the period is generally 30 days. In other classes of insurance express stipulations as to days of grace are becoming more commonl 166. Effect of tender of premium during days of grace “…….In the case of a policy of continuing insurance, such as life assurance, if the insurance is expressed to be for a specific period but the premiums are payable at intervals during the period, the established principle is that payment within the days of grace is equivalent to payment on the due date ”

[48]The following extracts from Birds’ Modern Law of lnsurance7 also provide useful insight:- “5.7 Duration and Renewal of InsurancePolicies The question of the length of an insurance contract is a matter for the policy itself to provide. There are no rules of law. However, it is safe to state as a general rule that the life contract is quite different from other insurance policies. There must be at least a presumption that that a life contract is entire, is one contrac existing until the death of the life assured, or a specified fixed date in the case of an endowment or term policy. So, provided that the premiums due are properly paid, the insurer cannot refuse to renew a life policy, nor can he allege non-disclosure of material facts that happen after the contract is first concluded…… In contrast, most other policies are of limited duration, normally of one year, though, of course, there is no bar to the agreement of a policy for a shorter or longer term. But upon inquiry of such a policy, if the parties choose to renew the contract, the renewal in law is a fresh contract and thus, for example, the duty of disclosure arises again. 5.7.1 Cancellationunder a policy term Many non-life policies contain a condition entitling either party to cancel them upon giving notice to the other party, usually of seven or 14 days, but a clause permitting immediate cancellation would no doubt be valid. Some such conditions may require the insurer who seeks to cancel to show cause, but this is not essential and an absolute right to cancel is enforceable. One would imagine that nowadays insurers only rarely exercise their cancellation power arbitrarily, but, even ff this is so, there would appear to be an unanswerable case for the restriction of such rights, What is needed is a guaranteedminimum period of notice before cancellation can take effect, in order to allow the insured to seek fresh cover, and, particularly, a requirement that the insurer have good reason to cancer [Emphasis added] [49) The position on renewaland grace period is further explained in Birds’ as follows: “5.7.3 Renewal and days of grace “Apart from life policies, there is no right to renew an insurance contract in the absence of a term of the contract to that effect An insurer does not need any reason for not renewing. As we have seen, the renewal of a non-life policy constitutes the effecting of an entirely new contract. 7 Eighth Edition at pages 100 – 103 In practice of course insurers do generally renew, and they may allow “days of grace” after the expiry of the old contract for the renewal premium to be paid. The precise effect of such a period depends upon the wording of the policy in question, but as a general rule, as this is a concession, it is unlikely that insured is protected while the premium remains unpaid, so that a loss before the payment would not be covered.”

[50]From the outset, it should be stated that the Policy does not fall within the category of a life or life assurance policy and is one for medical insurance coverage, which is treated differently. Life assurance policies are generally considered as continuing policies and all others are considered non-continuing policies. Some may be for a specific period as in the case of vehicle of homeownership where the duration is usually fixed for a specified period of 12 months. Others may be for a longer period or may contain a specified expiry date, however the insured or insurer are not barred or precluded from cancelling the policy at any time, in appropriate circumstances.

[51]In the present case the Policy contains no express termination clause, however at clause 3 which speaks of written notice to be given of an intention not to renew the Policy beyond the period for which a premium has been accepted. In such a case 30 days’ written notice must be given, prior to the next premium due date. Unless such notice is given, then a grace period of 31 days is permitted for payment of each premium falling due, during which period benefits will be suspended. This clause suggests that there will be instances where the defendant may find it appropriate to give notice of its intention not to renew the Policy, and in such a case once adequate notice is given, the grace period for payment of a premium will not apply. This, in my view, is the unmitigated effect of clause 3, which leads to the conclusion that the right of renewal was not automatic, as suggested by the claimant, neither was the Policy intended to be insulated from non-renewal until 2048. The position would be as state in Birds” at paragraphs 5.7 and 5.7.3 reproduced above.

[52]An insurance policy is simply a contract. It is trite that even where a contract does not contain a termination clause, a party is not precluded from terminating. This is usually accomplished by showing good cause, and providing reasonable notice, based on the circumstances of the contract. In this case the Policy stated the requisite period of notice to be given, and the defendant says that by the email of 10th August 2021 the claimant was informed that the Policy had been reviewed and was found to be commercially impracticable. Notice of the intention not to renew on the current terms of the Policy was given and an offer of alternative plans at an increased premium was made. The claimant rejected the offer and continued to submit payments at the 2008 premium.

[53]On examination of the email it states that the transition from Clico to the defendant would be seamless. However upon the anniversary of the Policy Date on 1st November 2021 the defendant will no longer offer renewal terms on the current plan initially issued by Clico, and will offer the option of upgrading the Policy for better coverage, closest to the claimant’s current budget. The offer comprised of (i} Nagicare EC$-Turquoise Plan, (ii} Nagicare EC$­ Emerald Plan, and (iii} Nagicare EC$-Gold Plan. The claimant was asked to indicate current medical history in order to proceed with the next step. The last sentence of the email reads: “On accepting our proposal, please be advised that there will be required to provide satisfactory evidence of insurability before coverage can commence [EXEMPTED] “

[54]Clause 10 of the Policy stipulates that “All premiums are payable in advance to the Company, in accordance with the Company’s premium rates in effect on the date of each renewal.” I accept that in keeping with this clause there is provision for periodic renewal and that payment must accord with the defendant’s rates in effect at the date of each renewal, and there must be acceptance of such payment. If the premiumis not in accordance with the defendant’s prevailing rates, it follows that the right to give notice of an intention not to renew will avail, as well as the right to refuse to accept a premium which does not accord with the insurer’s prevailing rates. It which case it would be open to the claimant to seek coverage from another insurer, at a different rate. Thus continuation of the Policy is conditional not only upon payment of a premium, but also acceptance of it by the defendant, if it is found to be in accordance with the prevaliing rates.

[55]Althoughclause 1 under “General Provisions” states that the Policy constitutes the entire contract, it also stipulates a procedure for making changes to the Policy, such that no change would be valid until approved by an Executive Officer of the defendant and endorsed or attached to the Policy. This is a clear indication that there was a procedure for making –. changes to the Policy, contrary to the claimants suggestion that it was fixed in all respec:ts until 2048.

[56]The claimant contends that the construct of the Policy envisaged a fixed premium from inception until 2048 and was not one where the parties would renew the policy on each anniversary of the Policy Date, as obtains with vehicle and house insurance. In this regard clause 10 of the “General Provisions” also stated that “The payment of any premium shall not continue this Policy in force beyond the date when the next premium is due and payable, except as may be otherwise provided herein”. There is no other clause in the Policy which provides otherwise. I agree that the expiry date is simply the date beyond which the Policy could no longer be renewable on each anniversary of the Policy Date, and that it would have been renewable on each anniversary, from October 2009 up until October 2048 when it would come to an end and be no longer renewable. Thus, the expiry date served only to indicate the date upon which the Policy would automatically expire, and would no longer be renewable, once it remained active up to that time.

[57]As the Policy is not a life or life assurance policy, it would be subject to the general principles which apply to non-continuing policies as stated in Halsbury’s and Birds’ at paragraphs 47 to 49 above. There could be no purpose to clauses 3 and 10, if the Policy only had one renewable date after the claimant’s 65th birthday in 2048. As I understand it, if the Policy is still active at 60 years, then it will be extended to the age of 70. If for any reason the Policy remains active and is not extended, then there can be no further renewals beyond 2048, when it will come to an end. It is clearly stated that the Policy is not renewable beyond that expiry date in 2048.

[58]It is my considered opinion that the claimant’s interpretation of the various clauses do not represent the combined effect of the matters contained at paragraphs 6, 7 and 9 on page 4, and clauses 3 and 10 on page 5 of the Policy. Taken together these clauses demonstrate that thiere was an avenue for exiting the Policy once: adequate notice was given, and the parties were unable to reach consensus on the premium rate for renewal on the anniversary of the Policy Date in 2021.

[59]In that regard, I do not consider it unusual of flippant that with the passage of time, age, increases in the cost of health care, and the overall performance of the Policy, that the terms could have become commercially impracticable, and required review and adjustments for renewal in the new policy year. It is the case that benefits are payable as a percentage of expenses incurred, and as the cost of medical services increase the payout becomes greater, and may well become unsustainable on a premium which was projected on conditions which existed in 2008. It is also well known that the cost of medical services has increased dramatically with the onslaught of the global pandemic, since 2019.

[60]I accept that in accordance with the terms of the Policy the defendant was entitled to review the premium rates and to determine the effective rate at which coverage would be offered to the claimant on the anniversary of the Policy Date in 2021. There is no ambiguity arising from the heading of clause 3 as “Grace Period” . The clause begins by setting out the circumstances in which a grace period will not apply for payment of premium, and it is when notice has been given of an intention not to renew. The ability to terminated is also clearly discemable from the wording of clause 10 where it says “The payment of any premium shall not continue this policy in force beyond the date when the next premium is due and payable, except as may be otherwise provided herein. This ties in with clause 3 where says that notice of the intention not to renew may be given 30 days prior to the next premium due date.

[61]I agree with Counsel for the defendant that the extract from MacGilivray makes a distinction between life assurance policies where the right of renewal is absolute, and other insurance policies where the right of renewal is not absolute. The Policy in this case falls within the latter, irrespective of the premium and expiry dated stated on its face. In such a case an insurersmay review Policy at each renewal period and may not renew by refusing to accept the premium tendered, if it does not accord with the premium rates in effect at the time of such renewal and adequate notice of the intention to not renew has been given. It is the case that generally insurers tend to renew without change, but that is only if the insurer elects to do so.

[62]Based on the forgoing, the defendant has demonstrated that the claimant has no real prospect of succeeding on the claim, and that the defence has a very real prospect of defeating the claim.

Conclusion

[63]I therefore make the following orders: 1. The claimant’s application for summary judgment is dismissed. 2. Summary judgment is given for the defendant. 3. Cost is awarded to the defendant in the sum of $3,500.00. Cadie St Rose-Albertini High Court Judge < p style=”padding-left: 30px;”> [SEAL]