Zeller v British Caymanian Insurance Company Ltd: PC 16 Jan 2008

(Cayman Islands) The Board considered the effect of a misdeclaration on a proposal for medical insurance.
Lord Bingham considered a statement which was said to be ‘complete and correct to the best of my knowledge and belief’. Lord Bingham stated: ‘It is unnecessary to rehearse these authorities in detail, since it is clear in the Board’s opinion that the basis of this contract, as it affected Mr Zeller, was that the statements made by Mr Zeller in the application form were true to the best of his knowledge and belief. This was expressly stated three times in the form, and the incompleteness of the statement at the very end of the form seems likely, having regard also to the absence of punctuation, to be attributable to a typographical error. It was not stated in the form, as is often done, that the applicant’s warranty that his answers were true to the best of his knowledge and belief was to be the basis of the contract, but that was plainly to be understood. Ms Corbett drew attention to the parenthesis in condition (b) at the end of the form (see para 7 above: ‘if such statements are fraudulent or material to the acceptance of this application’), but this immediately follows a warranty of correctness to the best of the applicant’s knowledge and belief. It cannot, consistently with the rest of the form, be read as entitling the insurer to cancel the policy if a material fact is not disclosed despite the applicant answering the insurer’s questions fully to the best of his knowledge and belief. Thus the judge was right to regard the real question as being whether Mr Zeller, if he honestly believed he was answering the questions truthfully, was guilty of non-disclosure, and Ms Corbett was correct to tie her submissions, as she expressly did, to the questions Mr Zeller answered. This approach is entirely consistent with that of the Court of Appeal of England and Wales in Economides v Commercial Assurance Co Plc [1998] QB 587, 598, 599, where the duty of the applicant was held to be one of honesty.’


Lord Bingham


[2008] UKPC 4, [2008] Lloyd’s LR IR 545



Cited by:

CitedCheltenham Borough Council v Laird QBD 15-Jun-2009
The council sought damages saying that their former chief executive had not disclosed her history of depressive illness when applying for her job.
Held: The replies were not dishonest as the form could have been misconstrued. The claim failed. . .
CitedGenesis Housing Association Ltd v Liberty Syndicate Management Ltd CA 4-Oct-2013
The housing association was to develop an estate of social housing, supported by an insurance guarantee. The insurance proposal contained a clause stating that the information in the proposal was to form the basis of the policy, and that the policy . .
CitedGenesis Housing Association Ltd v Liberty Syndicate Management Ltd TCC 8-Nov-2012
Insurers had rejected a claim under the policy, saying that the proposal form had included a basis of insurance declaration warranted by the proposer, and that since it had named a main contractor different to the one named, there was no liability . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Insurance

Updated: 13 July 2022; Ref: scu.263864