Malekout v Allied Dunbar Assurance Plc

An insurance policy covering disablement is construed by giving its words their natural and ordinary meaning in context and by considering the policy’s purpose. Where the wording is ambiguous, it is construed against the insurer as proferens. A medical condition arising after the policy may qualify even though it was contributed to by a pre-existing congenital abnormality, provided the later condition is distinct. The policy need not be read as excluding illness or infirmity indirectly arising from a pre-policy condition unless it says so.

The claimant appealed against the dismissal of his claim for waiver of pension contributions under a Personal Retirement Plan. The policy applied where disablement arose directly or indirectly from a condition first coming into existence after the policy was signed.

The claimant had pre-existing congenital cervical ribs with fibrous bands, but the judge found that thoracic outlet syndrome developed only after the policy began and caused his incapacity to work as a dentist. The central issue was whether the syndrome was a qualifying post-policy condition or an illness arising from the pre-policy congenital abnormality.

1. Appeal allowed. The policy was ambiguous and had to be construed, so far as necessary, against Allied Dunbar as proferens.
2. The words of the policy were to be given their natural and ordinary meaning in context, having regard to the purpose of the provision. No special rule applied merely because the contract was an insurance policy. The approach was consistent with Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896 and Hayward v Norwich Union Insurance Limited [2001] Lloyd's Rep IR 410.
3. Thoracic outlet syndrome and the congenital cervical-rib abnormality were both medical conditions within the policy. The court adopted the approach in Cook v Financial Insurance Co Ltd [1998] 1 WLR 1765, treating “condition” as apt to describe a medical condition recognised as such by doctors.
4. The claimant’s inability to treat patients was a physical infirmity arising from thoracic outlet syndrome. The syndrome first came into existence after the policy date and was distinct from the pre-policy congenital abnormality. Its dependence on that abnormality as a contributory factor did not prevent coverage, because the policy required a post-policy condition and did not exclude infirmity or illness arising directly or indirectly from a pre-policy condition.
5. The declarations that contributions were treated as duly paid, together with special damages and interest, were ordered. Costs were awarded for the action and the appeal, subject to legal aid assessment. Permission to appeal further was refused by the Court of Appeal.

• Court of Appeal (Civil Division): allowed the appeal from the order made on 10 June 2003 by His Honour Judge Shaun Spencer QC, which had dismissed the claim.