A recent judgment in a case between Discovery Life and a policyholder sheds light on the scope of discovery requirements and the evidentiary standards necessary to challenge compliance.
Discovery Life has accused a policyholder of misrepresentation and fraud in a dispute over R16 million paid under disability and income protection policies. The allegations stem from claims lodged by the defendant, Sunil Pranpath, for injuries and mental health issues that he asserts have rendered him unable to work as an accountant.
The case escalated into a procedural dispute over discovery obligations, with Discovery Life seeking further documentation to substantiate its claims, and Pranpath resisting on various grounds.
The judgment handed down on 1 November in the High Court in Durban addressed two interlocutory applications arising from the dispute. The applications centre on “discovery” – the process of disclosing evidence – with Discovery Life seeking an order to compel further and better discovery, while Pranpath challenged the application as an irregular step and opposed it on substantive grounds.
The R16m that Discovery Life is attempting to recover was paid to Pranpath under two insurance policies that provided cover if he became totally and permanently unable to perform his duties as an accountant.
Pranpath first claimed benefits in June 2013 following orthopaedic injuries from a car accident, which Discovery Life accepted and paid. In February 2015, he filed additional claims, citing major depression and chronic pain. These claims were approved in December 2016 after Discovery accepted his statements as truthful.
Under the policies, continued payouts require proof of sustained income loss, with periodic reviews mandated. Pranpath completed review forms in June 2018, August 2019, and August 2020, consistently stating he was entirely unable to work. A quality-of-life questionnaire from September 2019 supported these assertions.
However, Discovery alleges that Pranpath misrepresented his condition, claiming surveillance conducted in October 2019 showed him working as an accountant at an office in KwaDukuza during regular hours. Discovery Life suggests he had been working since at least 2016.
Bid to obtain supporting documents
Discovery issued its first notice under Rule 35(3) on 14 February 2023, demanding additional documents that may substantiate its fraud claims. When Pranpath failed to respond within the required timeframe, Discovery Life filed an application to compel compliance on 22 March 2023. Pranpath eventually responded on 4 May 2023, submitting an affidavit but refusing to cover Discovery Life’s legal costs for filing the application.
Pranpath’s affidavit opposing the application prompted a drawn-out exchange between the parties, with Discovery Life insisting on cost recovery and responding with additional legal filings.
On 15 August 2023, Discovery Life issued a second Rule 35(3) notice to correct errors in its initial request and demand further documents. Pranpath replied a week later but withheld some documents, citing various objections.
This prompted Discovery Life to file another application on 2 February 2024, seeking to compel the production of key documents or sworn confirmation of their absence.
Discovery Life demands comprehensive financial records – spanning from 2012 to the present – including documents related to Pranpath’s personal finances, business operations, and the corporate entities he controls.
The requested documents include financial details of Pranpath’s sole proprietorship, Sunil Pranpath Inc, and three corporate entities he oversees.
The Rule 30 application
Pranpath opposed the move, filing a Rule 30 notice to challenge Discovery Life’s application as procedurally irregular. On 15 April 2024, Pranpath escalated matters further by lodging a formal application under Rule 30 to have Discovery Life’s filing set aside entirely.
Pranpath argued that Discovery Life’s latest application to compel further discovery was procedurally irregular and duplicated an earlier, unresolved application to compel.
However, the court found two critical flaws in Pranpath’s argument.
First, the court ruled that under Rule 30(2)(a), a party cannot challenge an alleged procedural irregularity if they have taken further steps in the case while aware of the issue. Pranpath, having already submitted an answering affidavit in response to the contested application, forfeited the right to object.
Second, the court clarified that the two applications were distinct. The earlier application sought a response to Discovery Life’s initial document request, whereas the latest application focused on compelling the production of specific documents. The earlier application became moot once the defendant responded.
Pranpath raised additional grounds for resisting the application for further discovery, claiming the process would be prohibitively costly and arguing that many documents are either irrelevant or non-existent. He also asserted that some of the requested records had already been obtained via subpoena.
However, the court found that Pranpath failed to clarify whether he currently possesses the contested documents, previously held them, or knows their whereabouts. This lack of disclosure, the court noted, violates procedural discovery requirements and complicates its ability to evaluate the merits of his defences.
The court noted that relevance is determined based on the pleadings and includes any documents that might enable a party to advance its case or undermine its opponent’s. While discovery affidavits are generally conclusive, they can be challenged if there are reasonable grounds to believe the deponent possesses undisclosed documents or has made false assertions.
Acting Judge Anna Annandale dismissed Pranpath’s application in terms of Rule 30 with costs on Scale C, ordering him to produce extensive financial documents within 10 days or declare under oath their absence and whereabouts. The documents relate to both the Pranpath’s personal finances and corporate entities under his control, spanning from 2012 to the present.
Read the full judgment here.
Anyone who is innocent would happily give Discovery the info they need. He is obviously not that mentally disabled if he has the capacity and energy to fight them. Lock him up for fraud!