Cirencester Friendly Society Ltd v Parkin

JUDGE SEYMOUR: The claimant in this action, Cirencester Friendly Society Limited carries on business as an insurer. It specialises in providing income protection insurance against illness and accidental injury to its members. The defendant, Mr Christopher Parkin, applied on 9 March 2007 to become a member of the claimant. The significance of becoming a member of the claimant is that one has to become a member, because it is a mutual society, in order to participate in the benefits which the claimant provides.

The consequence of the application of the defendant to the claimant to become a member and be entitled to benefits is that on 21 May 2007 the claimant offered to accept the defendant’s application, subject to some qualifications which are presently immaterial. What is material is that, in making his application to become a member of the claimant, the defendant answered a number of questions on the application form which are material for present purposes. There was a question, “Do you have any symptoms for which you might seek medical attention in the future?” to which Mr Parkin answered, “No”. There was a question, “Have you consulted or received any advice or treatment from a health practitioner in the last five years?” and Mr Parkin answered that by reference to indigestion, which, for the purposes of this judgment, I need not elaborate on further. There was a question on mental health:

“Have you EVER had (a) depression, anxiety, stress, tension, insomnia, mental illness, anger management, nervous breakdown or counselling? (b) any debility, post viral/chronic fatigue or ME (Myalgic Encephalopathy)?”

Mr Parkin answered no to those questions. Finally, so far as is material for present purposes, Mr Parkin was invited to answer these questions:

“Have you EVER (b) been advised by any other doctor, practitioner, counsellor, chiropractor, osteopath, physiotherapist, acupuncturist, herbalist etc, on your health or wellbeing? (c) had any other illness or injury or condition requiring investigation or hospital treatment not already referred to in any other question? (d) had any diseases, disorders or disabilities in the past that are not already disclosed in any other question? (e) used drugs other than for prescribed purposes?”

Mr Parkin answered “No” to all of these questions. The truth of the matter is that, had he answered those questions correctly, Mr Parkin would have disclosed that he had had a number of panic attacks, that he had consulted his doctor in relation to chest pains, and he would have disclosed that he had been a habitual user of cannabis. Had he answered these questions correctly, the application which the claimant accepted on about 21 May 2007 would have been rejected.

However, the claimant having been misled, it permitted Mr Parkin to become a member of the claimant on 1 July 2007. He was issued with a certificate of membership and an income protection insurance contract pursuant to the rules of the claimant. It is, in the circumstances, perhaps not altogether surprising, certainly to those with a cynical cast of mind, that, having become a member of the claimant on about 1 July 2007, on 31 August 2007 Mr Parkin made a claim under the insurance which the claimant provided, contending that he suffered from Myalgic Encephalopathy and was unable to perform his job from 29 August 2007.

That claim was rejected by the claimant on 6 December 2007, but on about 2 January 2008 Mr Parkin complained to the Financial Ombudsman Service that the claimant had wrongly rejected his claim for income protection and had cancelled the contract from the start. The role of the Financial Ombudsman Service is statutory. There is a statutory disputes resolution procedure established by section 225 of the Financial Services and Markets Act, 2000. Having gone through the Ombudsman Service process, on 10 September 2010 a lady called Melissa Collett, who was the, or an, Ombudsman in the Financial Ombudsman Service, made a decision upholding Mr Parkin’s complaint. The decision is plainly based upon fraudulent assertions which had been made by Mr Parkin in the course of the consideration by the Ombudsman of his particular circumstances, the frauds in particular being that he suffered from Myalgic Encephalopathy, which he did not, that he was unable to work, which he was not, and that he had not dishonestly, but, as it were, inadvertently, failed to disclose his previous cannabis use.

What happened thereafter was that the claimant accepted, at least initially, the decision of Ms Collett , and consequently on 22 July 2011 the claimant paid Mr Parkin an amount of £19,096.84, including interest, in respect of the claim relating to the period from 29 August 2007 to 20 March 2008. Mr Parkin then decided that he was going to make another claim, or rather he was going to claim in respect of another period, that is to say beginning on 21 March 2008. In respect of that period, he alleged that he was now suffering from chronic fatigue syndrome. That claim was again rejected by the claimant, and again there was a complaint to the Financial Ombudsman Service. Again the Financial Ombudsman Service, in the person of a lady called Lindsey Wolosky, was deluded by the frauds of Mr Parkin, so that on 25 July 2012 she was persuaded to uphold the complaint of Mr Parkin. However, on that occasion the claimant did not accept the decision and did not make any payment. Instead this action was commenced in 2013, following investigations as to the circumstances of Mr Parkin.

This action has had a somewhat unusual history since being commenced on 20 March 2013. Basically, Mr Parkin has participated only to a limited extent, and he certainly has not participated in any of the parts of the litigation process which would obviously have been adverse to him. In particular, he has failed to give proper disclosure and he has failed to attend for a medical examination by a psychiatrist. As a result of that failure, Mr Parkin’s defence and counterclaim in this action has been struck out. An unless order, that is to say an order providing that it would be struck out unless he attended for a medical examination by Dr Holden, was made on 23 May 2014.

Mr Parkin has not appeared or been represented today, which is the trial of this action. Notwithstanding that the defence and counterclaim has been struck out, there has to be a trial because of the nature of the relief which is being sought on behalf of the claimant. It is right to say that in the course of pursuing claims against the claimant Mr Parkin has been guilty of a number of fraudulent representations. There have been fraudulent representations in the claim form in which he asserted what his condition was and that he was incapacitated from working. Moreover, however, on 11 January 2011, Ms Caroline Roper, the health claims consultant instructed by the claimant, visited Mr Parkin at, I think, his parent’s address, and, in response to her inquiries, Mr Parkin basically told her a load of lies. He said that he was separated from his wife, that his wife lived in Cyprus, that he lived with his parents, that his condition had deteriorated in terms of physical weakness and depleted energy and he gave an account of his daily activities which essentially meant that he was incapable of performing any worthwhile tasks. On 15 April 2011, Dr AH Lister, consultant physician in occupational medicine instructed by the claimant, visited Mr Parkin at his parent’s home. Mr Parkin misled Dr Lister in a similar fashion to that in which he had misled Ms Roper as to his circumstances.

Nemesis overtook from Mr Parkin most dramatically because, like so many people nowadays, in particular those who seem minded to seek to perpetrate frauds, he seemed incapable of keeping off the Internet and sharing the true nature of his activities through social media. So it was that it has transpired that, far from being incapable of working and suffering from any such condition as he has described, he is actually an aficionado of a type of sports supercar called “Noble” and seems to have spent the greater part of the last 10 or 12 years refurbishing a Noble sports car and driving it, sometimes racing it, principally in Cyprus. Mr Parkin seems to live in Cyprus, or at least lived in Cyprus certainly until 2012, with, and not separately from, his wife and seems to have continued to use cannabis.

In those circumstances, all of these facts being abundantly demonstrated by evidence which has been put before me in the form of witness statements, documents which have been obtained from the Internet and which have been downloaded and printed and, indeed, in some YouTube contributions showing the Noble sports car and its use, I am satisfied that it is appropriate for me to rectify the injustices which have been perpetrated by the misleading of the Ombudsman, resulting in the awards which I have mentioned on 10 September 2010 and 25 July 2012, by making these orders, which I do.

I set aside the award made by the Financial Ombudsman Service on 10 September 2010 and I declare that Mr Parkin obtained the award by the Financial Ombudsman Service on 10 September 2010 by fraud and, as a consequence, that award is, and was, unenforceable. I set aside the award made by the Financial Ombudsman Service on 25 July 2012 and I declare that the defendant, Mr Parkin, obtained that award by fraud and that, as a consequence, that award is unenforceable.

I make a declaration that the income protection contract with the claimant, which I have mentioned was obtained by the defendant’s fraudulent misrepresentation, and that the claimant was entitled to avoid the contract ab initio by its solicitors’ letter of 29 January 2013, which it did. I declare that Mr Parkin has made reckless and fraudulent statements or declarations to the claimant in connection with his application for membership and/or his claims for benefits under the contract from 29 August 2007 until 28 February 2013, and continuing, in breach of the rules of the claimant, and that the claimant is entitled to avoid the contract between the parties ab initio and/or to expel the defendant from its membership as an alternative to the declaration which I have already granted that the income protection contract is void ab initio.

I order repayment of the sum of £19,096.84 which I have already mentioned was paid by the claimant to Mr Parkin.