Tag Archives: income protection

Taylor v Asteron Life–appeal

Peter James Taylor failed in his High Court income protection claim against NZ life insurer Asteron Life where the High Court upheld Asteron Life’s counterclaim for repayment of sums paid under the policy to Mr. Taylor. Mr Taylor has lodged an appeal with the Court of Appeal. He sought a stay of execution of amongst other things the costs award against him pending determination of that appeal. The Court of Appeal has dismissed that application: Taylor v Asteron Life Limited [2019] NZCA 683 (20 December 2019).

This decision serves as a general reminder that an appellate court will not generally stay a costs award. The issue of costs sits as a a secondary consideration because it is incidental to the conduct of civil litigation. It does not have the same quality as a state of affairs where if a lower court decision is not stayed the substantive appeal becomes meaningless (or to use a word not used outside of legal practice: “nugatory”). This is so even where the appellant faces bankruptcy as a result of enforcement of the costs award. It is open to the Official Assignee to pursue the appeal if it has merit.

Steve Keall
Barrister
27 December 2019

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Recent case a reminder of Court’s limited role in disability benefit insurance cases

The recent case of Percy v Sovereign [2014] NZHC 1573 is a reminder of the limited nature of the Court’s inquiry in the context of a disability benefit/ income protection claim.

Where an insurer’s decision about disability cover is under scrutiny, the question is whether the insurer acted in good faith, took account of relevant information available to it, and reached a decision that was reasonably open to it. It is only if the insurer has failed to form a valid opinion that the Court will determine the matter itself, on the basis of the trial evidence. If there has been no such failure, it makes no difference that the Court may have reached a different view.

The relevant decisions in this case were Sovereign’s decisions to discontinue payment of a total disability benefit to the policyholder and to decline his total and permanent disability claim. The Court was also required to consider an alternative claim that the policyholder was eligible for a partial disability benefit.

In Percy, Her Honour Justice Katz reviewed the evidence of the insurer’s decision-making processes. The Court concluded that it had not failed to reach a valid opinion reasonably open to it. The primary claim did not succeed.

The position with regards to the claim for a partial disability benefit was less straightforward. The Court noted that in this case, the policyholder never presented any evidence to Sovereign in support of a partial disability claim, because he had never made such a claim, being adamant that he was entitled to the full benefit. The Court further noted that, as a result it would have been difficult, if not impossible, for Sovereign to assess the extent of any partial disability. The Court did not identify any error on the insurer’s part and so concluded that it was not entitled to undertake its own assessment of partial disability. So, this claim also did not succeed.

Steve Keall