Catherwood v Asteron Life Limited - [2023] NZCA 357

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA8/2023
[2023] NZCA 357

BETWEEN	HUGH RODERICK CATHERWOOD Appellant
AND	ASTERON LIFE LIMITED Respondent

Hearing:	13 June 2023
Court:	Wylie, Thomas and Brewer JJ
Counsel:	H D J Holderness for Appellant C M Meechan KC and A Borchardt for Respondent
Judgment:	9 August 2023 at 11 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay costs to the respondent for a standard appeal on a band A basis with usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Wylie J)

Introduction

Notwithstanding that he is alive and, on the evidence, in good health, the appellant, Hugh Catherwood, seeks payment of the sum insured (or the death benefit) under a life insurance policy he holds with the respondent, Asteron Life Limited (Asteron). He says that he is entitled to payment of the sum insured because, in early to mid-2019, he was “terminally ill”. The policy provides that an insured is terminally ill if his or her “life expectancy is, due to sickness and regardless of any available treatment, not greater than 12 months”. Mr Catherwood says that when he made the claim for the death benefit in early 2019, he was sick, that the policy requires that the treatments available to him be ignored and that, when they are ignored, his life expectancy at the time was not greater than 12 months.
Asteron has declined to pay the sum insured to Mr Catherwood. It argues that his condition at the relevant time did not fall within the definition of the words “terminally ill” contained in the policy. It says that the policy requires that Mr Catherwood’s life expectancy had to be not greater than 12 months, despite the treatments which were available to him at the time. It notes that Mr Catherwood’s prognosis in early 2019, taking into account the treatments he was then receiving and was likely to undergo, was that he was unlikely to die within 12 months.
In the High Court at Christchurch, Dunningham J ruled in favour of Asteron and rejected Mr Catherwood’s assertion that Asteron was in breach of the policy when it declined to make payment of the sum insured to him.[1]
[1]Catherwood v Asteron Life Ltd [2022] NZHC 3296 [Judgment under appeal].
Mr Catherwood appeals this judgment. He says that the Judge failed to correctly interpret the relevant provisions in the policy, that as a consequence she erred in interpreting the same and that she made a number of associated errors. Asteron disagrees. It says that the policy was correctly interpreted by the Judge and that it is not yet obliged to pay the sum insured to Mr Catherwood under the policy.[2]
[2]We use “not yet” because the policy is still in force and, provided it is maintained by Mr Catherwood, Asteron will become liable to pay the sum insured when Mr Catherwood dies or becomes terminally ill.
The dispute…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZCA 357
Decision Date: 9 August 2023 at 11 am

CaseChat Overview and Summary

Hugh Roderick Catherwood sought a payment from Asteron Life Limited under a life insurance policy on the basis that he was "terminally ill." Asteron declined to pay the sum insured, stating that Catherwood's life expectancy was not less than 12 months. The Court of Appeal dismissed Catherwood's appeal, upholding the original ruling that Asteron's interpretation of the policy was correct. The Court found that the phrase "regardless of any available treatment" in the policy's definition of "terminally ill" could mean either disregarding or despite. Considering the context of the policy and the commercial purpose of the insurance contract, the Court concluded that the policy intended to take into account available medical treatment when determining whether someone is terminally ill. This interpretation was deemed reasonable and supported by relevant Australian cases. The Court also upheld the trial Judge's decision to admit evidence regarding general industry practices, finding it relevant to the interpretation of the policy. The appeal was dismissed, with Catherwood ordered to pay costs to Asteron on a band A basis with usual disbursements. The Court certified for second counsel.

Orders