Catherwood v Asteron Life Ltd - [2021] NZHC 2612

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000314

[2021] NZHC 2612

IN THE MATTER of the Declaratory Judgments Act 1908

BETWEEN

HUGH RODERICK CATHERWOOD

Applicant

AND

ASTERON LIFE LIMITED

Respondent

Hearing: 23 September 2021

Appearances:

C A McVeigh QC for Applicant

C M Meechan QC for Respondent

Judgment:

1 October 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 1 October 2021 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

CATHERWOOD v ASTERON LIFE LTD [2021] NZHC 2612 [1 October 2021]

[1] The applicant, Hugh Roderick Catherwood (Mr Catherwood), entered into a life insurance policy with Asteron Life Ltd (Asteron) in 2009. In February 2019, he made a claim for payment of a terminal illness benefit under the policy. Asteron declined his claim on the basis he was not suffering from a terminal illness within the meaning of the policy. Mr Catherwood intends to seek a declaratory order as to the proper construction of the policy believing that “all other things being equal” if his construction is accepted, Asteron will be obliged to pay the proceeds of the policy to him.

[2] An application for a declaratory order is ordinarily brought under pt 18 of the High Court Rules 2016.1 The matter before me is an application by Mr Catherwood pursuant to r 19.5(1) of the High Court Rules for an order permitting him to bring his proceeding by way of originating application under pt 19. He considers that the pt 19 procedure is the most efficient and least costly manner of determining the proceeding.

[3] The application is opposed by Asteron. It considers that Mr Catherwood’s claim is for breach of the insurance contract and ought properly to be brought as an ordinary proceeding under pt 5 of the High Court Rules. Asteron argues there is nothing exceptional or unusual about this claim such that dealing with it under anything other than pt 5 is required “in the interests of justice”.2

The background

[4] On 23 October 2009, Mr Catherwood entered into a SmartLife policy with Asteron. At all material times the policy was in full force and effect.

[5]The relevant terms of the policy for present purposes are the following:

5.2 Terminal Illness Benefit

If you become terminally ill while covered under this policy, we will pay the sum insured for the SmartLife cover.

…

10.0Commonly used words or expressions

1 High Court Rules 2016, r 18.1(b)(v).
2 Rule 19.5(1).

…

terminal illness and terminally ill means

· in the opinion of a specialist medical practitioner; and

· if we require, in the opinion of one of our approved specialist medical practitioners; and

· in our assessment, having considered medical or other evidence we may require,

your life expectancy is, due to sickness and regardless of any available treatment, not greater than 12 months.

[6] On 31 December 2018, Mr Catherwood had a scan which…

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: [2021] NZHC 2612
Decision Date: 1 October 2021

CaseChat Overview and Summary

The applicant, Hugh Roderick Catherwood, sought leave to bring a proceeding for a declaratory order under the Declaratory Judgments Act 1908 against Asteron Life Limited, seeking to establish the proper interpretation of the term "terminal illness" in his life insurance policy. The court was required to decide whether the proceeding should proceed under Part 18 or Part 19 of the High Court Rules 2016. Mr Catherwood argued that the Part 19 procedure was the most efficient and least costly manner of determining the proceeding, whereas Asteron contended that the claim was for breach of contract and should be brought under Part 5 of the High Court Rules.

The court considered the nature of the proceeding and the appropriate procedural pathway. While the court acknowledged that Mr Catherwood was entitled to choose his remedy, it was of the view that the proceeding would require the application of common law principles of contractual interpretation. The court also found that there would be a need for discovery and the possibility of interlocutory applications, and that case management would be desirable. Given these factors, the court was not satisfied that the interests of justice required the proceeding to be determined under Part 19. Accordingly, Mr Catherwood's application for leave to commence the proceeding under Part 19 was refused.

The court ordered that costs should follow the event, but counsel were to confer as to costs and only if they could not agree, file memoranda within 21 days.

Orders