Kumar v Westpac Life NZ Limited HC Auckland CIV 2007-404-006822

[2008] NZHC 2393

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-006822

BETWEEN  ROSELYN SANGITA KUMAR AS EXECUTOR OF THE ESTATE OF MANOJ KUMAR, ALSO KNOWN AS MANOJ MICHAEL KUMAR

Plaintiff

ANDWESTPAC LIFE NZ LIMITED Defendant

Hearing:         17 June 2008

Counsel:         M Clark for plaintiff

M V Robinson/J F Parnell for defendant

Judgment:      30 June 2008 at 5pm

JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 30 June 2008 at 5p.m. pursuant to Rule 540(4) of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Vallant Hooker & Partners, PO Box 47088, Ponsonby, Auckland, for plaintiff

Simpson Grierson, Private Bag 92518, Auckland for defendant

R S KUMAR AS EXECUTOR OF THE ESTATE OF M KUMAR V WESTPAC LIFE NZ LIMITED HC AK CIV 2007-404-006822  30 June 2008

[1]      This case concerns the scope of cover under a free accidental death certificate offered by the defendant (Westpac Life) whilst an application for life insurance was being considered.

[2]      The plaintiff (Mrs Kumar) is the administratrix of the estate of Manoj Kumar

(Mr Kumar) who died on 7 December 2005.

[3]      In March 2005 Mr Kumar took out life insurance and home and personal loan insurances with Westpac Life.   He applied on 28 November 2005 to increase his life cover.   As part of the terms of the application Westpac Life immediately issued Mr Kumar a certificate for  accidental  death  cover  pending  its  determination  of  the application.

[4]      Mr Kumar died suddenly on 7 December 2005, following a heart attack. Mrs Kumar initially claimed under the three policies which Mr Kumar took out in March 2005.   Those claims were declined on the grounds that Mr Kumar had failed to disclose relevant medical history.      Mrs Kumar then made a claim under the interim accidental death certificate.     Westpac Life declined that claim also, on the grounds that the cover was for death by accident only and Mr Kumar’s heart attack had been caused by heart disease.

[5]      Both parties have applied for summary judgment.    Counsel agree that the issue for determination on both applications is whether Mr Kumar’s death was as a result of an accident.     It was common ground that this is a matter of interpretation of the interim certificate issued on 28 November 2005.

Principles for summary judgment

[6]      Counsel agreed that both applications are capable of being determined by summary  judgment.  The  Court  is  able  to  determine  the  interpretation  of  the certificate as a matter of law.    The material facts are not in dispute.    Mrs Kumar pleads two causes of action (breach of contract and breach of the Fair Trading Act

1986) but it was common ground that both causes of action stand or fall on interpretation of the certificate.    For that reason, the differing requirements under r

136 of the High Court Rules for applications for summary judgment by plaintiffs as against defendants make no difference in the present case.   Counsel agreed that the meaning of ‘accident’ as used in the certificate will determine the matter one way or the other.

The certificate

[7]      The   interim   accidental   death   cover   certificate   was   issued   when   the application for increased life cover was made on 28 November 2005.    It applied for up to sixty days whilst the proposal for increased life cover was being considered

and, accordingly, was in force when Mr Kumar died.    The certificate reads:

Westpac Interim Accidental Death Cover Certificate

Life to be Insured:   Kumar Manoj

Amount of Accidental Death cover :  $300,000

The Term Cover insurance you have applied for does not begin until the proposal has been accepted by Westpac Life-NZ-Limited.

However Westpac Life-NZ-Limited provides free death by accident cover for 60 days while your proposal is being assessed.

The amount of the interim cover is the amount of Death Sum insured under your proposal (but not exceeding $300,000).

The benefit will be paid to the proposed Policy Owner if the Life to be insured dies prior to 27/01/2006 as a result of an accident incurred after this certificate has been issued.

Death from self inflicted injuries and accidents resulting from unlawful acts or participation in hazardous pastimes are not covered.

The interim Accidental Death cover will immediately cease if your proposal is cancelled or declined or when the proposed policy is issued.

Westpac Life-NZ-Limited      Date:   28/11/2005

[8]      Where the parties differ is in relation to the nature of the cover provided, and whether the circumstances of Mr Kumar’s death come within it.

The arguments

[9]      Counsel were agreed that whether or not there is cover under the certificate depends on the natural and ordinary meaning of ‘accident’ and ‘accidental death’ in the context of the certificate:     Mount Albert City Council v NZ Municipalities Co- operative Insurance Co Ltd [1983] NZLR 190 (CA). They differed, however, as to what that natural and ordinary meaning is.

[10]     Counsel for Mrs Kumar submitted that Mr Kumar’s death was unexpected and as such would be considered by the ordinary person to be an accident.     She pointed to the lack of any definition of accident or accidental death in the certificate, and relied on the definition of ‘accident’ given by Lord Macnaughten in Fenton v J Thorley  & Co Ltd [1903] AC 443, 448 (a worker’s compensation case) as ‘an unlooked-for mishap or an untoward event which is not expected or designed’. She argued that this is what the ordinary person would understand ‘accident’ to mean. She submitted that the Court should adopt a liberal interpretation in favour of the assured under which there was cover for any unexpected death not expressly excluded. She relied on a certificate from Mr Kumar’s doctor that he was not predisposed to any condition that might unfavourably influence his normal expectation of life to say that the heart attack was unexpected, and submitted that the exclusions in the certificate did not apply. Counsel relied on definitions of

‘accident’ as an unexpected event as given in Fenton v J Thorley & Co Ltd and adopted in Mount Albert City Council v NZ Municipalities Co-operative Insurance Co Ltd, and the definition of ‘accident’ in the Compact Oxford English Dictionary.

[11]     Counsel for Westpac Life submitted that a death arising from heart disease did not fall within the natural and ordinary meaning of accident as used in the certificate.       He  argued that  the  plaintiff’s  interpretation  of  ‘accident’  as  ‘any unexpected event’, so as to include death as a result of heart disease distorted the word in the context of the certificate, stretching it beyond its natural and ordinary meaning.      He  submitted  that  there  was  no  scope  within  the  language  of  the

certificate to allow the ‘more favourable’ interpretation advanced on behalf of Mrs Kumar.   He supported his argument by reference to authorities in which the Court had found that a death arising from the processes of nature was not a death ‘from accident’ (Price v NZ Insurance Co Ltd [1996] 3 NZLR 727) and submitted that the Court should make a distinction between the cause of death (heart disease) as against the mode of dying (heart attack): Solicitor-General v The Coroner of Balclutha HC Dunedin CIV 2005-412-749 21 March 2006, Fogarty J.   He also submitted that this approach was consistent with a range of dictionary definitions, and the definition of

‘accident’ in the Injury Prevention, Rehabilitation, and Compensation Act 2001.

Discussion

[12]     The  starting  point  for  interpretation  of  the  certificate  is  the  natural  and ordinary meaning of ‘accident’ for the purpose of the cover provided by the certificate.    In that respect I note the adoption by the Court of Appeal in Mount Albert City Council v NZ Municipals Co-operative Insurance Co Ltd (at p 193) of

the following passage from 25 Halsbury’s Laws of England (4th  ed), para 594, note

1:

… the trend is, if anything, to adopt a liberal interpretation in the favour of the assured, so far as the ordinary and natural meaning of the words used by the insurers permits this to be done.

[13]     The following passage from the judgment of Cooke J (as he then was) in that case (at p 193) also provides some guidance:

As to what is normally meant by “accident”, it is necessary to bear in mind Earl Loreburn’s observation in Trim Joint District School Board of Management v Kelly [1914] AC 667, 681, that the meaning is “ruled neither by logic nor by etymology, but by custom, and no formula will precisely express its usage for all cases”. As a general guide, however, and notwithstanding that it appears in a workers’ compensation case and not a case relating to public liability or other insurance, it is traditional to take Lord Macnaughten’s definition in Fenton v J Thorley & Co Ltd [1903] AC

443, 448:   “an unlooked-for mishap or an untoward event which is not expected or designed”

[14]     From this starting point Cooke J considered several English, Australian and

Canadian cases where the Courts had been called upon to interpret the meaning of

‘accident’  (most  of  which  were  in  relation  to  public  liability  policies)  and

commented that whilst they could provide some helpful guidance, they were not necessarily  exhaustive.      The  matter  had  to  be  determined  on  the  facts  of  the particular case.

[15]     It is not enough, in my view, to say that anything unexpected necessarily comes within the cover provided by the certificate.   The cover is clearly something less for mere mortality cover.     I regard it as inarguable, for example, that death by cancer, which caused a vital organ to stop functioning, could come within the definition, even if the particular organ failure which ultimately caused the death was unexpected.    This is the rationale that was adopted by this Court in Price v NZ Insurance Co Ltd. The following passage is apposite (at p 731):

From the point of view of the plaintiff it might be said that Commodore’s death was unlooked-for, untoward, and unexpected.    But, in my opinion, any such description cannot be determinative of the claim.  It is necessary to go further and consider whether the natural and ordinary meaning of the policy words “from accident”, in their context, cover the events relating to Commodore’s death.     In my opinion it would be stretching those words beyond their natural and ordinary meaning,  and  distorting them in  their context, to say that commodore’s death was “from accident”.    His death arose from the processes of nature.

[16]     Although the facts of the cases are different, the underlying principle is the same.     It stretches the natural and ordinary meaning of accident to extend cover under the certificate to a death arising from the process of nature.

[17]     Counsel for the plaintiff sought to argue that Mr Kumar’s heart attack in itself was an accident by reason of it being unexpected.   He was only 41 years of age, and his doctor had provided a certificate to Westpac Life to the  effect  that  various medical conditions from which he was suffering would not inevitably lead to his death.   That interpretation, however, takes no account of the fact that the heart attack was merely the end result of existing heart disease.   Further, I accept that the Court should take into account a well established distinction (recognised in coronial enquiries:    Solicitor-General v The Coroner of Balclutha at para [15]) between the real cause of death and the mode of dying.    In this case although the mode of dying was heart attack, the real cause of death, as set out in the post mortem report, was heart disease.

[18]     Counsel for Mrs Kumar argued that the certificate must be taken to include death by heart attack because it had not been specifically excluded.   I do not accept that as the correct approach.   The exclusion clause operates only if there is otherwise cover.      It does not help interpretation of cover to consider what events might otherwise  be  excluded.      I note  that  this  is  the  approach  taken  in  Price  v  NZ Insurance Co Ltd (at p 732).

[19]     Counsel for Mrs Kumar also referred me to other cases where the Court was able to gain guidance from the wider terms of policies, and particularly from definitions of accident, and again submitted that the absence of any policy or definition in the present case should permit a wider construction in favour of the assured.    I do not find that those other cases help.       I consider that the use of

‘accident’ in the context of this certificate is sufficiently clear.

Decision

[20]     Westpac Life has satisfied me that Mrs Kumar’s causes of action cannot succeed.    It is entitled to entry of judgment against Mrs Kumar.    Mrs Kumar’s application is dismissed.

[21]     Westpac Life is entitled to costs on a 2B basis together with disbursements as fixed by the Registrar.

Associate Judge Abbott