Percy v Sovereign Assurance Co Ltd - [2014] NZHC 1573

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-7645 [2014] NZHC 1573

BETWEEN
DAVID JOSEPH PERCY

Plaintiff

AND

SOVEREIGN ASSURANCE COMPANY LIMITED

Defendant

Hearing: 25-28 February 2014 and 3,4,5 and 6 March 2014

Counsel:

G P Blanchard and C M Hanafin for Plaintiff
C M Meechan QC and A Borchardt for Defendant

Judgment:

7 July 2014

JUDGMENT OF KATZ J

This judgment was delivered by me on 7 July 2014 at 12:00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Lowndes Jordan, Auckland
Graeme Edwards, Auckland

Counsel: G Blanchard, Auckland
C Meechan QC, Auckland

PERCY v SOVEREIGN ASSURANCE COMPANY LIMITED [2014] NZHC 1573 [7 July 2014]

Table of Contents

Introduction ........................................................................................................................1
The scope of the Court’s inquiry into Sovereign’s decision making ..............................4
Mr Percy’s claims ...............................................................................................................8
Issue relevant to all claims  9
Total disability claim under the Income Protection Plan  10
Partial disability claim under the Income Protection Plan  11
Total and permanent disability claim under the Life Plan  12
The facts.............................................................................................................................14
Mr Percy’s first episode of depression - 2006  16
Recurrence of Mr Percy’s depression – June 2009  18
Preparation of a functional job description  23
Dr Fraser’s 13 September 2009 Report  24
Mr Percy sells his business  25
Sovereign reviews the position – January and February 2010  27
Sovereign declines Mr Percy’s total and permanent disablement claim  31
Unsuccessful attempt to prepare a vocational re-integration plan for Mr Percy        32
Meeting between Sovereign and Mr Percy on Friday 25 June 2010  38
Mr Percy’s challenge to Sovereign’s decisions  41
Claims Committee review  44
Mr Percy’s current situation  47
What constitutes “total disability”? ................................................................................50
Did Sovereign and its advisers fail to understand the difficulty and complexity
of Mr Percy’s specified occupation?................................................................................60
Did Sovereign fail to consider whether Mr Percy was suffering a total disability
as at 29 June 2010, having regard to his symptoms of depression at that time?.........70

Mr Percy’s claim 70

Events during 22 to 29 June 2010 71

Discussion 76
Did Sovereign fail to act fairly and/or reasonably by not investigating Mr Percy’s
concerns regarding Ms Leeson and Mr Schnabel’s assessment as to his level of
function? ............................................................................................................................82

Mr Percy’s claim 82

Ms Leeson and Mr Schnabel’s assessments of Mr Percy’s level of function 83

Discussion 88
Did Sovereign fail to act in good faith, fairly and/or reasonably by making a
predetermined decision on 29 June 2010? ......................................................................94
Mr Percy’s claim  94
Discussion  99
The Claims Committee’s decision of February 2011 ...................................................107
Dr Wyness’ Report  108
Dr Kahan’s Report  113
Review of Dr Wyness’ and Dr Kahan’s reports by Professors Kydd and Gorman........115
Discussion  119
Did Sovereign err in not investigating whether it was feasible for Mr Percy to
work on a reduced basis? ...............................................................................................123
Did Sovereign act unreasonably, unfairly, or otherwise in breach of its obligations
to Mr Percy in concluding that he was not entitled to a partial disability benefit? ..133
Mr Percy’s claim  133
Discussion  137
Did Sovereign err in…

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.

Keep reading for free

Create a free CaseChat account to read Percy v Sovereign Assurance Co Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2014] NZHC 1573
Decision Date: 7 July 2014

CaseChat Overview and Summary

David Percy sought to challenge a series of decisions by Sovereign Assurance Co Ltd to refuse his claims for total disability, partial disability, and total and permanent disability benefits under his income protection and life insurance policies. The High Court of New Zealand dismissed Mr Percy's claims. Sovereign had engaged various medical experts to assess Mr Percy's fitness to return to his occupation as a financial adviser. Mr Percy submitted that Sovereign and its advisers failed to understand the difficulty and complexity of his occupation, failed to take into account his symptoms of depression at the relevant time, failed to properly investigate his concerns regarding the assessment of his level of function, and made a predetermined decision to cease paying him disability benefits. The Court found that Sovereign had taken into account all relevant information available to it, and its decision to cease paying Mr Percy's disability benefits was reasonable. The Court also found that the Claims Committee's decision to uphold Sovereign's decisions was reasonable. The Court further found that there was no evidence to support Mr Percy's claims that Sovereign breached its obligations to him in declining his claim for a total and permanent disability benefit.

Orders