Taylor v Asteron Life Limited - [2019] NZHC 978

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2015-485-1032

[2019] NZHC 978

BETWEEN
PETER JAMES TAYLOR

Plaintiff

AND

ASTERON LIFE LIMITED

Defendant

Hearing: 11–15 February; 18–20 February 2019

Appearances:

A C Beck for the Plaintiff

C M Meechan QC and A Borchardt for the Defendant

Judgment:

7 May 2019

JUDGMENT OF COOKE J

Table of contents

THE KEY FACTS[4]
THE POLICY[14]
Total Disability Benefit[16]
Partial Disability Benefit[21]
THE PLAINTIFF’S CLAIMS FOR A DECLARATION[25]

Does Mr Taylor suffer from a sickness?[28]

Was Mr Taylor Totally Disabled?[37]

Was Mr Taylor Partially Disabled?[49]

Meaning of Monthly Earned Income[52]

Relevant calculation[57]

DEFENDANT’S COUNTERCLAIM[65]

The correct legal framework[66]

Did Mr Taylor breach his obligations?[71]

The representations about work[74]

Statements about income[83]

Remedy – restitution[96]

Was the contract cancelled?[99]

What should be restituted?[104]

Change of position[109]

TAYLOR v ASTERON LIFE LIMITED [2019] NZHC 978 [7 May 2019]

Karitane house[115]
The motor vehicles[117]
Overseas travel[120]
Conclusion on change of position[123]
CONCLUSION[124]

[1] For many years the plaintiff, Mr Peter Taylor, undertook business on his own account as an insurance broker. He also took out his own income protection insurance policy. In July 2010 he made a claim under that policy as a consequence of significant medical problems. Cover was accepted by the insurer, Asteron Life Ltd (Asteron), and he was paid certain insurance benefits until September 2014 when Asteron suspended payment.

[2] Mr Taylor commenced these proceedings, and in a two page statement of claim seeks a declaration that he is entitled to continuing benefits under the policy, an order for claimed arrears, and other related orders. In a four page statement of defence and counterclaim Asteron denies Mr Taylor is so entitled, and seeks restitution of all payments previously made under the policy. Asteron says that in his claim form and the subsequent progress reports Mr Taylor reported that he was not working, or only undertaking very limited work, when he in fact was working more extensively. This is said to breach his duty of utmost good faith. In a four page defence to the counterclaim/reply Mr Taylor denies this, and pleads defences to the counterclaim including a change of position defence.

[3] Notwithstanding the apparently confined nature of these disputes, and the brevity of the pleadings, there are a number of issues to be addressed. Moreover in opening Mr Beck for the plaintiff advised that there was a very stark difference in the positions of the parties, as Asteron was contending that Mr Taylor had acted fraudulently, and Mr Taylor contended that Asteron was failing in its duties in a highly inappropriate way.

THE KEY FACTS

[4] Whilst there are important disputes as to fact arising in the proceedings, certain core facts are not in dispute.

[5] Mr Taylor commenced work as an insurance broker after leaving school and following a short period of study at Otago University. He worked for insurance companies, including Sun Alliance Life, opting not to accept a salary but to…

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: [2019] NZHC 978
Decision Date: 7 May 2019

CaseChat Overview and Summary

The plaintiff, Mr Taylor, brought a claim against the defendant, Asteron Life Limited, seeking a declaration that he was entitled to continuing benefits under an income protection insurance policy and an order for payment of arrears. Asteron denied the plaintiff's claims and counterclaimed for restitution of all payments previously made under the policy, alleging that Mr Taylor had breached his obligations of good faith by making false statements in his claim forms. The High Court of New Zealand dismissed the plaintiff's claims and upheld the defendant's counterclaim. The Court found that Mr Taylor had breached his obligations of good faith by making false statements in his claim forms, including misrepresenting the amount of work he was engaged in and his income. The Court also found that Mr Taylor had not acted in good faith in relation to the change of position defence, as he had induced the defendant to pay him money under the policy by making false statements. The Court held that the defendant was entitled to restitution of all payments made to the plaintiff under the policy and reserved leave for the defendant to file a memorandum setting out its claim for interest. The defendant was also entitled to costs for resisting the plaintiff's claim and on its counterclaim.

Orders