Cancer-beating lawyer challenges insurance company in Court of Appeal

A senior lawyer who beat cancer has taken his insurance provider to the Court of Appeal over a $1.2m payout, reported the NZ Herald.

Christchurch lawyer Hugh Roderick Catherwood sued Asteron Life Limited for breach of contract after the company denied him the full amount under his life insurance policy following his diagnosis with stomach cancer in January 2019. Catherwood was told that his chances of surviving the next five years were lower than 50%, even after undergoing surgery and chemotherapy.

The lawyer had taken out life insurance with Asteron Life in 2009. As per the policy, he was entitled to a death benefit payout in the event that he died; he was also entitled to a payout should he be diagnosed with a terminal illness.

The policy defined a terminally ill person as one with a life expectancy of no more than 12 months as a result of sickness, “regardless of any available treatment”. Catherwood argued that he met this definition; however, Asteron Life countered that he did not meet the definition as he could avail of treatment that would bolster his chances of surviving his illness.

Catherwood first took his case to the High Court, where Asteron Life prevailed under Justice Rachel Dunningham last December. Catherwood appealed the ruling; earlier this month at the Christchurch Court of Appeal, his lawyer Henry Holderness challenged Dunningham’s interpretation of the wording in Asteron Life’s life insurance policy to mean that since Catherwood could avail of treatment, he therefore didn’t qualify for his payout.

Asteron Life’s legal representative, Christine Meechan KC, noted that interpretation of the policy’s wording was at the crux of the matter, but countered that the policy could not realistically be interpreted in just one way. She said that an insurer could reasonably not opt to pay a full death benefit if there was no satisfactory certainty that the policy’s beneficiary would die.

Meechan added that Catherwood’s appeal would only succeed if he was able to prove not only his cancer diagnosis, but that he was likely to die in the space of 12 months despite undergoing treatment.

The Court of Appeal bench has reserved its decision.

Catherwood had previously received a payout of $564,185 that was claimed under trauma recovery insurance, and will still be given the $1.2m payout in the event of his death. Asteron Life has since modified the definition of “terminally ill” in its policy to mean one’s life expectancy not exceeding 12 months as a result of sickness and even with medical treatment available.