28.04.2014

van der Noll v Sovereign Assurance Co Ltd [2013] NZHC 3051

Mr van der Noll was a member of a group insurance scheme for income protection.  He suffered from chronic pain syndrome, which prevented him from working in his former occupation.  Under his policy, Sovereign could cease payment of his benefit after two years if it considered on reasonable grounds that he was not suffering from a total disability.  Sovereign obtained expert opinions from an occupational physician and a vocational assessor, and decided that Mr van der Noll was no longer entitled to a benefit.

The Court identified the following principles that an insurer should follow when making a decision on whether an insured is entitled to a benefit:

  1. The insurer should interpret the policy to determine the correct questions in issue.
  2. Where an expert opinion is sought, the expert should be provided with all the relevant information.
  3. The expert must be asked the correct questions.  However this does not require the insurer to request the expert to analyse specific policy provisions, where the insurer is not delegating the determination to be made to the expert.
  4. The insurer is bound by a duty of good faith and fair dealing.
  5. The insurer must have due regard for the interests of the insured, but this duty is contractual, not fiduciary.
  6. Where a state of affairs governing the entitlement to a benefit turns on the opinion of the insurer, the insurer must act reasonably in considering the matter and forming its opinion.
  7. The insured bears the onus of proof in both the original claim and any review application.

The Court will not substitute its judgment for that of the insurer.  If the insurer has addressed itself to the right questions and taken account of the relevant information available to it, and the decision reached is reasonably open to the insurer, the Court cannot intervene.  This test is similar to the Wednesbury principle applied in judicial review applications.

Back to Summary Table

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Flooded car
Flooding due to overland flow paths and damaged drainage
Persistent heavy rainfall across the country often results in damage to property due to flooding caused by overland flow paths and defective drainage.  But who is responsible for the cost of the dama...
17.06.2025 Posted in Climate Change & Property
Understanding Indirect Privacy Notification: What you need to know
The Privacy Amendment Bill (the Bill), if passed into law, will require agencies to notify individuals when their personal information is collected from a source other than the individual themselves, ...
16.06.2025 Posted in Corporate & Commercial & Employment
iStock  Succession Plan medium
Family Ties: Intra-Family Succession and Exit Planning
As the second instalment in a series of articles looking at the generational wealth transition and its impacts on business succession in New Zealand, Ben Hickson (partner, Corporate & Commercial...
16.06.2025 Posted in Corporate & Commercial & Private Wealth
Employment law at a glance – June 2025
If you are anything like us, you will be shocked to realise that we are halfway into 2025. As time has been marching on, so too have employment law developments – and there have certainly been quite...
05.06.2025 Posted in Employment
HH Pg  Forrest uncropped
ETS Update: Climate Change Commission recommends minor tweaks to ETS Settings
Last month, He Pou a Rangi Climate Change Commission (the Commission) released its annual advice to the Government on the Emissions Trading Scheme (ETS) settings for the period 2026 to 2030 (Advice)....
HS Scrabble Med Crop Vignette
Health and safety learnings for landowners following latest Whakaari decision
The leasing and subleasing of land, buildings and infrastructure is commonplace in New Zealand business and commerce, but what happens when something goes wrong? Do landowners have health and safety o...
08.05.2025 Posted in Health & Safety
Navigating Settlor Intentions in Trust Restructures – Legler v Formannoij [2024] NZSC 173
In Legler v Formannoij the surviving widow Marina Formannoij, was forced to navigate the complexities of two trusts that were part of her late husband Ricco Legler’s estate plan: the Kaahu Trust (wh...
08.05.2025 Posted in Private Wealth
SEND AN ENQUIRY
Send us an enquiry

For expert legal advice, please complete the form below or call us on (09) 375 8700.