Pilkington v Fidelity Life Insurance Company Limited

(High Court, 30 October 2012, Wellington, Simon France J, CIV-2012-485-2017)

Background

This case involved a protracted dispute between Mr Pilkington and Fidelity Life Insurance Company Limited (Fidelity).

Mr Pilkington became unable to work is 2004.  He held income protection insurance with Fidelity, and Fidelity initially accepted his entitlement to monthly income payments.  However, a dispute as to his ongoing entitlement arose and, after Fidelity ceased making payments, proceedings were issued.  These proceedings were settled.

However, in relation to the last settlement in February 2012, Fidelity failed to resume the monthly payments because it wished to undertake fresh assessments.

Issue

Mr Pilkington sought an interim injunction ordering Fidelity to:

  • Maintain payments under the policy until the proceedings are resolved;
  • Pay a lump sum of missed payments, and interest thereon; and
  • Refrain from seeking to require the plaintiff to sign a particular consent form in relation to seeing a nominated physician.

Immediately prior to the hearing, Fidelity made a limited offer to:

  • Pay half the monthly entitlement until resolution, as long as Mr Pilkington co-operated to obtain an early fixture; and
  • Reimburse half the missed payments, without interest.

Mr Pilkington declined this offer.

Decision

The Court did not dismiss the impact of Fidelity’s non-payment on Mr Pilkington.  However, there was an absence of any evidence as to his current situation and the Court did not consider it to be reasonable to require Fidelity to honour the policy on the supposition that Mr Pilkington’s arguments were correct.

The Court made an interim order that Fidelity immediately pay 50% of all benefits that should have been paid since the settlement in February 2012, and thereafter resume payment of 50% provided Mr Pilkington submitted the required form each month completed by his doctor.