Miah v The National Mutual Life Association of Australasia Ltd

• Jurisdiction: New Zealand
• Judge: Asher J
• Judgment Date: 08 December 2016
• Neutral Citation: [2016] NZCA 590
• Docket Number: CA554/2015
• Court: Court of Appeal
• Date: 08 December 2016

Between

Abdur Rahim Miah

Appellant

and

The National Mutual Life Association of Australasia Limited

Respondent

[2016] NZCA 590

Court:

Miller, Cooper and Asher JJ

CA554/2015

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against the granting of summary judgment against the appellant on the grounds that it was not arguable that his deceased wife's estate had been entitled to a 50 per cent benefit of a life insurance policy over her life — the appellant and his wife had two separate life policies, each of which named one spouse as the life insured and both as the policy owners — an owner was the person(s) named as Policy Owner in the Schedule and, if more than one, meant all such persons jointly — the appellant and his wife were named in the schedule as the Policy Owner — the wife was murdered in Bangladesh and shortly thereafter, the appellant became bankrupt with his interest in the policy being assigned to the Official Assignee (OA) — the OA had accepted the respondent's avoidance of the policy and refused to assign the right to sue on the policy to the appellant — whether the policy was owned by the appellant and wife as tenants in common so that her share fell into her estate and he could enforce the policy as executor of her estate — in the alternative, whether the policy was held on a joint tenancy, which was severed on the appellant's bankruptcy, so that the wife and the OA held the policy as tenants in common — whether the proceeding was a collateral attack on a finding in another proceeding that the OA's refusal to assign the right to sue was not unreasonable.

Counsel:

R J Hooker for Appellant

J A Knight and A J Wicks for Respondent

JUDGMENT OF THE COURT

• A The appeal is allowed.

• B The decision entering defendant's summary judgment is quashed. C Costs are fixed and reserved.

REASONS OF THE COURT

(Given by Asher J)

Introduction

1 Abdur Miah and his wife Afrouza Miah in 2006 entered into a life insurance policy over the life of Mrs Miah with National Mutual Life Association of New Zealand Ltd (AXA). Mr Miah was bankrupted in April 2007, and shortly after that in May 2007 Mrs Miah died. Mr Miah's interest in the policy passed to the Official Assignee because of the bankruptcy. AXA avoided the policy for material non-disclosure. The Official Assignee accepted AXA's decision and did not pursue a claim.

2 Mr Miah has sued AXA in his latest amended statement of claim on various grounds including in his alleged capacity the executor of his wife's half share of the life insurance benefit. The question in this appeal is whether he has any available cause of action as executor of the estate of Mrs Miah. It is said by AXA that Mr Miah has no cause of action as executor because the life insurance benefit was payable only to Mr Miah as the surviving policy owner and his interest passed to the Official Assignee on his bankruptcy. This argument was accepted by Associate Judge Doogue, who in the judgment under appeal entered defendant's summary judgment for AXA against Mr Miah. 1

3 AXA also supports the decision of the Associate Judge on the ground that the proceeding should be struck out as an abuse of process.

Narrative

4 The material facts are few. In June 2006 AXA issued a policy over the life of Mrs Miah. It was matched by an identical policy issued over Mr Miah's life. The policy named the “Policy Owner” as Abdur Miah and Afrouza Miah. It provided a life insurance benefit of $2 million payable on the death of Mrs Miah and a trauma insurance benefit of $100,000. On 4 April 2007 Mr Miah was bankrupted.

5 It is said that Mrs Miah executed two wills, one on 5 May 2007 and one on 11 May 2007. Both focused on the policy, the first identifying it by number and stating that she was the first owner and owned 50 per cent of the benefit. Her husband was the second owner with a 50 per cent policy benefit for the benefit of his estate. The second will stated that her husband would distribute the policy to her family and creditors. The wills, which were evidently completed in Bangladesh, were produced at a very late stage of the hearing below. For that reason, and perhaps

because of their remarkable focus on the details of policy ownership, AXA denies that the wills are genuine

6 Mrs Miah was in Bangladesh in May 2007. She was murdered there on the 22nd of that month. It appears from the judgments in the Courts below that Mr Miah's brother was convicted of her murder, but before us counsel could not confirm it. We were given to understand that Mr Miah himself was tried in absentia and acquitted.

7 On 5 July 2007 Mr Miah made a claim to AXA for the life insurance benefit. AXA investigated the claim and avoided the policy on grounds of material non-disclosure. It was said by AXA that contrary to the information the Miahs supplied when applying for the policies, the Miahs were in serious financial difficulty. The Official Assignee accepted that avoidance. Nothing we say in this judgment is intended to convey the impression that the Official Assignee was wrong to do so, or to suggest that AXA will not succeed in avoiding the policy on that ground. The Official Assignee refused to assign to Mr Miah the right to sue on the policy, and that decision was challenged by Mr Miah and upheld by Associate Judge Christiansen on appeal. 2

8 Mr Miah nonetheless brought the present claim, alleging that he was entitled to the benefit of all the policy. He then amended the claim to allege that Mrs Miah's estate was entitled to part of the sum insured because the Miahs owned the policy as tenants in common in equal shares. He claimed to enforce that right as her executor for her half of the policy (the first cause of action). He further contended that if the policy was jointly owned then that ownership was severed on his bankruptcy so Mrs Miah was entitled to an equal share that he could enforce as her executor (the second cause of action), and that his own interest in the policy was not property that ever vested in the Official Assignee (the third cause of action). Other claims were made, but we need not discuss them because they are not pursued on appeal. 3

9 In the High Court, Associate Judge Doogue granted AXA's application for summary judgment, 4 which was brought on the basis that there was no seriously arguable claim. He accepted AXA's submissions that:

These two issues lie at the heart of this appeal.

• (a) Mrs Miah had no entitlement to payment on her death; rather, the benefit vested in Mr Miah alone as survivor; and

• (b) on Mr Miah's bankruptcy all of Mr Miah's interest in the policy vested in the Official Assignee, with whom that interest remains.

10 This is an appeal from a defendant's summary judgment. The onus is on the defendant to prove on the balance of probabilities that the plaintiff cannot succeed. 5

11 The parties agree that the first issue turns on construction of the policy, to which we now turn. The resolution of the second issue follows on from the first.

Interpretation

The words of the policy

12 The policy appears to be in a standard form with details inserted. It is stated to be a “Risk Protection Plan” and includes a life insurance benefit ($2,000,000) and trauma insurance benefit ($100,000). In the schedule it is stated that the events making the amounts payable are the death of the Life Insured (Mrs Miah) or major trauma to the Life Insured (Mrs Miah). It is also stated that, apart from the Income Protection and Business Expenses components referred to in the policy that were not taken up by the Miahs, “All other Benefits are payable to you”.

13 “You” is defined as “the Policy Owner”. The definition of “Policy Owner” provides:

Means the person or persons named as Policy Owner in the Schedule and if more than one means all such persons jointly.

(Emphasis added)

14 The schedule under Policy Details states:

Policy Owner: Abdur Miah

Afrouza Miah

15 The plain meaning of all these clauses is that this is a jointly owned policy, and all benefits are payable to the joint owners, Mr and Mrs Miah. Thus it could be expected that the Miahs as co-owners were each contractually entitled jointly to the whole of the life or the trauma insurance benefit, and would receive that benefit jointly.

16 Insurance policies such as these can be jointly owned as either tenants in common or as joint tenants. 6 Some benefits under a jointly owned policy may be payable to the policy owners jointly and others may not. 7

17 Mr Hooker who appeared for Mr Miah submitted, as we understand it, that the policy was owned as tenants in common. In the alternative, he submitted it was held by the Miahs in a joint tenancy, which was severed on Mr Miah's bankruptcy. Mr Knight for AXA on the other hand submitted that a proper construction of the policy was that the life insurance benefit was payable to Mr Miah alone as the sole survivor, and not to Mrs Miah's estate. The interest was not a joint one and therefore there was no ability to sever. In support of that proposition, both before us and before Associate Judge Doogue, he relied on the background circumstances, the policy wording and English case law.

18 It can be immediately observed that the clauses we have outlined plainly direct that the payment is to be made to the two co-owners. That would mean that on Mrs Miah suffering a qualifying trauma, they would be paid the trauma insurance

benefit jointly. In relation to the life insurance benefit, she would be dead. Should the benefit go to the named co-owners by a half payment to Mr Miah and a half payment to Mrs Miah's estate, or should the payment go to Mr Miah entirely

Background circumstances

19 In interpreting the contract, the background circumstances known to the parties and any inferences that could be drawn from the subject matter of the contract are able to be admitted for consideration. 8

20 There are no communications...