In May last year Peter Taylor, who claimed he was too sick to work while spending big on luxury cars, a new home and overseas trips, was ordered by the High Court to pay back income insurance he received from his insurer, Asteron Life Ltd.
Mr Taylor applied for a stay of execution at the Court of Appeal in October on the basis of a new affidavit he had sworn by.
In the application, Mr Taylor asked for a stay on the High Court judgement and the "subsequent judgement on interest and costs".
The interest, which Justice Cooke said Asteron was entitled to, came to $128,153.
With court costs added, the "net judgement debt" was now about $666,000.
In his new affidavit, Mr Taylor stated he became ill in 2009 and was not able to continue the business and draw salary from it.
He rejected the High Court’s judgement he had made false assertions about his income, arguing he had provided the court with financial statements prepared by accountants "with whom he had a long-standing relationship".
"He asserted that his tax returns for the years 2010-15 consistently show either a loss or a nil assessment," the court judgement stated.
Mr Taylor further argued the trust that owned his old business was "in accordance with professional advice and normal business practices".
"I reject the assertion that I have made efforts to ‘alienate assets and allocate income’ to my wife in a way that is somehow improper," Mr Taylor said in his affidavit.
He did admit he had received some funds from the trust to help with his expenses in the past three years, but he said he had "no right to receive any income that might accrue to the trust".
Ultimately, he stated, he was not in a position to pay back the sum he was ordered to, nor did he have assets to work as a security on the payment.
In response for Asteron, Christine Meechan QC warned the court to be sceptical about Mr Taylor’s claims, pointing to a lack of evidence behind the trust that owned what was once Mr Taylor’s insurance company.
She said there was an "absence of evidence to suggest that the trusts might not be persuaded to exercise their discretion in favour of payments to Mr Taylor to ease his present difficulties".
Mr Taylor’s appeal was declined in a judgement announced by the Court of Appeal last month.
Asteron has also issued a bankruptcy notice in the High Court at Dunedin.
The case began when Mr Taylor lodged a High Court claim against Asteron after the company stopped making payments amid unanswered questions about his finances.
Asteron then lodged a counter-claim, seeking reimbursement for payments made to Mr Taylor over four years.
In findings favouring the insurance company, Justice Cooke outlined how Mr Taylor had spent significant sums on a new holiday house at Karitane, two Mercedes Benz coupes and trips to the Pacific, all while relying on insurance payments from Asteron.
The court heard Mr Taylor was a self-employed insurance broker when, in 2010, he lodged the income protection claim with Asteron.
Mr Taylor claimed he had been too ill to work since December 2009, and Asteron accepted the claim and began regular payouts.
Then, in 2014, the company sought additional financial information from Mr Taylor, including clarification of payments totalling $551,491 that were passing through a separate set of accounts associated with him.
In his claim, he outlined his medical conditions, including bone cancer, a radiation burn from treatment and two cases of meningitis, among other issues, but no medical evidence was called in court.
Under his policy, Mr Taylor qualified for total disability payouts if he worked no more than 10 hours a week.
However, evidence to the court suggested he remained "actively involved" in his business, working an average of four hours a day from home or in his office, and on other business ventures.
The income he received had remained "essentially unaffected", pushing him beyond the limits set for total disability payments.
Mr Taylor’s answers to questions about this were also deemed "unreliable, and at times not credible", and he was not totally disabled, Justice Cooke concluded.
His accounts had shown large losses — of up to $75,301 a year — during the period, but a separate set of accounts, unearthed during the court discovery process, recorded profits of up to $166,013 a year.
Justice Cooke concluded the profitable accounts had been deliberately changed to create a second "false" set of accounts that removed "significant" revenue streams to ensure losses were booked.
Justice Cooke was "simply not in a position" to know who created the false accounts, but the accurate ones confirmed Taylor was not entitled to a payment from Asteron.
Asteron, in its counterclaim, sought reimbursement for its payouts, arguing Taylor had breached his "obligation of good faith".
Justice Cooke agreed, dismissed Taylor's claim, upheld the counterclaim by Asteron, and ordered Taylor to pay the company $371,286.70.
Court costs and interest payments would be determined later.
