The New Zealand Court of Appeal has reduced the amount Asteron Life is entitled to recover from a self-employed insurance broker who submitted false information to support his claim for continued payment of income protection benefits.

Asteron Life had succeeded in its counterclaim against Peter Taylor when the High Court ruled last year the broker must repay $NZ371,286.70 ($337,195) plus interest and cost to the Suncorp-owned entity.

The counterclaim was filed after Mr Taylor sued to have Asteron Life resume paying him disability benefits, which were suspended in September 2014 following an investigation by the insurer that found he gave false details about his income and hours worked.

Asteron Life counterclaimed for recovery of the entire amount it had paid under the income protection policy, including a $NZ51,835.64 ($47,076) payment that was backdated to January 2010.

Mr Taylor had submitted his claim in July that year, saying he suffered from medical conditions that rendered him totally disabled.

The Court of Appeal handed down its verdict last week, dismissing Mr Taylor’s appeal against the High Court ruling ordering him to repay the amount sought by Asteron Life.

But it also cut the amount Asteron Life is entitled to recover by $NZ51,835.64, saying this portion of the benefit payment applied to a period – January to July 22 2010 – where the insurer had failed to establish Mr Taylor was not totally disabled.

The appeal ruling also pointed out the High Court declined to find the initial claim involved false statements, meaning Asteron Life’s allegation there was a “breach of utmost good faith” could not succeed.

The Court of Appeal says the insurer did prove Mr Taylor dishonestly provided false information in subsequent forms to support his application for benefit payments to continue from July 23 2010, and therefore had a right to recover what it was owed.

“We agree with the [High Court] that Mr Taylor’s claim must fail,” the Court of Appeal ruled. “We also agree… that Asteron is entitled to succeed on its counterclaim.”

But the counterclaim will only apply to the period where Mr Taylor gave fraudulent information about his income and hours worked to the insurer, which had asked for progress reports to assess the ongoing payment of disability benefits.

“We do not consider that Mr Taylor’s dishonesty in respect of subsequent periods means that Asteron is entitled to recover amounts paid in respect of the initial period,” the Court of Appeal said.

“His dishonesty in respect of those later periods… do not impugn in any way the validity of the payments made in that earlier period.”