A New Zealand couple in Perth has won the right to pursue their racial discrimination case against ANZ for selling them a life insurance policy which is worthless because they are not citizens.

Photo: 123rf

Charles and Judith Cairns of Perth will take their case to the New South Wales Civil and Administrative Tribunal after a ruling from that tribunal that they have a case to take.

Read the full decision here

If they succeed, their backers have vowed to use it to challenge discriminatory laws at the federal level that deny New Zealanders support.

ANZ, however, says the grounds of the complaint have already been addressed.

The Cairns had already paid $20,000 in premiums over nine years on a $200,000 policy when a financial planner alerted them last year to the fine print, barring them from any payout because they were not citizens or permanent residents.

Mr Cairns couldn't quite believe it.

"Can you imagine if I passed away, or any New Zealander, the husband passed away, and the wife goes and gets the life insurance and they only paid it out what you have paid in there," he said.

"It just tears your guts out. Imagine your partner being stuck with no money."

Most expat New Zealanders are in the same boat as special category visa (SCV) holders. Only ANZ knows just how many have been denied an insurance payout, but it has not revealed this.

Photo: RNZ / Claire Eastham-Farrelly

Mr Cairns has opted to pursue legal action despite ANZ subsidiary OnePath refunding their premiums and, under pressure, offering him a new policy.

"If I had of taken their policy, they would've told me to zip my mouth. It's actually for all the other Kiwis that are out there in the same situation I would be in."

Mr Cairns suffered a stroke while he thought he was still covered, and now has no life insurance, though his wife did get a policy with another company.

The original insurance policy with ANZ was direct-marketed to them a year after they moved to Sydney in 2004.

OnePath conceded at the special hearing that the Cairns were never covered by their policy to begin with - even though their application and their premium payments were accepted.

The couple said they wanted a public apology.

"For all Kiwis. You know, really, we have been treated like second-class citizens," Mr Cairns said. "I thought that was wrong."

Change to include NZers being backdated - ANZ

ANZ said on Wednesday that it had already taken steps to address the Cairns' concerns.

The bank said, since 2009, New Zealand citizens living in Australia had been eligible for insurance, and OnePath was applying that to all its older direct life insurance policies.

That would include people who applied before 2009 and who ANZ might not have known were New Zealand citizens at that time, it said.

The couple's legal advocate, David Faulkner, said this was an admission by the bank that before 2009 it was discriminating along nationality lines.

In the statement on Wednesday, an ANZ spokesman said: "We remain happy to engage with the Cairns to explain our position and the steps we have taken to address their concerns throughout this process.

"As this matter is still before a tribunal, it would be inappropriate to comment any further."

Next step, federal laws - advocate

Mr Faulker has said earlier that they wanted OnePath to change the wording in the old policies and notify New Zealanders that they could revisit any claims.

He had fought for a year to get them this far, he said - and for five years through a series of other anti-discriminatory challenges since winning against ACE Insurance when he tried to get credit card insurance in 2011.

"This issue crops up all the time," he said.

"I've had this happen to me four times. Only late last year I settled with another major Australian insurer out of court when I was denied travel insurance on a very similar basis."

Mr Faulkner said, if the Cairns won, it would show that some federal laws were also discriminatory, and the next step would be to use the statistical evidence to argue New Zealand expats should be able to claim under the incoming National Disability Insurance Scheme.

"We will be asking the tribunal to spell it out, that you simply cannot deny insurance to New Zealanders residing here permanently under the trans-Tasman travel arrangements - if you do so you will be breaking the law.

"This time we will be asking that it is decisively dealt with so that it never happens again."

The Cairns' case is expected to go to the tribunal before the end of the year.