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High Court rules on “red zone” land offers

In Fowler Developments Ltd v CERA [2013] NZHC 2173 the High Court considered applications for judicial review by owners of residential land and uninsured homeowners in the “red zone” challenging the legality of the CERA offers to pay 50% of the 2007 Land Value.  The plaintiffs alleged that the offers were unlawful because they were not made in accordance with the Canterbury Earthquake Recovery Act 2011.   The Court  decided that the “red zone” was not implemented properly in accordance with the CERA. It set aside the 50% offers made and required the Minister & Chief Executive reconsider the decision as to any new purchase offers.  This decision is a victory for the plaintiffs.

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Earthquakes, Insurance broker and no insurance

An insurance broker failed to place home insurance for homeowners when asked to in May 2009.  The earthquake in September 2010 badly damaged the house.  The broker then unsuccessfully  tried to place the cover with the insurance company and backdate the cover.  The High Court decided that the broker was liable to the homeowners in Marchand & ors v Jackson & anor [2012] NZHC 2893. In Marchand & ors v Jackson & anor [2013] NZHC 1752 the High Court quantified the broker’s liability at $2,686,779.  The broker joined his professional indemnity insurer, IAG New Zealand Ltd, as a third party.  It applied for summary judgment based on the dishonesty exclusion.  The High Court refused to enter summary judgment in Marchand & ors v Jackson & anor [2012] NZHC 944.  The Court of Appeal has now allowed IAG’s appeal and decided that the insurance policy dishonesty exclusion applied.  Had the broker not hidden the lack of cover from the homeowners they would have organised cover.  So the broker’s dishonesty was a causative of the loss.  The Court of Appeal decision is IAG New Zealand Ltd v Jackson [2013] NZCA 302.

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Delay in service and limitation periods

Recently I conducted a hearing for owners of a leaky home where the defendants had asked the High Court to strike out the claim by reason of delays in service of the court proceedings having affected their ability to cross claim and join third parties.  The defendants alleged that by reason of the expiry of the 10 year limitation period under the Building Act they had been so prejudiced that justice was no longer achievable.  In the decision in McConnel v Matthews & ors [2013] NZHC   1819 Christiansen AJ dismissed the application.  The defendants were unable to show prejudice and that they could not have brought cross claims and joined third parties.  The proceedings were commenced within the 10 year limitation period and served within 12 months of filing.

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