Yet again the High Court (Davidson J) has ordered EQC and Southern Response to pay costs to homeowners where both paid money after being sued in excess of what each had offered before being sued late 2013. In Zygadlo v EQC & Southern Response  NZHC 1699 the High Court ordered EQC to pay $12,210.27 in costs and SR $45,291.56. EQC paid $159,626.71 in August 2015 and SR paid a further $340,000 in March 2016 to remediate the house damage. EQC asked the Court to order that the homeowners pay it $21,350.47 because they had changed expert witnesses and delayed the proceeding. They also said that the Court could not make a costs order because a litigation funder had paid the costs and not the homeowners. This argument failed. SR asked the Court to order the homeowner to pay it costs of $78,741.75 because the homeowner did not receive the total amount asked for, the increased amount paid by SR came from its internal reassessments- not the litigation, and the delay by the owner’s experts. EQC and SR failed in their arguments to receive a costs award, however, the Court did reduce some costs/disbursements associated with the delays and changes in engineering witnesses. The judgment is notable that it ordered EQC to pay 2/3rds and SR 1/3rds of the costs before EQC paid cap. This judgment is further vindication of the benefits of suing. The owners were about $380,000 better off by suing.
Here is newsletter 11 for Grant Shand on EQC and Insurance issues.
In Emmons Developments NZ Ltd v Mitsui Sumitomo Insurance Co Ltd & anor  1244 the High Court (Matthews AJ) discussed a summary judgment application by the owner of Rydges, a carpark and the Grant Thornton Building in Christchurch for costs of demolition, building protection and fees from Mitsui and Vero subsequent to the earthquakes in 2010/2011. It noted that Emson applied for summary judgment in early 2016, but then withdrew the application after the insurers filed/served opposition documents. The Court decided that Emson should never have applied for summary judgment and awarded costs and disbursements against it of about $20K
In NZ Fire Service Commission & ors v Legg & ors  NZHC 1492 the High Court (Nation J) considered a claim by the NZ Fire Service Commission and the Selwyn District Council to recover costs incurred in fighting a substantial fire in January 2013 that emanated from a burn heap of vegetation from the owners of the property (Leggs) and the landscaping business operated at the property (Evolving Landscapes Ltd). Leggs sought indemnity for the claim from AMI and Evolving sought indemnity for the claim from Lumley. The evidence was that that fire started in the burn heap that the Leggs/Evolving had ignited in mid December 2012 that they believed was extinguished then. The Court held that Leggs/Evolving were liable for the costs of fire fighting. It decided that Leggs/Evolving had not been reckless/grossly negligent in relation to the fire so the insurers could not rely on an exclusion cause about failing to take reasonable care. It also decided that the evidence did not establish that the fire was caused by the landscaping business of Evolving, rather than the Leggs’ lifestyle block activities, so AMI was liable. This fire damaged houses and businesses nearby, so this is probably not the end of the litigation.
High Court – Claims about failed remedial work by EQC or insurers are not part of the High Court Earthquake List. They are dealt with separately in a similar manner to which leaky home cases are/were dealt with. This is because such claims usual involve more parties than just the EQC/Insurer (builder, engineer, architect etc). Apparently the Court will shortly issue guidance for the progress of claims.
For homeowners looking to remediate earthquake damage there may be extra costs caused by contamination of the land where foundation solutions involve the disturbance or removal of soil. These can include, but are not limited to, the costs associated with engaging an environmental expert, undertaking further investigation and removing the contaminated soil. The cost to remove and dispose of contaminated soil can be in excess of $100,000. You can find more information about contaminated land at www.mfe.govt.nz/land.
The Ministry for the Environment has identified a number of industrial, agricultural and horticultural activities that are known to use hazardous substances which could potentially contaminate land. These activities are known as HAIL activities (Hazardous Activities and Industries List).
A full list can be found at http://www.mfe.govt.nz/land/risks-contaminated-land/my-land-contaminated/hazardous-activities-and-industries-list-hail, and includes:
- Chemical manufacture, application and bulk storage;
- Electrical and electronic works, power generation and transmission;
- Explosives and ordinances production, storage and use;
- Metal extraction, refining and reprocessing, storage and use;
- Mineral extraction, refining and reprocessing, storage and use;
- Vehicle refuelling, service and repair;
- Cemeteries and waste recycling, treatment and disposal;
- Land subject to the migration of hazardous substances from adjacent land in a quantity that could be a risk to human health or the environment;
- Land that has been subject to the intentional or accidental release of a hazardous substance in sufficient quantity that could be a risk to human health or the environment.
Common examples of HAIL sites are land that has been used for the production of gas and coal products, historic sawmill and timber treatment plants, old sheep dips, historic mining sites and historic landfills. Your property’s Land Information Memorandum (LIM) report and the Listed Land Use Register (www.llur.ecan.govt.nz) will usually identify whether your property has been subject to a HAIL activity.
If you are applying for a permit, building consent or resource consent for land that has been subject to a HAIL activity, the National Environmental Standards (NES) for Assessing and Managing Contaminants in Soil to Protect Human Health (Resource Management Regulations 2011) will apply (http://www.mfe.govt.nz/publications/rma/nes-assessing-soil-protect-health). This will ensure that contaminated soil is identified, assessed and managed in a way that does not endanger human health or the environment. This process can be very expensive.
We suggest you look at the registers for your property now.