Mr Young and his co trustees had previously obtained a judgment against Tower Insurance on 7 December 2016 that their house was a rebuild at a cost of $1,620,887 together with general damages of $5ooo for Tower not providing a report. The owners then asked the Court to order Tower to pay costs of $93,194 and disbursements of $102,259.91 (witness expenses and court fees). This was said to be less than two thirds of the owners actual legal costs. Tower said that any costs ought to be reduced significantly because the the owners had extended the hearing time with unnecessary allegations and not succeeded with the deliberate wrongdoing allegations. The Court in the judgment Young & ors v Tower Insurance Ltd [2017] NZHC 482 said that the owners were the successful party even though they did not get everything they asked for. It reduced the costs award by one day of hearing time for unsuccesful allegations about Tower wrongdoing. It increased the award to 2C for witness statements, bundle and trial preparation. Ultimately the Court ordered Tower pay costs of $89,849 and disbursements of $98,874.91. It did not order Tower to pay any costs on the costs application.
By the judgment 21 March 2017 in Invercargill City Council v Southland Indoor Leisure Centre Charitable Trust [2017] NZCA 68 the Court of Appeal allowed the Council’s appeal against a High Court (Dunningham J) judgment that it was liable to pay in excess of $16M for the roof collapse of Southland Stadium in September 2010. The only Council act within the limitation period was the Council issuing a code compliance certificate on 20 November 2000. The Court decided that the Trust had not relied upon the code so the Council could not be liable for negligent misstatement. It relied upon its own contractors/staff in not remediating the roof issues. The Court noted that if it had found the Council liable it would have found the Trust to be 50% responsible. Harrison and Cooper JJ decided that in the circumstances the council did not owe the alleged duty of care. It was in control of the entire building process and was an original owner. It did not rely on the Council.
In Myall v Tower Insurance Ltd [2016] NZHC 251 the High Court (Dunningham J) considered Tower’s obligations under the insurance policy where the actual floor area was 799m2, but the owner had insured the house for only 650m2. The number of rooms and amenities were not specified on the insurance policy schedule which only referred to the insured house being a house built in 1885 with an area of 650m2. There were 8 bedrooms and 6 bathrooms. Tower calculated the premiums based on 650m2. Tower used a pro rata adjustment to reduce the calculated rebuild cost. Mr Myall suggested that elements unaffected by area such as numbers of toilets and doors could not be apportioned on a pro rata basis. Dunningham J decided that the Tower approach was correct because the house was very large and many of the costs were based on the extent of the work, rather than fixed costs on elements. She noted that the outcome may be different where you were dealing with an 120 m2 house insured for 80m2 where significantly more of the costs would be for items unaffected by floor area such as bathrooms and kitchen(s).
As of 1 March 2017 the District Courts Act 2016 is in effect so that the District Court can now accept claims up to $350,000 rather than the previous $200,000. This will enable many earthquake insurance/eqc claims to be filed in the District Court with its cheaper filing fee ($200 vs $1350). The District Court also operates a quick track for earthquake claims shortening time frames for events.
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