Southern Response (formerly AMI Insurance) had a practice of maintaining duplicate remedial costings for earthquake damaged houses.  A “customer” version and an “office” version.  The “customer” version did not include demolition, professional fees and contingency.  The “office” version included these costings.  Southern Response concealed the “office” version with the effect that many people settled their insurance claim for less than their entitlement.  Rick and Anna Groen sued Southern Response in the High Court claiming breaches of the Fair Trading Act and duty of good faith.  The High Court in Groen v Southern Response [2018] NZHC 1025 recently considered the status of the legal advice Southern Response received in the context of witness statements and an upcoming trial.  The judgment contains a good summary of the issues.  The Court decided that Southern Response could edit witness statements and statement of defence to remove reference to legal advice, but if at trial it tried to rely on the legal advice for its conduct then it would waive privilege over the advice and must provide the advice.  There are likely thousands of people in the same situation as the Groens that also have claims against Southern Response.

In Xu & anor v IAG New Zealand Ltd [2018] NZCA 149 the Court of Appeal confirmed the High Court decision that under the insurance policy the reinstatement right under the policy was not transferable to a subsequent owner.  It was personal right that could not be assigned.  Because the original insured did not reinstate the house before selling it to the current owner there was no right to reinstatement costs.  Xu received indemnity value only.  The Court of Appeal followed its previous decision in Bryant.  It is now likely that Xu will try to have the Supreme Court consider the issue.  This judgment affects subsequent owners that may have bought a house with an assigned claim expecting to recover reinstatement costs.