Here is a link to the Canterbury Earthquakes Insurance Tribunal Bill introduced on 1 August 2018. It appears to create a tribunal that is a replica of the Weathertight Homes Tribunal. Notably the Tribunal can only consider claims by an original insured against EQC and/or any insurer. The Act expressly does not apply if ownership of the property is transferred following the insured physical loss or damage. The Tribunal has the power to direct parties to mediation and appoint independent experts. It also has the express power to restrict cross examination of witnesses and disallow the use of experts unless they are necessary. A big negative is that the Tribunal is not empowered to award costs based on success, but can only award costs if there is proven bad faith, meritless allegations or unreasonable delay. Any appeals are to the High Court, but only with leave of the High Court. This Tribunal is about 7 years too late and repeats the errors that make the WHT a bad choice for many homeowners. It also excludes the “on solds” that are the most prevalent claims now. A positive is that it enables people to prosecute land claims cheaply without much risk of adverse costs. Another query is why does the Act not apply to Kaikoura claims?
In Blumberg v Frucor Beverages Ltd & ors [2018] NZHC 1876 the High Court (Jagose J) considered whether a not-at-fault car driver could recover the costs of hiring a replacement car whilst the collision damaged car was repaired from the at-fault driver. The dispute was really between insurers and Right2Drive (New Zealand) Ltd. R2D since 2016 has provided not-at-fault drivers with replacement cars during the period of their damaged car’s repair. R2D seeks to recover its charges from the at-fault drivers or their insurer(s). Since 2016 insurers had refused to pay R2D $4.22M, so R2D initiated the court proceedings. The Court decided that the insurers were liable for all of the R2D charges. These were mitigation expenses reasonably incurred. The driver was only required to act reasonably which he/she had done so by entering into the hire agreement with R2D to mitigate the loss of use of their car.
The High Court on review in Deo Gratias Developments Ltd v Tower Insurance Ltd & ors [2018] NZHC 1881 has overturned a previous High Court decision to award an earthquake claim plaintiff 75% of the 2B cost and disbursements. Davidson J decided that there was insufficient evidence that EQC was responsible for the costs being incurred to justify more than the 50% usual award. The short time between EQC paying cap and the insurer settling the claim was insufficient to justify an inference of greater EQC responsibility. Interestingly Davidson J says that an insurer is not bound to wait for EQC to declare over cap or pay cap before settling with an insured. The loss covered by the EQC Act requires objective assessment, not simply EQC’s view. The insurer is not bound by EQC’s subjective view. Additionally the Court upheld the cost awards against EQC on all 4 claims because the claimants had by the court process recovered more than EQC ever offered as costs.
The 2016 Kaikoura earthquake damaged Deloitte House in Wellington. Precinct Properties Holdings Ltd owns the building. OMV New Zealand Ltd leased the ninth and tenth floors of the building. OMV says the earthquake damage has rendered it untenantable and that the lease has automatically terminated. Precinct denies this and has claimed for unpaid rent, seeking summary judgment in the High Court. OMV asked the High Court to stay the rental summary judgment pending arbitration of wider issues such as misrepresentations by Precinct about the earthquake rating of the building and untenantability. The Court of Appeal in OMV New Zealand Ltd v Precinct Properties Holdings Ltd [2018] NZCA 240 dismissed an appeal by OMV from the High Court decision that a claim for rent was not subject to the arbitration clause in the lease. So the claim for unpaid rent could continue in the High Court. OMV has to pay the actual legal costs of Precinct under the lease.
In QBE Insurance (International) Ltd v Allianz Australia Insurance Ltd [2018] NZCA 239 the Court of Appeal upheld the High Court decision that Allianz was not liable for earthquake damage because its insurance policy did not commence until 4pm on 4 September 2010 in relation to the earthquake that occurred at 4.35am. The QBE policy ended at 4pm on 4 September 2010 so it was solely liable. The agreement between the insured’s broker and Allianz on placement was that the Allianz policy would incept on the expiry of the QBE policy. Any later documents could not affect that agreement.
Here is Southern Response’s 28 June 2018 statement about enforcement of limitation defence(s) after 4 September 2018. Southern Response had previously said that it would not enforce a limitation defence before 4 September 2018. In its statement it says that after 4 September 2018 its position is that the limitation period runs from the date that Southern Response settles, declines, or advises in writing a decision on the claim. This is similar to the EQC and Tower position.
In Robin v IAG & ors [2018] NZHC 1464 the High Court (Gendall J) reversed the decision of Matthews AJ in Robin v IAG & ors [2018] NZHC 204 about joining as defendants people involved in post earthquake repair work. Ms Robin owned 214 Fitzgerald Avenue. She sued IAG alleging that the earthquake repair work done did not restore the house to the policy standard. She also sued the manager of the repair work, Canterbury Reconstruction Ltd. IAG joined Hawkins who monitored/assessed the remedial work as a third party. IAG then asked the Court to join as defendants Houselifters Ltd, Max Contracts Ltd and the Christchurch City Council. Ms Robin opposed the joinder. Gendall J said that Matthews AJ was wrong not to join them as defendants. They were involved in the allegedly defective work and no other party could/would join them as third parties. It would not be onerous for Ms Robin to formulate and prove the claim(s) given she had sued CRL.
In Gabriel & ors v EQC & Vero [2018] 1255 the High Court dismissed an application by Vero for summary judgment against the current owner of an earthquake damaged house based on an argument that the original insured had waived the claim against Vero. The original insured owner had apparently agreed with Vero in 2013 to close the claim, however, the evidence was uncertain about whether the claim referred to was only the “out of EQC scope claim” or the entire house claim. So the Court refused to enter summary judgment and the claim continues against Vero by the current owner assignee.
Auckland
PO Box 137243,
Parnell, 1052
Tel: +64 27 434 5489
grant@grantshand.co.nz
