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IAG liable for defective earthquake repairs

In Bruce & ors v IAG New Zealand Ltd [2018] 3444 the High Court (Mallon J) decided that IAG had not complied with its obligations to reinstate the earthquake damaged house to “as when new”.  So it is liable to pay the costs of reinstating the house and/or loss in value of the house by reason of certain defects.  Quantum is to be determined at a later hearing.  IAG originally spent about $1.4M to rebuild the foundation, but post work the floor level differential was 46mm and there were 8 areas with slopes of more than .5%.  The Court confirmed that where an insurer elects to repair that the policy becomes a repair contract and the insurer is liable in damages.  The standard of repair was to be an equal condition as it was when it was built in 2006.  The owners claimed general damages for distress, inconvenience and mental anguish caused by IAG’s conduct.  IAG said that general damages are not available in New Zealand for breach of an insurance obligation.  The Court found that the Bruces’ were entitled to general damages that were to be quantified at a later hearing.

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Kiwifruit claimants awarded costs against Crown

In Strathboss Kiwifruit Ltd & anor v Attorney General [2019] NZHC 62 the High Court (Mallon J) considered an application for costs by Strathboss and Seeka subsequent to a hearing that found MAF/MPI was negligent in relation to PSA that affected kiwifruit orchards in 2010.  There is to be a separate hearing about quantum.  The plaintiffs sought costs of $1,715,088 and disbursements of $900,723.64 of which $449,124.69 was for experts.  The Crown said costs should not be determined pending appeals and/or any payment should be deferred pending appeals.  The appeal is scheduled to be heard 11 March 2019.  The fact that there was a litigation funder was not relevant.  The Crown said that any costs award should be reduced by 30% because the plaintiffs failed on 2 causes of action.  The Court said that it was common for a successful party to fail on some aspects of their claim and the failures did not substantially increase the Crown’s costs.  Of interest the court awarded 4 days per witness statement for preparation and 1.5 days preparation for each day of trial.  The plaintiffs position on costs was substantially upheld and the Court awarded costs claimed with minor adjustments.

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