Lyttleton Port settled its insurance claims against its insurers for about $450M for earthquake damage caused by the 4 September 2010 earthquake. It then sued its insurance broker, Aon, claiming a further $170M alleging that Aon was negligent in not obtaining full replacement cover of the Port’s assets without sub limits. Aon joined Colliers and Opus as third parties. Aon also asked the court to join as a third party the Port’s solicitor, Tony Paterson, alleging that he had failed to give advice to the Port about the relevant insurance policy. The High Court twice refused to join Mr Paterson. In Lyttelton Port Company Ltd v Aon New Zealand & Ors  NZHC 2809 the Court granted Aon leave to appeal to the Court of Appeal.
In Settlers Crescent Partnership v IAG New Zealand Ltd  NZHC 2775 the owners of 4 adjoining buildings at 14 Settlers Crescent, Ferrymead (funded by Risk Worldwide) sued to recover for damage in the June 2011 earthquake notwithstanding that they had cash settled for $10,233,973.80 with IAG for damage to the buildings in the September 2010 and February 2011 earthquakes on the basis that those buildings were recommended for demolition as being destroyed. The Court unsurprisingly found that the partnership suffered no further loss in the June 2011 and the claim failed.
In a surprising decision in Kilduff & anor v Tower Insurance Ltd  NZHC 2021 Gendall J ordered Tower Insurance to pay costs of $81,249 and disbursements of $122,515.20 in a case where Kilduff claimed $1,952,891 and only recovered $628,516 after a five day court hearing. Prior to the court hearing Tower had offered Kilduff $650,000 in August 2017 and $734,000 in October 2017. Both of these amounts exceeded the repair cost judgment of $628,516. Nevertheless, Gendall J decided that Kilduff had been successful once he added on costs and disbursements to the judgment sum to get a total of $855,169.20.
Here is the link to our EQC & Insurance Newsletter #19.
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?
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  NZHC 1464 the High Court (Gendall J) reversed the decision of Matthews AJ in Robin v IAG & ors  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.
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  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.
Here is the most recent link to our latest EQC & Insurances newsletter.
In Xu & anor v IAG New Zealand Ltd  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.
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