Notwithstanding the success of the Greater Christchurch Claims Resolution Service it appears the Government is proceeding with the establishment of the Canterbury Earthquakes Tribunal. Based on the version of the bill reported from the House on 9 May 2019 the goal is for the Tribunal to exist from 10 June 2019. The Tribunal still cannot deal with “on solds” being houses sold after the relevant earthquake(s). Unlike the GCCRS the decisions of the Tribunal are public. The Tribunal still has restrictions on the ability to award costs.
The judgment in Self-Realization Meditation and Healing Centre Charitable Trust (New Zealand) v IAG New Zealand Ltd & ors  NZHC 763 is emblematic of disputes post failed earthquake remedial work where IAG insured the house and was involved in the remedial work. The homeowner sued IAG who then joined as third parties three building entities involved and two Hawkins companies. The Court struck out the notices against two builders. The third builder is insolvent. The Hawkins companies are in receivership and liquidation. QBE insured Hawkins, but the extent of its liability is uncertain. So IAG will be the last man standing.
In Doig v Tower Insurance Ltd  NZCA 107 the Court of Appeal dismissed an appeal by the Doigs about Tower’s representations about insurance cover/rights on a Redcliffe house the Doigs bought in a damaged state in September 2012 after the Canterbury earthquakes. The Doigs said that Tower had represented to them that they would get the reinstatement rights under the assigned policy rather than indemnity value. The Court confirmed the High Court view that Tower had not made an unequivocal representation about replacement cover and in any event the Doigs had not relied on any representation to their detriment as they were already legally committed to the purchase. The Doigs also said that they ought to have been awarded interest on the indemnity payment from the date of the earthquake of 22 February 2011. The Court disagreed and said that Tower did not have to pay until EQC had paid cap which was not until after July 2016. It also said that there was no policy right to interest for late payment and because there was no substantive judgment there could be no separate judgment for interest under s87 of the Judicature Act 1908.
The High Court (Andrew AJ) judgment in Brinsdon v Beazley & anor  NZHC 808 considered an application by an insurance broker (GH Beazley) and insurer (Vero) to strike out the claims brought in Court by JR Brinsdon relating to earthquake damage from earthquakes in 2010 and 2011 on the grounds that they were brought more than 6 years after the relevant events. Mr Brinsdon did not commence proceedings until September 2017. Ms Brinsdon said that she was under-insured as a result of defective advice from Mr Beazley on inception and renewal of policies. The cost to remediate the house on Rutland St, Christhurch far exceeded the total sum cover of $223,143.70 placed. The Court refused to strike out the claims. The Court said that that the defendants had ongoing duties of care to ensure and/or advise about the adequacy of insurance cover. it was at least arguable that the defendants breached duties by failing to disclose that the 2010 policy was subject to a monetary sum insured and they knew Ms Brinsdon was under a misapprehension about the cover. This was sufficient to postpone the limitation period on the grounds of equitable fraud. Separately Ms Brinsdon established a credible case to postpone the limitation period based on late knowledge. So the proceedings continue.
In May 2017 IAG declined the earthquake damage claim by Stephen & Alexis Coyle on the grounds that they had fabricated or modified documents to inflate the cost to rebuild their damaged property so as to bolster their position in the course of the negotiation of a cash settlement of their claim. In Cogle v IAG New Zealand Ltd  NZHC 793 Lester AJ granted an application by IAG to have an expert inspect electronic equipment to investigate whether the equipment had been used to alter/create documents that appeared to be dubious. Documents on letterhead(s) of a builder and supplier were according to the builder and supplier not provided by them.
In Tower Insurance Ltd v Kilduff & anor  NZCA 82 the Court of Appeal dismissed Tower’s appeal against a High Court decision that awarded the homeowners costs of $81,249 and disbursements of $122,515.20 after a trial about earthquake damage to the house at 101 Clifton Terrace, Sumner. The Court of Appeal upheld the decision of Gendall J that Kilduff was successful after the hearing notwithstanding that on a claim for a cash payment of $1,952,891 from Tower; Kilduff only recovered a declaration that Tower was liable to pay up to $871,042.14 (including EQC) being net $628,516.01 for specified work once done. The Court noted that that it was not unusual for a plaintiff to obtain relief in the precise terms of the statement of claim. Success on limited terms is still success for costs purposes. Tower made “calderbank” offers of $650,000 in August 2017 and $734,000 in late October 2017. Tower could not prove that its offers exceeded the amount recovered including costs and disbursements at the time of the offer. So the offers had no effect on a costs award. The Court noted that if Tower had made its $734,000 offer early in the dispute it would have beaten the amount recovered. The Court of Appeal upheld the awarding of band C for witness statements, hearing preparation and written submissions.
In the puzzling decision of Hood v EQC & anor  NZHC 349 the High Court (Dunningham J) decided that Ms Hood who had been entirely successful with her claim by moving EQC from a repair cost of $10,729 to one of $438,292.63 through Court proceedings could only recover 50% of her costs because theoretically the insurer, IAG, was also around and Ms Hood should have recovered the balance of the costs from it. This was in circumstances where once EQC paid the cap the insurer immediately agreed to pay the rebuild cost claimed and IAG had for months said that wanted to settle out based on a rebuild. I do not understand how a person can be entirely successful, but not recover 100% of the recoverable costs. No rights of appeal of the judgment as it was review of a decision of Matthews AJ who also thought that 50% was appropriate.
In Bruce & ors v IAG New Zealand Ltd  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.
In Viktor and Beata Ltd v EQC & Tower Insurance Ltd  NZHC 3017 the High Court (Nation J) considered claims for costs by the homeowner and EQC on a claim for earthquake damage to 8 Lamorna Road, Queenspark. The homeowner discontinued the claim against EQC two weeks before the scheduled trial after EQC paid $19,311 for defective EQC repairs, but without EQC paying any more money than it had paid prior to commencement of the proceeding for earthquake damage. The owner then settled with Tower Insurance with Tower paying $25,000 towards costs. The owner sought costs of $24,752.54 from EQC and EQC sought costs of $18,286 from the owner. The Court decided that each party was to some extent unsuccessful so awarded not costs at all.
In Fitzgerald & ors v IAG New Zealand Ltd  NZHC 3447 the High Court (Gendall J) considered whether IAG’s proposal to epoxy rubble foundation cracks and jack/pack piles/perimeter to relevel a floor with a differential of 58mm complied with its insurance policy obligation to reinstate the earthquake damaged house to a condition as similar as possible to when it was new. The Fitzgeralds own 111 Innes Road, St Albans. It is TC3. The house built in the 1920’s is 2 storey with timber frame, weatherboard cladding and metal roof built on an unreinforced rubble perimeter foundation with internal piles. After the earthquakes the floor level differential is 58mm in the house. The earthquakes also caused some cracks to the perimeter foundation. The Court decided that the policy standard of”when new” involved a comparison to the state of the house when it was built. So any foundations must provide that level of support. Gendall J decided that repairing the foundation cracks with epoxy met the policy standard and so did the proposed jacking and packing of piles and perimeter. This would not meet the standards for a newly built home, but met the insurance policy standard that required the comparison to as built in the 1920’s. The conclusions were premised on IAG being able to obtain building consents (or exemptions) and code compliance certificates for the work. If it could not do so, then IAG would be required to replace the entire foundation.
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