Here is the Grant Shand EQC & Insurance Newsletter #22.
In Biggins & anor v Southern Response Earthquake Services Ltd  NZDC 25609 the District Court considered an application by an insured home owner for summary judgment for the cost of a carport that was not included when SR rebuilt the insured’s house. There were also claims for general damages and the owners’ share of liability for a common driveway. The insured house had a carport. The house rebuilt by Southern Response after the earthquakes did not. SR said it was not liable because the cost of a carport was included in the costing for the rebuilt house. Southern Response lost. There were no documents that supported the SR position. SR also lost on the driveway share issue, but avoided a liability for general damages.
Fitzgerald & ors v IAG New Zealand Ltd  NZHC 3447 was a High Court judgment by Gendall J about the repairability of a rubble foundation damaged in earthquake(s). The Fitzgeralds appealed the judgment to the Court of Appeal, but also applied to have Gendall J recall his judgment on the grounds that the Court had relied upon incorrect evidence by IAG’s expert engineer, Craig Lewis, about similar repair strategies being performed on other houses in Christchurch. Apparently one house relied upon by Mr Lewis was TC2 and not TC3 and did not get a building consent as an exemption was granted. In Fitzgerald & ors v IAG New Zealand  NZHC 632 The High Court (Gendall J) dismissed the recall application. The judgment says that it relied on evidence other than from Mr Lewis and expressly referred to the failure to cross examine IAG’s builder who said he had seen the repair done 20 times and evidence from Fitzgerald’s own geotechnical engineer about consent. It also noted it would generally not be appropriate for a Court to recall its judgment once an appeal had been lodged.
In Taylor v Asteron Life Ltd  NZHC 978 the High Court (Cooke J) dismissed a claim by an insured, Peter Taylor, to recover benefits under an income protection policy and upheld the insurer’s claim to recover $371,286.70 in payments made plus interest to be determined. The Court found that Mr Taylor was not totally disabled because he continued to work after his alleged “sickness”. The insurer called as witnesses three employees of Mr Taylor who gave evidence about the extent of Mr Taylor’s work that was far greater than what Mr Taylor said. Documents also contradicted Mr Taylor’s evidence. The Court also found that Mr Taylor was not partially disabled either because any sickness/illness did not affect his work and he actually earned more money after the sickness/illness than he did prior. Mr Taylor also made false statements about work and income that entitled Asteron to avoid/cancel the policy and recover money paid. The judgment is notable for reference to false duplicate sets of accounts for Mr Taylor’s business.
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.
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