A demolition contractor, Nicon, has sued Tower Insurance/Stream Group for allegedly unpaid fees on post earthquake demolition work and quote provision. Nicon claims $350 plus GST for each of the 1083 quotes it gave to Tower/Stream ($379,050). It also claimed that Tower was obliged to give it the work for any actual demolition carried out on the quoted jobs. In Nicon Ltd v Tower Insurance Ltd & anor  NZHC 2005 the High Court (Gendall J) decided four preliminary questions about the alleged agreement with Tower/Stream. The Court decided that a written heads of agreement between Nicon and Stream was binding and it required Tower/Stream to offer Nicon first the demolition work on jobs it quoted on. Tower/Stream did not do so. The Court decided that the evidence did not prove the existence of a $350 quote fee. The claim likely continues now as one for loss of profit by Nicon on demolition jobs that Nicon was not given in breach of the agreement.
In Hoju & anor v EQC & anor  NZHC 2138 the High Court (Osborne AJ) awarded costs of $12,934 and disbursements of $15,537.28 in favour of Southern Response Earthquake Services Ltd against homeowners that claimed to recover repair costs of $472,604 from Southern Response, but later accepted the claim was under cap and discontinued against Southern Response. EQC quantified repairs at $12,154.60 and Southern Response at $13,442. For the homeowners their lawyer, Stephen Rennie (Rhodes & co), argued that the homeowners should not pay any costs because deciding costs should wait until the claim against EQC is determined and that EQC and Southern Response should have used the same lawyer. Mr Rennies also wrongly suggested that Southern Response had not engaged with the homeowners prior to the court proceedings and that the claim was necessitated by limitation. All of these arguments failed. Southern Response recovered all disbursements on experts (less GST) and costs on 2B basis apart from band A for 4 conference memoranda and discovery.
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?
In Blumberg v Frucor Beverages Ltd & ors  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.
In QBE Insurance (International) Ltd v Allianz Australia Insurance Ltd  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  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.
In Gabriel & ors v EQC & Vero  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.
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