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Insurance Assignment – Indemnity only

In Xu & anor v IAG New Zealand Ltd [2018] 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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Myall v Tower Insurance – no further appeal

The Supreme Court in Myall  v Tower Insurance Ltd [2018] NZSC 35 has refused an application by Mr Myall for leave to appeal the Court of Appeal decision about professional fees on a house rebuild and the apportionment of the rebuild cost based on under insurance.  It said that notwithstanding obvious errors by the High Court and Court of Appeal there was no question of general or public importance.

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Earthquake Claim Limitation – IAG & Southern Response

Here is a short video I did about the limitation act(s) applying to earthquake claims and the extended limitation period(s) that apply to claims against IAG and Southern Response.  For IAG it is 30 June 2018 and Southern Response it is 3 September 2018.

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Insurance recovery for Southland Stadium

In Southland Indoor Leisure Centre Charitable Trust v Invercargill City Council [2017] NZSC  190 the Supreme Court allowed the appeal by the Trust against the dismissal of its claim by the Court of Appeal, but reduced the recovery by 50% for the Trust’s contributory negligence in not acting on engineering advice to investigate roof construction issues.  The original judgment was for about $15M.  The Supreme Court said that the Court of Appeal was wrong in characterising this case as one of negligent misstatement when it was a simple negligence case based on negligent issue of a code compliance certificate, however, it was correct to reduce any recovery by 50% for contributory negligence.

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When 2 insurers apparently cover the same date (4 September 2010)

In BC 74246 v QBE Insurance (International) Ltd & Allianz Australia Insurance Ltd [2017] NZHC 1473 the High Court (Whata J) resolved a dispute between QBE and Allianz about who was liable for the 4 September 2010 earthquake where the relevant QBE insurance policy expired at 4pm on 4 September 2010, but there was also an Allianz policy for the same property that stated the period of insurance “effective date” 4 September 2010 and expiry date of 4pm on 4 September 2010.  The 4 September 2010 earthquake occurred at 4.35am.  QBE asked the Court to order Allianz to be equally liable on the basis that the Allianz policy commenced at 12am on 4 September 2010.  The Court dismissed the QBE claim because the clear intention was that the Allianz policy commence when the QBE policy expired at 4pm.  It was to be seamless cover.  The Court implied the 4pm commencement as a term and also said that the objective interpretation of the policy was that it was to commence at 4pm.

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AMI Insurance – Exclusion clause application

In AMI Insurance Ltd v Legg & ors [2017] 321 the Court of Appeal upheld AMI’s appeal that it was liable to indemnify the Leggs for damage/costs from a rubbish heap fire on their Selwyn property in January 2013.  Some of the material in the heap came from the Leggs’ lifestyle block and some from a separate landscaping business run by their company Evolving Landscapes Ltd.  Legg insured the lifestyle block with AMI and ELL insured the business with Lumley.  In the High Court Nation J held both insurers liable.  Contrary to Nation J’s findings the Court of Appeal held that there was an effective causal connection between the ELL material on the heap and the resultant fire.  The Court applied the principle from Wayne Tank & Pump Co Ltd v Employers Liability Assurance Corporation Ltd [1974] 1 QB 57 that states where a loss has two effective and interdependent causes one within the policy and one excluded by it, the exclusion prevails.  The AMI policy excluded liability in connection with any business.  The ELL was an effective and interdependent cause of the fire so AMI was not liable to the Leggs.