The Court of Appeal in its judgment in IAG v QBE & ors [2022] NZCA 208 considered the liability split between IAG as the insurer of the Sleights’ earthquake damaged house and QBE as the insurer of IAG’s project manager for the defective earthquake repair work, Hawkins.  IAG did not challenge that it was liable to pay the Sleights the cost to remediate the house after previous repair work by/for IAG did not restore the house to the insurance policy standard of “when new”.  IAG also challenged the High Court (Gendall J) decision to award interest on the repair costs from when the Sleights first complained in 2015, notwithstanding that the repair costs were calculated at the date of hearing in 2020.  Predictably the Court of Appeal overturned the interest award from 2015.  The Court of Appeal allowed IAG’s appeal and increased the QBE liability to include all key defects that were visible to Hawkins on inspection.  It allowed the QBE appeal and found that it was not liable for final certification of payments where IAG knew about defects before certification.  QBE and IAG are to go away and work out the quantum effects.

For all those people that settled their earthquake insurance claim with AMI Southern Response before 1 October 2014 here  is the link to the Southern Response DRA Package.  Register and provide information to Southern Response online.  Then get legal advice on the Southern Response DRA offer.  Southern Response will pay $2000 towards legal advice.  Advice should not cost more than that.  Use a lawyer that has experience in resolving these cases like Grant Shand.

Homeowners insured by AMI/Southern response that settled their claim before 1 October 2014 are now entitled to be paid up to many hundreds of thousands of dollars more. Make sure that you get what you are entitled to and do it now.  Grant Shand will charge only $2000 including GST to advise on and settle the claim.   He did the case of Avonside Holdings Ltd v Southern Response that changed the Southern Response practice and required it to pay a contingency and professional fees as part of a settlement.  Southern Response will reimburse the $2000 so owners effectively nothing to get the best advice and outcome.



In 4 judgments released today, 20 September 2021,  Osborne J in Ross v Southern Response Earthquake Services Ltd has allowed Southern Response to communicate its DRA claim settlement package to the 3000 eligible owners over the objections of Grant Cameron lawyers at the same time as owners are informed that they can opt out of the Cameron class/representative claim.  The Court also dismissed the Cameron/Ross application by which they asked the Court to order Southern Response to set aside 15% of any settlement Southern Response agrees with an owner with the intent that the 15% be available to pay Cameron and the litigation funder.  Owners also need to be told about their possible liability to Cameron and the funder if they do not opt out.  Cameron/Ross had also tried to prevent Southern Response settling with owners.  Anyone that settled their earthquake insurance claim with AMI/Southern Response before 1 October 2014 should now contact Southern Response or knowledgeable and experienced lawyers like Grant Shand.  links to 3 judgments here.  Ross v SRESL [2021] NZHC2454; Ross v SRESL [2021] NZHC 2453; Ross v SRESL [2021] NZHC 2452;


In Pinot Properties Ltd v Vero Insurance New Zealand Ltd [2019] NZHC 2244 the High Court (Osborne J) dismissed an application to transfer an earthquake court proceeding to the Earthquake Insurance Tribunal as the Court decided that the relevant building at 205 Manchester St was not a residential building, nor residential property, so was not eligible.  The Court reached this conclusion notwithstanding that EQC paid claim(s) and the properties had been used for residential purposes.  Vero insured the property under a commercial property.

In Dewes & ors v IAG New Zealand Ltd & ors [2019] NZHC 2270 the High Court (Lester AJ) considered an application by home owners to transfer a claim about a defectively repaired earthquake damaged house where IAG had joined Hawkins and Hawkins’ insurer, QBE.  QBE did not want the claim against it transferred to the Tribunal and said that it was a separate proceeding not within the Tribunal jurisdiction.  The High Court disagreed with QBE and said the entire dispute could be transferred, which it did.

In a puzzling result, Dunningham J in Moore v IAG New Zealand Ltd [2019] NZHC 1549 decided that the earthquakes of 4 September 2010, 22 February 2011 and 13 June 2011 had the same cause and were one event for the purposes of the IAG policy.  The effect was that Mr Moore could  only recover the total sum insured of $2,500,000 plus gst once notwithstanding there was damage in each event and remediation was in excess of $4M.  This is yet another insurer favourable judgment out of the High Court in Christchurch.

In Myall v Tower Insurance Ltd [2019] NZHC 528 the High Court (Dunningham J) considered whether an insured should account for interest to the insurer on a partial claim payment; whether Tower must pay the full replacement value in cash now and any interest payable on the full replacement value fixed by the Court.  Myall insured his house at 81 Ainsley Terrace, Christchurch for a floor area of 650m2.  The house was damaged beyond repair in the earthquakes.  It turned out the house was actually 799m2.  After hearings in the High Court and Court of Appeal the full replacement value was fixed/agreed to be $5,273,021.71.  Tower made interim payments of $1,359,000 in January 2012 and $1,612,644.12 in April 2013.  It asked the Court to order Myall to account for interest of $431,138.71 on the part payments when/if Tower ultimately paid full replacement value. The Court declined to order interest as the policy did not provide for it and Tower did not specify it before it made the payments.  Mr Myall said that because Tower had elected to cash settle it was liable to pay now even though Mr Myall has not replaced the house.  The Court disagreed and said that the election was made under the policy which required the insured to reinstate, or replace, the house before payment.  The Court did not consider the argument that any replacement house had to be in NZ.  It did not award interest on the full replacement value.  The judgment also records that Mr Myall is to pay Tower $32,000 for costs on the first High Court hearing.

In the puzzling decision of Hood v EQC & anor [2019] 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.

The application of the 6 year limitation period under the Limitation Act(s) to claims arising out of the Canterbury earthquakes has resulted in differing positions by insurers and EQC as to how they will respond to claims.  Some take the view that the 6 year period starts on the date of the property damage; whereas others say that it is not until there is a denial of liability or purported settlement.  In Globe Church Incorporated v Allianz Australia Insurance Ltd & anor [2019] NSWCA 27 the New South Wales Court of Appeal by a 3:2 margin said that the cause of action accrued on the damage to the property.  This was supposedly consistent with the UK position.  The Court expressly identified that there could be circumstances where liability had a pre-condition.  It is arguable that in relation to an insurer it is a pre-condition that EQC meet its liability.