In Self Realisation Meditation and Healing Centre Charitable Trust (New Zealand) v IAG New Zealand Ltd [2018] NZHC 2077 the High Court (Osborne AJ) struck as parties two builders joined by IAG to claims by a property owner about earthquake damage to two Christchurch houses.  Each builder had minimal allegedly defective work and the property owner sued only IAG based on the policy without alleging defective remedial work.

In Blumberg v Frucor Beverages Ltd & ors [2018] 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 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.

In Annex Devleopments Ltd v IAG New Zealand Ltd & anor [2017] NZHC 706 a property owner, Annex, asked the Court to set aside a settlement agreement it entered into in February 2012 for settlement of a commercial building claim on the ground that it and IAG had made a mistake about the extent of the insurance cover.  Annex settled the claim(s) for $9,430,000.  IAG had previously made progress payments for emergency repairs and lost rent of $229,746.35.  Annex said that it ought to have received about $15M to $16M.  IAG insured the building for replacement with a sum insured of $8,706,824.  Annex said that its cover ought to have reinstated on each event and not when each claim was paid as IAG contended.  The Court disagreed and said that cover reinstated only on payment and only to the extent of the payment.  The Court entered summary judgment for IAG.  The claim continues against the insurance broker that placed the cover, Peter Taylor and Associates Ltd.

On 16 December 2016 Gendall J in the judgment in The Southern Response Unresolved Claims Group v Southern Response Earthquake Services Ltd [2016] NZHC 3105 gave approval to the proceedings against Southern Response being brought as a representative action.  The Group currently comprises 41 members who allege that Southern Response engaged in a strategy to improperly minimise its overall financial exposure to Canterbury earthquake claims.  The strategy is detailed in the judgment.  Gendall J also decided that the litigation funder’s fee was fair and reasonable, but required it to communicate with group members about misleading original advice giving each group member 21 days to withdraw.  Other Southern Response policyholders have until 16 April 2017 to “opt in” to the proceeding.  The Court declined the Group’s request for Southern Response to provide to them names and contact details of all unresolved Southern Response claimants.

Here is the 2016 Report on the Christchurch Earthquake Litigation List by the Chief High Court Judge.  Points of note are:

  1.  302 new proceedings since 30 September 2015;
  2.  This includes 53 cases involving alleged defective or inadequate repairs;
  3.  More Judges to be allocated to earthquake cases;
  4.  In the year 125 cases were settled and discontinued and only 2 required a full hearing and judgment;
  5.  There are 400 active cases of which 55 are set down for trial and 345 are in the case management process;
  6.  More Judge time will allocated to early judicial settlement conferences;
  7.  Only 1 case awaits disposal in the Court of Appeal.


It is coming up to 6 years since Western Pacific Insurance Ltd (“in liq”) was placed into liquidation by its shareholders on 1 April 2011.  Time is fast running out to sue insurance brokers who placed insurance cover with Western Pacific in circumstances where there were solvency issues.  We are aware of about 6 court proceedings against brokers arising out of Western Pacific from unsatisfied earthquake claims.  We are also aware that brokers have notified their insurers of a likelihood of many more claims from the earthquakes.  The six period for suing the broker(s) is running out.

In Ramage v EQC & Southern Response [2016] NZHC 2327 the High Court considered an award of costs against Southern Response after it settled a claim at a mediation, but with costs not agreed.  EQC prior the Court hearing had agreed to pay costs of $32,677.51.  The judgment is notable at para [27] for the statement that success against EQC is determined by whether EQC concedes the claim is over cap.  If so, then EQC should be liable for costs of at least 50%.  Southern Response was found to have acted unreasonably by not disclosing complete DRA’s.  It also acted unreasonably by agreeing with EQC’s position that the claim was under cap when its own assessments showed that it assessed the claim as over cap.  Notwithstanding the success by the Ramages in getting a settlement from Southern Response above previous offers the Court only awarded 25% of the costs from Southern Response.  This % is difficult to reconcile with previous decisions.