Council Insurance Leaky Building

In Napier City Council v LGMFL [2022] NZCA 422 the Court of Appeal allowed an appeal by the Council on its ability to recover from its insurer (“Risk Pool”) for its contribution of $12.355M to settle a leaky building claim about Waterfront Apartments.  The Waterfront plaintiffs claimed about $20M of which $16.2M comprised costs of remediation.  The relevant insurance policy excluded cover for claims about weathertightness.  The insurance policy did cover non-weathertightness defects.  Contrary to the High Court decision the Court of Appeal decided that the exclusion removed cover only for Council liability from weathertightness defects.  The Council could recover from Risk Pool for non-weathertighness defects.  The dispute was sent back to the High Court for it to apportion the settlement between weathertight and non-weathertight defects and to determine whether the settlement was reasonable.