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.
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