QBE earthquake repairs appeal fails

In QBE v Davern & IAG [2025] NZCA 310 the Court of Appeal dismissed QBE’s appeal against the High Court decision in Davern & IAG v QBE [2023[ NZHC 2146 that QBE was liable to pay $1,593,484.54 plus interest as building costs for the Daverns’ property in Redcliffs that was insured by IAG and rebuilt by IAG after the Canterbury earthquakes.  QBE insured Hawkins who was responsible for scoping the original rebuild.  Hawkins screwed up the sequencing of work in the original rebuild causing extra costs. The Daverns and IAG entered into a deed of settlement and assignment in 2018, pursuant to which IAG was subrogated to the Daverns’ rights, interests, claims, and remedies. Hence, the present contest was essentially between IAG (as the Daverns’insurer) and QBE (as Hawkins’ insurer).  The Court decided that Hawkins had a positive independent obligation to update the overall scope of works for the rebuild project if it became obvious that required work had not been scoped, irrespective of whether a formal variation had been initiated by the builder or customer.  Hawkins failed to provide or procure an updated scope of works for the Required Retaining Wall on the southwestern slope at any time prior to the house being substantially built (or indeed at any time prior to the 2012 Agreement terminating in December 2016) which was a breach of Hawkins’ updated scoping obligation in the 2012 Agreement.  The Court dismissed the appeal.