Ministry of Justice

Joint application for referral of question of law to High Court / insurer raised limitation defences / parties agreed that question of limitation periods be referred to High Court / Canterbury Earthquakes Insurance Tribunal Act 2019, s53 / Limitation Act 2010, s11 / Earthquake Commission Act 1993, s18 / HELD / two questions approved / wider public interest & common issue /  where insurance policy provides “top up” cover for damage exceeding statutory cap, does the primary period under Limitation Act begin on the occurrence of the insured peril, or on date the claim has been confirmed as exceeding statutory cap / can insurer’s duty of utmost good faith act as a barrier to reliance on Limitation Act defence

Admissibility of evidence / Evidence Act 2006, s 57 / dispute over whether homeowner’s settlement with EQC was under or over the statutory cap which was relevant to determining the private insurer’s outstanding liability, if any / homeowner applied for the admission of EQC settlement agreement and pre-settlement discussions and negotiations / EQC submitted that the settlement agreement is clear and ambiguous, and there was no evidence that the pre-settlement negotiations and discussions could be used to interpret the agreement otherwise / Tribunal finding that it is not strictly bound by the Evidence Act, but will nonetheless be guided by its principles / Tribunal finding that it would be sufficient at this stage to admit the settlement agreement to evidence, but not pre-settlement negotiations and discussions / Tribunal noted that it may make further orders after receiving and considering the settlement agreement / Tribunal noted its objective to facilitate the expeditious resolution …

Damaged house / parties disagree on repair methodology / D seeks a rebuild, IAG seeks repair / 10 % contingency / whether IAG’s proposed repair strategy meet the Policy standard / IAG’s engineering proposal meets policy standard / IAG to pay amount needed to repair premises to Policy standard, within 5 working days of completed contract to repair / Any costs associated with damage by rats is damage consequential on earthquake damage and the investigation of extent of the damage by IAG / insulation that needs replacing due to rat contamination to be paid for by IAG under the Policy as rectification of earthquake damage / Any insulation to be replaced because has been wet, as opposed to contaminated by rats, is to be replaced within the 10% contingency allowance / IAG to reimburse cost of expert reports within 10 working days of decision / costs have risen 16% since the hearing 19 months ago and been taken that into account in making orders for costs for a Policy compliant repair.

Third decision / quantum / parties agreed to decision on the papers / considerable gap on quantum between parties / whether damages sought are reasonable / considers objections to additional evidence / Applicant objected to additional evidence on procedural and substantive grounds / matter had gone through facilitation, new evidence not raised in facilitation causes concern for Applicant / Literock argued as alternative Solution to Rockcote Integra System / Evidence Act 2006 and Rules of Court provide guidance to Tribunal on categories of evidence, including hearsay and unqualified opinion / experts conferral is an evidentiary process / repairs on existing property involves risk of damage to building / material supply delays and inflation / held: reasonable cost of repair $1,543,505 (incl) / IAG liable to pay / loss of amenity or loss of value not suitable means to calculate damages.

Preliminary issue / whether Limitation Act 2010 applies to claim under Consumer Guarantees Act 1993 in respect of insurance contract / Consumer Guarantees Act 1993, s 20(2), s 28, s 32 / Limitation Act 2010, s 11, s 12, s 14 / HELD / insurer cannot be required to remedy defects under s 32(a)(i) of the CGA as claim not brought within a reasonable time, but plaintiff has not lost the right to recover reasonable costs of having the failure remedied by another under s 32(a)(ii)(A) / that money claim is subject to the Limitation Act 2010 / directions for next steps issued

Exclusions in policy / CES / Vero / whether damage is recoverable / High Court transfer / specific performance of insurance contract / water ingress / whether exclusion clauses prevail over homeowners right to repair house / causation / Building Act 2004, ss 17 &112 / leaky building / Fair Insurance Code / Canterbury Earthquakes Insurance Tribunal Act, 2019 s 45 / expert conferrals / evidence / HELD / exclusion clauses not to be read broadly / statements made require materiality to be excluded / homeowners did not have actual knowledge of failure / objective intention of the parties when entering in to contract of insurance / alternative solution not acceptable / P&G and Margin 10% 

EQC / two properties / EQC’s liability under cl 3(f) of sch 3 Earthquake Commission Act 1993 / invoice fraud for emergency repairs / previous Tribunal decision held applicants were fraudulent in using EQC monies on emergency repairs / applicant did not challenge EQC’s decision to decline claim / EQC Declination letters to L / held: EQC Act provides discretion for EQC to decline a claim that is in any respect fraudulent entire claim is fraud has been / No order for compensation for loss of rent can be made against EQC / EQC to make payment of $10,240.05 within 10 working days of this decision.

EQC / Defective repairs / consequential damage / previous settlement offer not accepted / parties request the Tribunal to record the terms of the settlement except for the monetary amount.

Southern Response (SR) / house damaged during CES / process to rebuild foundations contained within agreement  / timeframes not adhered to / whether SR can rely upon an agreement as a defence or whether SR are estopped and must pay homeowner’s claim for enhanced foundations / evidence of correspondence between parties / whether claim was validly closed / held: SR can rely upon agreement / homeowner agreed to a process which he failed to follow / full and final agreement signed / allowances were made by SR.

EQC / Vero / extent of damage caused by CES / repair methodology / whether foundations were damaged by CES which require full replacement / timber framed, concrete perimeter beam on piles / HC transfer / EQC Act 1993 / Diagrams / impartiality of evidence / ‘when new’ and cost incurred policy / policy subject to Building Act 2004 and building code / burden of proof / physical damage /geotechnical evidence / structural evidence / foundation dislevelment historic / historic settlement / consequential damage to kitchen / full foundation replacement not supported by evidence / perimeter beam and piling did not suffer a material change to its functionality caused by CES / minor CES damage established to dwelling / repairs include: epoxy to perimeter foundation, consequential damage repairs, replacement of a pile, replacing broken roof, and interior linings / quantity surveyor to provide updated costings to Tribunal including P&G, Margin and GST / 10% margin / damages against EQC.

Slip rule / application for correction to judgment / independent expert described as surveyor in substantive judgment / CV provided to Tribunal refers to additional roles not stated in judgment / Canterbury Earthquakes Insurance Tribunal Act 2019, s 47(2) / non-party expert has no standing / no omission in judgment / application declined.

Further discovery application / applicants seek disclosure of internal communications, documents and advice regarding applicants’ eligibility for further repairs / also seek disclosure of legal opinion on basis insurer waived privilege / insurer contends discovery obligations discharged, legal opinion privileged / Canterbury Earthquakes Insurance Tribunal Act 2019, section 15 / section 40 / schedule 2, clause 13 / Evidence Act 2006, s 65 / CEIT Practice Note / Tribunal may order discovery / broader search parameters may discover further relevant internal communications, documents, and advice / insurer directed to conduct further search and discover any further documents / legal opinion privileged / privilege not waived / reference to legal opinion was in internal communication / not sent to applicants / not a voluntary disclosure of a significant part of the legal opinion inconsistent with privilege.

Hearing on three issues after case stated to High Court / first, uplift from the policy cap to the market value cap / policy cap is an overall cap on claims within one policy period, not per earthquake event / market value cap operates as an overall cap, not per earthquake event / insurer not permitted to now raise evidential issues as to scope of works, costs, and depreciation / insurer had sufficient time to commission own evidence in rebuttal / evidence before Tribunal sufficient to dispose issue / second, insurer’s entitlement to EQC payment credits when policy does not respond to that event due to policy cap / insured not permitted to be more than fully indemnified / retaining EQC payment would enable insured to recover in excess of maximum sum payable / third, liability for costs incurred by insured displacing insurer’s denial of liability / insured did not seek approval prior to engaging experts / policy required prior authorisation / insured unable to recover costs under policy…