Ministry of Justice

Costs / applicant sought indemnity costs against Natural Hazards Commission - Toka Tū Ake after respondent withdrew limitation defence shortly before determination of preliminary issue / applicant alleged bad faith, reliance on defence without substantial merit, non-disclosure of meeting minutes, failure to cooperate, and unreasonable delay / Canterbury Earthquakes Insurance Tribunal Act 2019, s47 / HELD / limitation defence available on face of claim and consistent with respondent’s published limitation policy / estoppel and waiver arguments never determined and withdrawal of defence did not establish lack of merit / no bad faith, misleading conduct, disclosure breach, or failure to cooperate established / delay largely attributable to late filing of applicant’s evidence and respondent withdrew defence within reasonable time after reviewing further evidence / statutory threshold for costs not met / each party to bear own costs

Assessment of EQC statutory cap and insurer “top-up” liability earthquakes / alleged roof failure, internal water damage, drainage defects, and slab cracking / multiple causes including earthquake damage, wear and tear, corrosion, design defects, and lack of maintenance / application of proximate cause and Wayne Tank principle (where concurrent causes include both covered and excluded perils, the exclusion defeats the claim) / consideration of exclusions for gradual deterioration and defects / whether insured met duty to mitigate loss / HELD / roof deterioration caused by mixed factors, with earthquake effects only minor / excluded causes (deterioration, defects, maintenance failure) engaged and, applying Wayne Tank, excluded cover for main roof / drainage and internal damage not earthquake-related / total loss below statutory cap / insurer not liable / claim dismissed (except patio defect issue)

Costs / insurer sought indemnity costs of $35,350.99 following dismissal of homeowner’s claim that insurer was liable for earthquake damage allegedly exceeding statutory cap / Canterbury Earthquakes Insurance Tribunal Act 2019, s47 / HELD / applicant’s allegation that settlement with Natural Hazards Commission - Toka Tū Ake left a shortfall recoverable from insurer was without substantial merit / applicant knew or ought to have known evidence did not support claim / own expert evidence did not strongly support earthquake causation and indicated more economical repair options / Tribunal rejected scale-costs approach and held costs under s 47 should reflect actual and reasonable costs unnecessarily incurred / costs attributable to disclosure disputes involving Natural Hazards Commission - Toka Tū Ake not recoverable as they were not caused by applicant’s conduct / insurer awarded $22,018.60 for costs reasonably incurred in responding to unmeritorious claim

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 of the proceedings.

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.