Ministry of Justice

Admissibility of evidence / litigant in person included submissions in affidavit / Tribunal prepared to make allowances for litigants in person who do not appreciate difference between submissions & evidence / counsel not expected to cross-examine arguments / homeowners not expected to incur unnecessary expense in calling expert witnesses / Tribunal has discretion to admit evidence that might otherwise be inadmissible, including hearsay evidence / Canterbury Earthquakes Insurance Tribunal Act 2019, s 37 / evidence not relevant to present stage of proceedings but still relevant & necessary to proceedings / Tribunal not prepared to strike out submissions / reports of expert witnesses admissible but Tribunal not willing to rule how much weight should be given to them / parties wishing to rely on documents expected to make submissions on weight given to them.

Case stated / application for referral of question of law to High Court / whether insurer’s obligation to pay repair cost of house to policy standard includes obligation to pay reasonable cost required to remedy defective repair work / insured’s claim for earthquake damage to house accepted / repair work completed & insurer paid full contract price / repair work defective / insured claims insurer should pay for cost of bringing house up to policy standard by repairing damage & rectifying defective repairs / Canterbury Earthquakes Insurance Tribunal Act 2019, s 53 / question one of contractual interpretation & so a question of law / question addresses primary cause of action raised against insured & requires urgent determination in High Court / positive or negative answer would lead to speedier & more cost effective outcome for insured / case stated likely to be provide important benefits, not only for insured, but for many other homeowners / application granted.

Defective repairs / remediation strategy / obligation to indemnify / moisture ingress resulting from earthquake damage and repairs / whether remediation strategy cannot meet durability requirements / whether repairs met IAG’s obligations under the policy / if not, what steps are necessary to meet those obligations / as when new standard / meaning of damage / Canterbury Earthquakes Insurance Tribunal Act 2019, s 40, s 56 / Building Act 2004, s 17 / Sleight v Beckia Holdings [2020] NZHC 2851 / Technology Holdings Ltd v IAG New Zealand Ltd (2009) 1 ANZ Insurance Cases 61-786 / HELD / liquefaction ejecta compromised slab, damp proof membrane and tailings / caused by CES and constitutes damage / garage floor slope caused by CES, differential settlement of slab is damage / repairs involved replacing perimeter foundation and back slab and grout injection to fill void / whether repairs a reasonable response to damage, and whether repair properly carried out / foundation repairs improved perfor...

House damaged during the CES / 22 February 2011 Christchurch earthquake / 14 February 2016 Kaikoura earthquake / IAG managed repair programme / defective repairs / Hawkins / Falcon / un-scoped unrepaired earthquake damage / council consent issues / IAG argue pre-existing water ingress issues / cladding reinstatement / QBE removed as a party / credibility of witnesses / weighting of evidence / Building Act 2004 / Consumer Guarantee’s Act 1993 / Building Code / as when new policy standard / Sleight v Beckia Holdings [2020] NZHC 2851 / held: repairs require remediation / IAG to re-clad stucco / general damages threshold not met

EQC / Tower Insurance / Canterbury Earthquakes Insurance Tribunal Act 2019, s 11 / allegations of fraud against L for emergency repairs / Tribunal previously found L to be fraudulent / EQC application to be removed as a party / claim made 3 months after earthquake date / Tower’s liability / loss of rent cover / held: L had knowledge to make claim within EQC’s time frame / EQC Act 1993 / Limitation Act 1950 / Limitation Act 2010 / EQC are removed as a party / Tower are subsequently removed as a party

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.

EQC –Canterbury Earthquake Sequence - EQC emergency repair payment scheme – homeowners carrying out fraud – multiples properties - misrepresentation of invoices – evidence as to the credibility of applicants – defence of cultural differences in conducting business in NZ and China – found to be wilfully carrying out fraudulent invoices.

Proper calculation of EQC cap / Earthquake Commission Act 1993, s 18 / HELD / s 18(1)’s purpose is to limit EQC’s exposure in event of major natural disaster / method to calculate cap is two-part process / examine which sub-paragraphs in s18(1) apply / then, if necessary, calculate the entitlements to identify which is the lowest / insurance policies were for “full replacement value” and did not specify a sum, therefore s 18(1)(a) cannot apply / s 18(1)(b) only applies if the policy does not specify a replacement sum but does specify an amount for which the building is to be insured under the EQC Act / s 18(2) cannot be used to quantify the s 18(1)(b) sum / s 18(2)’s purpose is to prevent homeowners from nominating an unrealistically low figure for natural disaster cover under s 18(1)(b) / on the facts, only s 18(a)(c) applies because the other two could not

Negligence / breach of contract / claim insurer breached insurance policy contract or was negligent in repairing spouting and downpipe, causing landslip / whether overspill occurred / whether drainage system earthquake damaged / evidence demonstrates water spilling from spouting after initial repairs and damage caused by earthquake / insurer was obliged to repair damage to the policy standard, and is liable for defective repairs / insurer owes duty of care to repair damage in proper manner / functionality test applied, repairs not fully functional / causation / overspill a material and substantial cause of landslip / applicants able to recover losses of constructing retaining wall / interest awarded / costs and general damages not awarded

Process of insurance contract / insurer elected to pay cash equivalent of cost of repairs / applicant claims insurer’s experts did not properly identify earthquake damage and insurer’s repair methodology not reasonable / Ginivan v Southern Response [2018] NZHC 2403 / HELD / applicants entitled to select experts and builders, choose repair methodology, develop scope of works, and enter into building contract for price they consider to be reasonable / insurer entitled to undertake its own assessments, at its expense / if insurer’s cash equivalent of cost of repairs is less than applicant’s own scope, applicants will need to meet the additional cost unless they satisfy insurer or the Tribunal the insurer’s figure is unreasonable / insufficient evidence to determine / all complaints to be addressed together  

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 

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...

Election under insurance policy / insured stated they did not intend to complete certain repairs / telephone conversation recorded in file note / file note is hearsay contained in business record / Evidence Act 2006, s 19 provides file note is admissible; questionable whether staff member would have useful recollection of events / whether an election under insurance policy / communication of election choice must be unequivocal / insured needs to make an informed election choice, having a reasonable appreciation of scope of damage, the work required to remediate, and the likely indemnity otherwise available / insured was not aware of difference in outcome between the two options / alternatively, election was not unequivocal as it was directed towards particular repair strategy.