Ministry of Justice

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)

Application for non-party discovery order against property manager / Canterbury Earthquakes Insurance Tribunal Act 2019, sch1 cl13 / District Court Act 2016, s 106 / HELD / documents are, may be, or were in the possession, custody or control of non-party / non-party discovery order made  

Decision on costs / applicants seek costs against Vero / applicants argue Vero incurred unnecessary expenses and costs related to unmerited matters / Vero argue it was entitled to raise matters now alleged to be without substantial merit / s 47 CEIT Act 2019 / section to be construed narrowly / HELD: fact that an argument was unsuccessful does not equate to allegation being without substantial merit /  impossible to isolate with any certainty the costs related to isolated pleadings and affidavit defences / Tribunal declined to award costs to applicants  / parties bear their own costs.

Final Quantum Decision (decision) issued 2021 / IAG made application for recall of decision and for a stay on enforcement of orders / E opposed application / IAG argued decision contains mistakes central to the disposition of the quantum issues and is not in accordance with natural justice or procedural fairness / E argued Tribunal lacks jurisdiction or power to recall decision or stay enforcement of decision / whether Tribunal has power to recall its decisions / whether Tribunal has power to recall perfected decisions / recalling decision is against the principle of finality / High Court Rules 11.9 / Tribunal is defined and limited by CEIT 2019 Act / ss 46 and 49 of the Act / at time decision was published, Tribunal’s powers were exhausted / no power to order a stay / IAG’s objection to paragraph [30] of decision is misconstrued / alleged error does not change outcome / IAG’s application for recall declined

Southern Response / canterbury earthquake sequence / defective repair / disagreement over repair methodology / as when new policy wording / protrusion is aesthetically non-compliant / reasonable that the protrusions removed and Southern Response pay for the repair / newly constructed garage sits hard against boundary line which affects amenity / homeowner argues misleading conduct in accordance with Southern Response v Dodds / misleading claim unsuccessful / Southern Response not liable for replacing 100 year old wiring when carrying out repairs

Multiple parties / seeking determination on question of law s 53(1) / whether Tribunal has jurisdiction under s 45(1) of its Act to determine issues as to costs under an agreement between the parties / HELD / Tribunal was set up to determine disputes about insurance claims / overriding purpose of the Act is to provide fair, speedy and flexible services for resoling insurance disputes / s 46 provides that Tribunal may make any order a court of competent jurisdiction could make in relation to the general law of NZ / s 47 discretionary power of Tribunal to award costs / Contractual claims for as incurred legal and expert costs are prima facie enforceable contractual obligations / the Tribunal has jurisdiction to decide issues of contractual cost claims and is not limited by s 47 / Tribunal can answer question of law as a pre-hearing determination

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 –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.

EQC – order sought to reopen full and final settlement agreement made in the CEIT – EQC oppose reopening of agreement – homeowners accepted cash payment offer to settle defective repairs – jurisdictional defence of CEIT raised – ss 46(8)(a) and 8 CEIT Act 2019 – homeowners argue they were given guarantees by the CEIT and EQC that they could return to Tribunal if items were worse than quoted –  homeowners claim duress with signing settlement agreement – person acting as agent of EQC – EQC seek costs against homeowners – costs denied –  reopening settlement agreement struck out – transcript of proceedings as evidence.

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.

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.