Yet again the High Court (Davidson J) has ordered EQC and Southern Response to pay costs to homeowners where both paid money after being sued in excess of what each had offered before being sued late 2013. In Zygadlo v EQC & Southern Response  NZHC 1699 the High Court ordered EQC to pay $12,210.27 in costs and SR $45,291.56. EQC paid $159,626.71 in August 2015 and SR paid a further $340,000 in March 2016 to remediate the house damage. EQC asked the Court to order that the homeowners pay it $21,350.47 because they had changed expert witnesses and delayed the proceeding. They also said that the Court could not make a costs […]
Here is newsletter 11 for Grant Shand on EQC and Insurance issues.
In Emmons Developments NZ Ltd v Mitsui Sumitomo Insurance Co Ltd & anor  1244 the High Court (Matthews AJ) discussed a summary judgment application by the owner of Rydges, a carpark and the Grant Thornton Building in Christchurch for costs of demolition, building protection and fees from Mitsui and Vero subsequent to the earthquakes in 2010/2011. It noted that Emson applied for summary judgment in early 2016, but then withdrew the application after the insurers filed/served opposition documents. The Court decided that Emson should never have applied for summary judgment and awarded costs and disbursements against it of about $20K
In NZ Fire Service Commission & ors v Legg & ors  NZHC 1492 the High Court (Nation J) considered a claim by the NZ Fire Service Commission and the Selwyn District Council to recover costs incurred in fighting a substantial fire in January 2013 that emanated from a burn heap of vegetation from the owners of the property (Leggs) and the landscaping business operated at the property (Evolving Landscapes Ltd). Leggs sought indemnity for the claim from AMI and Evolving sought indemnity for the claim from Lumley. The evidence was that that fire started in the burn heap that the Leggs/Evolving had ignited in mid December 2012 that they believed […]
High Court – Claims about failed remedial work by EQC or insurers are not part of the High Court Earthquake List. They are dealt with separately in a similar manner to which leaky home cases are/were dealt with. This is because such claims usual involve more parties than just the EQC/Insurer (builder, engineer, architect etc). Apparently the Court will shortly issue guidance for the progress of claims.
For homeowners looking to remediate earthquake damage there may be extra costs caused by contamination of the land where foundation solutions involve the disturbance or removal of soil. These can include, but are not limited to, the costs associated with engaging an environmental expert, undertaking further investigation and removing the contaminated soil. The cost to remove and dispose of contaminated soil can be in excess of $100,000. You can find more information about contaminated land at www.mfe.govt.nz/land. The Ministry for the Environment has identified a number of industrial, agricultural and horticultural activities that are known to use hazardous substances which could potentially contaminate land. These activities are known as HAIL […]
EQC has repaired thousands of houses inadequately. Any money spent by EQC on these repairs is wasted and ought not count when assessing whether EQC has paid “cap” under the EQC Act. In some cases the repairs by EQC were so bad that they have increased the amount that it costs to fix the house. EQC is liable for that amount also. So when dealing with EQC about failed repairs it is essential to establish what has been done and what needs to be done to properly remediate the house. We suggest involving your insurer in the process as you do not want to be short paid by EQC.
People that settled with Southern Response based on an Arrow Detailed Repair/Rebuild Analysis (“DRA”) may have claims against Southern Response under the Fair Trading Act where the settlement sum was based on a DRA, but Southern Response did not disclose that it had other DRA’s with a greater sum that included extra components/allowances that were part of a rebuild cost. Concerned insureds need to act quickly by reason of limitation issues. Check whether the DRA settled on had allowances for fees and contingency etc.
In Driessen v EQC & Southern Response  NZHC 1048 the High Court (Davidson J) on 19 May 2016 has ordered EQC and Southern Response to pay costs and disbursements to a homeowner where EQC and Southern Response settled the claims after being sued for amounts greater than they had offered to pay prior to being sued. Prior to being sued in November 2013 EQC assessed the damage at $58,504. Southern Response assessed its liability at $20,000 for DFPP. Ultimately EQC paid $153,422 in November 2015 and Southern Response paid $358,232 in March 2016 (weekend before trial). The Court ordered EQC to pay $20,120.08 and Southern Response $50,030.30. The judgment […]
Here is the link to Grant Shand EQC & Insurance Newsletter 10.
The EQC Action Group has settled its dispute with EQC. Here is a link to the website that has the settlement terms. There is a joint statement that sets out what is agreed. Insurance under the Act insures the house for replacement value, which includes the cost to reinstate a house to substantially the same condition as when new and the cost of complying with any applicable laws; EQC’s liability includes the costs to fix undamaged parts where that is affected by remediation of damaged parts; If a house has suffered earthquake damage that includes the floor being out of level: The fact that the floor level is within the […]
below is from the CERA website CERA has been disestablished This page directs you to the agencies to contact for information and assistance on the regeneration of greater Christchurch, along with some useful contacts. The Canterbury Earthquake Recovery Authority (CERA) was established as a government department on 29 March 2011 to lead and coordinate the Government’s response and recovery efforts following the earthquakes of 2010 and 2011 in Canterbury. CERA was disestablished on 18 April 2016 as the Government transitions from leading the recovery, to establishing long-term, locally-led recovery and regeneration arrangements. Some of CERA’s functions have wound down, and other responsibilities are now carried out by these central and […]
Here is a link to the Radio NZ website story about problems with EQC repairs. It includes 2 interviews and mentions Grant Shand as being involved getting EQC to pay cap for a homeowner.
Here is the link to the spreadsheet of cases in the High Court Earthquake list as at 31 March 2016.
As of 1 April 2016 the various Lumley general insurance claim teams merge into the IAG model.
On March 2016 the Court of Appeal in Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd  NZCA 67 dismissed an appeal by an insured against the High Court’s refusal to set aside a settlement agreement on the grounds of mistake. It also comments on the inappropriateness of a Risk Worldwide person (George Keys) purporting to give “expert’ evidence when that person had a financial interest in the outcome of the claim. Prattley claimed that it was mistaken in relation to a settlement agreement it entered into with Vero about damage to Worcester Towers at Cathedral Junction. In August 2011 Prattley settled all claims with Vero for $1,050,000. That […]
EQC announces plan to settle drainage claims 7 Mar 2016 The Earthquake Commission (EQC) is rolling out an assessment programme for sewer and stormwater pipes suspected of having earthquake damage, starting this month (March). EQC’s General Manager of Customer & Claims, Trish Keith, says it currently has about 2,500 drainage claims but expects this could increase to about 6,000 with most claims being settled with cash payment. “EQC’s focus has been getting houses repaired and people back in their homes. But we are now in a position where we can address the issues with drainage,” Mrs Keith says. “It has been some time since some drains were inspected. To ensure […]
Here is a link to the report by the Parliament Finance and Expenditure Committee in its annual review of the 2014/15 performance and current operations of Southern Response Earthquake Services Limited. This is the first review of Southern Response. The report raises concerns about the ability of Southern Response to settle all claims within the amount allocated by the Government and the payment by Southern Response of bonuses to staff based on their claim settlement record. Southern Response so far has paid $3.3M to staff as bonuses. The Committee was concerned about the possibility that policy holders were not receiving their correct entitlement to enable the staff to receive a bonus. […]
Here is the link to newsletter #9.
Here is a link to a piece by Cam Preston about the current state of insurance claim settlements. His view is contrary to that of the Insurance Council on its website here which says that its members are on track to settle the vast majority of claims in 2016. IAG and Southern Response that together have over two thirds of the claims still have 5069 unsettled claims. Currently there are only 209 active proceedings on the High Court Earthquake list.
By the judgment 24 February 2016 in Southern Response Unresolved Claims Group v Southern Response Earthquake Services Ltd  NZHC 2345 the High Court (Mander J) declined the Group’s application for leave to bring the proceeding as a representative action in the name of its nominated representative, Cam Preston. The Group is an unincorporated body of 46 people with unresolved claims with SR. The claims are in various stages with some still “under cap”. The judgment refers to there being 2587 unresolved SR claims. The Group Claimants appeared to have differing issues with SR, so the Court was unable to identify issues common to the entire group that is a […]
Here is a link to the ABC Australia show “Lateline” and its piece from 16 February 2016 about the delays in the rebuilding of Christchurch. It contains interesting comments about IAG and its performance. Below are 2 quotes from IAG that are interesting. RENEE WALKER, IAG: We work with our customers. It’s always a negotiation, so they’ll be presented with a cash settlement offer and then is a negotiation. We’re not in the practice of forcing cash settlement. So there is always a conversation. RENEE WALKER: We think and we maintain that we are settling our claims at a reasonable rate. And we would like to work with our […]
Here is the link to a speech by Justice Kos at a Judges’ Conference in Brisbane recently. It is about the Christchurch earthquakes and the judicial response to the earthquakes. It goes through the major cases and comments on the judicial processes implemented to deal with the cases.
Some earthquake court cases have been in the Court system since 2013. They have dragged through the joint expert process that the Court used to see as essential, but in practice achieved very little towards resolving claims. Now that the cases have completed the interlocutory phases they are being allocated hearing dates. Amazingly cases of 5 days hearing time are now being allocated hearing dates in March 2017. That is appalling. So much for the quick resolution of earthquake cases.
People that have bought properties after the earthquakes are likely to have taken an assignment in relation to EQC and insurance policies. This may involve an assignment of the claim, the proceeds, the rights and/or the policy. Each is a different property right. This is likely to be recorded in the property sale and purchase agreement and a deed of assignment. There has been no issue with EQC recognising the right of the new owner to receive what may have been due to the previous owner. Some insurers have taken the position that the policy cannot be assigned without their consent. Also that the purchaser cannot acquire reinstatement rights or […]
We continue to come across home owners who do not understand the extent of their obligations under a cross lease in relation to insurance for earthquake damage. The cross lease will usually contain a term obligating an insured to spend any insurance money received on reinstating the damage. So an insured that takes a cash settlement could be sued later by other owners if they do not spend the money on reinstating. All owners can agree to vary the cross lease if needed to delete this requirement. If an owner repairs or rebuilds, but builds it different to what was there then the insured will need the consent of the […]
Here is a link to EQC’s advice about what to do after the earthquake on 14 February 2016. You have 3 months to make a claim. The 3 month period cannot be extended. It is better to be safe than sorry.
Here is the press release from the insurance council to the effect that CNZ members AA Insurance, FMG, the IAG brands, MAS, Tower and Vero have agreed not to plead a defence under the Limitation Act 1950 or the Limitation Act 2010 for any residential claim relating to the Canterbury Earthquakes where proceedings are filed in the Courts before 4 September 2017. This does not affect claims against EQC or Southern Response. To save arguments and issues I still recommend that owners sue insurers by 4 September 2016.
Here is the link to the press release from the EQC website about how it will apply the limitation period(s) under the Limitation Act. To be safe I recommend that owners sue before 4 September 2016. Better to be safe than sorry.
here is the link to the High Court Earthquake list as at 11 December 2015.
Here is a link to a Press story about the 6 year limitation period under the Limitation Act and its effect on claims for earthquake damage. To be safe anyone with an unsettled claim against EQC or their insurance company should sue by 3 September 2016. Once the limitation period expires that is the end.
This morning National Radio (Morning Report) broadcast an interview I did with Conan Young about the amount paid by EQC for legal costs in relation to Christchurch earthquake claims. In information released under the OIA EQC disclosed that the legal costs have been $23.6M. In 2014 the legal costs were $7.4M. These numbers do not include amounts paid by EQC for legal costs of homeowners. The interview was broken into 2 parts. Here is the link to part 1 and here is the link to part 2.
Here is the link to EQC and Insurance newsletter from Grant Shand Barristers & Solicitors
The Christchurch High currently operates a special list to deal with earthquake cases. Here are some stats from a recent Law Society presentation. 437 earthquake related proceedings filed 210 cases disposed of by discontinuance or judgment 176 cases discontinued with 71 discontinued after being set down for trial and 35 of those discontinued within 1 month of the trial date 34 cases disposed of by judgment using a total of 125 court days 227 active cases with 61 set down for trial and 166 in case management
Under the Limitation Act insured homeowners only have 6 years from the date of the damaging earthquake(s) within which to sue EQC and insurance companies for compensation. If homeowners do not sue then the claim(s) for money are no longer enforceable. So EQC and insurers will escape without paying. For houses and land damaged in the earthquake(s) on 4 September 2010 court proceedings must be filed by 3 September 2016. That date is fast approaching. Once the limitation period has expired that is the end. It cannot be extended. Sue now.
As well as covering buildings EQC also covers damage to residential land. Homeowners need to progress these claims now. These claims expire if the homeowner does not sue EQC within 6 years of the land damage. The primary claim is for the cost to restore/remediate the land. Do not believe EQC when it tells you that it only needs to pay a difference in value of the land between now and before the earthquakes. EQCover for land is limited to land that is within the property boundary – and includes: the land under the home and outbuildings (eg, shed or garage) the land within eight metres of the home and […]
here is a link to a story and video about bad building work – particularly of foundations.
In Newberry v AA Insurance Ltd  NZHC 2457 the High Court (Nation J) on 8 October 2015 considered a claim by Brian Newberry about 30 Lladro figurines damaged in the Christchurch earthquakes that had a replacement value of $210,065. The problem for Mr Newberry was that his insurance policy had a limit for “works of art” of $5000 per item with a total of $20,000, unless the items were separately specified in the insurance policy schedule. Unfortunately, he did not specify the Lladro as “works of art”. The insurance policy defined “works of art” as – Pictures, paintings, prints, sculptures, ornaments, tapestries, antiques (other than furniture), hand woven mats or […]
Grant Shand Barristers and Solicitors is again a finalist for the Insurance Law Firm of the Year Award at the New Zealand Law Awards. Here is the list of finalists. Grant Shand is the only finalist that does not act for insurance companies. The New Zealand Law Awards will be held on Thursday 19 November 2015 at the Pullman Hotel Auckland.
Here is the link to the most recent published earthquake list. Interestingly all cases about failed earthquake remedial work by insurance companies or EQC will not be put on the list. One of the earthquake list Judges; Justice Kos, is now a Judge on the Court of Appeal, so will be replaced.
The appeal period for any appeal from the judgment in C & S Kelly Properties Ltd v EQC & Southern Response Earthquake Services Ltd  NZHC 1690 has expired with no party lodging an appeal. There has been no agreement about the costs payable by EQC and Southern Response so the Court will now have to determine that issue. Notwithstanding the recent MBIE report to the effect that 30 out of 32 hand selected properties that were jacked and packed by EQC were non-compliant with the building code apparently EQC still maintains that it can jack and pack this property.
Here is a link to a Stuff article on the comments by builders involved in doing building work for EQC and Fletchers. Beneath the article are comments corroborating the content of the article that EQC and Fletchers are not blameless for the defective building work. Both EQC and Fletchers ought to be legally liable for any defective building work. I am aware that both have previously been sued for defective work. I would not rely on either to remediate defective work and homeowners have no obligation to allow EQC or Fletchers to try to remedy defective work.
Here is a link to an article on stuff that IAG has exceeded its $4 Billion reinsurance limit for the February 2011 earthquake. Apparently IAG expects to settle claims for damage in the other earthquakes at less than the reinsurance limit.
Below is an extract from the MBIE website about its report on faulty building repairs. The report identified significant failings with the “jack and pack” method. Here is the link. Report into Canterbury residential repairs released 19 August 2015 The Ministry of Business, Innovation and Employment (MBIE) has released a report into the Building Code compliance of earthquake repairs to Canterbury homes. The report follows an independent survey of 101 homes randomly selected from more than 2,700 addresses provided by EQC, Housing New Zealand, Southern Response and IAG. The survey also included a small sample of houses where homeowners had opted out of an insurer-led home repair programme. The organisations […]
Stuff and the Press recently published the article here about the likely liability of Fletchers and insurers for defective earthquake remedial work. It is unfortunate that those involved in the article did not accurately state the law. Where an insurer chooses to do, or have paid for, remedial work under the insurance policy then it is liable for the quality of that work as if it was the builder. There are a few Court proceedings already against insurers for defective building work. Fletchers as the project manager owes obligations to the home owner to perform its role with reasonable skill and care. That includes ensuring that the work complies with the […]
Here is the link to the post on the EQC website about failed remedial work. The houses the subject of the investigation will be the tip of the iceberg. I do not recommend that homeowners rely on EQC to accurately scope and remediate the failings. Better to engage an independent expert.
Five Years On: How Insurance Claims Arising from the 2010-11 Earthquakes Have Been Dealt With New Zealand’s proximity to the geologically active Pacific Ring of Fire leads to 20,000 recorded earthquakes each year. Most earthquakes are minor but annually around 200 are strong enough to be felt. Between September 2010 and June 2011, Canterbury was hit by three major earthquakes. While such natural events are not uncommon in the country, the intensity of those earthquakes, and the fact that they occurred so close together, caused considerable damage to the region, destroying buildings, roads and infrastructure. It affected 460,000 people, and damaged 150,000 homes; 20% of which (30,000) were seriously damaged. […]
In a judgment 5 August 2015 in Church Property Trustees v Attorney General & Anor  NZHC 1843 the High Court (Dunningham J) discussed the consequences of the breach of trust by the CPT in spending $4.7M of the insurance proceeds for the Cathedral on the cardboard cathedral in Latimer Square. CPT had recently transferred funds to cover the payment, so there was no need for any orders against it. The Court decided that the payment for Cathedral contents was not required to be used for the Cathedral only. It also decided that the CPT was not in breach of its obligations by failing to insure the Cathedral for replacement cost.
Here is a link to our most recent newsletter.
Cera has published its later red zone offer. Details are below. Residential Red Zone Offer Recovery Plan The Residential Red Zone Offer Recovery Plan has now been approved and released The Residential Red Zone Offer Recovery Plan [PDF 716KB, 32 Pages] The media release announcing The Residential Red Zone Offer Recovery Plan » The Recovery Plan confirms the following Crown offers: For all vacant red zone land: a new Crown offer at 100% of the 2007/08 rateable land value. For all insured commercial red zone properties: a new Crown offer at 100% of the 2007/08 rateable land value and 100% of the 2007/08 rateable improvements value for the insured improvements, […]
Introduction On 22 July 2015 the High Court (Mander J) released the 107 page judgment in C & S Kelly Properties Ltd v EQC & Southern Response Earthquake Services Ltd  NZHC 1690. This was the case where the primary issue was whether the damage to the foundations (floor differential 88mm) was caused by the earthquake(s). EQC & Southern Response said that the earthquake(s) did not damage the foundations and the differential was caused by the wind, a flax bush and/or had existed since the house was built. Summary Mander J decided that Kelly had proved that the floor level differential was earthquake damage, so EQC and SR lost. The […]
By the judgment 22 July 2015 in Southern Response Earthquake Services Ltd v Avonside Holdings Ltd  NZSC 110 the Supreme Court dismissed the appeal by Southern Response against the Court of Appeal decision of 1 October 2014. It confirmed that in calculating the rebuild cost of a house under the Southern Response insurance policy for the buy another house option, 1c.ii, a reasonable estimate for professional fees and contingencies should be included in the sums payable, as if the house is actually being rebuilt. Both Courts were unpersuaded by the Southern Response argument that because the house was not actually going to be rebuilt there were no risks and […]
Here is a link to a story from Radio NZ about the hearing on Christchurch plan proposals, particularly about required floor levels. Here is the link to the website for the Independent Hearings Panel and here is the link to the actual panel decision.
Here is our newsletter #6
The Courts have confirmed the ability of insureds to recover for separate damage to insured buildings in separate quakes even where the total recovery then exceeds the sum insured under the policy. This has caused issues about proving the extent of the damage in each earthquake and remedial scope/costs. In Vero Insurance New Limited v Morrison & anor  NZCA 246, 16 June 2015 the Court of Appeal considered the use of a model based on ground shaking as a method of allocating damage and repair costs. The industrial/commercial building at 23 Heathcote Street, Woolston was insured by Vero Insurance for $4,004,300 per event. It was damaged in the Canterbury […]
In Medical Assurance Society of NZ Ltd v East & ors  NZCA 250, 17 June 2015 the Court of Appeal allowed the appeal by MAS against a High Court (Whata J) decision on the timing of payment of replacement cost and dismissed it on the standard of the work. The owners’ house was damaged in the February 2011 earthquake. The concrete slab had a floor level differential of 44mm and areas of the slab had a slope greater than .5%. The owners proposed underpinning the slab and MAS proposed relevelling by LMG. The owners engaged Risk Worldwide. They sought a judgment for remediation costs of $3.096M (rebuild). Risk Worldwide was […]
Class actions against EQC and Southern Response have been the subject of media attention in the past 3 years. This has intensified recently with the proposed class action against Southern Response. Here is the link to Grant Cameron’s page. Here is the Southern Response page about the proposed class action. There is no specific mechanism, or rule(s), by which there can be a “class action” in NZ. Rules proposed in 2008 have never been implemented. Recently the Court(s) have shown a willingness to permit representative actions under r4.24 of the High Court Rules. This has enabled the “Feltex” and “Bank fees” proceedings. The “Feltex” proceedings failed in the High Court […]
CERA has released its draft red zone recovery plan. Here is a link to it. Taking into account the five key criteria the Chief Executive’s preliminary views on the quantum of the new Crown offers were as follows: • For all vacant red zone land: a new Crown offer at 100% of the 2007/08 rateable land value. • For all insured commercial red zone properties: a new Crown offer at 100% of the 2007/08 rateable land value and 100% of the 2007/08 rateable improvements value for the insured improvements, if the insurance benefits are transferred to the Crown. Alternatively the owners may choose not to accept any payment for the […]
Discussions begin on reform of EQC Act Minister Responsible for the Earthquake Commission (EQC), Gerry Brownlee, and Associate Minister of Finance, Steven Joyce, say the Government has developed a number of proposals to reform the EQC Act, which are being released for public discussion today. “These reforms are designed to ensure the EQC scheme remains focussed on insuring homes; resolves the difficulties experienced in Canterbury with the interaction of land and building cover; better integrates EQC and private insurers’ claims handling processes; and ensures the ongoing financial sustainability of the scheme,” Mr Brownlee says. “We also propose keeping EQC’s role in supporting research and education about New Zealand’s natural hazards and […]
In Prattley Enterprises Ltd v Vero Insurance NZ Ltd  NZHC 1444 the High Court (Dunningham J) considered a claim by Prattley to set aside the insurance claim settlement agreement it entered into in August 20111 with Vero Insurance for damage to its building known as “Worcester Towers”. The building at 103-105 Worcester Street, Christchurch was damaged in the earthquakes on 4 September 2010, 26 December 2010 and 22 February 2011. It was “red stickered” and demolished in September 2011. In August 2011 Prattley entered into an agreement with Vero to settle the insurance claim(s) at $1,050,00 plus GST. Later Risk Worldwide became involved and prosecuted the Prattley claim(s) seeking a […]
Here is the link to the NZLS page with links to the most recent High Court earthquake list and case summaries.
More problems are emerging with houses purportedly fixed by Uretek insertion beneath the concrete slab in Christchurch. We issued new Court proceedings recently for one house against Uretek, Southern Response, Christchurch City Council and the builder/engineer involved. More to come.
In the judgment of Minister for Canterbury Earthquake Recovery v Ace Developments Ltd & anor  NZHC 1027 the High Court (Osborne AJ) has ordered that the defendants vacate a property at 115-117 Moorhouse Avenue that was subject to notice of acquisition by CERA in July/August 2014. The defendants were the owner and lessee of the property. The defendants unsuccessfully opposed the vacation order on the basis that there was no offer/agreement about compensation.
The Court of Appeal has today dismissed the appeal(s) by EQC against High Court decisions awarding homeowners costs and disbursements where EQC paid cap after being sued. Here is the judgment. This is an excellent result for homeowners and should encourage more people to sue EQC. The High Court had awarded each homeowner 50% of the 2B costs and disbursements on the basis that an insurer was still a party. The Court of Appeal refused to increase this to 100%.
Southern Response applied to the Supreme Court for leave to appeal the Court of Appeal decision including a 10% contingency and 10% professional fees as part of a rebuild costing. By a brief judgment released 4 may 2015 the Supreme Court said: A The application for leave to appeal is granted (Avonside Holdings Ltd v Southern Response Earthquake Services Ltd  NZCA 483). B The question on which leave is granted is whether the Court of Appeal was correct to find that the respondent was entitled under its insurance policy with the appellant to claim allowances for contingencies and for professional fees given that the respondent has elected to purchase […]
Here is the link to newsletter no. 5
Subsequent to the High Court judgment of 10 December 2014 on declarations sought by EQC on flooding and liquefaction vulnerability etc the two intervenors applied for an order that EQC contribute to their costs. By a judgment 12 March 2015 the High Court decided to let costs lie where they fell.
EQC and Insurers postponed dealing with what they termed “multi-unit” claims. These claims are now emerging and raise many issues. They use the term “multi unit” to refer to physcially connected properties. These properties can be unit titles within a body corporate, cross-leased properties or physically connected units on separate titles. The primary reason for the delay in the resolution of multi unit claims is that EQC postponed its assessment of them. With a body corporate there is a single insurer and usually a single sum insured. There will be issues with the apportionment of the sum insured between units when there is insufficient cover to pay for reinstatement. If […]
Here is a link to a presentation by Southern Response CEO, Peter Rose, at the recent “Seismics and the City” event held on 27 March 2015. Mr Rose considers Cancern and RAS to be excellent from the Southern Response perspective, however, I am not sure that is a positive recommendation for insureds. Mr Rose uses the phrase “qualitative easing” for Southern Response now considering information provided by insureds. Interestingly Southern Response has settled only 57% of its 7348 “overcap claims” more than 4 years after the 22 February 2011 earthquake. That leaves about 3160 unsettled. This number presumably excludes those claims that are still “under cap”. Apparently I am […]
In East & anor v Medical Assurance Society New Zealand Ltd  NZHC 3399 the High Court (Whata J) discussed the timing of payments by an insurer on reinstatement of a house and considered whether proposed concrete slab foundation remediation methods met the “as new” policy standard. The Court decided that the insurer was liable to pay the reinstatement costs up front and not as they were incurred. It decided that clear wordng was required in the policy to require an insured to spend the money before the insurer was required to pay. Witnesses for the homeowner apparently accepted that underpinning the foundation met the required standard. The insurer wanted […]
In Kraal & anor v EQC & anor  NZCA 13 the Court of Appeal upheld the decision of the High Court in Kraal & anor v EQC & anor  NZHC 919 to the effect that the Council imposition of the notice under s124 Building Act 2004 preventing occupation/building work was not physical damage to the insured house so there was no cover from EQC/Allianz. This case was run as preliminary issue case for the owners by a law firm that acts for Southern Response. Surprisingly they do not appear to have run the argument that the inability to legally repair the house by reason of the s124 notice made the […]
Leans of walls are a symptom of earthquake damage. This is know as wall verticality. We recently did a trial against Lumley General Insurance where the primary issues was whether the wall leans were caused by earthquake(s) and if so, what is the required remedial work and cost. The Court reserved its decision. The lean of walls is often an item overlooked by people assessing earthquake damage. It is important that it is not overlooked.
Thousands of people appear to still be trapped in the process and the victims of delayed and inadequate EQC assessments. EQC prioritises assessments for houses where it is sued. So the quickest way to get out of the EQC process is to sue. If through the Court process EQC then pays cap EQC will be liable for legal costs and disbursements. So, suing EQC is better economic choice.
There High Court judgments have ordered EQC to pay costs and disbursements to homeowners where EQC paid cap after being sued. These are Whiting & ors v EQC & anor  NZHC 1736; Ryde v EQC & anor  2763 and van Limburg v EQC & anor  2764. EQC appealed each of these decisions to the Court of Appeal and Ryde and van Limburg cross appealed the Court’s decision to reduce the costs to 50%. The High Court had said that it would reduce the award by 50% because the insurer was still a party. The Court of Appeal heard the appeals on 11 March 2015. It is hoped that the Court of Appeal […]
The closing submissions in the case of Kelly v EQC & Southern Response took place on 3 & 4 March 2015. This is the case notable for the defence by EQC and Southern Response that a weatherboard house in Burwood (TC3) with a post earthquake(s) floor differential of 88mm suffered no foundation damage in the earthquake(s) notwithstanding that the property moved downwards about 360mm and horizontally about 660mm and immediately adjacent houses suffered foundation damage. EQC and Southern Response also said that the floor differential was caused by the wind and a flax bush. EQC and Southern Response first said there was no foundation damage in September 2014 having accepted […]
Here is the link to the most recent High Court earthquake list.
A message from CERA – Port Hills residential red zone Final offer acceptance date The final date for property owners to accept the Crown offer to purchase eligible properties in the Port Hills residential red zone is 27 February 2015. The settlement deadline for properties in the Port Hills residential red zone is 6 weeks after the date of the agreement for sale and purchase. Given the potentially large number of transactions scheduled to settle during the period following 27 February 2015, we ask that practitioners do everything reasonably possible to ensure that preparations for settlement are completed in a timely manner, including sending settlement statements and undertakings as early […]
Link to newsletter 4 below http://us9.campaign-archive1.com/?u=d5b576ad87990334eed3b48a7&id=3f0de8eaea&e=[UNIQID
In three separate High Court judgments the High Court has ordered EQC to pay legal costs and disbursements to homeowners who had commenced court proceedings against EQC and insurers during which EQC changed its position and paid its cap liability. Hopefully all 3 proceedings are heard by the Court of Appeal in March 2015.
After losing in the Court of Appeal in Avonside Holdings Ltd v Southern Response Earthquake Services Ltd  NZCA 483, Southern Response filed an application for leave to appeal to the Supreme Court. Both parties have now filed submissions with the Supreme Court and it will now decide the leave application. Over 2 months after the Court of Appeal judgment and after service of a statutory demand Southern Response paid the increased judgment sum by paying a further $215,308.66. Notwithstanding the comments from the Court of Appeal, Southern Response then refused to pay any costs for the High Court hearing. By a judgment on 19 December 2014 in Avonside Holdings […]
In QBE Insurance (International) Ltd v Wild South Holdings Ltd  NZCA 447 the Court of Appeal dealt with 3 appeals about the interpretation of reinstatement clauses in commercial insurance policies. QBE Insurance filed an application for leave to appeal to the Supreme Court, but later abandoned it. Vero Insurance did not seek leave to appeal. Lloyds Underwriters applied for leave to appeal to the Supreme Court, however, in the judgment released 16 December 2014 in Certain Underwriters at Lloyds & anor v Crystal Imports Ltd  NZSC 186 the Supreme Court refused leave to appeal. The underwriters wished to argue that the effect of the reinstatement clause is that cover […]
The Supreme Court in the decision in Tower Insurance Ltd v Skyward Aviation 2008 Ltd  NZSC 185 on 15 December 2014 dismissed the appeal by Tower Insurance about the interpretation/rights under Tower’s home insurance policy. Tower had sought to impose on Skyward in settlement of its insurance claim either a second hand house chosen by Tower Insurance or to pay as a maximum the value of a comparable second hand house, rather than pay the full replacement value for the property being the cost to rebuild the insured house. The Supreme Court decided that where the house is damaged beyond economic repair and Tower has not chosen to rebuild or […]
EQC asked the High Court to make various declarations in relation to whether a property’s increased vulnerability to flooding after the earthquake(s) was land damage and, if so, approval to settle the claim by paying the diminution in value of the property rather than the cost to remediate the damage. The declarations changed over time and by the end of the Court hearing on 31 October 2014 there were also declarations sought that a property’s increased vulnerability to liquefaction was land damage; that the vertical movement of a house was land damage and not building damage and that the only method of claiming against EQC was by judicial review. EQC […]
Below is a link to our recently distributed newsletter. http://us9.campaign-archive1.com/?u=d5b576ad87990334eed3b48a7&id=00ea2b3b21
Campbell Live recently ran a piece about an insured that requested information/documentation held by Southern Response about him under the Privacy Act. I highly recommend this process. You may be surprised by what emerges when you get the documents. The documents/information about me held by Southern Response were very informative.
In Ryde v EQC & anor  NZHC 2763 and Van Limburg v EQC & anor  NZHC 2764 the High Court has ordered EQC to pay the costs and disbursements of insured homeowners that sued EQC where EQC for years refused to pay and wrongly assessed the house(s) as under cap but paid cap once sued. These decisions are positive for homeowners and an incentive to them to sue EQC if they are dissatisfied with EQC.
On 1 October 2014 the Court of Appeal said that Southern Response was liable to pay professional fees of 10% and a contingency of 10% as part of a rebuild cost; costs in the Court of Appeal and that the High Court order of “no costs” must change. Southern Response has not yet paid the increased judgment amount of a further $214,934.14. A statutory demand was served on it on 23 October 2014. Southern Response eventually paid the costs in the Court of Appeal of $17,780 only after being served with a statutory demand. Notwithstanding the Court of Appeal directive about costs in the High Court and the success of […]
The High Court has released an update as at 30 September 2014 on the operation on the earthquake list.
By the judgment in Firm PI 1 Ltd v Zurich Australian Insurance Ltd & anor  NZSC 147 delivered 15 October 2014 the Supreme Court by a 3:2 majority decided that the sum insured of $12.95M for the Salisbury Apartments included any amounts due from EQC which in this case was $6.8M. The insured and its broker argued that the sum insured was additional to the amount due from EQC. The actual replacement cost of the complex was apparently about $25M. The majority placed emphasis on the sum insured being based upon a replacement valuation and that the insurer had calculated the premium based on the net figure which was […]
The progress of cases through the High Court Earthquake list is heavily dependent on the conduct of experts at meetings and in the production of “joint reports”. A previous post commented on an EQC expert (Dick Beetham from GHD) and his questionable conduct in cutting/pasting another engineer’s signature to a document that was not actually the “joint report” of the engineers. A recent judgment of Whata J on 25 September 2014 in Morrison & Cross v Vero Insurance Ltd [NZHC] 2344 commented on the conduct of Vero expert(s) and its lawyer’s involvement in the process. The Court commented adversely on the involvement of the Vero lawyer in the drafting of the […]
In its decision 1 October 2014 in Avonside Holdings Ltd v Southern Response Earthquake Services Ltd  NZCA 483 the Court of Appeal decided that the High Court was wrong not to include a contingency at 10% of build costs and professional fees also at 10% of build costs in the calculation of the rebuild cost of Avonside’s house at 1146 Avonside Drive and the amount due to Avonside for it to buy another house under the insurance policy. The decision will cost SR up to $400,000 (including costs and interest) on this case. It is yet another loss for Southern Response in the Courts. Insureds that deal with Southern Response […]
A Christchurch family is attempting to sue the Earthquake Commission, and their insurer, Southern Response, after being told damage to their home may have been caused by wind, and a flax bush, rather than an earthquake. http://www.radionz.co.nz/national/programmes/checkpoint/audio/20151477/eqc-revises-house-repair-costs-from-$500k-to-$50k
Insurers whittled down an agreed rebuild of a Burwood house to a $50,000 repair, the High Court was told today. Cameron and Suzanne Kelly are, through their company, claiming about $590,000 for the rebuild of their house which, they say, is uneconomic to repair. http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/10557626/Foundation-damage-not-quake-owners-told
A Christchurch family is attempting to sue the Earthquake Commission and their insurer after being told damage to their home may have been caused by the wind and a flax bush, rather than a quake. Cameron and Suzanne Kelly are attempting to sue EQC and Southern Response. It is believed they are the first residents to take the commission to court over its assessment processes. http://www.radionz.co.nz/news/national/255745/house-damage-blamed-on-wind,-flax
The below email from Southern Response about a job on which it engaged Uretek to lift the house is illuminating as to the issues with Uretek. Names and address removed. Hi [homeowner] The drains were affected when Uretek returned to do some extra work that was thought necessary. When they put their delivery unit into the ground at one point it penetrated the sewer line. When Uretek was injected at this one location it went into the sewer line. After Uretek did the initial leveling the drains were checked and found to be ok. After Uretek did the extra work the drains were not checked. The drains were found […]
David Harding was a member of IPENZ when he was involved in the design and construction of the CTV building in 1986 which collapsed in the earthquake on 22 February 2011. People lodged complaints with IPENZ about Mr Harding. Mr Harding resigned from IPENZ on 25 June 2014 before the hearing of the complaints took place on 14 August 2014. At the IPENZ hearing Mr Harding argued that because he was no longer a member of IPENZ he could not be subject to the disciplinary process. IPENZ disagreed and continued with the process. Mr Harding then asked the High Court to judicially review the IPENZ position. By a judgment 17 […]
In a decision released 10 September 2014 in QBE Insurance (International) Ltd v Wild South Holdings Ltd & anor  NZCA 447 the Court of Appeal disposed of appeals in 3 separate proceedings each of which involved issues over the operation of an “automatic reinstatement” clause. The Court decided that cover reinstates as soon as an event causing loss happened. Under the insurance policy either party may by notice cancel reinstatement, but notice must be given prospectively. The court held that the doctrine of merger did not apply. The Court said that the application of the deductible clause should await evidence at trial as should whether a building was “destroyed” […]
In a current High Court proceeding the engineering expert engaged by EQC, Dick Beetham from GHD Ltd, produced and enabled the filing in court what he entitled as a “joint report” by the parties’ engineers. In fact it was not the version of the report agreed to and signed by the homeowner’s engineer. Instead Mr Beetham had copied/cut the engineer’s signature and applied it to a different document and then enabled the document to be filed in Court representing it to be the agreed “joint report”. Below is an extract from a Court minute about Mr Beetham’s conduct. The conduct is currently the subject of complaints to IPENZ and CPENG. […]
Here is a link to an excellent article in the The Press by John McCrone about the future problems that will be caused by current EQC and insurance company promoted repair strategies.
The Christchurch City Council has increased the required floor levels from those in the current plan (Variation 48). Here is a link to a property search function. Input the address and it will give you information on what is required for the property. As an example houses in Lower Styx Road, Brooklands that were required to be 11.8m above the datum are now required to be 12.3m above the datum.