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This is our 3rd newsletter which this month summarises recent relevant Court decisions and hearings and topics raised recently by homeowners.  This month at the firm we welcome a new lawyer, Ines Shennan, who gets admitted as a Barrister and Solicitor on 4 December 2014.  We did not win Insurance Law Firm of the Year at the recent Law Awards.  The winner was McElroys, a noted Auckland firm that acts for insurers.

Court orders EQC to pay legal costs...
In two recent High Court decisions given on 6 November 2014 named Ryde v EQC & anor [2014] NZHC 2763 and Van Limburg v EQC & anor [2014] NZHC 2764 the High Court ordered EQC to pay costs and disbursements on a 2B basis.  2B is a preset rate for work done under the High Court Rules.  EQC is to pay half of the calculated costs on the basis that the second defendant, insurer may have a liability for the other half. 

In Ryde  EQC incorrectly assessed the house in September 2011 and paid cap in August 2013 after Ryde had sued EQC and IAG in May 2013.  In Van Limburg EQC had wrongly assessed the house in September 2011 and paid cap in August 2013 after Van Limburg had sued EQC and Tower in June 2013.

These are the second and third judgments to order EQC to pay costs and disbursements based upon its failure to properly settle claims as soon as reasonably practicable.  They are positive for homeowners and encouragement to not be afraid to sue EQC.

EQC Declaratory Judgment
Between 28 and 31 October 2014 a full Court of the High Court (Heath, Kos & Gilbert JJ) in Christchurch heard an application by EQC for various declarations primarily about whether the increased flooding vulnerability of properties, as caused by the earthquake(s), is land damage under s19 of the Earthquake Commission Act 1993.

EQC also sought the High Court approval of an EQC policy to place thresholds for land movement (100mm in single quake or 200mm total) before it was compensable damage and to compensate for land damage by paying the difference in value of the property, rather than the cost to repair/reinstate the land.

During the hearing the Insurance Council added declarations about Increased Liquefaction Vulnerability and EQC added a declaration by which it asked the Court to state that the only method of challenging EQC was by judicial review.
EQC by its chosen process sought to affect the rights of thousands of homeowners.  It chose to name as a defendant only the Insurance Council.  Subsequently the Christchurch City Council and Southern Response Earthquake Services Ltd were added as defendants.  Duncan Webb and Grant Shand were later granted permission to make submissions acting for interveners. 

Hopefully the Court delivers its decision before Christmas.  EQC did not receive a favourable reception from the Court
Rockfall & Physical Damage
On November 2014 the Court of Appeal heard the appeal in Kraal v EQC & anor  CA281/2014 which is a case about whether the risk of rockfall was physical damage for the purposes of the EQC Act and then the relevant insurance policy.
On 5 November 2014 the Supreme heard the appeal by Tower Insurance against the Court of Appeal decision in Skyward Aviation 2008 Ltd v Tower Insurance Ltd [2014] NZCA 76.  This was the case about whether Tower could impose on an insured a replacement comparable house.  Apparently the Supreme Court was not receptive to Tower’s arguments. 

Under the Limitation Act 1950 a person only has 6 years within which to sue for breach of contract, tort or a sum due under an enactment.  The 1st earthquake was 4 September 2010.  So there is still plenty of time within which homeowners can sue if dissatisfied with EQC or an insurer.
EQC & Graeme Robinson
According to “The Press” there may be adverse findings about EQC’s engaged engineer Graeme Robinson by an engineering disciplinary committee.  The actual findings and any discipline imposed will be interesting.  It could cause serious problems for EQC which has relied on Mr Robinson for decisions about pre-existing damage.  It has also relied on Mr Robinson to train EQC employees about identifying pre-existing damage.

Avonside Holdings/Southern Response

Southern Response has applied to the Supreme Court for leave to appeal the Court of Appeal decision in Avonside Holdings Ltd v Southern Response Earthquake Services Ltd [2014] NZCA 483 given on 1 October 2014.  Despite the Court of Appeal saying that the costs order in the High Court (no costs) must change Southern Response still denies a liability to pay costs in the High Court, so the High Court is now required to determine costs.

Jeremy Morriss - Solicitor

Jeremy concluded his LLB and BCom (in Economics) at the University of Canterbury in 2012.

He was admitted to the Bar in December 2013. Since working for Grant Shand he has primarily been involved with Insurance disputes and claims arising out of the Canterbury Earthquake events. He regularly appears in the High Court on Earthquake cases