Grant Shand Barristers & Solicitors - 2016
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EQC & Insurance Newsletter #11.

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Failed Rebuild/Repair Cases
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.
AMI & Lumley liable for Selywn fire damage in 2013

In NZ Fire Service Commission & ors v Legg & ors [2016] 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 was extinguished by then.  The Court held that Leggs/Evolving were liable for the costs of fire fighting.  It decided that Leggs/Evolving had not been reckless/grossly negligent in relation to the fire so the insurers could not rely on an exclusion cause about failing to take reasonable care.  It also decided that the evidence did not establish that the fire was caused by the landscaping business of Evolving, rather than the Leggs’ lifestyle block activities, so AMI was liable.  This fire damaged houses and businesses nearby, so this is probably not the end of the litigation.
Summary Judgment Application fails against Insurers

In Emmons Developments NZ Ltd v Mitsui Sumitomo Insurance Co Ltd & anor [2016] 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.
Earthquake Fixes and Contaminated Land (HAIL)

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

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 activities (Hazardous Activities and Industries List).

A full list can be found at, and includes:

  • Chemical manufacture, application and bulk storage;
  • Electrical and electronic works, power generation and transmission;
  • Explosives and ordinances production, storage and use;
  • Metal extraction, refining and reprocessing, storage and use;
  • Mineral extraction, refining and reprocessing, storage and use;
  • Vehicle refuelling, service and repair;
  • Cemeteries and waste recycling, treatment and disposal;
  • Land subject to the migration of hazardous substances from adjacent land in a quantity that could be a risk to human health or the environment;
  • Land that has been subject to the intentional or accidental release of a hazardous substance in sufficient quantity that could be a risk to human health or the environment.

Common examples of HAIL sites are land that has been used for the production of gas and coal products, historic sawmill and timber treatment plants, old sheep dips, historic mining sites and historic landfills.  Your property’s Land Information Memorandum (LIM) report and the Listed Land Use Register ( will usually identify whether your property has been subject to a HAIL activity.

If you are applying for a permit, building consent or resource consent for land that has been subject to a HAIL activity, the National Environmental Standards (NES) for Assessing and Managing Contaminants in Soil to Protect Human Health (Resource Management Regulations 2011) will apply (  This will ensure that contaminated soil is identified, assessed and managed in a way that does not endanger human health or the environment.  This process can be very expensive.

We suggest you look at the register for your property now.

EQC & Southern Response Ordered to Pay Costs
In Driessen v EQC & Southern Response [2016] 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 shows the benefit in suing EQC and insurers.
Southern Response & Missing DRAs

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 DRAs 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.
EQC & Failed Repairs

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.
"Coming together is a beginning, keeping together is a progress, working together is success."
Grant Shand Barristers & Solicitors
0800 474 263

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Grant Shand Barristers & Solicitors · Level 2, 26-28 Hobson Street Towers · Hobson Street · Auckland, Auk 1140 · New Zealand

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