Body Corporate 74246 v QBE Insurance (International) Limited

[2017] NZHC 1030

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-409-765 [2017] NZHC 1030

BETWEEN

BODY CORPORATE 74246

Plaintiff

AND

QBE INSURANCE (INTERNATIONAL) LIMITED

Defendant

ALLIANZ AUSTRALIA INSURANCE LIMITED

Third Party

Hearing:	17 May 2017
Appearances:	C R Johnstone for Plaintiff P Davies for Defendant R Tosh and C Laband for Third Party
Judgment:	18 May 2017

JUDGMENT OF FOGARTY J

This judgment was delivered by Justice Fogarty on

18 May 2017 at 3.00 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Wynn Williams, Christchurch

DLA Piper, Auckland

Fee Langstone, Auckland

BODY CORPORATE 74246 v QBE INSURANCE (INTERNATIONAL) LIMITED [2017] NZHC 1030 [18

May 2017]

[1]      This case is set down for trial on Monday 22 May 2017, before Woolford J. There has been  a flurry of last minute procedural issues.   These centre around applications by the third party, Allianz to re-join the Body Corporate as a party and to prevent Allianz, the third party, from filing an amended statement of defence and counterclaim.

[2]      Underpinning both issues is the current intent of QBE, to argue that Allianz also insured the Body Corporate at 4.35 am on 4 September 2010 and that Allianz cannot obtain rectification of its policy to qualify the description in Allianz”s invoice of 19 November 2010:

Period of Insurance: Effective Date: 04/09/2010

Expiry Date:     4pm on 04/09/2011

[3]      Allianz proposes to argue for rectification to make it clear that the period of cover is from 4.00 pm on 4 September 2010, and to argue rectification without the Body Corporate being a party to the litigation.  Allianz does not see the need for the Body Corporate to be a party.   Allianz intends to rely upon a number of English authorities supported by the editorial views of the learned editors of Snell’s Equity.1

The Body Corporate has been a party. After it settled with QBE, and indeed after the

dispute between Allianz and QBE was pleaded, leave was granted by this Court for the Body Corporate to discontinue as a plaintiff.2

[4]      The Body Corporate in no way wishes to  become a party again, and  to participate in what it sees as litigation between QBE and Allianz to which it has no interest.  It does not want in any way to put its interests at stake by “being caught in the cross hairs of the dispute between Allianz and QBE” said Mr Johnstone, its counsel.  He has confirmed its position in a memorandum dated 18 May, and now

filed in this Court.  For convenience it is attached to this judgment.

1      John McGhee (ed) Snell’s Equity (33rd ed, Sweet & Maxwell, London, 2015).

2      See Case Management Conference minute of Christiansen AJ dated 14 July 2016 paragraphs [1]

to [4].

[5]      In the course of the argument, the Court adjourned and counsel were able to reach a resolution whereby it was agreed the trial could proceed without the Body Corporate being a party.  That resolution followed upon my granting leave to Allianz to file its draft amended statement of defence and for QBE to file in reply.

[6]      Mr Johnstone has applied for costs on an actual basis on this issue of joinder from both Allianz and QBE, leaving it for the Court to allocate the proportion. Naturally enough both QBE and Allianz oppose costs on an actual basis.  Nor did they agree on a 50 per cent allocation.

[7]      Mr Johnstone wanted a prompt order for costs, he did not want his clients to have to “wait”.   I do not think I can do justice to an application for actual costs without waiting to see the outcome of the trial and the award(s) of costs made by the trial Judge.

[8]      I do, however, observe that I am not attracted to the 50:50 split.  I am minded to the view that the costs of this latest round of procedural issues was driven by Allianz, seeking to join the Body Corporate, and by QBE seeking to prevent Allianz from filing the amended statement of defence and counterclaim.

[9]      However, as noted, I will await the result of the trial, and such orders of costs as may be made by the trial Judge, before considering the award and allocation of the costs of this interlocutory application.

MR JOHNSTONE’S MEMORANDUM

1.        The  purpose  [memorandum]  is  lodged  on  behalf  of  the  Body Corporate

74246 and James Hawkins McGillivray and Piera Louise McGillivray as trustees  of  the  1091  Ferry  Road  Family  Trust  and Yvonne  Chaplin  and Geoffrey Childers as trustees of the Rata Trust, as the (former) Plaintiffs to the proceeding.

2.The purpose of the memorandum, pursuant to the direction made by Justice Fogarty at the interlocutory hearing Wednesday, 17 May in the Auckland High  Court, is to record for the Court, and the Defendant and Third Party, in advance of the trial commencing Monday, 22 May, my clients’ position in respect  of  the  defence  of  rectification  pleaded  by the Third  Party.    The following statement is made by my clients with the expectation that they will not be (re)joined as a party to the proceeding.

3.        Their stated position is:

The Body Corporate and Trustees declare that they have no interest in the determination of whether or not the subject insurance contract commencing 4

September 2010, under the Allianz material damage and business interruption policy and schedule, should be rectified.

If the Court is required by the parties to address rectification of the insurance contract, the Body Corporate and Trustees do not wish to be heard on that issue and will abide by the decision of the Court.