Legal Research
Cases
Freer v Earthquake Commission

Freer v Earthquake Commission

Case [2023] NZHC 1301 29 May 2023

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-428

[2023] NZHC 1301

BETWEEN ANDREW ROBERT FREER and LUCINDA RAE MCEVEDY
Plaintiffs

AND

EARTHQUAKE COMMISSION

Defendant

Hearing: 22 and 23 February 2023

Appearances:

A R B Barker KC and G D R Shand for Plaintiffs N L Walker and C J Curran for Defendant

Judgment:

29 May 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 29 May 2023 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

FREER v EARTHQUAKE COMMISSION [2023] NZHC 1301 [29 May 2023]

Table of Contents

Para No

Introduction [1]

The plaintiffs’ claim

[8]

Legal principles

[12]

The proposed class and common issue

[21]

The Earthquake Commission case

[32]

The interpretation argument

[38]

Criticisms of process and counsel

[41]

Section 19

[43]

Private insurance

[44]

The plain meaning of s 19

[46]

Priority of reinstatement over payment

[59]

The legislative and drafting history

[69]

Michalik v Earthquake Commission

[77]

Natural Hazards Insurance Act

[79]

Conclusion on the interpretation issue

The application argument

[81]

[82]

Further issues

[101]

Result

[103]

Introduction

[1] As a result of the 2010/2011 Canterbury earthquakes, many properties were left more vulnerable to liquefaction in future natural disaster events (known as increased liquefaction vulnerability (ILV)) and/or more vulnerable to flooding in such future events (known as increased flooding vulnerability (IFV)).

[2] The plaintiffs own a property that was damaged during the earthquakes resulting in ILV. The Earthquake Commission (EQC) settled the plaintiffs’ claim for land damage by payment of its assessment of the diminution of value (DOV) of the land caused by ILV and not the cost of reinstatement of the land. EQC considers this was lawful in accordance with declarations granted by this Court in Earthquake Commission v Insurance Council of New Zealand Inc.1

[3] The plaintiffs have brought this action for recovery of what they say is their true entitlement under the Earthquake Commission Act 1993 (the Act) being the cost to reinstate their land up to the limit of cover in s 19(a) of the Act, less what they have already been paid by EQC and an excess of $5,000.2 The difference is more than
$132,000.

[4] The plaintiffs’ claim was set down for trial, but the hearing has been vacated as they have applied under r 4.24 of the High Court Rules 2016 to represent almost all (save with some minor exceptions) property owners whose claims for land damage caused by ILV and/or IFV were settled by payment on a DOV basis. They contend settling such claims on a DOV approach was wrong and there are thousands of property owners in the same position as them who have not received their full entitlement under the Act.

[5] EQC opposes the application for representative orders. It says the plaintiffs’ claim is plainly meritless. Further, it says there is no common issue for the class the plaintiffs seek to represent. Finally,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Freer v Earthquake Commission

Details

AGLC: Freer v Earthquake Commission [2023] NZHC 1301
Case: [2023] NZHC 1301
Decision Date: 29 May 2023

CaseChat Overview and Summary

The plaintiffs sought to bring a representative proceeding on behalf of all property owners in New Zealand whose claims for land damage caused by the Canterbury earthquakes were settled by payment of diminution of value (DOV) rather than the cost of reinstatement. The plaintiffs claimed that EQC was liable to pay the cost to reinstate the land, up to the limit of cover in s 19(a) of the Earthquake Commission Act 1993, less what they had already been paid by EQC and an excess of $5,000. EQC opposed the application for representative orders on the basis that the plaintiffs' claim was plainly meritless and there was no common issue for the class the plaintiffs sought to represent. The court considered the legal principles governing applications under r 4.24 of the High Court Rules 2016, including the requirement for a common issue of fact or law of significance to each member of the represented class, the adequate representation requirement, and the importance of access to justice and judicial economy. The court found that the plaintiffs had failed to identify a suitable common issue justifying the granting of leave under r 4.24. The court noted that the plaintiffs had not argued that EQC had a strategy to settle IFV and ILV land damage claims only on a DOV basis, and that the potential to do so existed. The court decided to adjourn the application to allow the plaintiffs to adequately identify a common issue or interest between all members of the proposed represented group, taking into account the importance of access to justice and judicial economy. The court also noted that the court should take a liberal and flexible approach in determining whether there is a common interest.

Orders