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He v Earthquake Commission

He v Earthquake Commission

Case [2017] NZHC 2136 4 September 2017

Statutory Interpretation

Insurance Law

Property Law

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-1775 [2017] NZHC 2136

BETWEEN
XIAOMING HE

Plaintiff

AND

THE EARTHQUAKE COMMISSION First Defendant

AND

CERTAIN SYNDICATES OF LLOYDʼS OF LONDON SEVERALLY SUBSCRIBED TO COVERHOLDER CONTRACT B0429CNG90466

First Second Defendant

AND

CERTAIN SYNDICATES OF LLOYDʼS OF LONDON SEVERALLY SUBSCRIBED TO COVERHOLDER CONTRACT B0429CNG110466

Second Second Defendant

Hearing: 12-16, 21-23 June and 3-4 July 2017

Appearances:

P A Cowey and A J Summerlee for Plaintiff
B A Scott and G M Scott-Jones for First Defendant
R M Flinn and A W Moore for Second Defendant

Judgment:

4 September 2017

JUDGMENT OF DUNNINGHAM J

HE v THE EARTHQUAKE COMMISSION [2017] NZHC 2136 [4 September 2017]

Table of Contents

Introduction ............................................................................................................[1] The property at 377 Selwyn Street .........................................................................[7] Background to the claim ......................................................................................[15] Cover under the EQC Act ....................................................................................[31] Cover under the insurance policies ......................................................................[38] Case management of these proceedings...............................................................[45] The plaintiff’s evolving case ................................................................................[51] The relevant law ...................................................................................................[55] Burden of proof [55] What is damage? [60]

What was the condition of the property prior to the Canterbury earthquake sequence? .............................................................................................................[69]

Evidence of Mr He [72] Evidence of Ms Ye [74] Evidence of Mr Loh [76] Photographic evidence [85] Physical evidence relating to the structure itself [90] What damage was suffered in the 4 September 2010 earthquake? ......................[93] What damage was claimed? [93] What damage occurred? [97] Has EQC met its obligations in respect of the September damage? [98] What damage was suffered in the 22 February 2011 earthquake? .....................[122] What damage was claimed? [124] What is the expert evidence in relation to these claims? [125] Were the wall linings damaged? [159] Was there damage to the exterior weatherboards? [162] Did the earthquake damage walls and veranda posts through “racking”? [167] Was there damage to the perimeter foundation? [172] What damage was suffered in the 13 June 2011 earthquake? ............................[192] What damage is claimed? [192] Was there damage to the concrete hardstand or other hard-landscaping? [197] Was there damage to the garages? [199]

Outcome on the plaintiff’s claims for earthquake damage ................................[213] Interest ................................................................................................................[215] Costs ...................................................................................................................[217]

Introduction

[1] Mr He, the plaintiff, owns a property on a street corner at 377 Selwyn Street, Addington. The property comprises a house, of indeterminate age, but likely to be at least 80 years old, which has a shop attached to the front of it opening on to Selwyn Street. The shop is run as a dairy and Mr He rents the house and shop to a tenant.

[2] Mr He’s property was insured during the Canterbury earthquakes in 2010 and

2011 with the second defendants. The second defendants accept that, in the event of damage to the property by the earthquake, they would provide earthquake insurance cover for loss or damage not covered by the first defendant, the Earthquake Commission (EQC), in accordance with the terms of the respective insurance policies.

[3] To date, EQC has paid approximately $16,000 to Mr He for repairs to the house. However, Mr He claims EQC should have paid him the…

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 He v Earthquake Commission

Details

AGLC: He v Earthquake Commission [2017] NZHC 2136
Case: [2017] NZHC 2136
Decision Date: 4 September 2017

CaseChat Overview and Summary

The plaintiff, Mr He, brought an action against the Earthquake Commission (EQC) and the second defendants, Offshore Market Placements Limited (OMPL), for failure to pay for earthquake damage to his property. The property, at 377 Selwyn Street, Addington, is a house with a shop attached to the front of it. The house is run as a dairy and the shop is rented to a tenant. Mr He claims that the EQC should have paid him the maximum of $100,000 for each of the earthquake events on 4 September 2010, 22 February 2011, and 13 June 2011 because each of the earthquakes caused significant damage to the property, in particular, to the foundations of the house. He also claims that the second defendants are liable because the damage to the house in each earthquake event exceeded the amount of the EQC cap. He also claims that the second defendants should pay for damage to the garages to the rear of the property and to the concrete hardstand area in front of them. In total, Mr He now claims he is owed around $717,000, plus interest, by the defendants. The defendants resist Mr He’s claims for further payments. They say that the foundation damage claimed by Mr He was pre-existing and was not materially altered by the earthquakes. Similarly, OMPL resists the claims for damage to the concrete hardstand and rented garages on the basis that the identified damage was pre-existing, reflecting their age and deficiencies in their construction. The issues for determination were:(a) Was there material damage to the property, as a consequence of the Canterbury earthquakes, in addition to that which the defendants have responded to?(b) If so:(i) How extensive was that damage?(ii) What is required to remediate it?(iii) Which earthquake event does it relate to or, if more than one, how should it be apportioned between the earthquake events?(iv) What is the cost of the remedial work?(c) Did the fact Mr He accepted the installation of a heat pump under the Chimney Replacement Scheme mean he is no longer entitled to cost of repair of one of the chimneys?(d) If any of the defendants are found liable to make a further payment to Mr He, should interest be awarded and when should it run from? The Court found that the plaintiff’s claim for judgment against the first and second defendants for failing to settle his earthquake claims, fails in all respects, except for a minor claim for repairs to plaster damage on a section of the perimeter foundation. As that was not an outcome addressed in the quantity surveying evidence, the Court was unable to quantify this claim, but expected it will fall well within the statutory cap of $100,000 under the EQC cap and therefore will only require the first defendant to respond. In respect of the second defendant, its only liability to the plaintiff is for the costs of interior repairs to the south garage, which it has already agreed to pay. If the parties cannot resolve issues of quantum, the Court reserved leave to return to the Court for a determination on this issue. The Court held that, in substance, the defendants were the successful parties and costs should follow the event.

Orders