Hood v Earthquake Commission - [2018] NZHC 2393

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-001024

[2018] NZHC 2393

BETWEEN
RACHEL MARY HOOD

Plaintiff

AND

THE EARTHQUAKE COMMISSION

First Defendant

AND

IAG NEW ZEALAND LIMITED

Second Defendant

Hearing: 11 September 2018 (Determined on the papers)

Counsel:

G D R Shand for Plaintiff (Applicant for costs)

K Rouch for First Defendant (Respondent on costs application)

Judgment:

12 September 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] This claim is derived from the Christchurch earthquakes. The claim has settled in all respects except for costs. Ms Hood’s claim against IAG New Zealand Limited (IAG) has been settled on the basis that costs will not be paid. Ms Hood seeks costs against The Earthquake Commission (EQC).

[2] Ms Hood’s house was insured for replacement. EQC’s initial assessment was that it would cost $10,729 to repair the house. It was not until March 2018 that EQC accepted that Ms Hood’s claim exceeded its maximum liability of $100,000 plus GST, a point which the assessed cost of repairs was $438,292.63.

[3]Ms Hood through her solicitor claims costs of $21,631 and disbursements of

$9,418.45 making a total of $31,049.45. No allowance is made in this total for any costs to be awarded against, or paid by, IAG. Subject to a payment made on account

HOOD v THE EARTHQUAKE COMMISSION [2018] NZHC 2393 [12 September 2018]

Ms Hood claims from EQC the entire scale costs which might be awarded in a case of this kind, by her calculation, and all her disbursements.

[4] EQC has paid the sum of $12,179.37 to Ms Hood towards her costs. Thus Ms Hood now seeks an order for payment of the balance of $18,870.08. EQC’s payment was assessed as 50 per cent of the scale fee for commencement of the proceeding, 50 per cent of the scale fees for three memoranda, 50 per cent of one day at scale rates in respect of discovery, and 50 per cent of the costs of the scale fee for inspection for one day. EQC has also paid 50 per cent of all disbursements claimed.

[5] Assessment of costs in earthquake cases has come before this Court frequently. Where there are two defendants, it is established that as a general guideline, an award of costs against each defendant will be for half the overall costs payable to the plaintiff.
As Davidson J said in Deo Gratias Developments Ltd v Tower Insurance Ltd:1

[31] … While an award of costs is discretionary, the need for a consistent approach is important, particularly in the context of the many claims which have a similar narrative and features as in the Earthquake List in the Christchurch High Court Registry.

[32] The well settled guideline is readily applied in earthquake list cases to avoid the need for parties to come to court seeking costs orders, and only when differentiating features are identified should it not apply.

[6] The guideline referred to by his Honour does not prescribe…

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.

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Details

Case: [2018] NZHC 2393
Decision Date: 12 September 2018

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Matthews delivered a costs judgment in the case of Hood v Earthquake Commission. The plaintiff, Rachel Mary Hood, sought costs against The Earthquake Commission (EQC) after her claim relating to the Christchurch earthquakes was settled in all respects except for costs. The initial assessment by EQC was that the cost to repair the plaintiff's house was $10,729, but it later accepted that the claim exceeded its maximum liability of $100,000 plus GST, with the assessed cost of repairs being $438,292.63. The plaintiff claimed costs of $21,631 and disbursements of $9,418.45, for a total of $31,049.45. EQC had already paid $12,179.37 towards the plaintiff's costs, and the plaintiff sought an order for payment of the balance of $18,870.08.

The legal issue before the court was whether the guideline of each defendant being responsible for 50% of the overall costs payable to the plaintiff should apply in this case. The court noted that while there was sympathy for the plaintiff's situation, it was difficult to reach a firm conclusion on the rights and wrongs of delays in this field of litigation. The court considered the vast number of cases EQC was handling, the pressure on experts to make assessments, and the fact that the proceedings were not issued until October 2016, five years after the earthquakes. The court ultimately decided to apply the general guideline, with each defendant responsible for 50% of the costs of the case.

The court examined the plaintiff's claims for costs in four categories: commencement of the proceeding, conference memoranda, discovery, and inspection. The court agreed with EQC's acceptance of responsibility for 50% of the costs for the commencement of the proceeding and conference memoranda. However, the court disagreed with EQC's assessment of one day for discovery and ruled that the plaintiff was entitled to costs for 2.5 days. The court also found that the plaintiff was entitled to costs for 1.5 days for inspection, as only EQC was liable to pay costs for inspection.

The court concluded that the plaintiff was entitled to costs and disbursements in the amount of $15,524.73, of which $12,179.73 had already been paid by EQC. Therefore, EQC was ordered to pay the remaining $3,345.00. No costs were awarded on this application as neither side was entirely successful, but each had prevailed to some extent.

Orders