Inicio Ltd v Tower Insurance Ltd - [2020] NZHC 90

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-000176

[2020] NZHC 90

BETWEEN
INICIO LIMITED

Plaintiff

AND

TOWER INSURANCE LIMITED

Defendant

Hearing: 9 December 2019 with further submissions in writing provided by Counsel on 16 December 2019.

Appearances:

R J Hargreaves for Plaintiff

M C Smith and H E Savage for Defendant

Judgment:

7 February 2020

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 February 2020 at 12.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

INICIO LTD v TOWER INSURANCE LTD [2020] NZHC 90 [7 February 2020]

Introduction

[1] The plaintiff, Inicio Ltd (Inicio) owned a house damaged beyond economic repair in the 22 February 2011 earthquake. The house was insured with the defendant, Tower Insurance Ltd (Tower) for its full replacement value. Tower contributed its assessment of its full replacement value liability under the policy towards the building of two new units (the units) on the same property for Inicio under a construction contract dated 18 September 2012. The units were completed in April 2013. Inicio says that Tower undervalued its insurance claim. It seeks to recover as damages the unpaid balance of what it alleges was the full replacement value of the house.

[2] Tower applies for summary judgment. Tower argues that Inicio’s causes of action are time-barred and, in so far as that is not the case, the allegations made do not give rise to a valid claim. Inicio opposes the application.

Facts

[3] Inicio was the owner of 531 Cashel Street. The house on the property was extensively damaged in the 22 February 2011 earthquake. It was insured with Tower. The terms of Inicio’s Provider Rental House policy with Tower included:

(a)The insured property was Inicio’s “house”:

House means the domestic building(s) shown in the certificate of insurance you own at the situation, including its fixtures and fittings (other than floor coverings not permanently fixed or glued in place, blinds and drapes), walls (other than retaining walls), gates, fences, underground and overhead services extending to the public mains, permanent swimming pools and spa pools and any other domestic structure on the same site (other than metal driveways or paths).

(b)The “house” was insured against “sudden and unforeseen accidental physical loss or damage” save as excluded under the policy. The “house” was insured against natural disaster damage on the following basis:

If your house suffers natural disaster damage, we will pay the difference between the amount paid under EQCover and the sum insured shown in the certificate of insurance.

(c)The terms that applied to settlement of claims under the policy included the following:

We will arrange for the repair or replacement or payment for the loss, once your claim has been accepted.

We will pay either:

● the full replacement value of your house at the situation; or

● the present day value;

As shown in the certificate of insurance.

[…

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: [2020] NZHC 90
Decision Date: 7 February 2020

CaseChat Overview and Summary

The case of Inicio Ltd v Tower Insurance Ltd [2020] NZHC 90 involved a dispute between Inicio, the owner of a house that was damaged in the 2011 Christchurch earthquake, and Tower Insurance Ltd, the insurer of the property. The issue at hand was whether Inicio's claims for breach of the insurance policy and misleading or deceptive conduct under the Fair Trading Act 1986 were time-barred, and if not, whether they could succeed. The case was heard in the High Court of New Zealand, Christchurch Registry.

The court examined the six-year limitation period for money claims under the Limitation Act 2010 and the three-year limitation period for claims under the Fair Trading Act. The court found that Inicio's first cause of action, based on breach of the insurance policy, was not time-barred as Tower had acknowledged its liability in writing. The second cause of action, concerning misleading or deceptive conduct under the Fair Trading Act, was found to be time-barred in part but not in all respects.

In summary, the court dismissed Tower's application for summary judgment, allowing Inicio's claims to proceed to trial. The court held that some aspects of Inicio's Fair Trading Act claim were time-barred, but others could proceed to trial for determination. The court also reserved leave for the parties to file memoranda on costs if they were unable to agree on the matter themselves.

Orders