Kraal v Earthquake Commission - [2015] NZCA 13

For a Court ready (fee required) version please follow this link

IN THE COURT OF APPEAL OF NEW ZEALAND

CA281/2014
[2015] NZCA 13

BETWEEN

HELEN KRAAL AND BRUCE ROBERTSON IRVINE
Appellants

AND

EARTHQUAKE COMMISSION
First Respondent

ALLIANZ NEW ZEALAND LIMITED
Second Respondent

Hearing:	13-14 November 2014
Court:	Wild, Simon France and Asher JJ
Counsel:	N Campbell QC, C R Johnstone and R Hargreaves for Appellants J A Knight, A Neris and N J Bruce-Smith for First Respondent I J Thain and K R Pengelly for Second Respondent
Judgment:	13 February 2015 at 3 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellants must pay the respondents’ costs for a standard appeal on a band B basis and usual disbursements. We certify for second counsel for each respondent.

____________________________________________________________________

REASONS OF THE COURT

(Given by Asher J)

Introduction

This appeal arises out of the catastrophic earthquakes in Christchurch. It concerns the claim of the appellants, Helen Kraal and Bruce Robertson Irvine, that they are entitled to insurance cover of their house under the Earthquake Commission Act 1993 (the ECA). Their claim results from the Christchurch City Council (the Council) prohibiting any occupation of their property due to a significant and ongoing risk from rock fall.
The first respondent, the Earthquake Commission (EQC), is the successor of the Earthquake and War Damage Commission.[1] The second respondent, Allianz New Zealand Ltd (Allianz), is an insurer that insured the home of Ms Kraal and Mr Irvine under a Premier (Accidental Damage) Replacement House Policy.
[1]Earthquake Commission Act 1993, s 4.
In the High Court, Mallon J held that the Council was not liable to pay the replacement value of the appellants’ house because their property had not suffered “natural disaster damage”.[2] In particular, she held that the definition of natural disaster damage, “physical loss or damage to the property”, required physical disturbance to the property, and did not extend to claims for losses (such as loss of the right to occupy) which did not arise from physical disturbance. The primary issue on appeal is whether this is a correct interpretation of “natural disaster damage” in the context of the ECA.

Background

[2]Kraal v Earthquake Commission [2014] NZHC 919, [2014] 3 NZLR 42 [High Court judgment].

The property in question is at 119 Wakefield Avenue, Sumner (the property). At the time of the earthquakes, Ms Kraal and her partner lived there. They had lived there for 18 years and had raised two children there. The property had been purchased by her and Mr Irvine as trustees of the Helen Kraal Family Trust. We will refer to the appellants and occupiers collectively as Ms Kraal, as she is both a joint trustee and an occupant.
The house is situated on the eastern side of the road. There is a flat area on the western side of the road opposite Ms Kraal’s house that rises to an area of rocks and the steep face of Richmond Hill, which is part of…

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.

Keep reading for free

Create a free CaseChat account to read Kraal v Earthquake Commission and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2015] NZCA 13
Decision Date: 13 February 2015 at 3 pm

CaseChat Overview and Summary

This appeal arose out of the catastrophic earthquakes in Christchurch. The appellants, Helen Kraal and Bruce Robertson Irvine, sought insurance cover for their house under the Earthquake Commission Act 1993 (the ECA). The Christchurch City Council had prohibited any occupation of the property due to a significant and ongoing risk from rock fall. The primary issue on appeal was whether the loss of the right to occupy the property constituted "natural disaster damage" under the ECA. The Court of Appeal held that the loss of the right to occupy the house did not constitute "natural disaster damage" under the ECA. The Court considered the ordinary meaning of the words of the statute, the context of those words and the legislative history of the relevant statutory provisions. The Court concluded that "natural disaster damage" in the ECA required physical loss or damage to the property. The Court also considered relevant case law, which supported the interpretation that loss and damage must be physical. The Court held that the loss of the right to occupy the house, which did not result from physical loss or damage to the property, did not fall within the definition of "natural disaster damage" under the ECA. The appeal was dismissed, and the appellants were ordered to pay the respondents' costs for a standard appeal on a band B basis and usual disbursements.

Orders