Marchand v Jackson - [2012] NZHC 2893

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV 2011-409-810 [2012] NZHC 2893

BETWEEN NICOLA JAYNE MARCHAND, JACQUES RENARD MARCHAND AND PATRICK GREGORY COSTELLOE
First Plaintiffs

ANDNICOLA JAYNE MARCHAND AND JACQUES RENARD MARCHAND Second Plaintiffs

ANDJOHN F JACKSON Defendant

ANDIAG NEW ZEALAND LIMITED Third Party

Hearing: 20-23 August 2012

Counsel: G A Hair for Plaintiffs
B R D Burke for Defendant
Appearance excused for Third Party

Judgment: 2 November 2012

JUDGMENT OF THE HON JUSTICE KÓS

[1] An insurance broker is retained to arrange house and contents insurance. For one reason or another he fails to do so. Yet he tells his clients he has placed the insurance. They make a small claim on the policy. Unknown to them, the broker pays the claim himself. Then disaster strikes. The clients’ house is severely damaged in the September 2010 Canterbury earthquake. The broker says he is not liable for failing to place the insurance. He says the house was not insurable in the first place. That is because one of the clients has convictions for fraud, which led to his previous insurance being cancelled. The broker says these facts had not been
disclosed. Had they been, insurance could not have been obtained.

MARCHAND, MARCHAND AND COSTELLOE v JACKSON & ANOR HC CHCH CIV 2011-409-810 [2 November 2012]

[2] Were the convictions and cancellation disclosed? Was the house insurable? Is the broker liable?

Background

[3] The first plaintiffs, Mrs Marchand, her husband Dr Marchand and their solicitor Mr Costelloe, are trustees of the Nicola Marchand Family Trust. Thereby they are also the owners of a five hectare farmlet at 21 River Road, Tai Tapu, south west of Christchurch. On the farmlet is a large modern house. Its replacement value is not entirely clear. Probably it exceeds $1.5 million.

[4] In June 2009 the first plaintiffs (whom I will describe collectively as “the Marchands”) retained the defendant insurance broker, Mr John Jackson, to arrange house, contents and other insurance. They also retained him to arrange business insurance for their medical practice, Doctors on Cashel Limited.

The narrative suspended

[5] I pause at this point to explain two things. First, why the Marchands went to Mr Jackson to obtain insurance. And second, why Mr Jackson faces personal liability in this case.

Why new insurance was needed

[6] In 2008 Dr Marchand was convicted on three representative counts of using a document to obtain a pecuniary advantage, and one representative count of dishonestly using a document for the same purpose. The charges related to fictitious general medical services claims. Some 57 transactions in all, amounting to $30,500 in fraudulent claims over a three and a half year period. Dr Marchand pleaded guilty part way through a defended trial. Convictions were entered in September 2008.

Sentencing occurred that December. Dr Marchand was sentenced to eight months’ home detention.1 The sentencing judge, Judge Doherty, noted full repayment had been made, a full apology given to Pegasus Health, and that Dr Marchand had no prior convictions. 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 Marchand v Jackson

Details

AGLC: Marchand v Jackson [2012] NZHC 2893
Case: [2012] NZHC 2893
Decision Date: 2 November 2012

CaseChat Overview and Summary

In Marchand v Jackson, the plaintiffs sued the defendant, an insurance broker, for failing to obtain house and contents insurance for their property. The plaintiffs alleged that the broker had assured them that insurance was in place when it was not. The broker argued that the plaintiffs were uninsurable due to criminal convictions and the cancellation of their previous insurance policies. The High Court found in favour of the plaintiffs and held that the broker was liable for damages. The court found that the plaintiffs would likely have disclosed the material facts and obtained insurance if the broker had properly performed his duties. The broker's failure to do so left the plaintiffs uninsured, and he was held liable for the amount necessary to put them in the same position as if the insurance cover sought by them had been obtained. The court also found that there was no contributory negligence on the part of the plaintiffs.

Orders