Mathieson v Tower Insurance Limited - [2020] NZHC 136

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-000572

[2020] NZHC 136

BETWEEN
NEIL CAMPBELL MATHIESON and

MOIRE MATHIESON as Trustees of the CLAN MATHIE TRUST
Applicants

AND

TOWER INSURANCE LIMITED

Respondent

Hearing: 5 November 2019

Appearances:

G Jones and L Hill for Plaintiffs M Smith for Defendant

Judgment:

11 February 2020

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 11 February 2020 at 3.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Introduction

[1] The plaintiffs own a large, century-old home, known as “Stoneycroft”, which was significantly damaged by three successive earthquakes in the Canterbury earthquake sequence of 2010-2011. They have made claims against their insurer, Tower Insurance Ltd (Tower), in respect of each event, for the cost of repairs, up to the cap set in the policy.

MATHIESON v TOWER INSURANCE LIMITED [2020] NZHC 136 [11 February 2020]

[2] However, Tower says it is only required to make one payment up to the cap set by the policy, which it has done.

[3] The claim by the plaintiffs for additional payment under the policy is being pursued in the Canterbury Earthquakes Insurance Tribunal.1

[4] The primary dispute between the parties turns on interpretation of the insurance policy. For that reason, the Tribunal has referred the following questions to this Court for its opinion, pursuant to s 53 of the Canterbury Earthquakes Insurance Tribunal Act 2019 (the Act):

(a)The policy contains a warranty that the “maximum sum insured is
$455,000” (the $455,000 Cap). Is the $455,000 Cap (less EQC payments) an overall cap on the amount that the Trust can recover under the policy or does it apply as a cap per earthquake event?

(b)The policy limits the present day value recovery under the policy to “the market value of the property less the value of the land as an unoccupied site” (the Market Value Cap). Is the Market Value Cap (less EQC payments) an overall cap on the amount that the Trust can recover under the policy, or does it apply as a cap per earthquake event?

(c)Or, does the policy apply in some way other than as set out in (a) or (b)?

The proceeding in the Tribunal is adjourned until this Court provides its opinion on the case.

[5] The plaintiffs accept that if the question is answered in Tower’s favour, the claim in the Tribunal cannot go further. If, however, the question is answered in the plaintiffs’ favour, there may be additional issues of quantification to resolve in that forum.

1 A specialist Tribunal established by the Canterbury Earthquakes Insurance Tribunal Act 2019.

Relevant background

[6] The case stated for the opinion of this Court was accompanied by an agreed statement of facts. For the purpose of this case, the following background is relevant.

[7] The plaintiffs are the current trustees of Clan Mathie Trust (“the trustees”), a family trust which owns the house that is the subject…

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 136
Decision Date: 11 February 2020

CaseChat Overview and Summary

The case of Mathieson v Tower Insurance Limited involves the interpretation of an insurance policy concerning a large residential property damaged by successive earthquakes. The plaintiffs, trustees of the Clan Mathie Trust, sought clarification from the court on whether the policy's $455,000 cap and the market value cap applied as a limit per earthquake event or as an overall limit across multiple events. Tower Insurance argued that these caps should apply as overall limits across the sequence of earthquake events, while the plaintiffs contended that the caps should reset after each earthquake event.

The court considered the principles of indemnity and the specific wording of the insurance contract, noting that the policy was an indemnity policy, which means the insured is to be fully compensated but not more than fully compensated. The court examined the express terms of the policy, including the definition of "present day value" and the stipulation that the maximum sum insured was $455,000. The court distinguished the present case from previous judgments where per event limits were found, reasoning that the $455,000 was a cap on the sum insured, not a per event limit, and that it did not automatically reinstate after each loss.

The court concluded that the $455,000 cap was an overall limit on the amount that could be claimed within one policy period, with a potential exception if the house retained market value after the first period of insurance and further damage occurred during the renewed period. The court found that the market value of the property served as an overall cap on the amount that could be recovered, but only in the unlikely scenario that the house retained value after the initial damage and further damage occurred during the renewed policy period. The court's opinion provided the necessary clarification for the Canterbury Earthquakes Insurance Tribunal to proceed with the plaintiffs' claim. The court reserved the question of costs.

Orders