Myall v Tower Insurance Limited - [2019] NZHC 528

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2015-409-000230

[2019] NZHC 528

BETWEEN
PAUL GEOFFREY MYALL

Plaintiff

AND

TOWER INSURANCE LIMITED

Defendant

Hearing: 6 December 2018

Appearances:

K P Sullivan for Plaintiff M C Harris for Defendant

Judgment:

21 March 2019

JUDGMENT OF DUNNINGHAM J

[1] Mr Myall, the plaintiff, owned a fully restored historic mansion, known as Riverlaw, in the suburb of Opawa in Christchurch. It was so badly damaged in the Canterbury earthquakes of 2010-2011 that it had to be demolished. Mr Myall initially hoped to rebuild Riverlaw. However, disputes arose with his insurers over what sum comprised full replacement value and no steps were taken while these were being resolved. The reasons for the disputes included that Mr Myall had not insured the house for its true floor area and the parties disagreed on how the policy determined the specifications for the rebuild.

[2] On 23 February 2017, I gave a judgment on the disputes which affected the calculation of full replacement value.1 That judgment was appealed and cross-appealed on various grounds. With those issues resolved, the parties have

1 Myall v Tower Insurance Ltd [2017] NZHC 251.

MYALL v TOWER INSURANCE LIMITED [2019] NZHC 528 [21 March 2019]

recently agreed that the amount which represents full replacement value is
$5,273,021.71, and on the costs payable in the High Court.

[3] The parties had hoped that would be the end of the matter. However, it was not. Two issues were identified as outstanding. The first is whether Mr Myall must account for use of money interest on the interim payments that were made to him in 2012 and 2013. Tower Insurance Ltd (Tower) says it raised this point in argument before the High Court but that point was not determined. It says it is a significant point of principle and one that is worth a substantial sum here as the interim payments totalled nearly $3,000,000. Mr Myall resists this claim.

[4] The second issue is whether Mr Myall is still required, in accordance with the policy, to rebuild or replace his home before the balance is paid, or whether Tower has waived this requirement when it elected to cash settle, and cannot now insist on it.

[5] These issues were initially raised in memoranda filed in the Court late last year. Given the importance of them to the parties, and the amounts at stake, I agreed to hear counsel on these issues. In the course of exchanging submissions, a third issue was identified by the plaintiff which was whether he was entitled to interest as provided for in r 11.27 of the High Court Rules 2016 on what was described as the “judgment sum” from the date of the High Court judgment to the date of payment.

The insurance policy

[6] Before dealing with the three issues arising, it is necessary to briefly recap the relevant provisions of the insurance policy. The defendant, Tower, agreed to pay…

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 Myall v Tower Insurance Limited 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: [2019] NZHC 528
Decision Date: 21 March 2019

CaseChat Overview and Summary

The case of Myall v Tower Insurance Limited involved a dispute between Paul Geoffrey Myall, the plaintiff, and Tower Insurance Limited, the defendant. The plaintiff owned a historic mansion named Riverlaw, which was demolished following severe damage in the Canterbury earthquakes. The primary dispute was over the full replacement value of the property and the terms under which the defendant was to pay this amount. The case had a complex history, with previous judgments and appeals regarding the calculation of the full replacement value. The current hearing dealt with three unresolved issues: whether the plaintiff must account for use of money interest on interim payments, whether the defendant was obliged to pay the full replacement value regardless of whether the plaintiff rebuilt or replaced the house, and whether interest should be paid on the judgment sum under the Judicature Act.

The court ruled that the defendant was not entitled to deduct use of money interest earned on the interim payments when it paid the balance of the sum representing full replacement value. The court found that the interim payments made were not conditional on the plaintiff accounting for interest, and there was no contractual obligation for the plaintiff to do so. The court also ruled that the defendant did not need to pay the balance of the calculated amount of full replacement value until and unless the policy requirement to incur the cost of rebuild or replacement was met. The court found that the defendant's election to cash settle the claim did not waive the requirement for the plaintiff to rebuild or replace the house. Lastly, the court ruled that interest under the Judicature Act was only payable from the point when the plaintiff had incurred the cost of rebuilding or replacing the house and was entitled to additional payment under the policy.

The court made a declaration as to the sum which represented full replacement value and reserved leave to address the issue of what constituted "replacing...your house" in terms of the policy. The plaintiff was ordered to pay the defendant costs in the sum of $32,000. The court determined that costs should lie where they fall unless the parties could not agree, in which case they would need to file memoranda on the issue.

Orders