Obrecht v Earthquake Commission - [2015] NZHC 555

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000605 [2015] NZHC 555

BETWEEN
JERRY GEORGE OBRECHT AND

AIMEE JANE OBRECHT Plaintiffs

AND

THE EARTHQUAKE COMMISSION First Defendant

AA INSURANCE LIMITED Second Defendant

Judgment: 24 March 2015

JUDGMENT OF GENDALL J (Dealt with on the papers)

OBRECHT v THE EARTHQUAKE COMMISSION [2015] NZHC 555 [24 March 2015]

The costs application

Introduction

[1] Jerry George Obrecht and Aimee Jane Obrecht (the Obrechts) filed these proceedings against the Earthquake Commission (EQC) and AA Insurance Ltd (AA) on 28 August 2014. The proceedings concern their earthquake-damaged two-storey, timber framed house, on a concrete slab foundation in New Brighton, Christchurch. It was originally built in 1940, but has been extended and renovated.

[2] As I have noted, the property was damaged in the Christchurch earthquakes. The Obrechts plead that separate damage was inflicted upon the property in earthquakes in September 2010, February 2011 and December 2011. They are covered under a replacement policy by AA. In a 13 October 2014 minute, Wylie J noted that the Obrechts seek to have the house repaired or rebuilt, and do not seek a payout.1 Wylie J then averred:2

[5] Mr and Mrs Obrecht have this morning assured me that they are seeking to repair/replace their house and that they are not seeking a cash settlement…The insurance policy provides for repair/replacement, and only in limited circumstances, a cash settlement.

[6] The statement of claim as it stands at the moment seeks a cash settlement. It will require amendment.

The prayers for relief

[3] The 28 October 2014 statement of claim first filed, in relation to AA, sought the following relief:

AA declaration that the second defendant is liable to pay to the plaintiffs up to a maximum of $524,556.61 to reinstate the house;

B Judgment for general damages of $50,000; C Interest;
D Costs.

Alternatively

A Judgment for:

1 Obrecht v The Earthquake Commission CIV-2014-409-605, 13 October 2014 (Minute) at [5].
2 At [5]–[6].

1. Reinstatement costs of $524,556.61;

2. General damages of $50,000; B Interest;

C Costs.

[4] After Wylie J released his 13 October 2014 minute, an amended statement of claim was filed on 29 October 2014. In relation to AA, the prayer for relief stated as follows:

AA declaration that the second defendant is liable to pay to the plaintiffs up to a maximum of $524,556.61 to reinstate the house;

B Interest; C Costs.

Inadequacies remain

[5] After this amended statement of claim was filed, counsel for AA again raised issues with the relief sought. This resulted in a telephone conference on 11
November 2014 and a minute released the same day.3 Wylie J recorded the

dissatisfaction of AA with the amended pleading, but stated that he would make no further orders in that regard.4 It was noted, however, that:5

… It is, of course, open to AA to take whatever steps it considers are appropriate as a result of the amended statement of claim and the assurance given by Mr Shand (that the plaintiffs…

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 Obrecht v Earthquake Commission

Details

AGLC: Obrecht v Earthquake Commission [2015] NZHC 555
Case: [2015] NZHC 555
Decision Date: 24 March 2015

CaseChat Overview and Summary

Jerry George Obrecht and Aimee Jane Obrecht brought proceedings against the Earthquake Commission and AA Insurance Limited. The Obrechts sought a declaration that AA Insurance was liable to pay up to a maximum of $524,556.61 to repair or rebuild their earthquake-damaged Christchurch home. AA Insurance sought summary judgment or to strike out the Obrechts' claim. AA Insurance submitted that the Obrechts' claim was not legally tenable because their insurance policy did not provide for the relief sought. The Obrechts responded that their claim was similar to those in other cases and that they had been prepared to proceed to trial. The Obrechts then agreed to amend their claim to seek a declaration of liability rather than a declaration for payment. The Obrechts subsequently sought costs on the basis that AA Insurance's application had been unreasonable and that they had acted pragmatically to avoid the expense of a trial. AA Insurance argued that it was entitled to costs because the Obrechts had delayed in making the amendment and because the Obrechts had incurred costs as a result of AA Insurance's application. The court found that the Obrechts' original claim was legally untenable and that AA Insurance was entitled to costs on the basis that the Obrechts had unreasonably delayed in amending their claim. The court found that AA Insurance's application was reasonable and that the Obrechts were liable to pay costs of $6,766.

In summary, the court found that the Obrechts' claim was legally untenable, that AA Insurance was entitled to costs because the Obrechts unreasonably delayed in amending their claim, and that the Obrechts were liable to pay costs of $6,766. The court ordered the Obrechts to pay AA Insurance $6,766 in costs, together with any disbursements as may be awarded by the Registrar.

Orders