Obrecht v Earthquake Commission

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.