Ritchie v Earthquake Commission

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000831 [2017] NZHC 1242

BETWEEN

JAMES MATTHEW RITCHIE AND

SANDRA JANE BUSHNELL Plaintiffs

AND

EARTHQUAKE COMMISSION First Defendant

AND

LUMLEY GENERAL (NZ) LIMITED Second Defendant

Hearing:

29 May 2017

Appearances:

N S Wood and K S Rouch for Applicant (First Defendant) J E Bayley and R C Harris for Respondents (Plaintiffs)

B J Read for Second Defendant (Supporting the applications)

Judgment:

8 June 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [on interlocutory applications]

Summary of outcome and the significance

[1]      By this judgment the Court dismisses the first defendant’s interlocutory applications for orders striking out the plaintiffs’ claim or, alternatively, requiring the plaintiffs to file a more explicit pleading.

[2]      The  plaintiffs,  as  insured  houseowners  of  an  earthquake-damaged  house, have encountered a difficulty not uncommon in cases on this Court’s Earthquake List.  They know their house was damaged by more than one earthquake; the first defendant (EQC) has determined an apportionment of damage between two earthquakes, with the damage from one earthquake over cap,1 and EQC has paid the

plaintiffs accordingly; the plaintiffs have not resolved with their private insurer, the

1      For the “cap” see [6] below.

RITCHIE V EARTHQUAKE COMMISSION [2017] NZHC 1242 [8 June 2017]

second defendant (Lumley), their claim for the balance of the damage; the plaintiffs would accept the EQC apportionment as the basis of calculating the balance due from Lumley, but Lumley have put EQC’s apportionment in issue.

[3]      The plaintiffs are therefore in doubt as to the party from whom they are entitled to relief.  They sue.  They join both EQC and Lumley as defendants.  They plead the facts known to them.  They plead their uncertainty as to which defendant is liable and expressly invoke r 4.3(4) High Court Rules.  They seek declarations as to apportionment of damage and their entitlement, and they seek an inquiry.

[4]      EQC takes issue with the plaintiffs’ pleadings, asserting that the pleadings should either be struck out or further particularised.   This Court refuses EQC’s applications.  The plaintiffs’ pleadings are appropriate to the situation in which the plaintiffs’ doubt as to the correct defendant persists by reason of the pleaded position of Lumley as the second defendant.

Background

[5]      The plaintiffs’ house was damaged in the Canterbury earthquake sequence.  It is common ground that it was damaged by both the 4 September 2010 and the 22

February 2011 earthquakes.   The house was insured under Lumley policies at the time of each earthquake.  Where the insured chooses to repair or rebuild their house, Lumley’s commitment under the policies is to pay costs actually incurred (on a specified basis).

[6]      EQC is a Crown entity established under the Earthquake Commission Act

1993.  It is required, to a limit of $100,000 plus GST per event (the cap), to reinstate the  house  to  substantially the  same  (but  not  better  or  more  extensive  than)  its condition when new.2

[7]      After  the  September  2010  earthquake  (and  before  the  February  2011 earthquake),  the  earthquake damage to  the…