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Ryde v Earthquake Commission

Ryde v Earthquake Commission

Case [2014] NZHC 2763 6 November 2014

Civil Litigation & Procedure

Insurance Law

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-987 [2014] NZHC 2763

BETWEEN
STEPHEN CHARLES RYDE AND

CONCEPCION ARGUTA RYDE Plaintiffs

AND

THE EARTHQUAKE COMMISSION First Defendant

IAG NEW ZEALAND LIMITED Second Defendant

In Chambers: On papers

Judgment:

6 November 2014

JUDGMENT OF THE HON JUSTICE KÓS (Costs on discontinuance)

[1] Mr and Mrs Ryde own a house in Wainoni, Christchurch. It was damaged in three earthquakes in September 2010 and February and June 2011.

[2] The focus of dispute in this case has been whether the cost of repairs is “over cap”. That is, that the cost of reinstatement exceeds the Earthquake Commission’s (EQC) maximum statutory liability of $100,000 (plus GST, but less a 1 per cent excess). If the foundations of the house needed to be rebuilt, the claim would almost certainly be over cap. In that case IAG’s insurance policy would respond.

[3] The Rydes lodged claims for each earthquake with EQC and IAG. EQC took the initial position that all three claims were under cap. IAG took the position that it was not liable to pay anything until it could ascertain the loss was over cap.

[4] By May 2013, more than two years after it initially assessed the house, EQC

had paid $3,978.08 for emergency repairs, but nothing more. IAG had paid nothing.

RYDE & ANOR v THE EARTHQUAKE COMMISSION & ANOR [2014] NZHC 2763 [6 November 2014]

[5] Dissatisfied with this response, the Rydes brought proceedings against EQC and IAG on 15 May 2013. In August 2013 EQC accepted that the February 2011 quake claim reached cap. They paid the Rydes $171,179.20, which plainly reflected loss from more than one event.

[6] There was some dispute whether that amount was sufficient. But on 10 June

2014 the parties agreed that the August 2013 payment settled the Rydes’ EQC claims. There was no agreement as to costs. On 9 July 2014 the Rydes filed a notice of discontinuance against EQC.

[7] The usual rule is that costs are awarded against a discontinuing party. It is not invariable however. The Rydes now apply for an award of costs against EQC. EQC opposes that application. It says costs should lie where they fall. It does not seek costs against the Rydes.

Chronology

[8] In order to assess the Rydes’ claim for costs, it is helpful to set out the order

of events.

[9] On 19 September 2011, an EQC assessor inspected the house. The scope of works document noted damage to the concrete perimeter foundation. The proposed method of repair was filling the cracks with epoxy. It did not require complete replacement of the foundations. EQC estimated repairing the damage would cost
$126,718. It appears none of the claims individually were over cap, as that sum related to all three quakes.

[10] In October 2011 the house was referred for repair under the Canterbury Home Repair Programme (CHRP). Mr Brendon Stiven, who manages the CHRP, has sworn an affidavit. He deposes that houses assessed as requiring…

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 Ryde v Earthquake Commission

Details

AGLC: Ryde v Earthquake Commission [2014] NZHC 2763
Case: [2014] NZHC 2763
Decision Date: 6 November 2014

CaseChat Overview and Summary

The plaintiffs, Stephen and Concepcion Ryde, sued the Earthquake Commission (EQC) and IAG New Zealand Limited over earthquake damage to their home in Wainoni, Christchurch. EQC and IAG disputed the amount of the damage and the plaintiffs sought to recover costs from EQC after discontinuing the action. The High Court had to determine whether the plaintiffs were entitled to costs from EQC. The Court found that it was reasonable for the plaintiffs to bring the proceeding as they were not paid by EQC for more than two years and EQC had initially assessed the damage incorrectly. The Court also found it was reasonable for EQC to defend the proceeding as the plaintiffs' claims were excessive. The proceeding was discontinued when EQC paid an amount that the plaintiffs considered sufficient to meet EQC's obligations. The Court found the merits of the case were not so obvious as to influence the costs outcome. The Court held that it was just and equitable to displace the presumption that the plaintiffs should pay EQC's costs. The Court ordered that the plaintiffs receive half their costs from EQC up until the date EQC made the payment the plaintiffs considered sufficient.

Orders