Sii v Earthquake Commission - [2017] NZHC 2469

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-009-002314 [2017] NZHC 2469

BETWEEN
TING HUA SII

Plaintiff

AND

EARTHQUAKE COMMISSION First Defendant

AND

TOWER INSURANCE LIMITED Second Defendant

Appearances:
M C Smith and S F Alawi for Second Defendant (Applicant for

costs)

G D R Shand for Plaintiff (Respondent on costs) (No appearance for First Defendant on this issue)

Judgment:

9 October 2017

(Determined on the papers)

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [on costs]

Introduction

[1] Tower Insurance Ltd, the second defendant, (“Tower”) was the insurer of the home of Ting Hua Sii, the plaintiff, (“Mr Sii”) at the time it was damaged in the Canterbury earthquake sequence.

[2] Mr Sii initially commenced this proceeding in the District Court in 2013 against the Earthquake Commission alone (EQC). Mr Sii subsequently in 2015 had the proceeding transferred to this Court and had Tower joined upon the basis that Mr Sii was now alleging that the damage to the house exceeded EQC’s statutory cap,
rendering Tower liable under the insurance policy. Mr Sii alleged that the repair cost

SII v EARTHQUAKE COMMISSION [2017] NZHC 2469 [9 October 2017]

of his damage was $733,242.85, and that Tower was liable for $402,474.39 of that together with general damages of $25,000 for stress.

[3] Tower filed a statement of defence (as had EQC). Tower asserted that the house had suffered relatively minor earthquake damage falling within EQC’s statutory cap.

[4] Thereafter Tower, in accordance with Court timetables, engaged experts in surveying, geotechnical engineering/structural engineering and quantity surveying. There were reports prepared and conferral and joint reporting processes.

[5] Those matters were completed in mid-2017 at which point it became common ground between the parties that Mr Sii’s claim was within EQC’s statutory cap. Mr Sii revised his estimate of the cost of repair to $77,604.05. EQC and Tower’s estimates were both close to $33,000.

[6] On 20 July 2017, Mr Sii accordingly discontinued his claim against Tower. The Court has since received memoranda as to costs and disbursements.

Costs – competing positions

Tower’s application

[7] Tower applies for costs on a 2B1 basis with a 50 per cent uplift. It relies both on the presumption (under r 15.23 High Court Rules) that costs should follow the event upon a discontinuance and upon the fact that Mr Sii’s claim against Tower failed in substance.

[8] For increased costs, Tower invokes r 14.6(3)(b)(ii) High Court Rules, upon

the basis that Mr Sii’s claim against Tower lacked merit.

[9] Tower also seeks recovery of its disbursements, including the substantial fees it has paid to its experts.

Mr Sii’s opposition

[10] For Mr Sii, Mr Shand concedes that costs should follow the event.

[11] While Mr Shand accepts a 2B approach to some items of cost, he submits that both discovery and inspection should appropriately be calculated on a 2A basis.2

[12] Mr Shand submits that increased costs are not justified. Mr Shand observes that the level of Mr Sii’s…

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 Sii v Earthquake Commission

Details

AGLC: Sii v Earthquake Commission [2017] NZHC 2469
Case: [2017] NZHC 2469
Decision Date: 9 October 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Osborne considered the issue of costs between Ting Hua Sii (the plaintiff) and Tower Insurance Limited (the second defendant). The plaintiff had originally filed a claim against the Earthquake Commission (the first defendant) in 2013, alleging extensive damage to his home caused by an earthquake. The claim was later amended to include the second defendant, Tower Insurance Limited, on the basis that the damage exceeded the statutory cap of the Earthquake Commission, rendering Tower liable under the insurance policy. The plaintiff subsequently revised his claim, reducing the estimated repair costs to an amount within the statutory cap. Consequently, the plaintiff discontinued his claim against the second defendant.

The second defendant applied for costs on a 2B1 basis with a 50 per cent uplift, arguing that the plaintiff's claim lacked merit and fell within the criteria for increased costs under the High Court Rules. The plaintiff, in turn, opposed the application for increased costs, arguing that his claim was based on expert advice and that an award of increased costs would be punitive.

Associate Judge Osborne found that the costs should be assessed on a mixed 2A/2B approach, resulting in a total scale award of $11,150. The Court determined that the joinder of the second defendant did not lack merit, as the plaintiff had acted in accordance with expert advice, which changed during the expert reporting and conferral process. The Court also found that the fees charged by the experts engaged by the second defendant were reasonable and proportionate in the circumstances of the proceeding. The second defendant was awarded its disbursements, including the fees paid to its experts.

Ultimately, the Court ordered that the plaintiff pay the second defendant's costs and disbursements, fixed in the sum of $12,042 for costs and $55,010.67 for disbursements.

Orders