Tower Insurance Ltd v Domenico Trustee Ltd - [2015] NZCA 372

IN THE COURT OF APPEAL OF NEW ZEALAND

CA303/2015
[2015] NZCA 372

BETWEEN	TOWER INSURANCE LIMITED Appellant
AND	DOMENICO TRUSTEE LIMITED Respondent

Hearing:	30 July 2015
Court:	Randerson, Heath and Collins JJ
Counsel:	M C Harris and M H A Ho for Appellant D A Webb and S E Goodwin for Respondent
Judgment:	13 August 2015 at 12:30 pm

JUDGMENT OF THE COURT

AThe appeal is allowed and the High Court judgment is set aside.
BThe cross-appeal is dismissed.
CThe proceeding is remitted to the High Court for rehearing in the light of the judgment of this Court.
D The respondent must pay one set of costs to the appellant for a standard appeal on a Band A basis together with usual disbursements. There is no certification for second counsel.
ECosts in the High Court are to be dealt with in that Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No

Introduction
The insurance policy
The factual background
Was the Judge correct to conclude that TOWER did not make an unequivocal election to settle on a cash basis on the terms pleaded in the first amended statement of claim?

The High Court judgment
Domenico’s submissions

Was it open on the pleadings for Gendall J to conclude that, by reason of delay on TOWER’s part, it was to be treated as having elected to settle on a cash basis?

The Judge’s findings
Submissions on election through delay
Discussion

Result

[1]
[11]
[14]

[31]
[31]
[37]

[47]
[47]
[55]
[57]
[67]

Introduction

The respondent (Domenico) owns a residential property on Breezes Road, Christchurch that was damaged beyond economic repair by the major earthquakes in that city in September 2010, February 2011 and June 2011.
The appellant (TOWER) insured the house for its full replacement value. Domenico promptly made claims to the Earthquake Commission (ECQ) and to TOWER to the extent that the cost of repairing the damage exceeded the EQC’s statutory cap.
It was not until 28 February 2013 that the EQC confirmed that the damage to the house and garage on Domenico’s property exceeded the statutory cap. Formal advice of Domenico’s EQC payouts did not come until 26 April 2013 and amounted in total to $132,783.41.
TOWER accepted liability under the policy. On 8 April 2013, it emailed to Domenico’s principal, Mr Da Col, a proposed cash settlement offer of $236,413.20 based on the costs of rebuilding the house.[1] From this sum, it was necessary in terms of the policy to deduct the EQC payments. Domenico did not accept this offer nor an increased offer TOWER made on 18 April 2013 of $254,501.38.[2] Instead, Domenico’s response was to issue proceedings against TOWER in the High Court on 30 April 2013 based on rebuilding costs of $842,392.45.
[1]It made a separate payment to Domenico in August 2012 for the garage and hard landscaping and that is not in issue.
[2]Again, the EQC payments were to be deducted from this sum.
The expert evidence available to TOWER…

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.

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Details

Case: [2015] NZCA 372
Decision Date: 13 August 2015 at 12:30 pm

CaseChat Overview and Summary

Tower Insurance Ltd appeals against the decision of Gendall J of the High Court at Christchurch that it was obliged to pay the present day value of the property under the policy to Domenico Trustee Ltd, with the opportunity for Domenico to claim any additional costs of rebuilding the house should it decide to do so in future. Domenico cross-appeals against the finding that Tower had not made an unequivocal election to settle on a cash basis on the terms pleaded in the first amended statement of claim. The Court of Appeal allows the appeal, dismisses the cross-appeal and remits the proceeding to the High Court for rehearing in light of the Court's judgment. The Court holds that the High Court was not open on the pleadings for Gendall J to conclude that, by reason of delay on Tower’s part, it was appropriate for the Court to make the election and decide that Tower was to settle on a cash basis. The Court also holds that the High Court was not correct to conclude that Tower did not make an unequivocal election to settle on a cash basis on the terms pleaded in the first amended statement of claim.

Orders