Hearing:	24 October 2018
Court:	Brown, Courtney and Katz JJ
Counsel:	M C Smith for Appellant C R Johnstone for Respondents
Judgment:	29 March 2019 at 4.00 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Katz J)

The appellant (Tower) insured the respondents’ property, which was substantially damaged in the 2010 and 2011 Christchurch earthquakes.
In 2016 the respondents issued proceedings against Tower pursuant to their insurance policy. The key issues at trial were the scope of the required repair, the appropriate costing of the repair, and a claim by the respondents for general damages.
In his substantive decision of 17 April 2018 (as subsequently amended on 30 May 2018 pursuant to the slip rule)[1] Gendall J determined that the maximum amount payable by Tower for repair of the respondents’ house was $628,516.01.[2] This was calculated on the basis that the cost of repairs was $871,042.14, from which $242,526.13 was deducted (being the amount that the respondents had already received from the Earthquake Commission (EQC)).
[1]High Court Rules 2016, r 11.10.
[2]Kilduff v Tower Insurance Ltd [2018] NZHC 704 [substantive judgment] and Kilduff v Tower Insurance Ltd [2018] NZHC 1243 [subsequent judgment].
In his subsequent costs decision, Gendall J ordered Tower to pay the respondents costs totalling $81,249, together with disbursements totalling $122,515.20.[3]
[3]Kilduff v Tower Insurance Ltd [2018] NZHC 2021 [costs judgment].
Tower now appeals the costs decision. The key issues raised by its appeal are:
(a)Did the Judge err in concluding that the respondents were the successful party?
(b)Did the Judge err in his assessment of Tower’s Calderbank offers?

(c)Did the Judge err in his quantification of the costs award?

Background

The factual background is set out in the substantive decision.[4] We briefly summarise key aspects below.
[4]Substantive judgment, above n 2, at [6]–[21].
The respondents, as trustees of a family trust, own a residential property in Sumner, Christchurch. The property was damaged during the Christchurch earthquakes of 2010 and 2011.
The respondents lodged their claim with their insurer, Tower, in September 2011. The cost to repair the house was initially assessed by Tower as being around $188,000. Tower then sent the respondents a proposed scope of works for discussion in October 2012. In June 2014 Tower made a cash settlement offer of $85,074.34, plus any additional costs reasonably incurred in conducting the repairs within two years. That offer was based on a total estimated repair cost of $317,600.47, less EQC payments. It was the only settlement offer that was made prior to the issue of proceedings.
Gendall J summarised the next steps as follows:[5]
[19] In the meantime, the…

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 Tower Insurance Ltd v Kilduff

Details

AGLC: Tower Insurance Limited v Kilduff [2019] NZCA 82
Case: [2019] NZCA 82
Decision Date: 29 March 2019

CaseChat Overview and Summary

Tower Insurance Limited appealed against a costs decision of the High Court in relation to proceedings brought by the respondents for damage to their property caused by the Christchurch earthquakes. Tower argued that the High Court erred in concluding that the respondents were the successful party, in its assessment of Tower’s Calderbank offers, and in its quantification of the award. The Court of Appeal held that the appeal should be dismissed. The Court found that the High Court was correct in concluding that the respondents were the substantially successful party. The Court held that the High Court erred in its assessment of Tower’s Calderbank offers by taking into account all of the costs and disbursements incurred up to the conclusion of the trial, and post trial, in respect of interest. However, the Court found that Tower’s appeal in this respect failed because Tower had not demonstrated that its Calderbank offers exceeded the sum of the repair costs, plus that portion of the Court’s costs award that related to the costs and disbursements incurred prior to the date of each Calderbank offer. Finally, the Court found that the High Court was not plainly wrong in its quantification of the award, and that the Court of Appeal saw no basis to interfere with the exercise of the High Court’s discretion.

Orders