Van Limberg v Earthquake Commission

[2014] NZHC 502

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHRUCH REGISTRY

CIV-2013-409-1245 [2014] NZHC 502

BETWEEN  WILCO VAN LIMBERG Plaintiff

ANDTHE EARTHQUAKE COMMISSION First Defendant

TOWER INSURANCE LIMITED Second Defendant

In Chambers:           On papers

At Wellington

Counsel:                  G D R Shand for Plaintiff

J A Knight for First Defendant

Judgment:                18 March 2014

JUDGMENT OF THE HON JUSTICE KÓS (Costs)

[1]      On 24 June 2013 Mr van  Limberg issued  proceedings  against  EQC  and Tower  Insurance.    The  claims  related  to  damage  caused  by  the  February 2011 earthquake to Mr van Limberg’s house.

[2]      The claim against EQC was brought on the basis that it was liable to pay Mr van  Limberg  $113,850  pursuant  to  ss  18,  27  and  29  of  the  Earthquake Commission Act 1993 (the Act).

[3]      In its statement of defence dated 31 July 2013, EQC denied such liability.

[4]      An issues conference took place before me on 22 August 2013.  In it, EQC

advised that it had not completed its determination of Mr van Limberg’s entitlement.

But its impression was that the natural disaster damage would exceed the EQC cover

VAN LIMBERG v THE EARTHQUAKE COMMISSION [2014] NZHC 502 [18 March 2014]

under the Act.   Counsel for EQC therefore expected that it would settle the claim against it by paying the full amount Mr van Limberg was entitled to under s 18.  My minute noted:

The claim against EQC will then fall away and the proceedings against it should be discontinued at that point.

[5]      Of course, the claim against Tower Insurance would continue.

[6]      Four days later, on 26 August 2013, EQC paid Mr van Limberg $84,375. The sum paid was less than the $113,850 claimed because the parties accepted that the plaintiff’s dwelling was insured under s 18(1)(b) of the Act for a specified EQC sum of less than $100,000.  The sum paid is therefore the full sum Mr van Limberg was entitled to.

[7]      Mr van Limberg has not discontinued his proceeding against EQC.

[8]      Now by memorandum  (rather  than application)  dated 24  February 2014, Mr van  Limberg  seeks  an  award  of  costs  and  disbursements  on  a  2B  basis  of

$9,488.20 against EQC.

[9]      He also seeks interest of 5 per cent per annum from 1 July 2011 to 26 August

2013.  The logic for that claim is an assertion in the memorandum that, under s 29 of the Act, EQC is obliged to make payments as soon as reasonably practical. And that, for the February 2011 earthquake, it was reasonably practicable to pay on 1 July

2011.

Jurisdiction to award interest

[10]     The  Court’s  statutory  jurisdiction  to  award  interest  under  s  87  of  the Judicature Act 1908 is dependent on the giving of a judgment.   No judgment has been given here.  Dealing with a similar provision in England, Lord Denning said the

following in Jefford v Gee:1

1      Jefford v Gee [1972] 2 QB 130 (CA) at 150.

If the plaintiff takes the money out of Court in satisfaction of the claim, that is the end of the case.  He gets no interest because there is no judgment.  The Act of 1934 only entitles the plaintiff to interest where he gets a judgment.

[11]     No interest is payable at this point, therefore.

Costs

[12]     I am prepared to treat the memorandum as an application for costs.   It is however inappropriate to award costs now.

[13]     First, costs are awarded (save exceptionally)2 only where the proceeding has been concluded.  Either by judgment (in which case costs form part of the judgment) or on discontinuance.

[14]     Secondly, if Mr van Limberg discontinues his proceeding – which he has not done – then r 15.23 of the High Court Rules applies.  That is, he must pay costs, unless the Court otherwise orders (or the defendant otherwise agrees).  Of course, in a case where the reason for discontinuance is satisfaction by the defendant of the sum claimed, the plaintiff can reasonably expect the Court to order costs in his favour (unless there was good reason not to bring these proceedings).  The fact that payment of the full amount was made is, in effect, an admission as to the merits.  In most such cases, payment forms part of a settlement agreement that resolves costs. Not so here.

[15]     Thirdly, the full amount claimed has not been paid here.  What is apparent from the narrative presented by the competing memoranda is that EQC was entitled to resist the claim made against it for $113,850.  That amount exceeded its statutory

obligation, and Mr van Limberg has accepted $84,375 instead as his true entitlement.

2      For  example  under  r  14.8  of  the  High  Court  Rules  in  the  case  of  opposed  interlocutory applications. But even there, only on judgment being given.

[16]     In these circumstances I decline the informal application for costs, without prejudice to reconsideration of the issue upon discontinuance.

Stephen Kós J

Solicitors:

Grant Shand, Christchurch for Plaintiff
Chapman Tripp, Wellington for First Defendant

Gilbert Walker, Auckland for Second Defendant