Viktor and Beata Limited v Earthquake Commission - [2018] NZHC 3017

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-000383

[2018] NZHC 3017

BETWEEN
VIKTOR AND BEATA LIMITED

Plaintiff

AND

THE EARTHQUAKE COMMISSION

First Defendant

AND

TOWER INSURANCE LIMITED

Second Defendant

Hearing: On the papers

Judgment:

20 November 2018

JUDGMENT OF NATION J

Introduction

[1] This is a case in which both parties say they are entitled to costs. The substantive proceedings concerned the plaintiff, Viktor and Beata Ltd, the Earthquake Commission (EQC) and Tower Insurance Ltd (Tower). The plaintiff discontinued its claim against EQC on 31 January 2018. On 9 February 2018, the plaintiff and Tower reached a full and final settlement (including as to costs). Costs were not agreed as between the plaintiff and EQC at the time of discontinuance. The plaintiff and EQC have not been able to agree on costs. The plaintiff now seeks a determination of the Court on costs against EQC.

Background

[2] The substantive proceedings concerned an insurance claim for earthquake damage to a house at 8A Lamorna Road, Queenspark. EQC carried out repairs to the

VIKTOR & BEATA LTD v THE EARTHQUAKE COMMISSION [2018] NZHC 3017 [20 November 2018]

property in 2013 and made a cash payment of $130,232.43 for the September 2010, February 2011 and June 2011 earthquake sequences.

[3] The plaintiff alleged both that existing repairs were defective and further repairs were required. The plaintiff filed pleadings on 19 May 2016 on two grounds:

(a) A challenge to the validity of EQC’s election. The plaintiff sought judgment against EQC for $211,316.98 being three "caps" or payments of
$115,000 for each of the earthquakes on 4 September 2010, 22 February 2011 and 13 June 2011, less payments already made by EQC.

(b) For loss arising from defective repair work. The plaintiff sought $25,000.

[4] In its statement of defence dated 11 July 2016, EQC pleaded that on or around 28 April 2016 (before the proceeding had been filed) EQC had paid the plaintiff's mortgagee $130,232.43 in respect of the earthquake damage to the dwelling, and that the total amount EQC had paid in respect of the 22 February 2011 earthquake was the statutory "cap" or limit on EQC's liability of $115,000.

[5] In the joint memorandum of counsel for the first case management conference, counsel for EQC recorded that it appeared the plaintiff had not appreciated that EQC had already settled its claims by a combination of payment and reinstatement and had not appreciated that EQC already considered the 22 February 2011 earthquake claim to be "over cap".

[6] In June 2017, the proceeding was set down for trial to commence 19 March 2018. In the joint memorandum seeking trial directions, EQC recorded that the plaintiff had failed to seriously contend that the payments EQC had made in settlement of the claims were insufficient to meet EQC's liability.

Discontinuance

[7] On 25 January 2018, two months before the seven-day High Court trial, EQC wrote to the plaintiff outlining that EQC's position before 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.

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Details

Case: [2018] NZHC 3017
Decision Date: 20 November 2018

CaseChat Overview and Summary

Viktor and Beata Limited sought a determination on costs against the Earthquake Commission (EQC) after discontinuing their claim against EQC in relation to earthquake damage to a house. The substantive proceedings involved an insurance claim for earthquake damage to a property, with EQC having carried out repairs and made payments to the plaintiff. The plaintiff alleged that the repairs were defective and sought further payments from EQC. EQC maintained that it had already settled its liability for the damages. The plaintiff later discontinued its claim against EQC after EQC made a payment for defective repairs and settled with Tower Insurance. The plaintiff argued it was entitled to costs, citing unreasonable conduct by EQC and partial success in the proceedings. EQC contended it was entitled to costs under the presumption that a plaintiff who discontinues a proceeding against a defendant must pay the defendant's costs. The court found that while the plaintiff was unsuccessful with respect to the primary ground of its claim, EQC's conduct suggested acceptance of an incorrect earlier position on the quantum paid for repairs, warranting a displacement of the presumption. The court ordered that costs lie where they fall for both the substantive and costs proceedings.

Orders