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Young v Tower Insurance Ltd

Young v Tower Insurance Ltd

Case [2016] NZHC 2956 7 December 2016

Contract Formation

Breach of Contract

Insurance Policy Interpretation

Damages

Insurance Law

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000222 [2016] NZHC 2956

BETWEEN
GREGORY PETER YOUNG AND

MALLEY & CO TRUSTEES LIMITED AS TRUSTEES OF THE MCARA YOUNG TRUST

Plaintiffs

AND

TOWER INSURANCE LIMITED Defendant

Hearing: 29 August-2 September, 5-9 September & 14 October 2016

Appearances:

P F Whiteside QC and H T Shaw for Plaintiffs
M C Harris and ATB Joseph for Defendant

Judgment:

7 December 2016

JUDGMENT OF GENDALL J

YOUNG v TOWER INSURANCE LIMITED [2016] NZHC 2956 [7 December 2016]

Table of Contents

Para No

Introduction [1]

Factual background [4]

Mr Sinclair instructed [31]

The Policy [41]

Approach to interpreting the policy [43]

The plaintiffs’ claims [47]

The defendant’s response [48]

Issues [50]

What is the extent of earthquake caused damage? [50]

Is Tower’s repair strategy commonly used at the time of loss or damage? [54]

(a) What is the repair method/strategy proposed by the defendant? [55]

(b) Is the repair strategy proposed a construction method commonly used

at the time of the earthquakes?
[68]

In the alternative, if the repair strategy is one commonly used, is the

damage economically repairable?
[82]

(a) Will the proposed repair strategy work and return the house to an as

new condition?
[83]

(b) The economic viability of the repair strategy? [100]

Has Tower made an election to cash settle the plaintiffs’ claim? [122]

Rebuild cost? [129]

General and exemplary damages claim [145]

Exemplary damages [147]

General damages [151]

Relief sought [178]

Result [186]

Costs [190]

Introduction

[1] This is a claim brought by the plaintiffs who have a residential property on the Christchurch hills insured through Tower Insurance Limited, the defendant company, which was significantly damaged as a result of the Canterbury earthquake sequence in 2010 and 2011. Initial claims were made under the insurance policy, in particular after the 22 February 2011 event. A significant issue in the present case is whether the defendant has established that the plaintiffs’ property can be repaired to the standard required under the insurance policy by adopting a repair strategy put forward by an engineer instructed by the defendants which the plaintiffs contend is a method untried for hill homes in Christchurch or anywhere else in New Zealand.

[2] The defendant maintains the plaintiffs’ home is economically repairable in terms of this repair strategy. The plaintiffs’ position is that this is not the case, the house is damaged to such an extent that it is a rebuild, and in addition the defendants have elected here to make a cash settlement under the policy. The plaintiffs’ claim here also seeks exemplary and general damages from the defendant.

[3] Sadly, I need to say at the outset that, since the time the plaintiffs’ initial insurance claim was made in 2011, the relationship between the parties has deteriorated to such an extent that many allegations and counter allegations have flowed between them. A core thesis of the plaintiffs it seems is that the defendant…

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 Young v Tower Insurance Ltd

Details

AGLC: Young v Tower Insurance Ltd [2016] NZHC 2956
Case: [2016] NZHC 2956
Decision Date: 7 December 2016

CaseChat Overview and Summary

The case of Young v Tower Insurance Ltd is an insurance claim brought by the plaintiffs, trustees of the McAra Young Trust, against the defendant, Tower Insurance Limited, following significant damage to their residential property on the Christchurch hills due to the Canterbury earthquake sequence in 2010 and 2011. The plaintiffs sought a declaration that the damage to their property was beyond economic repair, and therefore a rebuild was necessary, as well as general and exemplary damages from the defendant. The defendant maintained that the property was economically repairable and denied any breach of an implied duty of good faith in handling the insurance claim. The court was required to decide whether the damage to the property was beyond economic repair, whether the defendant had breached an implied duty of good faith, and whether the plaintiffs were entitled to general and exemplary damages. The court found that the damage to the property was beyond economic repair and that the defendant had breached an implied duty of good faith by withholding a report recommending a rebuild. The court awarded general damages of $5000 to the plaintiffs and made a declaration that the property was beyond economic repair. The plaintiffs' claim for exemplary damages was dismissed. The court also ordered the defendant to pay the plaintiffs' reasonable temporary accommodation costs, not exceeding the contractual limit of $25,000, and reserved costs, disbursements, and experts' fees for further submissions.

Orders