Court of Appeal dismisses policyholders’ Canterbury earthquake appeal

The Court of Appeal has dismissed an appeal by a policyholders in relation to their insurance claim against Lumley arising out of the Canterbury Earthquakes: Jarden v Lumley General Insurance (NZ) Ltd [2016] NZCA 193.

A point of particular interest arises in the decision. The Court determined that Lumley’s “top-up” cover to pay for damage caused by a natural disaster which was stated to be in excess of cover provided under the relevant provisions of the Earthquake Commission Act 1993 was for cover in excess of EQC’s actual (statutory) liability. This is not always the same amount the EQC actually pays to policyholders, and was not in this case. Lumley was entitled to be satisfied that any sum paid by the EQC equated with its liability under the legislation (refer paragraph [26]).

With regards to this issue, the Court accepted a submission from Lumley  that its cover and premiums are fixed on the basis of EQC’s actual statutory obligation and that it is not open for the policyholder to alter unilaterally the basis upon which Lumley’s liability arises under the policy (refer [27]).

Steve Keall
23 May 2016


Court of Appeal confirms residential tenants’ immunity from suit

The Court of Appeal has upheld a decision of the High Court which found that a residential tenant under the Residential Tenancies Act 1986 enjoys the benefit of his or her landlord’s insurance and is therefore immune to legal claims in relation to property damage caused by the tenant that is covered by that insurance: Holler v Osaki [2016] NZCA 130.

I wrote about the High Court decision here, offering the respectful opinion that the High Court decision was incorrect. For the same reasons I believe the Court of Appeal decision is incorrect.

The case lends itself nicely to a further appeal to the Supreme Court, because it is essentially one of statutory interpretation, and is clearly one of general public, and commercial, significance.

Steve Keall
23 April 2016