Tag Archives: Supreme Court

NZ Supreme Court news: Canterbury earthquake cases

It is understood that Skyward Aviation 2008 Ltd v Tower Insurance Ltd is being heard in the Supreme Court tomorrow (Wednesday 5 November 2014). To refresh your memory, I wrote about the Court of Appeal case here. You can read the Court of Appeal decision here.

In other news, a review of the “Case Summaries” list on the Supreme Court website shows that applications for leave to appeal have been filed in the Supreme court respect of QBE Insurance (International) Limited v Wild South Holdings Limited and Maxims Fashions Limited (SC 106/ 2014) and Certain Underwriters at Lloyds of London and Sirius International Insurance Group Limited v Crystal Imports Limited (SC 107/ 2014); two of the three “conjoined” proceedings dealt with in the Court of Appeal in QBE Insurance (International) Limited v Wild South Holdings Limited [2014] NZCA 447 (10 September 2014) which I mentioned briefly here after the decision was delivered. Noticeably absent from this line up is the third of the three proceedings; Marriott v Vero Insurance New Zealand Ltd. One assumes that the insurer in this latter case was content not to push the issues further.

In further news, it is understood that the insurer has filed an application for leave to appeal to the Supreme Court in Avonside v Southern Response, which I wrote about here. One has to wonder about the utility of New Zealand’s highest Court potentially opining on specific line items in a replacement cost analysis, and as it relates to a “notional” rebuild only. Of course, only the insurer knows how many properties fall into that category. The bench addressing the leave application will need to decide what number of affected dwellings makes it a truly significant case, in the circumstances. One would have thought that would have to be a very high number.

Steve Keall
4 November 2014

Will Ridgecrest v IAG analysis impact on automatic reinstatement cases?

Some interesting analysis of the NZ Supreme Court’s recent decision in Ridgecrest v IAG can be found in this recent Bell Gully article.

In the policy in question in Ridgecrest v IAG, there was a per “happening” (ie event) limit of liability. The Supreme Court held that the policyholder holder could claim up to this full limit for each event, subject to the proviso that it could not claim in respect of the same damage twice by dint of the indemnity principle.

In contrast to the IAG/ Ridgecrest provision, many relevant material damage policies instead have an aggregate limit for all damage caused by all events during the policy period. On the face of it, this may suggest the Ridgecrest reasoning can be confined. However, these latter policies also tend to contain a provision reinstating the limit after each loss. The authors note that various High Court cases, the subject of a recent conjoined appeal to the Court of Appeal (Wild South Holdings Ltd v QBE Ltd, Maxims Fashions Ltd v QBE Ltd, Marriott v Vero Insurance Ltd and Crystal Imports Ltd v Certain Underwriters at Lloyd’s of London & Anor, 5 August 2014, in respect of which it is understood a decision is still awaited) have held that  these reinstatement provisions mean that a policyholder is able to claim a sum in excess of the stipulated aggregate limit if there are multiple losses during the policy period.

The authors state:

It remains to be seen whether the courts will apply the Supreme Court’s analysis of the Ridgecrest policy to material damage policies with aggregate limits and automatic reinstatement clauses. If so, the Ridgecrest decision will be of much broader significance in interpreting and applying material damage policies.

This is an interesting question, and it is suggested the initial answer will lie in the Court of Appeal’s anticipated decision mentioned above. Presumably the learned judges will take into account the Supreme Court’s decision in Ridgecrest while preparing their judgment. Watch this space.

Steve Keall
8 September 2014