With Christchurch earthquake re-repairs predicted to run into hundreds
of millions of dollars, the High Court ruled insurance companies cannot push responsibility
to recover compensation for faulty repairs back on to property owners. Insurers are contractually liable to properly
make good the original earthquake damage and they alone are directly responsible
for any faulty repairs carried out on their behalf by rebuild contractors.
Insurer IAG
New Zealand failed in its attempts to have a Christchurch Fitzgerald Avenue
property owner take up the legal chase over faulty foundation repairs. Suzanne Robin is suing IAG alleging the
repair was inadequate. The High Court
ruled against IAG’s attempts to drag into the litigation other parties it
alleges are to blame: the contractor who scoped the repair, other contractors
who carried out the allegedly faulty repairs and the Council as issuer of a
code compliance certificate.
Associate
judge Matthews said it is for IAG not Ms Robin to sue those responsible for the
allegedly faulty work. Ms Robin does not
have any information regarding the legal relationship between IAG and its
contractors. IAG was not a mere
intermediary. Insurance policy wording
created a direct contractual obligation on IAG to properly repair earthquake
damage to Ms Robin’s property.
Post judgement note: This decision was reversed on appeal. Other allegedly liable contractors are to be added as defendants. This enables all factual issues to be heard in one trial. And protects IAG's rights of subrogation, allowing it to enforce any rights in tort Ms Robin may have against repair subcontractors.
Post judgement note: This decision was reversed on appeal. Other allegedly liable contractors are to be added as defendants. This enables all factual issues to be heard in one trial. And protects IAG's rights of subrogation, allowing it to enforce any rights in tort Ms Robin may have against repair subcontractors.
Robin v. IAG New Zealand Ltd – High Court (21.02.18)
18.041