Southern Response is resisting production of legal advice allegedly supporting its claim that a Christchurch red zone payout was made in good faith after the Groen family discovered a $104,800 discrepancy between Southern Response internal documents and the deal offered.
The Groen family home at Brynn Lane, Bexley, was written off after the Christchurch earthquakes. Red-zoned by government, the family had to buy or build elsewhere. They were insured with AMI Insurance. Southern Response Earthquake Services Ltd has the job of settling Christchurch earthquake claims against AMI after the insolvent insurer was bailed out with taxpayers’ money. The Groens settled with Southern Response in 2012 for $337,700 after being told this was the amount allowed for rebuilds under their AMI policy. After a 2016 Privacy Act request, the Groens received an ‘office version’ of their claim which assessed a rebuild cost of $442,500. They want the 2012 settlement set aside. They allege Southern Response breached the Fair Trading Act. They are suing for the difference between the ‘office version’ and the amount previously agreed. This has yet to be decided. When filing its defence, Southern Response said it acted in good faith on the basis of legal advice received. In a preliminary hearing, the Groens asked to see this legal advice. Southern Response refused. It claims legal privilege.
Justice Davidson ruled the legal advice is privileged. Legal advice is not claimed as a defence. It is part of Southern Response’s narrative that it did act in good faith. Southern Response is able to use this legal advice when defending the Groens’ claim without having to produce the actual legal advice. Justice Davidson warned Southern Response. If there is anything in the legal advice which contradicts what it says in court then that alone would be evidence of bad faith.
AMI underwrote several different types of earthquake cover. Southern Response says the $442,500 ‘office version’ is generic; containing all potential costs for the Brynn Lane property that might arise in any claim against AMI, not the costs that may apply particularly under the Groens’ specific insurance policy.
Groen v. Southern Response Earthquake Services Ltd – High Court (11.05.18)
18.103