In contract works claims, a frequent dispute – for both insurers and insureds – is precisely where to draw the line between cover for new “damage” and excluded construction defects. The damage and defects are often interlinked and untangling the issue involves technical evidence.
Read MoreIn litigation, time can be everything. Limitation periods set strict deadlines for bringing claims – if a plaintiff is out of time, the claim may be thrown out, even if the claim is strong.
Read MoreThe test for unfairness, which will apply in New Zealand once the Contracts of Insurance Acts changes are implemented is almost identical to the test that has applied to insurance contracts in Australia since 2021. As a result, cases decided in Australia will provide important guidance for New Zealand insurers as they start to review their policy wordings for potentially problematic terms.
Read MoreThe Fletcher Construction Company Ltd v Chubb & BHSI [2023] NZHC 943
The New Zealand High Court recently looked at whether a third-party liability policy provided any cover to a head contractor for its liability to the principal under an indemnity clause in the construction contract. This decision provides helpful guidance on the applicable legal principles.
Read MoreBeca Carter Hollings & Ferner Limited v Wellington City Council [2022] NZCA 624
The Court of Appeal has recently upheld a High Court decision that the Building Act 10-year longstop does not apply to contribution claims against third parties. Contribution claims are instead governed by s 34 of the Limitation Act 2010. This means that time does not begin to run on contribution claims until settlement or judgment occurs. Insurers of third parties, such as professionals or construction entities, remain potentially ‘on the hook’ for much longer than previously thought.
Read MoreMoorhouse Commercial Park v Vero Insurance [2022] NZHC 3260
The High Court has delivered its judgment in a proceeding brought by the owner of a group of industrial buildings damaged by the Canterbury earthquakes, in a decision that will be welcomed by insurers.
In August last year we reported on the High Court decision of Grice J in Napier City Council v Local Government Mutual Funds Trustee Limited (Riskpool). In that decision, Her Honour held that the Council was not indemnified under its professional indemnity insurance policy with Riskpool as the claim against it was in respect of both weathertightness and non-weathertightness defects. Consequently, the policy’s weathertightness exclusion clause applied to the entire claim. At the time, we commented that the decision may have come as a surprise to many in the insurance industry as it went against the approach taken by many insurers, which was to differentiate between weathertightness and non-weathertightness defects when considering indemnity. It was only when there was a defect which was caused or contributed to by an excluded peril that was excluded from cover.
Read MoreNapier City Council v Local Government Mutual Funds Trustee [2021] NZHC 1477
In November 2018, we reported on the High Court decision of Hinton J in respect of an application by Local Government Mutual Funds Trustee (Riskpool) that a claim by Napier City Council be struck out. Riskpool had sought to strike out the Council’s claim on the basis that it had no tenable claim for indemnity as the plain meaning of the policy’s weathertightness exclusion clause (Exclusion) was that a “Claim” was excluded in its entirety if it was tainted by a weathertight defect.
Neither the High Court nor the Court of Appeal were prepared to strike out the Council’s application at an interlocutory stage. As a result, the proceeding returned to the High Court for a full hearing before Grice J in July and August 2020. In a lengthy decision handed down at the end of June 2021, Grice J found in favour of Riskpool and held that both weathertightness and non-weathertightness defects were caught by the Exclusion.
Read MoreBNZ Branch Properties Limited v Wellington City Council [2021] NZHC 1058
The High Court has recently ruled that a contribution claim by a defendant against third party engineers was not time-barred by the 10-year longstop period in the Building Act 2004.
Read MoreYan v Mainzeal Property and Construction Ltd (in liq) [2021] NZCA 99
On 31 March 2021, the Court of Appeal delivered a 186-page judgment in the much-publicised and lengthy Mainzeal litigation.
Read MoreThe Construction Contracts Act 2002 (CCA) was meant to ensure money was paid, quickly and efficiently, to parties to a construction contract. But, because of recent amendment, it now represents a potential trap for design professionals to fall into.
Read MoreMainzeal Property and Constructions Ltd (in Liq) v Yan and Others [2019] NZHC 255
In February of this year, the High Court upheld claims of reckless trading against the former directors of Mainzeal Property and Construction Limited (Mainzeal). The Court held the former directors had to pay $36 million, approximately one third of the $110 million owed to unsecured creditors. The decision is important for a number of reasons, including an adoption of a novel approach to assessing the quantum of the award against the directors.
Read MoreOwners Corporation No.1 PS613436T & Ors v LU Simon Builders Pty Ltd & Ors [2019] VCAT 286
Early morning on 25 November 2014, a resident of the Lacrosse Apartment building, in Melbourne, extinguished a cigarette in a makeshift ashtray sitting on a timber table on his balcony. A small fire started in the plastic ashtray, spreading to the table and then to the external cladding of the building. The cladding was made of Aluminium Composite Panels (ACP). These panels had a core containing highly flammable polyethylene, which was not compliant with the Building Code of Australia (BCA). The fire spread quickly up the side of the building, racing up thirteen floors in roughly fifteen minutes and causing extensive damage.
Read MoreNapier City Council v Local Government Mutual Funds Trustee Ltd [2018] NZHC 2269
A recent High Court decision by Justice Hinton has considered whether an insurer can rely on an exclusion clause to deny indemnity in respect of an entire claim, where only parts of the claim were likely caught by the exclusion.
Read MoreInvestigation into the Performance of Statistics House in the 14 November 2016 Kaikoura Earthquake - Ministry of Business, Innovation and Employment
Design standards and building laws will now be reviewed after an independent panel’s investigation into the unacceptable performance of Statistic House in Wellington in the Kaikoura earthquake.
Read MoreSiemens (New Zealand) Limited v Broadspectrum (New Zealand) Ltd [2017] NZHC 287
An interesting point highlighted by this case is that for larger projects, insurance obligations set out in the policy and contractual documents do not always sit well together. In this case a master supply agreement between the two parties had two different clauses limiting liability to two different amounts.
Read More
Invercargill City Council v Southland Indoor Leisure Centre Charitable Trust [2017] NZCA 68
The Court of Appeal has overturned the High Court and has found that the Invercargill City Council owed no duty of care to the Southland Indoor Leisure Charitable Trust, despite having issued a code of compliance certificate for work done on the roof of a building that later collapsed.
Read MoreAndrews Property Services Ltd v Body Corporate 160361 [2016] NZCA 644
This is an interesting case as builders, who were employed to fix the exterior of a leaky apartment complex, were not found to have a duty to warn the owners that a survey of the external damage had not been completed by the architects. However, the CA warned that there could be a duty in other circumstances.
Read MoreThe Supreme Court has refused to strike out a negligence claim against a manufacturer of faulty cladding, leaving a real possibility that manufacturers of building products may be liable to end users.
Read MoreAt Fee Langstone we’re experts in the field of insurance law. We are a team of skilled litigation lawyers, able to work with you to provide strategies and robust solutions, fast.
Auckland
Level 18, 51 Shortland Street
Auckland 1010
Tel. +64 9 373 0050
reception@feelangstone.co.nz
Christchurch
Level 1, 83 Lichfield Street
Christchurch 8011
Tel: +64 3 371 4622
