Home's EQC fight headed for court trial

MARTA STEEMAN
Last updated 22:58 04/07/2013

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Maryville Retirement Village has lost a $1.2m claim against the Earthquake Commission in the High Court, but the case is heading for trial.

The retirement village in Manchester Street in central Christchurch filed for a summary judgment by the High Court that EQC was liable to pay it another $1.2m as part of its earthquake claim for damage to the village of 65 villas and 35 garages.

The High Court said in its judgment released yesterday it had found for EQC "strictly" by the high threshold that applied for a summary judgment. To succeed with a summary judgment the court must be satisfied that the defendant, EQC in this case, has no defence.

Associate Judge Osborne said in his judgment he recognised that at a trial when the full context of the dealings between EQC and Maryville was placed before the court and examined "EQC may be found to have reached and communicated a determination which binds it".

Maryville claims that EQC had determined that it would pay Maryville $5,468,999 for earthquake damage but changed its stance and also its apportionment of the amount of damage between the September 2010 and February 2011 earthquakes, instead paying Maryville $4,267,184.

Maryville is claiming the balance of $1.2m from EQC.

Maryville argued the discussions between Keith Penny, a loss adjuster acting for EQC, and loss adjuster John Bell, appointed by Maryville's insurer ANZVAR and also representing Maryville's interest, were central to its case.

It said Penny's statements to Maryville representatives from May 14 to July 19 last year taken together amounted to a representation that $5.468m would be paid and that constituted a decision binding on EQC. The negotiations with EQC were with Penny.

The judgment said Penny had calculated that 49 per cent of the damage at Maryville was due to the September 2010 earthquake and 51 per cent to February 2011, but that was revised by EQC to be 10 per cent for September 2010 and 90 per cent for February 2011. That led to the $1.2m difference.

Maryville said it had comprehensive cover with ANZVAR which would pay the difference between the EQC payment and the total loss. It would not have settled "full and final" with ANZVAR if there had been any doubt over the finality of the settlement with EQC, Maryville argued.

However, Penny told the court he did not represent himself as having the authority to bind EQC and he made it clear during meetings that any recommendation he made was subject to final sign-off at EQC.

Bell's evidence was that there had been no suggestion by Penny that he did not have authority to settle on behalf of EQC.

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EQC chief executive Ian Simpson told the court Penny did not have the authority to bind EQC to any settlement with Maryville and only the chief executive had authority to make decisions over $500,000.

Osborne noted EQC did not present any evidence on the progress and outcome of Penny's discussions and negotiations.

He said also that from the emails between Maryville general manager Susan Reynen and Penny it was at least arguable that Maryville could not have reasonably relied on a view that a final determination had been reached with EQC.

- The Press

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