Vero Insurance Nz Ltd v Weathertight Homes Tribunal
| Jurisdiction | New Zealand |
| Judge | Andrews J |
| Judgment Date | 03 March 2014 |
| Neutral Citation | [2014] NZHC 342 |
| Docket Number | CIV 2013-404-004125 |
| Court | High Court |
| Date | 03 March 2014 |
Under the Judicature Amendment Act 1972 and the High Court's inherent power of review
In the Matter of an application for review of a decision made pursuant to the Weathertight Homes Resolution Service Act 2006
CIV 2013-404-004125
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
Application for judicial review of a decision of first respondent (Weathertight Homes Tribunal) refusing an application for an order removing the applicant insurance company as a party to a proceeding relating to a leaky building — Tribunal had asked applicant for a copy of an insurance policy believed to have been taken out by the developer during construction — incorrect policy was supplied and as a result, the fourth respondent applied successfully for joinder of the applicant — correct insurance policy stated applicant would not pay for any claim caused by or arising directly or indirectly from building works exceeding more than $100,000 — the complex cost $1.5m — the Tribunal concluded that it could not determine the issue of the applicable policy wording and the application of the exclusion clause — whether Tribunal had improperly limited its jurisdiction — whether the applicant should be removed as a party.
P Hunt and A Praulx for Applicant
S M Thodey and S Mitchell for Fourth Respondent
(RESERVED) JUDGMENT OF Andrews J
Contents
| Introduction | [1] |
| Background | [2] |
| The Tribunal's decision | [12] |
| Application for judicial review | [15] |
| Removal of a party under's 112 of the Act — legal principles | [17] |
| Was there an error of law? | [23] |
| Was there an error of fact? | [30] |
| Does the exclusion clause apply? | [38] |
| Conclusion as to errors of law and fact | [54] |
| Relevant/irrelevant considerations | [56] |
| Insufficient evidence | [58] |
| Result | [61] |
This proceeding is an application for judicial review of a decision of Mr K D Kilgour (“the Tribunal member”) of the Weathertight Homes Tribunal (“the Tribunal”), refusing the application by Vero Insurance New Zealand Ltd (“Vero”) for an order removing it as a party to a proceeding before the Tribunal (“the removal decision”). 1
The proceeding before the Tribunal is a leaky home claim in respect of the “John Jennings” complex of 18 townhouses, constructed at Albany, Auckland, during 1998 and 1999 (“the complex”). The body corporate and owners of the townhouses (“the claimants”) began a proceeding in the Tribunal on 27 June 2012, claiming the costs of repairs to the townhouses against eight parties. The parties include the
Council and Mr Stephen Woodhams, director of the Vance Commercial Ltd (later called Woodridge Construction Ltd) which built the townhouses (“Woodridge”). 2
On 26 September 2012 a case officer in the Tribunal asked Mr John Swan, the general manager claims at Vero Liability Insurance Ltd (“Vero Liability”), 3 to search for insurance held by Woodridge during the period 1998 to 2000. At that time, Vero was not a party to the proceeding. A search of Vero's “Solvit” electronic records system, revealed a policy, reference HO BIP 0600831. Mr Swan believed that the policy would have been a Royal & Sun Alliance policy, so provided the Tribunal with a copy of the Royal & Sun Alliance Business Plan policy wording (“the RSA policy”) which was applicable at the relevant time.
The Council then applied to join Vero to the proceeding under's 111 of the Weathertight Resolution Services Act 2006 (“the Act”) and 9 of the Law Reform Act 1936. Vero did not oppose the application, as it considered that the RSA policy did not provide grounds to do so. An order was made joining Vero to the proceeding on 14 January 2013.
In April 2013, the Council's solicitors queried with Vero's solicitors whether the correct policy had been provided. In particular, it was noted that the reference number and brand of policy did not correspond with advice they had earlier been given by Woodridge's insurance broker. Vero's solicitors were asked to search for an AMP policy, and it was suggested that the reference number might be BIP 5511054. Vero's solicitors referred the query to Mr Swan.
Mr Swan referred the query on to Mr Karl Orsler, a senior claims consultant at Vero. Mr Orsler has specialised knowledge of references to policy wording in the Solvit system. Mr Orsler's searches revealed that Woodridge had in fact held an AMP Business Pack policy from 30 January 1997 to 30 January 2002, reference HO BIP 0600831, which replaced a policy with the reference number BIP 5511054. A copy of the AMP Business Pack policy HO BIP 0600831 was provided to the Tribunal on 15 May 2013.
In an affidavit sworn on 22 May 2013, Mr Orsler said that Solvit records showed that Woodridge has an AMP Business Pack policy issued by AMP General Insurance Ltd, from 30 January 1997 until 30 January 2002. Mr Orsler said that he had made enquiries to ascertain if the underwriting file was available, and had learned that it no longer existed, and would have been destroyed by the document storage company after seven years, in accordance with standard business practice. Mr Orsler also said that he had retrieved archived policy wordings from AMP, and that the applicable wording was dated “2/97”.
In a second affidavit, sworn on 7 June 2013, Mr Orsler concluded that Mr Swan had made a mistake in providing the RSA policy, believing it applied to Woodridge. Mr Orsler noted that all of the Solvit entries for Woodridge included the entry “AMPG” in the field “Word” which, he said, confirmed that the applicable policy wording was that of AMP General Insurance Ltd. The prefix “BIP” before the reference number confirmed that the policy was an AMP Business Pack policy.
Mr Orsler's evidence was that the applicable policy wording includes (in the “Product and Public Liability Insurance” section) the following exclusion clause:
But we will not pay for…
…
Some other events and items
We will not pay for any claim caused by or arising directly or indirectly from:
…
• Building or construction works where the total value of the works is more than $100,000
…
In its application for a building consent, Woodridge stated that the value of construction work for the complex was $1.5m. The same figure is given for the value of the work in the Code of Compliance certificate issued by the Council on 3 November 1999.
On 22 May 2013, Vero applied to the Tribunal for an order that it be removed from the proceeding, under's 112 of the Act. The ground on which removal was sought was that the insurance policy which applied to Woodridge was the AMP Business Pack policy dated 2/97. As a result of the exclusion clause in this policy, Vero was not liable to indemnify Woodridge, therefore it was fair and appropriate in the circumstances to order that Vero be removed from the proceeding. The application was opposed by the Council, and by the claimants.
The Tribunal member determined that Vero had not met the requirements of s 112, so declined the application. Having referred to the Council's query concerning the policy Vero had previously disclosed, the member recorded that Vero's “further search investigations revealed that indeed the applicable insurance policy was in fact an AMP business pack policy and not the policy initially disclosed.” 4 The member then said: 5
I accept fully the explanation advanced clearly by Vero in … its application for removal. The copy policy first disclosed by Vero was a Royal & Sun Alliance policy which at the time Vero thought was applicable and on the basis of the wording of that policy Vero considered it had no grounds to
oppose joinder. Further investigation and search by Vero of its records prompted by the requisition from Auckland Council, Vero discovered that in fact the applicable policy was an AMP business pack policy and Vero submits that the wording of the AMP policy contains clear exclusions which have the effect of excluding a claim by Woodridge Construction and on this basis Vero now seeks to be removed.
After referring to the submissions filed on behalf of Vero, the claimants, and the Council, the member said: 6
[15] It does seem that the best available evidence regarding the type and extent of cover held during the relevant period by Woodridge Construction is that contained in the two affidavits from Mr Orsler. This is because Vero's documentation has been destroyed and any better evidence may not be forthcoming.
[15] I do accept completely Vero's explanation as to why it did not oppose leave and joinder when first given the opportunity and why it is now seeking removal.
The member went on to conclude: 7
[18] I accept the submissions advanced by the claimants and the [Council] notwithstanding the evidence from Mr Orsler, that there is still a marginal factual dispute over the wording of the applicable policy and as to whether it responds to the claim against Mr Woodhams and particularly Woodridge Construction and as to the breadth and otherwise applicability of the exclusion clause explained by Vero.
[19] I do accept that the actual and correct cover and extent of the insurance is probably a fact only established by the correct...
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