Defective earthquake repairs: successful appeal of Robin v IAG
By: Bethany Entwistle, Jarom Murphy
Published: 10/10/2018
IAG has successfully appealed the High Court’s decision in Robin v IAG [2018] NZHC 204.  See our article on the High Court decision here.

High Court decision

Ms Robin brought a defective earthquake claim against her insurer, IAG and the contractor who carried out the repairs, Canterbury Reconstruction Limited (CRL). IAG applied to join four other parties as defendants to the proceeding on the basis that each party was involved in the repair work and owed a duty of care to Ms Robin.

Associate Judge Matthews held it was not necessary, or in the interests of justice that the four parties be added to the proceeding.

The Appeal

IAG submitted that Associate Judge Matthews had wrongly:
  1. Determined that IAG had overall responsibility for the repair works and inappropriately viewed this as a relevant factor in deciding whether the additional parties should be joined;
  2. Believed that IAG would not need to sue the other parties in tort (on the basis of negligence) because liability could be passed down the contractual chain; and
  3. Assumed that the case against the additional parties went far beyond Ms Robin’s current claim and suing those parties would adversely impact her.
IAG argued that if it were to be found liable at the substantive hearing, it would have to initiate proceedings against the four parties dealing with essentially the same matters.

The Court of Appeal agreed with IAG on all points.  It held that responsibility for defective repair works is an issue to be determined at trial and has no relevance to an application for joining parties.  As CRL had gone into liquidation since the High Court’s decision, it was also held to be extremely unlikely, if not impossible, for CRL to join the proposed defendants to the proceeding (namely the subcontractor for breach of contract); liability could not be “passed down the contractual chain”.[1]  
 
The position of the Court of Appeal is summarised at [53]:

“I consider that this is a case where the plaintiff’s wishes should be overridden in the wider interests of pragmatism.  The material change in circumstances has also made the Associate Judge’s decision plainly wrong.  It is in the interests of justice that the proposed defendants be present in order to deal with all relevant issues, to represent their own interests and to avoid a multiplicity of hearings”.
The Court ordered three of the four proposed defendants be joined to the proceeding.[2]

Comment

The Court of Appeal’s decision confirms that while a plaintiff’s wishes are a factor to be considered, they are not determinative. The underlying rule is the “pragmatism of avoiding a multiplicity of hearings”.[3]

If you are faced with defective earthquake repairs and are unsure who to sue, our experienced national Dispute Resolution Team is here to help.
 
[1] CRL had a contract with the subcontractor, Max Contracts Ltd and could pursue that party for breach of contract.
[2] One of the four parties was in receivership.
[3] At [53].
 
 
 
 
 
 
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