When is a transfer to the EQ Tribunal not in the interests of justice?

Bolstad v EQC & Tower Insurance [2019] NZHC 3283

In the recent decision of Bolstad v EQC & Tower Insurance [2019] NZHC 3283 the High Court declined to transfer a proceeding to the Canterbury Earthquakes Insurance Tribunal (Tribunal). At issue was whether the transfer was in the interests of justice under s 16(2)(c) of the Canterbury Earthquakes Insurance Tribunal Act 2019 (the Act). The benefits for a plaintiff to transfer their claim include that the Tribunal may appoint experts and arrange settlement conferences at its own cost. However, the High Court has signalled that a tactical application by a plaintiff aimed at avoiding filing evidence and challenging the Joint Experts’ Report is not in the interests of justice.

• For proceedings to be transferred, the plaintiff’s claim must meet the eligibility criteria under s 9 of the Act and the criteria for transfer of proceedings under s 16 of the Act.
• A transfer must not be incongruous with the interests of natural justice.
• Natural justice required that additional evidence be presented to inform the defendant of the plaintiff’s claim.
• The plaintiff must have meritorious grounds to successfully transfer proceedings.

The Tribunal was established with the purpose to provide homeowners with a fair, speedy, flexible and cost-effective way to resolve their earthquake insurance claims. A plaintiff in the High Court may wish to transfer proceedings to the Tribunal to utilise the inquisitorial function of the Tribunal, arrange a mediation at the Tribunal’s cost, or to avoid the High Court hearing fees by requesting a Tribunal adjudication.

A transfer of a High Court proceeding to the Tribunal may be made by an application under s 16 of the Act, provided:

• The proceedings meet the eligibility criteria under section 9 (…); and
• The other party or parties to the proceedings have been given a reasonable opportunity to comment; and
• The Judge making the order believes that the transfer is in the interests of justice.

Tower opposed transfer on the grounds that it was not in the interests of justice (section s 16(2)(c)).

In the High Court, the parties’ experts had reached consensus on the extent of earthquake damage and the appropriate remediation strategy. This was recorded in a Joint Experts’ Report (JER) prepared by three experts, one instructed by each of the parties.

The plaintiff did not accept the experts’ conclusions in the JER but failed to provide evidence in support of his dissent and applied to transfer the proceeding to the Tribunal.

Tower argued the grounds on which the plaintiff intended to proceed with his claim were unknown. It was unclear if he intended to instruct a new expert given the plaintiff’s structural engineer agreed with the defendants’ engineering position. The Court found it hard to understand how the plaintiff could proceed with his claim without a new expert.

Associate Judge Lester agreed with Tower that a transfer based on the expectation that the Tribunal would fund a further expert report despite the JER’s outcome, did not reflect the Tribunal’s purpose. Lester AJ concluded that a transfer to the Tribunal aimed at allowing the JER to be challenged (at the Tribunal’s cost) was not in the interests of justice because the plaintiff had no evidence to support his assertions that the JER decision was wrong.

The parties attended an unsuccessful Judicial Settlement Conference prior to the plaintiff’s application for transfer. Accordingly, the Court doubted further alternative dispute resolution attempts would produce a different result without new evidence.

The Court declined to transfer the proceeding to the Tribunal but stated that the plaintiff may re-apply for a transfer if his case developed.

This publication is intended as a general overview and discussion of the content dealt with. It should not be used in any specific situation, in which case you should seek specific legal advice.