December 2014

NZILA President's message
Jonathan Scragg

More events a key goal

As the incoming NZILA president, I’d like to start by paying tribute to my predecessor, Craig Langstone, who has led the association for the past seven years and done a remarkable job.

Craig has been at the forefront of building NZILA both financially and in membership numbers.  That has significantly boosted attendances at events and led to the association’s annual conference becoming one of the insurance industry’s premier annual events.

I’d also like to thank Roger Scholes who has served for 16 years as vice-president. His dedication to NZILA is exceptional. He is replaced as vice-president by the very able Myles Noble.

I am grateful to Leon Briggs, who is continuing as treasurer, and Frank Rose, who retains the role of secretary. The high-calibre committee I am privileged to lead includes many insurance law and insurance industry luminaries.

For those who’ve not met me, I’m a partner with Duncan Cotterill, leading the firm’s insurance & litigation practice group in Wellington. I’ve worked previously as an associate at Barlow Lyde & Gilbert LLP (now part of Clyde & Co) in London; with Duncan Cotterill in Christchurch; and I was a judge’s clerk at the High Court in Wellington.

During my term as president, I want to see the association continue to prosper. Two of my key goals are to build on the annual conference’s success and expand the range of other events for members held during the year.

This year’s annual conference was in Wellington. It conference attracted about 280 delegates, from a membership of about 400.  The numbers attending surpassed Queenstown in 2013, which was also a record year. We’ve set a new benchmark, and aim to see the same numbers, if not more, attend in Auckland in 2015.  The conference is now the place where senior personnel from insurers, brokers, loss adjusters and law firms gather each year to learn, socialise and network with key industry colleagues.

But there is more to NZILA than the annual conference. We are always looking for new projects and activities to support as an association.

I want to reach out to new audiences, including in the regions, and involve more industry representatives and younger members. 

While Wellington, Auckland and Christchurch will each continue to host at least one event a year, we’re branching out to other locations, with Dunedin and Hamilton events to be scheduled in 2015.

NZILA’s first-ever event in Palmerston North was on October 23 (see the report in From the branches).  It was a great success, bringing together a range of industry personnel for an evening of wide-ranging discussion.

I want to continue to foster good relationships with the insurance law profession and the insurance market to bolster membership numbers. I’m keen to see younger people involved in NZILA – both law practitioners and industry participants.


Supreme Court decides Salisbury Apartments

A key discussion topic in NZ of late has been the Supreme Court’s split decision favouring Zurich against the body corporate of an apartment block that sustained severe damage in the February 22, 2011, Canterbury earthquake.

The Salisbury Park Apartments’ body corporate had insured two buildings with Zurich, using broker Firm PI 1 Ltd (then known as ACM).

The sum insured was $NZ12.95 million. After the February 22 quake, the reinstatement cost was assessed at $NZ25 million. The Earthquake Commission (EQC) paid $NZ6.8 million.

ACM argued Zurich should pay the full $12.95 million, not just the balance of $NZ6.1 million over and above the EQC’s contribution.

At trial, the High Court found the sum insured excluded the EQC’s contribution. The Appeal Court overturned that decision. The body corporate then appealed to the Supreme Court.

Supreme Court Justice Terence Arnold, with whom Justices John McGrath and Susan Glazebrook agreed, dismissed the body corporate’s appeal with costs.

Justice Arnold said: “This result does not flow from the interpretation accepted by the Appeal Court but from the fact the apartment complex was underinsured.” However, Chief Justice Sian Elias, with whom Justice William Young agreed, would have allowed the appeal.

The split decision shows that what can appear to be a relatively simple question often is not so straightforward.

(Firm PI 1 Ltd v Zurich and Body Corporate 398983 [2014], NZSC 147, 15/10/2014)