‘Chilling effect’ on EQC justice
A Christchurch landlord must pay more than $500,000 in costs after an unsuccessful court challenge seeking an exponential increase to his earthquake pay-out.
His lawyer in court warned the payment sought by the Earthquake Commission (EQC) and his insurer would have a ‘‘direct chilling effect’’ on others with unresolved claims.
However, lawyers for the insurers disagreed. They said there ‘‘would be no chilling effect’’ and a 50 per cent increase in costs was justified on the basis Xiaoming He’s claim kept changing.
He was ‘‘willing to say whatever he considered would increase his prospects of success regardless of the facts. Disproving these claims put the defendants to considerable expense’’ they said.
Justice Rachel Dunningham, in a judgment released February 8, ordered He to pay EQC $272,458.02, and his insurers – collectively referred to as Offshore Market Placements Ltd – $244,327.24.
‘‘It doesn’t matter because it comes from the wrong position,’’ He said. In emails provided to The Press he described the evidence relied on by the insurers as ‘‘fake’’.
He said he would be appealing last September’s High Court decision, in which Dunningham ‘‘dismissed virtually all’’ of his claims. However, it was unclear if proceedings had been filed.
Last year He launched High Court proceedings claiming EQC and his insurer owed him about $717,000 over and above the $16,000 pay-out EQC made on his Sydenham property for ‘‘substantial earthquake repairs’’.
The Selwyn St address included a house ‘‘likely to be at least 80 years old’’ with an attached shop, called Jay Dee’s Dairy. He’s claim also covered two garages at the rear of the property rented to a mechanic.
Dunningham said, while ‘‘[He’s] position continued to shift’’, the essence of the case was the house suffered damage after the February 2011 earthquake, and the garages and hardstand area in June.
He’s structural engineer found the damage was more likely to be caused by the earthquakes due to the physical properties of the structures, the force of the earthquakes and the bearing capacity of the relevant soils.
However, the insurers resisted all He’s claims. They argued there was evidence the misalignment of the buildings was historical, and it was implausible the damage claimed could have been caused by the earthquakes.
Dunningham said there was evidence the house had suffered ‘‘significant dislevelment’’ prior to the earthquakes, largely due to the ‘‘inadequacy of the foundations’’.
Isaiah Loh, He’s tenant and the owner of the dairy, gave evidence in court that there had not been much noticeable damage. He claimed he had an incentive to minimise any damage as he would have to move out if there were repairs.
The Sunday before the hearing, He emailed Loh to say if he gave the court ‘‘wrong evidence’’ EQC ‘‘might put all the liability to you or ask you to pay all the court costs’’.
Dunningham said the email, and another in which He repeated that giving evidence ‘‘might cost you very big dollars’’, was consistent with her ‘‘overriding impression’’ of He as someone who ‘‘appeared willing to do whatever was in his power to advance his claim, whether justified by the facts or not’’.
Apart from a minor claim for repairs to plaster damage, He’s claim ‘‘fails in all respects’’, Dunningham found.
Minister Responsible for the Earthquake Commission Dr Megan Woods revealed in January there were still 3000 unresolved EQC claims seven years on from the earthquakes.