Avoidance for Material Non-Disclosure – Recent English Case

 

Introduction

A Parliamentary Bill is due later this year to start the process of reforming New Zealand’s duty of disclosure law, as well as many other insurance law reforms.  However, given the COVID 19 pandemic, we expect this may not appear now until next year.  Even if Parliament enacts it sometime later next year, it will inevitably allow a lead in period of at least 12 months. This means the law may not change until 2022 or 2023 at the earliest.

In the meantime, the current duty of disclosure law applies.

A recent decision of the English High Court (Niramax Group Limited v Zurich Insurance Plc [2020] EWHC 535) clarifies some interesting issues about avoiding a policy for material non-disclosure under New Zealand’s current law. England’s former duty of disclosure law applied to the case.  That former law is essentially the same as New Zealand’s current duty of disclosure law.

In any event, the decision deals with interesting issues about the insurer proving inducement.  This requirement will likely remain as part of the reformed duty of disclosure law in New Zealand. [Read more…]

When New Zealand was placed into lockdown on the 25th of March, the Government issued an Epidemic Notice under s 5 of the Epidemic Preparedness Act 2006 and declared a state of national emergency under the Civil Defence Emergency Management Act 2002. This effectively granted the Government access to extraordinary powers that it would not usually have in order to ensure they were able to respond to the crisis that is COVID-19 in an efficient and uninhibited manner. It was those actions that allowed for s 70 of the Health Act 1956 to be unlocked from which the Director-General of Health, exercising the powers of a Medical Officer for Health, derived his powers to make directives to the public. All orders that were subsequent took the form of notices under s 70 of the Health Act.

The problem that arises upon reading s 70 of the act is that there appears to be a fairly big gap between the powers that Parliament intended to grant under this section and the actual restrictions that were imposed by the Director-General of Health upon the nation.

On the 25th of March the relevant notice was issued under s 70(1)(m) of the Health Act. This order required the closure of all premises apart from those that were exempt, those being private dwelling houses and essential businesses. Under this order people were also banned from congregating in certain outdoor places and people who were permitted to leave their houses for something “essential” were to practice social distancing, keeping two metres apart from one another. It was under this notice that the lockdown began, however s 70(1)(m) of the Health Act offers no legal basis to require people to isolate, this section of the Health Act merely deals with the closure of premises. There is a substantive issue with the fact that the lockdown, which required strict isolation measures, was initially grounded on legislation that granted the Director-General to close premises as he saw fit.
[Read more…]

Two insurers face litigation because of poor policy drafting

 
Introduction

We look at two recent court decisions, one in the Court of Appeal of Western Australia and the other in the High Court of New Zealand, where poor policy drafting led to policy interpretation disputes.

In both cases, the courts applied the law of contract interpretation to determine the dispute. However, clearer drafting by the insurers would probably have avoided the cost of fighting the court cases in the first place.
[Read more…]

We are delighted to announce that, on 1 January 2020, Amanda Hyde joined the Keegan Alexander partnership.

Amanda was admitted to the bar in 2010. She began her career in the legal team at the Ministry of Justice, subsequently moving to Chen Palmer where she practised public law. Amanda joined Keegan Alexander in 2013 where she has remained ever since, working in civil litigation.

Practising primarily in the High Court, Amanda has also appeared in the Family Court and District Court, and has argued appeals in the Court of Appeal and Supreme Court. She has appeared both as principal counsel and in support of senior counsel instructed by the firm. Amanda has worked across a broad range of matters, but has particular expertise in public/administrative law, intellectual property, extradition law, and trusts/estate disputes.

Her most recent accomplishments include:

• Appearing in the Supreme Court on behalf of two of the defendants in the long-running Dotcom litigation, with responsibility for arguing a significant aspect of the case for our clients;
• Succeeding on appeal in the Sealegs copyright infringement action against Orion Marine and Smuggler Marine, having drafted the written submissions on appeal and shouldered a portion of the oral argument in the Court of Appeal;
• Successfully arguing an application to strike out causes of action in a complex trust dispute.

In her seven years at the firm, Amanda has worked tirelessly in key roles in a wide variety of challenging cases. She has a genuine enthusiasm for legal practise, and an unwavering commitment to client service.

We congratulate Amanda on her achievements and welcome her to the partnership.

Negligent Drivers and Rental Cars

 

Liability for rental car costs

The law determining when a negligent party is liable to meet an innocent party’s cost of hiring a rental car in New Zealand is reasonably clear.  Where the innocent party needs to hire a rental car while his or her car is being repaired, (i.e. the innocent party is not in hospital or otherwise indisposed at the time), the negligent driver is liable for the hire cost as long as the rental car is broadly comparable and the cost is reasonable.

Now let’s add another factor to this scenario.  Let’s say a wealthy friend of the innocent party offers to hire his spare car to that party at the current hire rate for rental cars.  The wealthy friend requires the innocent party to sign a contract to this effect.  The contract also appoints the friend as the innocent party’s agent allowing the friend to use his best endeavours to recover the hire cost from the negligent party. If the innocent party does recover the cost, he or she must pay the money over to the friend.  If the innocent party does not recover the cost, then the innocent party must pay the hire cost to the wealthy friend.
[Read more…]