Are Canterbury earthquake claimants running out of time?
The sixth anniversary of the Canterbury September earthquake is fast approaching. With it, comes another worry to add to the anxiety and uncertainty facing those who have not yet resolved insurance issues arising from that earthquake and those that followed. Under limitation law, there is a six year time-limit on bringing civil claims to the courts, starting from the date of the incident on which the claim is based. For victims of the September earthquake, that would ordinarily mean that the time-limit expires on 4 September 2016. Insurers and EQC are indicating that this time-limit may be extended by one year. If you are yet to resolve your insurance issues, what do you need to know?
This area of the law is complicated by the fact that two statutory regimes apply, depending on the date of the event upon which the claim is based. The Limitation Act 1950 applies to events before 1 January 2011 and the Limitation Act 2010 applies to events after this date. Therefore, if your claim involves damage from the September earthquake, the Limitation Act 1950 will apply.
Claims involving damage from the September 2010 earthquake
Limitation legislation exists for the benefit of both claimants and defendants. It recognises that, although people should be able to bring claims to the court, as the years go by, people ought to be able to order their lives without worrying about having to defend themselves against ancient complaints. It stops people from unreasonably delaying bringing claims, ensuring that claims can be decided on up-to-date evidence, whilst also allowing claimants a fair amount of time to seek relief.
Although the Limitation Act 1950 sets a six year time-limit on bringing claims to court, in reality, a claimant can bring a claim ‘out of time’. Where this is done, the defendant is able to use the time-limit as a defence, which means that the court cannot grant relief. 1However, if a defendant does not raise the defence, it is well established that a court will not prevent a claim from going ahead.2
The Insurance Council of New Zealand has issued a statement confirming that its members: AA Insurance, FMG, the IAG brands, MAS, Tower and Vero have agreed not to use the defence under the Limitation Act 1950 for any residential claim relating to the Canterbury Earthquakes where proceedings are filed in the Courts before 4 September 2017.3
If this statement can be relied upon, those with residential claims against these private insurers have no cause for concern over the imminent six year anniversary of the earthquake. They can bring a claim any time before 4 September 2017, and these insurers have said they will not raise the time-limit defence. However, if you are insured with another provider, or have a claim relating to damage to commercial premises or loss of productivity, such assurances will make no difference.
EQC has also announced that it does not consider the six-year limitation period to run from the date of each Canterbury earthquake. Rather, they interpret the limitation period as commencing from the date where a claim has been settled or denied.4 Again, if this statement can be relied upon, if your outstanding claim is against EQC, you do not need to panic yet about running out of time.
But, can these statements be relied upon? Perhaps. However, those who have just gone through five years of wrangling with EQC or insurance providers, with no resolution and possibly no end in sight, may, quite justifiably, feel some scepticism towards these assurances. If you still feel concerned about the approaching deadline, what are your options? Is it necessary to file a claim in the court to protect your legal position?
If you do not file a claim in the court, it might be wise to take steps to document the fact that, in deciding not to do so before the expiry of the six year time-limit, you relied on the public statements issued by ICNZ and EQC. If you can show this, you may be able to rely on the principle of “estoppel”, if your insurer or EQC does try to use the limitation defence when they had stated they would not.
Further, under the Limitation Act 2010, parties can agree that the 1950 Act will not apply to their situation, despite the fact that the incident a claim is based on occurred before 1 January 2011.5 They can agree that the 2010 Act will apply instead. Under that Act, parties are able to contract out of the six year limitation period.6 One option is to contact your insurance provider or EQC and see if you can agree that the 2010 Act will apply to your claim and then agree to extend the limitation period beyond September 2016. Get this assurance in writing. If your insurer or EQC does not agree to this, you may be wise to file proceedings to protect your legal position.
If you are concerned about the approaching six year anniversary of the September earthquake and the possibility that you may be running out of time to resolve insurance issues, you should consider contacting your insurer or EQC and getting them to agree that the 2010 Act will apply to your claim and that the limitation period will be extended. If you cannot get them to agree to this, the best thing to do may be to file proceedings in the courts to protect your legal position.
If you would like more information about this issue, or to discuss your legal position, please contact one of our experts in the Litigation Team, Simon Munro, Jonathan Nicolle or Alexandra Cunninghame.
1 Humphrey v Fairweather  3 NZLR 91 (HC) at .
2 Law Commission Limitation Defences in Civil Proceedings (NZLC R6, 1988) at .
5 Section 59(2) Limitation Act 2010: “The action, cause of action, or right of action must, despite the repeal of the Limitation Act 1950 and unless the parties agree otherwise, be dealt with or continue to be dealt with in accordance with the Limitation Act 1950 as in force at the time of its repeal”.
6 Section 41 Limitation Act 2010: “No provision of this Act makes ineffective, or prevents the enforcement of, an agreement that conflicts or is inconsistent with, or that modifies or prevents some or all of the operation or effects of, a defence under this Act”.