Court confirms ability of EQC to decline for land subject to hazard notice registered under the Building Act
In Doyle v Earthquake Commission  NZRMA 546 the High Court upheld (in part) the decision by EQC to decline cover when a disastrous rainstorm hit the coastal town of Russell in Northland, causing a slip, which slid down the hill, demolished a bathroom, and caused internal damage to the Doyle’s holiday bach. EQC declined the Doyle’s claim as the property was subject to a notice issued by the Far North District Council under section 36 of the Building Act 1991 (the predecessor to section 72 Building Act 2004). The notice recorded that the land was likely to be subject to inundation, and erosion. In Doyle the High Court upheld the discretion by EQC to decline cover where a hazard notice was registered but also held EQC’s ability to decline cover for natural disaster damage was limited to the types of natural hazards listed in the registered notice.
On the facts, the case turned on the meaning of “inundation” (one of the hazards listed on the notice registered against the title). The High Court held that EQC were entitled to decline to indemnify the Doyle’s in part for the cost of removing the slip from its place of rest as that was “inundation” within the meaning of the notice registered against the title. An appeal to the Court of Appeal over the judgement did not proceed, so this aspect of the Court’s decision was unfortunately not further tested.