NEW ZEALAND Law and Practice Contributed by: Aaron Sherriff, Tanya Wood and Nick Laing, Duncan Cotterill
law rights to repudiate a contract or deny liability under it for a breach of a warranty or a condition. 8.3 Conditions Precedent A condition precedent may be created in a number of ways and does not need to be expressly described as such: • the consequences of a breach of a condition may be clearly prescribed; • the condition may be expressly described as a “condition precedent”; • the policy may contain a general clause that describes all conditions as conditions precedent; and • it may be implied by the wording or the signifi- cance of the condition that it was intended to be a condition precedent. These clauses are generally construed narrowly by the courts. The relevant act or omission must fall pre- cisely within the language of the policy for there to be a breach. A breach of a condition precedent entitles the insurer to avoid liability under the policy altogether. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage Coverage Disputes Beyond the complaints procedures dealt with by the dispute resolution services (see 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance , 6.6 Consumer Contracts or Reinsurance Contracts and 9.7 Alternative Dispute Resolution ), the civil courts of New Zealand will typically deal with insurance disputes as follows. • The District Court has general civil and commercial jurisdiction to deal with insurance disputes of up to NZD350,000. • The High Court typically deals with disputes with a value exceeding NZD350,000. Most commer- cial insurance disputes are dealt with in the High Court, which also has a special “Earthquake list” court that operates and streamlines hearing of the large volume of cases arising out of the Canterbury Earthquake sequence of 2010–11.
• The Canterbury Earthquakes Insurance Tribunal was established in 2019 and is an alternative reso- lution body for resolving disputes about insurance claims for physical loss or damage to residential buildings, property and land arising out of the Can- terbury Earthquakes. A judge alone hears insurance disputes in the New Zealand courts. Limitation A claim must be brought within six years of the act or omission on which the claim is based, with lim- ited exceptions (including where the claimant has late knowledge). Policies may include shorter limitation periods. Sec- tion 9 of the ILRA prevents an insurer from relying on such a limitation period unless the insurer has suffered prejudice by reason of non-compliance. That section is carried into the CIA, with one excep- tion. “Claims-made” policies, which deal with claims according to when the claim was made rather than when the event occurred, may be declined if the insured does not notify the insurer of the claim within 90 days of the end of the policy term. Third Parties See 6.5 Multiple Insured or Potential Beneficiaries . Note that an insured has no direct claim against a reinsurer if the reinsurer refuses to pay, because the relationship between the insurer and the reinsurer is a contractual one and not one of assignment, agency or partnership. 9.2 Insurance Disputes Over Jurisdiction and Choice of Law Parties are generally free to choose the jurisdiction and choice of law, including as set out in an insurance contract. In the absence of an express choice-of-jurisdiction clause, the courts take into account a wide range of (mainly practical) factors in determining jurisdiction, including:
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