INSURANCE CLAIM

Wanganui Chronicle, Volume 74, Issue 142, 18 June 1931, Page 8

INSURANCE CLAIM

WAIROA FREEZING WORKS IMPORTANT CASE- COMMENCED GISBORNE, June 17. The hearing has commenced in the Supreme Court before Mr Justice Blair of an action in which the Wairoa Farmers’ Co-operative Meat Company and the Bank of New Zealand claim against the New Zealand Insurance and Eagle Star and British Dominion Insurance Co. £77,850 for damage to the Wairoa Freezing Works, allegedly caused by the fire on February 5. Plaintiffs are represented by Messrs Harold Johnston, K.C., L. T. Burna rd and Lloyd Wilson, and defendants by Messrs A. Gray, K.C., H. P. Richmond, and A. H. John stone. Tho case is expected to occupy several days. The statement of claim asserts that by a policy on August 31, 1929, defendants insured plaintiffs against the loss or damage by fire or lightning of their works and plant at Wairoa, the total amount of the insurance being £139,176. On February 5, 1931, the buildings and contents were destroyed or damaged by fire*, the loss and damage resulting being assessed at £77,850. Details and particulars of the loss were delivered to the defendant companies on March 17, but defendants had wholly neglected and refused to pay, and, further, have repudiated liability or to enter upon an ascertainment or assessment of tho losses or damage. Plaintiffs, therefore, claim the amount of the loss, with interest Defendants’ Statement The statement of the defendants alleges that if any part of the premises insured was destroyed by fire, which is denied, such premises consisted of one building only and not separate buildings. They deny plaintiff’s allegations as to the fire and loss therefrom. They admit receiving a declaration and schedule and that they had refused to pay on same. Defendants allege the clause 5 conditions of the policy. Clause 5 is as follows: "If the whole or auy part of any building hereby insured or containing property hereby insured or the whole or any part of the building of which it is a part shall fall or become displaced, all insurance by this policy or its contents shall cease, unless the assured shall prove that the fall or displacement was caused by fire.’’ Defendants allege that if the destruction and damage occurred it was after part of the building had fallen and become displaced by reason of the earthquake of February 3, 4 and 5. Alternatively, defendants allege that plaintiffs had failed to prove that such fall or displacement had been caused by the fire. Further, defendants assert that the insurance does not under any circumstances cover loss or damage occasioned directly or indirectly, prominently or remotely, through or in consequence of earthquake or other convulsion of Nature. Plaintiffs have failed to submit proof that the alleged loss was not so caused.

Defendants quote clause 8 of the policy requiring notice and endorsement if trade or manufacture is altered or if in tho nature of occupation or circumstances affecting the building are changed; also clause 18, relating to arbitration in case of differences. Defendants state that difference has arisen and they claim the right to arbi- 1 trate. Normal After Earthquake Mr Harold Johnston, K.C., in opening tho case, stated that to plaintiffs the amount claimed meant everything, insolvency or bankruptcy. A stoppage of the works had already caused considerable loss to tho district, and if they were not ready by September 1 the loss would be almost untold. The case was also of importance throughout the Dominion to people who had lost chimneys. The Underwriters’ Association, in March, advertised that owners of properties damaged by earthquakes could rest assured that the policies remained free, and at no time had there been a remission by companies of any premium. On the view that the policies had ceased by reason of earthquake damage, the defendants were adopting a defence they had had to discard in all other cases in the Dominion. The works of plaintiff were practically untouched by the ’quake, so little damage being done that it could have been repaired by the staff in a couple of days. The fire was located by the works staff, fire brigades, and a constable, in "C” store, which store had been out of commission for four or five years, and in which there was nothing the earthquake could have caused to ignite. The electric wires in the store had been cut and taped, so it was not possible that electric current caused tho fire. The building was electrically dead. There could not have been a clearer case of non-earthquake fire. After the 'quake the machinery operated perfectly, and they got a normal reduction of temperature. The policy was on the buildings, set out separately with their contents, yet the defendants pleaded that the policy was on the whole building, and were suggesting that because the parapet of one building fell the whole policy was vitiated.

Damage to Bridge The most spectacular effect of the earthquake at Wairoa, Mr Johnston continued, was the damage to the bridge, but the condition of the bridge did not nffcct the efficiency of the brigade, as defendants inferred. The earthquake in Wairoa on February 3 appeared to have acted along definite boundaries and along a line on which the works stood no buildings seemed to have been damaged to any great extent. The works sustained no substantial damage and were in full working order immediately the power was restored. Plaintiffs immediately notified the company of the fire, and a week later urged that the damage be assessed because of the appalling position in which the framing community was placed and the importance of getting under way at once. On February 24 a letter was received from the general manager of the New Zealand Insurance Company denying liability. Mr Johnston had not concluded his address at the luncheon adjournment Onus on Defendants After lunch Mr Johnston, for plaintiffs, submitted that from the outset defendants had adopted an attitude of non liability. There was a distinct invitation to plaintiffs to allow the matter to go to litigation. Plaintiffs han offered implement proofs of loss. In any way all that plaintiffs had to do was to establish a prima facie case as

to the loss they had suffered by fire, the onus was on defendants to prove it was a ’quake fire. There vould be notlung m any suggestion that as tho district needed the freezing works, local patriotism may have made it difficult for the defendants to secure evidence to assist them. The fact that the Wairoa water mains were rendered useless by the ’quake was beside the point, seeing that water from those mains was not needed. Although slight ’quake damage had been done to the premises they were still in gooa working order. Plaintiffs’ case was that the damage due to the ’quake was trifling. Evidence was then begun for plaintiffs. Mr Johnston said there would bo 40 witnesses for his side. The case was adjourned till to-mor-roW*