Good Faith in Insurance Contracts

IAG acted in BAD FAITH on our claims.

IAG acted in BAD FAITH on our claims.

IAG acted in BAD FAITH on our claims. A legal Judgment in 2016 is extremely helpful here.

JUDGMENT OF GENDALL JYoung v Tower Insurance Ltd [2016] NZHC 2956

[163] With all these matters in mind, I therefore find that a duty of good faith on the part of the insurer is implied in every insurance contract. It must, as I see it, be a necessary incident of these contracts (long said to be contracts of utmost good faith) and an obligation that flows both ways. To suggest otherwise would make no sense. And in my view, this duty extends beyond a mere obligation on the insurer and the insured of continued disclosure. While the full scope and limits of the duty can be left for another day, I find, as a bare minimum, that the duty requires the insurer to:

(a) disclose all material information that the insurer knows or ought to have known, including, but not limited to, the initial formation of the contract and during and after the lodgement of a claim;

(b) act reasonably, fairly and transparently, including but not limited to the initial formation of the contract and during and after the lodgement of a claim; and

(c) process the claim in a reasonable time.

In reality IAG took the following actions to avoid meeting our claims.

  • Following the fire that destroyed Killara on 9/10 September, IAG appointed ex policeman, unqualified, Fire Investigator Russell Joseph to investigate the cause of the fire. He failed to find the Point of Origin of the fire and would later testify that ‘I don’t believe that the scene itself links Mr Robinson to the setting of the fire.’
  • With no evidence from the fire scene and me being 400Km away at the time the fire started, IAG had a major problem if they wanted to avoid meeting the claims.
  • IAG’s Computer ‘expert’ Martin Jorgensen came up with a theory, REMOTE IGNITION. It relied on me sending a PRINT COMMAND from the laptop in Hamilton to the PC at Killara which had been connected to a printer which in turn caused the fire when it responded to the print command. There was no physical evidence to support this theory. None of the components were located in the debris.
  • 7 months after the fire, based on this theory I was wrongfully arrested for Arson. Disclosure took several months, the images taken by Russell Joseph only being disclosed in late February 2013.
  • IAG continued to delay, even forcing the Court to get evidence from LogMeIn in the US which due to the complexity of international legal processes took almost a year. The information supplied was identical to what LogMeIn published on-line and in their product manual.
  • We had been struggling to survive for 3 years, IAG had not paid us a cent and eventually in 2014, ASB bankrupted us. Legally, this removed our rights for the Insurance claims and the litigation that was on-going attempting to get IAG to meet the claims.
  • In early 2015, at a hearing in front of Judge McDonald, about the existence of a ‘PRINT COMMAND’ on the night of the fire. Our computer expert, Mike Chappell of New Zealand Forensics used the Registry Viewer of the Forensic Toolkit software package to establish that the last PRINT COMMAND that the PC had received was on 8 September, 2011 at 22:55:09. This was over 25 hours prior to the fire being first seen.
  • Martin Jorgensen accepted that this was the case. He also used the Registry Viewer of the Forensic Toolkit software package which Mike Chappell had used to quickly find the date of the last print command. This evidence had been available to Martin Jorgensen since 2011. He clearly knew that the Remote Ignition theory was false from that date.
  • Martin Jorgensen suggested that an alternate printing system could have been used which would not use a print command, Direct printing. He produced an ‘EXTRACT’ from a Registry page of the PC which he claimed showed that Direct Printing had been used. The Extract also states that Martin Jorgensen used the Registry Viewer of the Forensic Toolkit software package.
  • Mike Chappell produced the full registry page which stated that the settings had not been changed since 30 April 2011. Since the last Print Command was on the 8 September 2011 and the settings had not changed, the settings shown must relate to the background print method which required a print command to make the printer operate.
  • The Remote Ignition theory had been proven to be false, Mr Annandale, Crown Barrister, stated that there was no case against me without remote ignition. In effect, I had a perfect alibi being 400Km away with no opportunity to cause the fire.
  • On 1 May 2015, I was acquitted of the arson charges. I contacted IAG asking if they would then be meeting the claims, I was told that we would have to go to the Civil Court. The evidence of the last print command on the 8 September 2011 would stand equally in the Civil Court with the same effect on the case.
  • In 2017, I asked IAG to reconsider the position, their lawyers DLA Piper responded stating that since we had been bankrupted we had no claim against IAG.
  • IAG created a Theory of Remote Ignition, attempting to get around my solid alibi. They knew the theory had a serious flaw, the lack of a Print Command on the day of the fire. They then delayed the case at every opportunity knowing that ASB would eventually bankrupt us, removing their legal liability to pay the claims.
  • I had been proven to be 400Km away from the fire, nothing was found at the Fire Scene to link me to setting the fire and remote ignition had not taken place. I therefore had no opportunity to cause the fire and any amount of circumstantial evidence is irrelevant.
  • IAG, to this day refuse to meet the claims hiding behind the effect of the bankruptcy. They knew I had a solid alibi from 2011, the whole plan was to force us into bankruptcy before we could prove the theory was false and that worked but is it morally and ethically fair?

Looking at these actions and comparing them to the Judgment of GENDALL J above, which as he states are the BARE MINIMUM of the obligations of the insurer in a case such as ours.

IAG did not disclose the evidence they were aware of in 2011, there was no print command on the day of the fire. There was considerable evidence showing that the intruders had caused the fire. IAG were fully aware that I did not cause the fire from day one of the investigation.

IAG did not act reasonably, fairly and transparently. They had me wrongfully arrested for Arson whilst they knew I had no opportunity to cause the fire, purely to allow them to avoid meeting the claim.

IAG did NOT process the claim in a reasonable time, they took every opportunity to delay knowing we eventually would be forced into bankruptc,y legally removed our rights to claim against IAG.

IAG acted in BAD FAITH on our claims.